Gas War: EPA and DOT Release Final Draft of Fuel Rollback

The U.S. Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) and the Environmental Protection Agency (EPA) released their final version of the Safer Affordable Fuel-Efficient (SAFE) Vehicles Rules on Tuesday. This will establish new targets for corporate average fuel economy (CAFE) and emissions standards for passenger vehicles from the 2021-2026 model years and just in the nick of time. The document had to be completed by April 1st, in order to leave sufficient time for the coming model year.

If you’ve been following the long and arduous process that brought us here, you’ll notice the document has changed slightly from previous drafts. The rollback still enacts the straightening of emission regulations but reels them back from the lofty goals set by the Obama administration. Annual increases in fuel efficiency standards will be set at 1.5 percent through 2026. Previous drafts had the Trump administration freezing efficiency requirements at 2020 levels.

According to the announcement, and EPA head Andrew Wheeler’s own words, the rollback seeks to balance environmentalism with market realities. “Reporting on incomplete information does a genuine disservice to the American people,” Wheeler said in an emoji laden tweet on Monday. “When finalized, the SAFE rule will [increase] US fleet fuel economy, [decrease] air pollution, and make new vehicles more affordable.”

While it was unclear which outlets he was referencing, he later fingered E&E News (an environmental activism/news website) for “misleading Americans with an alternative narrative.” But the initial critiques seem largely negative, if not a bit too swift, for their authors to have possibly read the entire document. The Atlantic immediately came out with a scathing review of the proposal’s presumed impact and the metrics used to qualify the rollback. But that’s hardly new. We also had some niggles with the data the EPA originally used to rationalize its position for the rollback ourselves (especially in regard to vehicle safety), though not enough to view the entire proposal as meritless.

As we’ve noted in the past, one’s general opinion of the SAFE vehicle rules is largely informed by their political/ideological leanings. Advocates seem largely focused on prioritizing existing factory jobs and ensuring Americans have access to the sort of vehicles they already buy en masse in addition to EVs. But opponents say that the rollback risks the environmental well being of the planet and could discourage U.S. advancements in cutting-edge technologies linked to green vehicles.

California and 22 other states plan to challenge the rule. The Golden State has the strictest environmental rules in the country and wants them adopted by others, with many states happy to oblige. It also has taken umbrage with the rollback proposal as it revokes California’s authority to set its own vehicle tailpipe emissions rules. The ensuing legal battles California and supporting states have promised ( or already launched) will undoubtedly cause problems for the automotive industry. But with growing emissions fines being the likely alternative, SAFE may still be preferable to a year of uncertainty. COVID-19 has already guaranteed 2020 will be a rough patch anyway.

Likewise, the practical average fuel economy for vehicles has been mostly stagnant since MY 2014. The University of Michigan previously conducted an assessment of the United States’ sales-weighted fuel economy, showing that the practical efficiency of American cars to be more influenced by fuel pricing and the economy than regulatory measures. While the study only ran between 2008 and 2018, we’re doubtful much has changed over the last two years. Large vehicles are still incredibly popular in the United States and EVs aren’t being purchased at a level sufficient to offset that.

There are other factors to consider, however. Those opposing the rollback say it risks putting over a billion metric tons of carbon dioxide into the atmosphere by 2026 and increases the amount of money Americans spend on fuel. But advocates insist that customers will still have the choice to buy more fuel-efficient vehicles and that charging automakers billions to adhere to manufacturing less-popular vehicles places unnecessary strain on the economy. If you’re interested in some heavy reading, the 1,975-page final rule document is ready to help you burn through one day of social distancing.

Key benefits the EPA and Department of Transportation would like to highlight include a $200 billion reduction in total costs over the lifetimes of vehicles through MY 2029, $100 billion reductions in regulatory costs, $1,400 reduction of the total consumer cost of ownership per new vehicle, more than $1,000 reduction in sales price per new vehicle, and an estimated 2.7 million additional new vehicles sold. It also makes mention of safety improvements believed to come into effect as a result of the changes (e.g. 3,300 fewer crash fatalities, 46,000 fewer hospitalizations, and 397,000 fewer injuries) but we’re still not sold on how those items are being calculated.

Still, the paper is robust and dives into everything with excruciating detail. It even addresses most of the claims that have been made against the rollback during the public comment phase — including the studies the EPA used to make its determination and the impacts to the environment weighted against economic factors. Due to the vast amount of relevant information, it’ll take us a few days to get through all of it. By then, California and environmental groups will probably have issued a collective response while they begin planning their next counter move.

[Image: Siripatv/Shutterstock]