(Agencies)
Updated: 2007-12-04 16:58

WASHINGTON - The White House on Monday threatened to veto legislation pending in the US House of Representatives that would require the first big increase in three decades in the country's automobile fuel efficiency.

Vehicles are seen during rush hour on the 405 freeway in Los Angeles, October 3, 2007. [Agencies]

Congressional Democrats have hammered out a complicated deal that could result in a 40 percent boost in fuel efficiency standards by 2020.

The White House said it opposed provisions expected to be included in the bill that would require utilities to get 15 percent of their electricity from renewable sources by 2020, and raise taxes on oil and natural gas companies.

"It appears Congress may intend to produce a bill the President cannot sign," top White House economic advisor Allan Hubbard said in a letter to House Speaker Nancy Pelosi.

The keystone of the House energy bill - expected to see a vote this week - would raise fuel-economy standards to 35 miles per gallon.

The White House has backed a rise in fuel economy standards as well as a boost in renewable fuels like ethanol, which is also expected to be included.

Playing chicken

But by seeking to include renewable requirements for utilities and higher taxes for oil companies, Pelosi is "playing chicken" with the White House and the Senate, said Kevin Book, an analyst with Friedman, Billings, Ramsey and Co.

With primary elections in states like Iowa looming in early 2008, Democrats and Republicans alike are under the gun to show that they are working to ease the pain of $90 oil and $3 gasoline prices on consumers, Book said in a report.

For that reason, "We expect the House to proceed back to a leaner energy bill" that will escape a White House veto and a possible filibuster threat in the Senate, Book said.

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