Move to freeze Obama-era mpg rules likely to set off fight
Washington — A long legal fight appears likely after the Trump administration said it will push to weaken stringent gas-mileage rules that would have required automakers to produce fleets averaging more than 50 miles per gallon by 2025.
The Environmental Protection Agency and National Highway Traffic Safety Administration proposed Thursday to freeze Obama-era gas-mileage rules after the 2020 model year, when automakers will be required to build fleets averaging nearly 39 miles per gallon fleetwide. And they indicated the federal government could move to revoke a longstanding waiver allowing California and other states to set their own stricter auto emissions standards.
The proposal, though not unexpected, set off waves of reaction.
While carmakers say the rules will let them produce the vehicles that buyers truly want, critics say the move will stifle innovation and put U.S. carmakers at a disadvantage in global markets that are moving toward zero-emission vehicles. Environmentalists see it as a further unraveling of President Barack Obama's environmental legacy that could accelerate global warming.
California Attorney General Xavier Becerra tweeted that his state "will use every legal tool at its disposal to defend today's national standards and reaffirm the facts and science behind them."
Automakers have pushed for a national mileage standard and for a review of the fuel-economy rules, which were set in 2012 by the Obama administration. The rules had been finalized ahead of schedule after Trump's election. Carmakers say they want one set of gas mileage rules that governs the whole country.
Two groups representing automakers — the Alliance of Automobile Manufacturers, which lobbies for carmakers that operate in the U.S., and the Association of Global Automakers, which represents international carmakers — released a joint statement Thursday saying it’s time for substantive negotiations to begin over a single national standard: "We urge California and the federal government to find a commonsense solution that sets continued increases in vehicle efficiency standards while also meeting the needs of America’s drivers.”
General Motors Co. echoed that statement, saying, "We look forward to working with all parties to achieve one national 50-state program."
Trump administration officials argue the Obama-era gas mileage rules were based on shaky assumptions that were set when gas prices were around $4 per gallon during the former president's tenure.
“When those standards were set in 2012, the agencies were looking ahead more than 10 years. These are complicated standards,” Bill Wehrum, assistant administrator for the EPA’s Office of Air and Radiation, said on press call Thursday announcing the proposal.
Since then, consumer preferences have changed greatly, shifting from passenger cars to SUVs and trucks, many of which are as fuel-efficient as the cars they replaced.
"At its core," Fiat Chrysler Automobiles said in a statement Thursday, "the proposed rule recognizes that assumptions made in 2012 about consumer preferences have fundamentally shifted in 2018."
That shift is stark at Fiat Chrysler, where Jeeps and Ram pickups are the big sellers and moneymakers, and passenger cars largely have been discontinued.
Rebecca Lindland, senior analyst at Kelley Blue Book, said car buyers have demonstrated clear preferences for trucks and SUVs instead of the most fuel-efficient small cars.
"While this freeze is disruptive and brings on uncertainty," she said, "it could also be an opportunity for manufacturers to concentrate on developing the most fuel-efficient versions of vehicles consumers already want to buy, instead of funneling hundreds of millions of research dollars into technology less than 4 percent of new car buyers seek."
Deputy NHTSA Administrator Heidi King framed it as a safety issue. She said requiring carmakers to continue producing ever-more efficient vehicles will result in increased car prices. And that, she said, that will cause drivers to hang to on their older vehicles longer. She noted that older vehicles typically lack safety features that are now common, such as back-up cameras.
"Already in the United States, we have the oldest fleet in the nation's history," she said. "It’s nearly 12 years old, the average age of a vehicle on our roads. We'd like to see the new technologies into the hands of consumers by managing to keep automobiles affordable for everyone."
The current Corporate Average Fuel Economy rules at issue call for ramping up from the current fleet-wide average of about 35 mpg for cars and trucks to an eventual goal of between 50 and 52.6 mpg by 2025. The goal was revised down from an initial target of 54.5 mpg, which equates to roughly 40 miles per gallon in real-world driving.
Under the Obama administration’s rules, automakers face fines of $5.50 for each one-tenth of a mile-per-gallon their average fuel economy falls short of the standard for a model year, multiplied by the total volume of vehicles sold. Automakers are allowed to purchase credits from other carmakers — like electric-car company Tesla — that come in under the mileage requirements.
Jeremy Acevedo, manager of industry analysis for Edmunds.com, noted that automakers will still have to contend with stringent gas mileage rules being imposed in other countries, even if the Trump administration is successful in its effort to roll back the U.S. standards.
Key markets in China, India, Europe — even California — are considering banning gasoline and diesel engines.
But Max Zhang, professor of mechanical and aerospace engineering at Cornell University in Ithaca, N.Y., said the Trump administration's move to roll back mileage rules could have an unintended consequence of giving foreign-owned automakers an advantage over Detroit's manufacturers. He noted that European, Japanese and Chinese automakers are "all aggressively pursuing research and development in zero-tailpipe emission vehicles.
“Thirty-seven miles per gallon, the new fuel-efficiency target by 2026 as the current proposal indicates, can be achieved by strategies such as improving internal combustion engines and modest weight reduction," Zhang said. "By contrast, 54 miles per gallon, as the Obama administration proposed, will certainly require auto manufacturers to massively introduce zero-tailpipe emission vehicles such as electric and fuel-cell vehicles to the fleets."
California to fight
Thursday's announcement was met with defiance in California, which spearheaded a lawsuit filed with with 16 other states in May, arguing the Trump administration move to reverse the Obama-era gas mileage rules is "unlawful."
California sets its own emissions standards under a waiver included in the 1970 Clean Air Act. A dozen other states and the District of Columbia have adopted California's emission rules, accounting for one-third of the U.S. auto market.
California Attorney General Becerra said at a news conference Thursday that the rollback of Obama-era mileage standards would imperil the state’s efforts to curb greenhouse gases. He connected climate change to wildfires burning out of control throughout the state.
“The earth is not flat and climate change is real,” Becerra said. “Can someone please inform the folks at the White House and our federal government of those facts?”
He promised another lawsuit if the administration makes good on plans to revoke its ability to set stricter auto emissions standards.
The Trump administration's proposal calls for doing just that.
"There's pretty strong evidence that Congress intended the federal government to be the primary regulator here," the EPA's Wehrum said Thursday. "Only in exceptional circumstances under the Clean Air Act is California able to implement its own tailpipe standards.
"What we’re talking about here is something very different, we’re talking about greenhouse gases," Wehrum continued. "We’re not talking about conventional pollutants like smog in Los Angeles.”
Carmakers are hoping for a compromise between the federal government and California because they are leery of the uncertainty a long legal fight would bring. The courts ultimately would decide the outcome.
The EPA and NHTSA said Thursday the proposed changes to gas mileage rules will be published in the Federal Register, which touches off a 60-day period during which industry stakeholders and the public will be able to comment.
Expect environmental groups to be part of that public discourse.
“The Trump administration is driving our auto future in reverse," Rhea Suh, president of the Natural Resources Defense Council, said Thursday. "The clean-car standards are already saving our families billions at the pump, supporting nearly 300,000 American jobs, and cleaning up dangerous tailpipe pollution. We need to speed up that progress, not slide backward.”
The Associated Press contributed.