Auto industry, environmentalists clash over fuel review

Melissa Nann Burke
Detroit News Washington Bureau

The auto industry on Wednesday applauded the Trump administration’s plans revisit a review of Obama-era standards that would boost fuel economy, while environmental and consumer groups warned of attempts to weaken the carbon-reducing rules.

“If the standards threatened auto jobs, then common-sense changes could have and should have been made,” President Donald Trump said at an event in Ypsilanti. “Just days before my inauguration, the previous administration cut short the promised midterm review in an 11th hour executive action. Today, I am announcing we are going to cancel that executive action. … We are going to ensure that any regulations we have protect and defend your jobs, your factories. We are going to be fair.”

Department of Transportation Secretary Elaine Chao said Wednesday her agency would work with the Environmental Protection Agency to complete the midterm review in a “transparent, data-driven manner” to determine by the original April 2018 deadline whether the standards are appropriate.

President Barack Obama’s Environmental Protection Agency in its final days finalized the mandate requiring automakers to produce car and truck fleets to average 54.5 miles per gallon by 2025.

But automakers complained that Obama’s EPA truncated the midterm evaluation that was to ensure the standards were appropriate based on market conditions. The industry in early February asked President Donald Trump to restore the evaluation process.

“These standards are costly for automakers and the American people,” EPA Administrator Scott Pruitt said in a statement. “We will work with our partners at DOT to take a fresh look to determine if this approach is realistic. This thorough review will help ensure that this national program is good for consumers and good for the environment.”

The EPA said if it finds the determination issued by the Obama administration is not realistic, it will submit a new proposal for public comment.

The Auto Alliance, a trade group representing the Detroit Three and other major automakers, applauded the decision to restore the data-driven review.

“By restarting this review, analysis rather than politics will produce a final decision consistent with the process we all agreed to under ‘One National Program’ for (greenhouse gas) and fuel economy standards,” said Mitch Bainwol, president and CEO of the Auto Alliance.

In a Feb. 10 letter to Trump, executives from 18 major auto companies said while they are committed to improving fuel economy and reducing carbon, ignoring “market realities” will drive up costs for buyers and put jobs at risk.

“The Trump administration has created an opportunity for decision-makers to reach a thoughtful and coordinated outcome predicated on the best and most current data,” Bainwol said. “Our industry is committed to producing even safer and more energy-efficient vehicles in the future, and that’s what this process is all about.”

U.S. Rep. Debbie Dingell, a Dearborn Democrat, stressed that Trump’s announcement doesn’t roll back the standards but allows for the “robust” midterm evaluation that the automakers, EPA, National Highway Transportation Safety Administration and the state of California agreed to in 2011.

Dingell said it’s her goal to keep all parties at the table working together to decrease emissions, reduce oil consumption, save consumers money and create jobs.

“Everyone involved needs certainty — from automakers building more fuel-efficient vehicles to the companies developing infrastructure to support them,” Dingell said.

“As the process moves forward, it is important for all stakeholders to ensure there are strong, workable standards in place that achieve the goals of the original agreement while keeping everyone together on one set of standards.”

Rep. Sandy Levin, a Democrat from Royal Oak, said he hoped Wednesday’s decision wouldn’t jeopardize the progress that auto companies have made in boosting fuel efficiency and reducing greenhouse gasses under a national standard.

“We must not return to the unworkable patchwork of state and federal standards that the original agreement was tailored to prevent,” Levin said. “We must also recognize the gains of the auto industry under President Obama’s leadership – seven straight years of sales growth and hundreds of thousands of new jobs.”

Trump’s decision elicited praise from the National Automobile Dealers Association and others who said it would help keep vehicles affordable for consumers.

Thomas Pyle, president of the Institute for Energy Research, cited estimates that some new vehicles cost more than $6,000 than they would have had the fuel economy mandates not been in place.

“Americans should be able to choose the vehicle that best fits their lifestyle instead of having Washington bureaucrats dictate what cars they can and cannot buy,” Pyle said.

“The green lobby and former Obama appointees will cry rollback, but the public knows that Obama once again abused his authority by fast-tracking the review in the last hours of his presidency.”

But a recent Consumers Union report disputes industry claims that the standards affect vehicle prices, finding that prices over the last 20 years remained steady, even as fuel economy improved.

Shannon Baker-Branstetter, policy counsel for Consumers Union, called the decision to withdraw the standards “nonsensical.”

She noted that EPA conducted its review of the standards for nearly two years, taking into account input from automakers, including thousands of pages of technology and cost assessments.

“The standards already take the cost into account, and the record shows that they are a reasonable, cost-effective approach to improving fuel efficiency and lowering consumers’ expenses,” Baker-Branstetter said in a statement.

“By rejecting the EPA’s final determination now, its new administrator is signaling the agency plans to weaken the standards instead.”

A report by the BlueGreen Alliance and Natural Resources Defense Council estimates that 69,000 workers in more than 224 factories and engineering facilities across Michigan work on components and technology that contribute to improving fuel efficiency in vehicles.

“Over the past decade, American workers have proven that we can build great cars and trucks, deeply cut pollution, and bring back jobs and manufacturing at the same time. Sound fuel economy and clean vehicle standards have been critical and remain critical to this success,” said Zoe Lipman, director of the BlueGreen Alliance’s Vehicles and Advanced Transportation Program.

“Good jobs that support families and communities, and plant investments that mean new equipment, orders, and hiring, depend on continuing this momentum.”

The Environmental Defense Council said reconsidering the fuel economy standards could create uncertainty and slow innovation in the U.S. market.

“The administration is making a mistake to retreat on the standards and let other countries take the lead in developing the next generation of cars,” said Fred Krupp, president of Environmental Defense Fund.

“If President Trump continues down this path, it will mean higher gas bills for families, more pollution, more dependence on oil and less innovation. Our economy needs to go forwards not backwards.”

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