It comes as no surprise that EPA Administrator Pruitt recently announced the Agency’s intention to rollback the 2022 through 2025 Corporate Average Fuel Economy (CAFE) standards for autos and light trucks. Candidate Trump telegraphed his intention to rollback CAFE and other Obama era environmental regulations while campaigning for the presidency.
In EPA Administrator Pruitt, President Trump has a witting tool to carry out his orders.
The Obama administration didn’t need any convincing of Trump’s intention to make good on his campaign promise. Just days before Donald John’s coming to Washington, EPA reaffirmed the 54.5 mpg[i] standard after evaluating the latest data to determine whether it remained technologically and economically feasible for the industry to meet the target. The current standard of 35.5[ii] mpg and the anticipated 2025 standard were originally agreed to in 2012.
The mid-term evaluation was to be completed before April 2018, according to the terms of the 2012 deal between the Obama administration and the auto industry. The 2022-2025 standards are often referred to as Phase 2. Phase 1 standards covered the years 2012 to 2016. By law, standards can be set for periods of no more than five years at a time. Standards for the period ending in 2030 will be the next tranche on the table.
In the eyes of the auto industry, the evaluation was a rush to judgment by the Obama White House to thwart—or at least impede—any effort by Trump’s troupe to make good on his campaign promise. On their own, CAFE standards are a very big deal as the transportation sector has now eclipsed the electric power as the largest source of climate changing greenhouse gas emissions (GHG) in the U.S..
The Administration's current intention to rollback the Obama standard appears to be based on no new information. As far as anyone seems to know, the data on which the decision was made is the same used by Administrator McCarthy to reaffirm the 54.5 standard in 2017. Apparently, Pruitt simply took the auto industry’s assertion that the data does not support the higher mpg target.
The conclusion is consistent with other times Pruitt has taken an industry’s word for something and re-typed it on official stationary. The habit also tracks Pruitt’s very Trumpian practice of denigrating and dismissing information that doesn’t support his preordained conclusion(s)—particularly if the information can be traced back to the Obama administration.
The transportation sector currently exceeds electric power as the primary source of CO2 emissions in the U.S. (see Graph 1) Every vehicle covered by CAFE between 2022 and 2025 will continue to emit carbon and other greenhouse gases (GHGs) for 12 or more years. This estimate is based on the current average age for cars on the road of 11.63 years and of 11.5 years for light trucks.
Although the transportation sector is made up of more than CAFE covered vehicles, reducing average fuel economies is as detrimental to the environment as revising downward or rescinding the Clean Power Plan (CPP). It is estimated that the 54.5 mpg standard would cut oil consumption by 12 billion barrels over the lives of covered vehicles and reduce CO2 emissions by six billion tons.
The focus of this article is not what the Obama established standard would mean for the environment nor whether the auto companies could feasibly meet the mpg target—although the evidence suggests the companies can. Rather, the commentary addresses three issues in need of additional attention:
By highlighting these issue areas, I am not suggesting the technology surrounding CAFE is unimportant. It is of course, and there are many good articles available. I’ve placed links to several of these sources at the end of this article. Readers may also go to my blog www.civilnotion.com and click here and here for a more detailed discussion of the auto industry’s arguments, legal and legislative issues and the corporate and climate implications of a rollback.
Understanding how we’ve gotten to where we are today in the matter of national fuel efficiency standards and where the CAFE debate may end up requires some appreciation for the history of the acts that created 54.5 mpg auto standard. It is also instructive to review something of Pruitt’s histrionics in the climate kabuki both before and after Trump’s triumphal march into Capital City.
A brief history of CAFE
The authority to set auto emission standards was initially granted to the federal government by the 1970 Clean Air Act (CAA). The actual standards were established in 1975 as part of the Energy Policy and Conservation Act (EPCA). The regulations were motivated by the 1973 oil embargo to reduce reliance on foreign oil. The passage of EPCA had very little to do with reducing the climatic impacts of auto emissions.
