This is a Mess: EPA Begins Quest to End California's Fuel Waiver

Matt Posky
by Matt Posky

The Trump administration has enacted phase two of its plan to revise Obama-era rules designed to cut pollution from vehicle emissions. In a proposal sent to the White House Office of Management and Budget on Thursday, the Environmental Protection Agency announced its intention to rescind the California waiver that separates it from the federal standards the state uses to regulate greenhouse gas emissions from automobiles.

Since allowing California to set its own emission standards would effective split the country’s auto market, the EPA has been clear that its ideal solution would be to cut a deal with the Golden State. Agency head Scott Pruitt previously said California “shouldn’t and can’t dictate [fueling regulations] to the rest of the country,” but acted in a manner that suggested a compromised could be reached.

This was followed by a lawsuit filed by 17 U.S. states, along with the California governor’s office, California attorney general, and the California Air Resources Board (CARB), alleging that the EPA had “acted arbitrarily and capriciously” in its decision to roll back the previous administration’s decision. While the odds are good that the Trump administration wasn’t ever interested in bending to California’s more stringent pollution policies, this was likely the point of no return — squashing any hope for meaningful negotiations.

In fact, post lawsuit, it seemed all scheduled discussions between the EPA and CARB were placed on the back burner. Still, the meetings that had occurred weren’t exactly productive.

Last month, Mary Nichols, head of the California Air Resources Board, met with officials from the Transportation Department and the Environmental Protection Agency in an effort to adjust the administration’s position. The EPA, Transportation Department, and White House issued subsequent press releases calling the conversations productive, noting they were “fully supportive of an open dialogue that proceeds in an expedited manner.”

Nichols was not inclined to agree. “Sounds like a great meeting based on the WH press release. Too bad it’s not the one we attended,” she tweeted on May 24th.

With negotiations in the gutter, California and other allied states figured a lawsuit was the best way to block the EPA’s proposed changes. “This phalanx of states will defend the nation’s clean car standards to boost gas mileage and curb toxic air pollution,” explained California Governor Jerry Brown.

As for the waiver, the EPA-backed revocation is contained in a joint proposal with the National Highway Traffic Safety Administration (NHTSA) and will undergo a review by the White House before it is released for public comment. While no official decision has been made, upholding the California waiver seems an unlikely event.

According to Bloomberg, the NHTSA proposes stalling vehicle fuel economy standards at 2020 levels through 2026. In an earlier draft, this meant holding efficiency requirements at a 37-mile-per-gallon average for light-duty vehicles, instead of gradually increasing them to roughly 50 mpg by 2025 — as per the previously established mandate. The NHTSA also suggests ending California’s self-governance on fueling in a manner that’s different than the EPA. It makes the claim that the 1975 law creating the first corporate average fuel economy standards supersede any waiver that allows states to enact their own rules.

Whether you’re in favor of maintaining the Obama-era rules or the Trump administration’s rollback, the waiver isn’t the ideal solution. Automakers have repeatedly stated that they are in favor of a national standard, regardless of what it is. Bill Ford, executive chairman at Ford Motor Co., and CEO Jim Hackett even went as far as saying their companies weren’t in favor of the rollback at all. This was echoed by the Alliance of Automobile Manufacturers (AAM), which has Ford as a member, over the past two months.

However, earlier this year, automakers and automotive lobbies like the AAM pressured Washington into easing vehicle efficiency standards. So, the public image of many automotive firms may not be representative of their true intent. Let’s also remind ourselves that Ford plans to abandon its most efficient models to focus primarily on truck sales.

While it’s in every manufacturer’s best interest to remain on the cutting edge of automotive technology and provide competitive, efficient vehicles, the industry hit efficiency shortfalls in 2016 and noted it could use come flexibility on the matter. Likewise, consumers aren’t purchasing hyper-efficient models at the same rate as when gas prices were higher.

Meanwhile, the rest of the world’s developed nations seem to be pursing very aggressive fueling policies that would effectively force widespread electrification in the coming decades. Whether or not California has its say, all automakers with a global footprint will have to take this factor into account.

Frankly, this entire issue has become a total mess. Further complicating things is the EPA’s 44-member Science Advisory Board, which voted on Thursday to review the rollback proposal. The group has expressed concerns that the Environmental Protection Agency has lapsed in its duties under the Trump administration and allowed itself to be influenced by corporate-backed studies and lazy research. It has suggested the fuel proposal, among others, may not have been sufficiently justified.

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • Jeff S Jeff S on Jun 03, 2018

    If some of the US standards are higher then why not make them global standards and for some of the global standards if they are higher than US standards then include them. Why not include better standards for vehicle roof strength in a rollover? It seems that everyone has a stake in safer, cleaner, and more efficient vehicles. Manufacturers want a uniform set of standards globally that is attainable and that will spread the costs over all their units while keeping their products affordable. The consumer wants a safer, cleaner, and more efficient vehicle that is not prohibitive in price. Having standards that can be changed at the whim of a President and then changed again once another President takes office or having standards determined just by a Governmental Agency without input from the industry and its engineers is not a solution. Whatever standards are agreed upon will not please everyone but at least uniform standards would eliminate the uncertainty of what the standards will be. Hard to budget for ever changing and uncertain standards.

  • Sub-600 Sub-600 on Jun 03, 2018

    Pretty soon Democrats in California will have a new cable news outlet, MS13NBC. “Morning Jose” will be good, I can’t wait to see Mika with tattoos and a wife-beater. Kamala, Pelosi et all won’t even denounce MS-13, they’re actually afraid of losing the gang vote. Incredible. Please secede, please.

    • FIEtser FIEtser on Jun 04, 2018

      The automakers wanted this chaos, they got it. Of course, they could just stop dragging their feet on electrification and get models out, which would mean that they will be able to surpass the required levels quite well.

  • Vulpine My first pickup truck was a Mitsubishi Sport... able to out-accelerate the French Fuego turbo by Renault at the time. I really liked the brand back then because they built a model for every type of driver, including the rather famous 300/3000GT AWD sports car (a car I really wanted, but couldn't afford.)
  • Vulpine A sedan version of either car makes it no longer that car. We've already seen this with the Mustang Mach-E and almost nobody acknowledges it as a Mustang.
  • Vulpine Not just Chevy, but GM has been shooting itself in the foot for the last three decades. They've already had to be rescued once in that period, and if they keep going as they are, they will need another rescue... assuming the US govt. will willing to lose more money on them.
  • W Conrad Sedans have been fine for me, but I were getting a new car, it would be an SUV. Not only because less sedans available, but I can't see around them in my sedan!
  • Slavuta More hatchbacks