Mild Misinformation About the Gas War: Governors Unite, Automakers Compromise
On Tuesday, 23 governors signed a joint statement urging the Trump administration to reconsider the proposed rollback of Obama-era fueling regulations. Led, unsurprisingly, by California Governor Gavin Newsom, the letter suggests a “common-sense approach” to national requirements with an emphasis on rising standards.
A minor update in the gas war to be certain — and yet annoyingly framed by a large portion of the media as a victory for California when the realities are far more complicated. To be frank, we’re getting pretty tired of these lopsided takes. This whole thing is a regulatory and political quagmire… on all sides.
“Strong vehicle standards protect our communities from unnecessary air pollution and fuel costs, and they address the largest source of carbon pollution in the United States,” states the letter. “We must unite to ensure a strong, science-based national standard, in California and across the country, that increases year over year.”
If anything, the collaborative memo further showcases the fractured nature of the issue. Last time we checked, there are 50 United States of America, not 23. But that hasn’t stopped the California Air Resources Board (CARB) from suggesting the nation is on its side or co-opting automaker claims that a split market would be bad for business.
CARB chairman Mary Nichols recently said it doesn’t make sense for the auto industry to build two sets of vehicles for Americans. “We have the largest group of states ever coming together to back our position,” she told The New York Times in an interview. “The fact that we now have over half the U.S. auto market supporting us indicates that we are going to stick with the standards.”
California wants to set its own emission rules, possibly going further than the preexisting standards that the (current) EPA claims may be economically untenable. But the board’s assertion that it cannot work with the Trump administration, or vice versa, effectively encourages the split-market outcome and nullifies any claims that it is supported by most OEMs.
Here’s what actually happened: Automakers lobbied aggressively for the rollback and were greeted by an administration that was highly interested in deregulation in 2017. A proposal was developed and California, keen to maintain its own, more-ambitious emission standards, fired back by saying it wouldn’t agree to the suggested rollback and would happily go to court. Both sides have been at odds ever since, with neither willing to make any legitimate concessions.
Since then, we’ve witnessed numerous news outlets claim that automakers are more-or-less backing California in the gas war. This is an egregious oversimplification at best. While practically all manufacturers have publicly pledged their support for a singular national standard, they’re requesting compromise — a midway point between Trump’s temporary freeze (between 2020 to 2026) and the Obama-era standards that require annual decreases of about 5 percent. They’re also asking that both sides of the debate return to the table for discussions to achieve a universal standard without litigation.
Who is in the right? Well, that’s largely a matter of opinion (isn’t it always). California believes it should have the right to self-regulate (while encouraging other states to follow its lead) and is convinced that the rollback will be disastrous for the economy and environment — emitting an estimated extra 321 million to 931 million metric tons of carbon dioxide into the atmosphere by 2035. The Trump administration is similarly fearful that without the lessened fuel rules the economy could take a hit, leaving average U.S. consumers saddled with expensive green cars they already aren’t interested in buying and haven’t managed to improve practical, sales-weighted fuel economies much over the last four years. It’s also claiming that promoting strict emission requirements would encourage companies to build smaller, less-profitable vehicles that would be unsafe safe vs present-day automobiles (debatable).
Meanwhile, automakers just want to make money, avoid fines and please shareholders without a lot of hubbub. They’re happy to risk getting caught off guard by a sudden spike in fuel prices if it means they can keep building larger, high-margin cars in the interim. They’ll also keep working on electric vehicles either way, and likely have to in order to appease the global market.
Here’s the dumbest part, though. Everyone is losing their minds over this issue and the EPA and the National Highway Traffic Safety Administration haven’t even established a final set of rules… which makes the no-compromise problem even more baffling. However, they’re rumored to have a final draft in the works and it’s expected to be sent to the White House for review in a month or so. Let’s hope everyone’s reporting can remain factually measured in the meantime.
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People from Cali should be forced to stay and live with the mess they've made instead of fleeing and infecting other states.
Great article, Matt!