As the CAA was being drafted and debated, California prevailed upon Congress to include a waiver provision allowing it to set more strident requirements than those established by the EPA. The request was based on the large number of autos in the state and the unique geographic circumstances responsible for its air quality problems, e.g., the frequent trapping of polluted air in the Los Angeles basin.
California’s efforts to regulate auto emissions date back to 1966 when it became the first in the nation to regulate tailpipe emissions. The waiver provision is unique to California. Other states are ineligible to receive the waiver, but they are permitted to adopt California's standards in lieu of EPA’s.
EPCA set the goal at an average of 27.5 mpg by 1985—roughly twice the 1978 model year average. Auto/light truck fuel efficiencies stayed much the same as they were in 1978 until the Energy Independence and Security Act of 2007 (EISA) was signed by President G.W. Bush. Support for vehicle fuel efficiencies was again more a matter of supply security than environmental defense.
EISA raised the combined average of SUVs, cars and light trucks to 35 mpg by 2020. Between 2020 and 2030 expectations for further increases are phrased as the maximum possible rather than as a number. Both EPCA and EISA were, for the most part, efforts to curtail domestic oil demand for security reasons rather than to combat climate change.
Regulatory responsibility for establishing the auto emission standards is shared by three entities—EPA the National Highway Transportation and Safety Administration (NHTSA) and the California Air Resources Board (CARB). CARB is included because of the California waiver provision. It has long been the hope of the auto industry that the three offices would create a single standard to avoid balkanized markets.
In 2009, a historic agreement between the Federal Government, state regulators, and the auto industry established a national program to implement these first meaningful fuel efficiency improvements in over 30 years and the first-ever global warming pollution standards for light-duty vehicles.
The agreement came about because of the unfortunate position the auto industry found itself in during the Great Recession. The timing of all of these events coincided with the decision in the case of Massachusetts v EPA and EPA’s subsequent 2009 endangerment finding that led to the CPP.
There would never be a better time for Mr. Obama to get the auto industry to agree to an ambitious standard than when the request was coupled to a bailout. He wanted the average fleet-wide fuel efficiency to reach 54.5 mpg by 2025. They needed a bailout.
In 2009, President Obama saw in the regulations a significant opportunity to limit harmful GHG emissions. Later in his administration, he would see these emissions as big part of the calculus used to determine the nation’s emissions reduction pledge made as a signatory of the Paris Climate Accord.
Bailout today versus efficiency standards a decade down the road never presented much of a dilemma for the industry; it needed
the money, and a lot could happen in ten years. Indeed, it did!
For the auto industry, the 2016 election was a second chance to make a first impression
The election of Trump was a very pleasant surprise for the automakers. Trump’s adamancy about ridding the nation of environmental regulations resembled their own espoused beliefs regarding the 2022-2025 standards.
The new businessman-president gave the industry an opportunity to duck out of the Obama deal. Claiming the evaluative data used to justify the 54.5 mpg standard was flawed, the Alliance of Automobile Manufacturers sued the EPA in March 2017. The manufacturers asked the U.S. Court of Appeals for the District of Columbia to vacate the final regulations and provide such additional relief as may be necessary and appropriate.
Alliance members include BMW, Fiat Chrysler, Ford, GM, Jaguar-Land Rover, Mazda, Mercedes-Benz, Mitsubishi Motors, Porsche, Toyota, Volkswagen, and Volvo. The Alliance is joined in opposition by the Association of Global Automakers in opposing the standard. Global represents foreign car manufacturers like Honda, Aston Martin, Nissan, and Kia.
The case was pulled from the court docket shortly after it was filed. Trump’s executive order to reconsider the standardsplaced the regulations on ice and gave the manufacturers the opportunity to re-plead their case. The industry then wrote the Administration directly asking for a re-review of the previous administration’s finding of feasibility.
