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EPA Revokes Interim Fuel Economy Increases

April 12, 2018

The Environmental Protection Agency is revoking standards requiring cars and light trucks sold in the United States to achieve an average of more than 50 miles per gallon by 2025.

U.S. Environmental Protection Agency (EPA) Administrator Scott Pruitt announced EPA was revoking standards requiring cars and light trucks sold in the United States to achieve an average of more than 50 miles per gallon by 2025.

EPA approved the current emission standards in December 2016, just before President Barack Obama left office and two years before the previous standards were scheduled to be reviewed.

Studies show the standard imposed in late 2016 would substantially increase the price of cars and change the composition of the nation’s automobile and light truck fleet for years.

‘Politically Charged Expediency’

In the April 2 press release announcing EPA was halting the tightening of fuel economy standards, Pruitt said the Obama administration had short-circuited the process for setting fuel economy standards for political reasons.

“The Obama administration’s determination was wrong,” Pruitt said in a press release. “Obama’s EPA cut the Midterm Evaluation process short with politically charged expediency, made assumptions about the standards that didn’t comport with reality, and set the standards too high.”

Pruitt said EPA would work with the National Highway Traffic Safety Administration to establish a new standard that “allows auto manufacturers to make cars that people both want and can afford—while still expanding environmental and safety benefits of newer cars.”

Automakers Support Change

The Alliance of Automobile Manufacturers (AAM), whose members produce 70 percent of the cars and light trucks sold in the United States, endorsed Pruitt’s decision.

Gloria Bergquist, AAM’s vice president of public affairs, said in a press statement her organization’s members, which include Ford, GM, FCA, Mazda, Toyota, and Volvo, among others, agreed with Pruitt’s decision to revise the interim standards.

“[AAM’s members] support the administration for pursuing a data-driven effort and a single national program as it works to finalize future standards,” Bergquist’s statement said. “We appreciate that the administration is working to find a way to both increase fuel economy standards and keep new vehicles affordable to more Americans.”

Pruitt said EPA had consulted with automakers before deciding to revise the standards.

Failed Government Interventions

As gas prices declined and the sale of pickup trucks and SUVs accelerated, car and truck fuel economy improvements have slowed since 2013.

In EPA’s press release, Pruitt said Obama’s EPA had been “optimistic in its assumptions and projections” about the availability of technology to meet the new standards, and he suggested if new, cleaner vehicles become too expensive, consumers will hold onto older cars, which will decrease collective fuel efficiency and result in increased emissions.

Federal fuel efficiency standards failed to reduce fuel imports as originally intended and are now unnecessary because of increased domestic oil and gas production, says Steve Goreham, executive director of the Climate Science Coalition of America and a policy advisor to The Heartland Institute, which publishes Environment & Climate News.

“The Corporate Average Fuel Economy (CAFE) standards were originally established by the Energy Policy and Conservation Act of 1975, passed in the middle of the 1970s oil crisis to try to reduce imports of foreign oil,” Goreham said. “But CAFE mileage standards failed to solve this problem, as imports of petroleum use rose from about 20 percent of domestic use in 1970 to 60 percent by 2005.

“By contrast, over the last decade, the fracking revolution boosted domestic oil production and caused imports of foreign oil to drop from 60 percent down to 20 percent again, with further declines ahead,” said Goreham. “The fracking revolution made CAFE standards obsolete, and as a result the standards should be relaxed and eventually eliminated.”

California Dreamin’

Subject to an EPA waiver, the 1970 Clean Air Act gave California the authority to set its own emissions limits. California has vowed to sue to halt EPA’s fuel economy reversal or use its waiver to maintain the Obama EPA’s standard for vehicles sold in California. This is important because twelve other states, representing approximately a third of the U.S. auto market, follow California’s standards.

In congressional testimony in 2017, Pruitt said EPA would not commit to maintaining California’s waiver to set separate emission standards. Apparently anticipating California’s reaction, EPA’s press release said the state’s waiver “is still being reexamined by EPA under Administrator Pruitt’s leadership.”

“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,” Pruitt said in the press release.

Conflict Between Law, Waiver

Marlo Lewis, a senior fellow with the Competitive Enterprise Institute, says EPA should never have allowed California to limit automobile emissions.

“EPA should never have granted California a waiver to implement its greenhouse gas motor vehicle law in the first place,” said Lewis. “California’s greenhouse gas emission standards for vehicles implicitly and substantially regulate fuel economy, because limiting car and truck carbon dioxide emissions requires using fuel-saving technologies or strategies, like weight reduction, that reduce the amount of fuel consumed per mile.

“However, the 1975 Energy Policy and Conservation Act, the nation’s original fuel economy statute, specifically preempts states from adopting or enforcing laws or regulations ‘related to’ fuel economy standards,” Lewis said.

Lewis says EPA’s decision to halt mandatory fuel economy increases is good for consumers.

“EPA’s announcement is good news,” said Lewis. “Fuel economy mandates limit consumer choice, add thousands of dollars to the cost of new vehicles, and result in car makers producing vehicles that are less safe than they otherwise would be.

“Congress should end the reign of bureaucrats and put consumers back in charge of telling automakers what kinds of cars and trucks to produce,” Lewis said.

H. Sterling Burnett, Ph.D. (hsburnett@heartland.org) is a senior fellow at The Heartland Institute.

Author
H. Sterling Burnett, Ph.D. is a Heartland senior fellow on environmental policy and the managing editor of Environment & Climate News.
hsburnett@heartland.org

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