The proposal urges automakers to have a fleet average of 35.5 mpg when the proposal is set into law, a standard which is 10 mpg higher that today’s rules. Obama also proposed a cut on carbon emissions from vehicles which play a major factor in worsening global warming.

Car manufacturers hear the gunfire at the starting point of a race to make lighter vehicles and efficient car engines like diesels and hybrids to meet the new guidelines. Experts point out though that the new call for better standards will have a $600 top up in the cost of production of every vehicle.

Looking from another vantage point, the US will be able to save 1.8 billion barrels of oil by 2017. The assumption is based on the average daily consumption of the US market of as much as 20.7 million barrels per day. The savings is equal to about 87 days of US oil usage.

Under the Bush administration, the 35 mpg mark is a goal set to be achieved at least by 2020. The call for better fuel economy comes on top of the March 2009 standards. The March guidelines set the 2011 vehicle models to have at least 27.3 mpg fuel mileage which is 8% better than today’s standards.

Car manufacturers have been opposing new fuel efficiency standards but have settled to agree to the new goals as they will have guidelines effective in all states with California included. Currently, automakers follow a separate guideline for the standards by the state of California. Legislators from California have agreed to follow the proposal from the federal government.

Allocations for the $455 million are as follows:

1. $419 million will be devoted to fund transportation projects that will include express lane automation, biodiesel ferries, vanpool vehicles, HOV lanes, safety infrastructure programs for bikes and pedestrians, and commute reduction initiatives.
2. The activities of the Community Economic Revitalization Board will be supported with $20 million of funding.
3. $10 million will aid the development of projects focusing on renewable energy technology for housing projects and public facilities.
4. Biofuel processing facilities and other biomass energy initiatives will be perked up by $6 million.

Legislations will serve as the foundation of these initiatives and investments to control damage to the environment and explore other options for energy production.

Proposals to pass laws on limiting the emission of green house gases are being pushed. Market incentives are also being put in place to encourage moves from all sectors. Some laws have been enacted in seven states of the US and four provinces of Canada in support of these moves.

Tax exemptions are also being lobbied to entice the public to buy hybrid passenger cars, trucks, and duty vehicles. Tax exemptions for the state of Washington will be stretched from 2009 to 2014.

Standards are also being set to drive the improvement of technology towards better energy efficiency.