With Trump in the White House and Pruitt at EPA, Secretary of Transportation Chao and Attorney General Sessions in the critical decisionmaking positions, the industry’s carboys, and cargirls were assured of two out of the three votes necessary to lower the 54.5 mpg target. CARB, the third member of the regulatory troika, has already given notice of its intention to retain the higher standard and its willingness to defend its decision in court.
In Pruitt, The Donald trusts—for good reason.
As the attorney general of Oklahoma, Pruitt sued EPA 14 times and established a special unit in the AG’s office having the singular purpose of combatting federal overreach. For the AG, anything the Obama administration tried to do was an overreach. When Pruitt first ran for AG, he promised Oklahomans he would protect their right to drive a car different than the one Washington thinks you should drive, and to reject confiscatory environmental regulations based on junk science. (emphasis added)
The core contention of Pruitt’s EPA lawsuits was the agency's not having the authority to regulate GHGs it and the courts claimed it had. The cases included challenges to the endangerment finding and the CPP—both of which followed from the U.S. Supreme rulings.
Trump has channeled through Pruitt his promises to get rid of it [EPA] in almost every form… [and] to have [only] little tidbits left.
For his part, the Administrator has taken on the task with a high degree of glee and a near total disregard
for the climate and the Constitution.
Pruitt’s success record in court, whether as Oklahoma’s legal eagle or Trump’s hit man, has not been particularly good—neither have his losses been particularly daunting. He continues to play fast and loose with legal precepts, ethical standards and mandated administrative procedures.
Pruitt says his overriding goal as administrator, and Trump’s avenging tool is to get the Agency back-to-basics following what he calls his theory of “(EPA) originalism.” Simply stated, his intention is to go back to the original legislative authorities, e.g., the Clean Air and Waters Acts, et al., and do only what those acts specifically direct the Agency to do.
The term “EPA originalism” coined by Pruitt is an homage to conservative constructionists of the Constitution,
e.g., Justices Rehnquist, Thomas and Scalia. There are significant problems with what it stands for.
Many of the original acts direct EPA to craft the regulations necessary to achieve the law’s purpose and objectives. The bills themselves don’t contain the actual rules to be followed. Moreover, the authors of the enabling legislation are often unclear about what is intended—which is where the courts come in.
There is a long line of litigation around environmental laws and regulations, e.g., CAA and the Endangered Species Act. Resolution of these cases generally requires a court either to fill in the blank spaces or to interpret what Congress meant to do when it passed a law. Judicial interpretations are based on the original legislation, while at the same time outside of it.
The Massachusetts case, for example, dealt with whether what came out of a car’s tailpipe contributed to climate change and if EPA had the authority to regulate the emissions. A majority of the Supreme Court read between the lines of the legislation. The Court declared that Congress was intending to grant EPA the authority to regulate emissions considered a danger to living things. Congress accepted the ruling as evidenced by it not going back to amend the legislation.
The decision in Massachusetts didn’t change the language of the original legislation. The opinion travels with it as an instruction to federal agencies. The opinion speaks to what is expected of federal agencies and will be referred to in future law cases. By Pruitt’s definition, court interpretations of intent fall outside the original four corners of enabling legislation, unless Congress chooses to amend the law.
Administrator Pruitt has shown himself inconsistent in the application of his working theories. He scoffed at the Obama administration’s definition of the phrase cooperative federalism condemning it as a euphemism for EPA’s usurpation of a state’s right.
As defined by Pruitt's predecessors at EPA in the case of the CPP the term described the federal government establishing an overall emissions reduction target allowing the state to decide how best to achieve the goal. As defined by Pruitt in public speeches and court pleadings the term is a euphemism for federal usurpation of a state's right.
Pruitt has commandeered the term as Administrator for his own purposes. In responding to questions about California’s continuing to be granted a CAA waiver Pruitt stated:
Cooperative federalism doesn't mean that one state can dictate standards for the rest of the country. It is in America's best interest to have a national standard, and we look forward to partnering with all states, including California, as we work to finalize that standard.
