The White House is poised to announce new federal standards for automobile manufacturers on Tuesday. Early news reports suggest that the deal will settle a long-standing dispute with California and create the first greenhouse gas standards for vehicles (Associated Press, Washington Post).

Indeed, reports suggest that the administration is going to essentially take the California standard and apply it across the nation. Such a move would reduce cumulative greenhouse gas emissions from new automobiles by nearly 30 percent by 2016. This translates into a mileage standard of about 35 miles per gallon (nearly 15 kilometers per liter) in 2016, which is in line with the standards that California had been proposing and four years ahead of the current schedule.

California proposed its greenhouse gas standards in 2004, but it needed a Clean Air Act waiver from the Environmental Protection Agency in order to institute the regulations. Automakers immediately sued, arguing that California was using the Clean Air Act to indirectly regulate fuel economy, which is something that only the federal government can do (the issue is still tied up in court).

EPA sided with automakers in December 2007, but Barack Obama pledged to reverse that decision during the presidential campaign. Now it looks like he will be able to fulfill that pledge, even as he overhauls the entire sector in an attempt to preserve some kind of future for beleaguered US auto companies.

The issue is also tied up with the Supreme Court decision granting EPA the authority to set greenhouse gas emissions for vehicles. EPA recently proposed a finding on that account, but it’s not year clear how these two issues might play out in the current decision. Stay tuned.