On Tuesday, March 7th, the Trump administration will reverse the Obama administration’s Final Determination requiring automakers meet an average 54.5 miles per gallon by 2025, according to Inside EPA.
An alliance of manufacturers had urged protection for fuel inefficiency in a letter to Trump EPA administrator Scott Pruitt in February, and the industry request is one of hundreds of industry-requested rollbacks in Obama rules that are now on the chopping block, according to the New York Times.
Image Credit: Econobrowser, Trends in oil supply and demand/EIA data
Claiming that the Obama administration greenhouse gas standards were too tough, 18 automakers — including Ford, Fiat Chrysler, and General Motors, as well as the North American branches of Volkswagen, Toyota, Honda, Nissan, and Hyundai — said they would not be able to manufacture autos with the required efficiency by the 2025 deadline.
In their February 21 letter, the alliance of auto manufacturers complained about the “technological and economic feasibility of these standards” and their supposed cost, cited as $200 billion (among all automakers from 2012 to 2025). They asked for the EPA to reverse the January 17th Final Determination codifying the rule, and to reinstate the original mid-2018 Review Date.
On Friday, a consortium of environmental groups responded — referencing the innovation that has cut carbon pollution from fuel use and the 700,000 jobs added to meet the new requirements — in a letter urging Pruitt not to roll back January’s Final Determination:
“Automakers can comply with the standards with available, cost-effective technology. Manufacturers are bringing new conventional technologies to the market on time and at a faster pace and lower cost than the Agency projected in the 2012 rulemaking. In fact, EPA’s analysis shows that automakers could actually surpass the 2025 standards, but the Agency decided to forego strengthening the standards in favor of enhancing the certainty needed to promote industry investment. The Agency considered the full range of in-depth technical, scientific and socioeconomic analyses, including those provided by industry stakeholders.”
Obama’s Science-Based EPA Final Determination
The original 2009 deal between the Obama EPA and automakers, published in 2011, would have had a mid-term review of the standards in mid-2018.
But in December of 2016, after a thorough multi-year process of review and consultation, as well as independent technical analysis and public comment from a wide range of stakeholders (including suppliers and auto manufacturers themselves), the EPA concluded that no revision was needed.
The EPA’s January Final Determination was based on the mid-2016 Technical Assessment Report (TAR) based on extensive technical and economic analysis by three government agencies utilizing the most current data available, including teardown studies to estimate costs, extensive vehicle testing to assess the wide variety of technologies deployable to achieve the standards, and full-vehicle simulation to project forward even further advances.
Image Credit: haymarketrebel via Flickr (some rights reserved)
California Auto Rules Also in the Crosshairs
According to the Washington Post, individuals briefed on the matter say that the new administration is concurrently considering an executive order that would revoke California’s ability to set higher fuel efficiency standards for autos.
California has long had a federal waiver giving it the ability to choose higher standards under the Clean Air Act, and with its very long-running Democratic legislative majority, the state has required them.
Many of California’s more rigorous environmental standards have been adopted by other states. In this case, California ZEV standards have been adopted by Connecticut, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island, and Vermont.
These require that automakers sell at least 4.5% ZEVs (Zero Emission Vehicles) by 2018, rising to 22% in 2025. With nine key markets following California’s higher standards, the California waiver presents a tempting target for makers of fuel-inefficient autos.
Presumably, industry is worried that, if enough states follow California standards, automakers sticking with inefficient models could be shut out of enough major markets that it might be actually worse than the 54.5 mile per gallon standard.
California Air Resources Board (CARB) Chair Mary Nichols said California will fight the automakers’ attempts to roll back the California waiver. California has already hired former Attorney General Eric Holder to oppose the Trump administration on industry deregulation, including environment rulings such as this one.
Image Credit: Wikimedia
But Won’t it Take Competence to Gut Efficiency?
The administration aims to reduce auto efficiency, which would increase US oil demand, raising oil prices. More efficient autos — both in the US and globally — is part of the the cause of reduced oil demand.
But would Pruitt’s EPA even be able to carry out any given Trump policy, including this one? While “drowning the government in the bathtub” has long been a GOP priority, in practice, that’s likely to result in less ability to get work done. Any organization is less effective after you’ve fired the help.
EPA staffers had already protested the appointment of Scott Pruitt to head an agency that he had repeatedly sued as Oklahoma Attorney General, sheltering legacy fossil fuel interests from meeting Clean Air and Clean Water protections.
The Trump administration has proposed a budget that guts 25% of the EPA budget of just $6 billion, as part of finding $54 billion to build up the bloated defense budget (already larger than the next 7–8 countries’ defense budgets combined). Trump’s budget would cut EPA personnel by 20%.
According to an EPA employee communication on Thursday, EPA’s current budget will run out in April of 2017 unless there is a Continuing Resolution to continue the current level of funding until the 2018 budget begins.
Image Credit: Kremlin — New Trump Secretary of State Rex Tillerson meets with Rosneft in 2012 (as CEO of ExxonMobil)
Certainly Trump’s Handlers Need More Oil Demand
Rolling back US fuel efficiency would be in the interest of the Trump’s apparent Russian handlers, as higher US fuel efficiency is among the causes for the drop in oil prices that have so decimated petro-states, with Russia among the hardest hit. The US is the #1 global oil customer, and fuel use has never recovered from 2008.
Low oil demand pushed oil prices to record lows over the last few years. Record-low oil prices have weakened petro-states like Russia, which was found by US intelligence agencies to have used a Soviet-era psyops campaign to install Trump as US president.
It was record-low oil prices that pushed Russia “strongman” Vladimir Putin to occupy at least two of the four Russian neighbors he’s invaded — to protect oil pipeline and supply routes. Putin risked costly sanctions, which put an additional squeeze on this same small group of Putin-connected Russian billionaires that appear to have assisted Trump to the position he now holds. So the Trump administration will have to increase oil demand if it is to please his Russian connections.
But Putin may have gambled on Trump being a more effective strongman than he has proved to be so far.
Related:
Will Autocracies Fall As The Oil Age Ends?
Who Benefits If Russian Oil Sanctions End?
Why Putin Wants A Trump Kleptocracy
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