There have been other times when Pruitt has violated his self-vaunted claim of being a states’ rightist. As Oklahoma’s AG, Pruitt was not above attacking another state’s right to regulate its internal affairs. He joined five other farm-state attorneys general in challenging a California law requiring that eggs sold there come from chickens kept in cages big enough to let them extend their wings.
Pruitt said of the law it’s almost like having a cage that’s air-conditioned, and [in which] they can do yoga. The case was thrown out of court. The judge couldn’t find a reason why it was any of Oklahoma’s business that California required more humane chicken cages.
It is possible that the Administrator simply doesn’t care for California—which would follow another well-worn Trumpian theme. The question of California’s CAFE waiver and the Administration’s intention to continue approving was put on the witness table during Pruitt’s confirmation hearing. He said in answer to the question he saw no reason why the exemption wouldn’t continue to be granted. Since the hearing, there are reasons to suspect Pruitt will find reasons for denying California’s petition.
Pruitt has already shown his colors in the transportation field with the proposed repeal of the Obama rule on glider trucks. The rule closes a loophole allowing the trucks to duck under emission rules and limits their production to 300 units annually.
The intended repeal comes in response to a petition by the major manufacturer of glider kits Fitzgerald, LLC. Gliders are heavy-duty trucks composed of a new cab and an old engine. These configurations are somewhat cheaper than a new rig.
In its petition, Fitzgerald cited research from Tennessee Tech that differed markedly from the research relied on by the Obama administration when it established the rule. There are reasons to discount Tech’s findings, however. In August 2017, the company and the university announced the opening of the Tennessee Tech Center for Intelligent Mobility at the Fitzgerald Technology Complex.
The last available estimate (2015) of the glider fleet was 10,000 units compared to 1,000 gliders in 2010—a ten-fold increase in five years. The 2015 number represents around four percent of the heavy-duty fleet.
Although a relatively small percentage of the total trucks on the road today, gliders are incredibly filthy compared to new rigs. EPA analysis in 2016 concluded that gliders produce almost three hundred thousand tons of nitrogen-oxide pollution a year, along with nearly eight thousand tons of diesel-particulate pollution. Agency scientists estimate that a single year of glider pollution causes as many as 1600 premature deaths.
Pruitt’s proposed rescission of the rule is being challenged in court by a dozen states including Maryland, North Carolina, Pennsylvania, and New Mexico. Manufacturers of new trucks like Volvo have also written EPA opposing the rollback.
The glider scenario reflects what appears to be Pruitt’s and the Administration’s standard operating procedure, i.e., use a regulated industry’s word to overturn an Obama era regulation. It does not bode well for California.
In Part 2 of the article California’s chances of being granted a waiver by the Trump administration will be discussed, as will the process and participants currently involved in the negotiations. Also, in Part 2 are two environment-saving policies that President Trump has tweeted about—whether he knows it or not.
Under less contentious circumstances a review of the 2022-2025 CAFEstandards could prove an opportunity to align the auto sector, consumers, climate defenders, state and federal governments in a successful working partnership. A partnership able capable of blending the fuel efficiency targets with other supportive public policies. The odds are long, but there is always the hope that cooler heads will prevail.
[i] In real world terms the 54.4 mpg standard equals between 35 and 40 mpg depending on whose estimate one chooses to quote.
[ii] In real world terms the 35.5 mpg standard equals between 25-27 mpg.
Image credit: Attributed to Goya (Francisco de Goya y Lucientes) (Spanish, Fuendetodos 1746–1828 Bordeaux)/public domain courtesy of Catharine Lorillard Wolfe Collection, Wolfe Fund, 1922
Joel B. Stronberg
Joel Stronberg, Esq., of The JBS Group is a veteran clean energy policy analyst with over 30 years’ experience, based in Washington, DC.