Wednesday, November 16, 2011

EPA & DOT Release New CAFE Proposed Rules

Nov 16: U.S. EPA and the U.S. Department of Transportation (DOT) formally unveiled their joint proposal to set stronger fuel economy and greenhouse gas pollution standards for model year 2017-2025 passenger cars and light trucks [See WIMS 7/29/11]. Cars, SUVs, minivans, and pickup trucks are currently responsible for nearly 60 percent of U.S. transportation-related petroleum use and greenhouse gas (GHG) emissions. On September 27, the agencies announced they were delaying the issuance of the Notice of Proposed Rulemaking which was scheduled for the end of September 2011. At that time the said they expected to have a proposal by mid-November [See WIMS 9/28/11].

    A release from the agencies indicated that the announcement is "the latest in a series of executive actions the Obama Administration is taking to strengthen the economy and move the country forward because we can't wait for Congressional Republicans to act." EPA said that when combined with other historic steps the administration has taken to increase energy efficiency, this proposal will save Americans over $1.7 trillion at the pump, nearly $8,000 per vehicle by 2025. These combined actions also will reduce America's dependence on oil by an estimated 12 billion barrels, and, by 2025, reduce oil consumption by 2.2 million barrels per day -- enough to offset almost a quarter of the current level of our foreign oil imports. Taken together, the actions will also slash 6 billion metric tons in GHG emissions over the life of the programs. The proposed standards alone will slash oil consumption by 4 billion barrels and cut 2 billion metric tons of GHG pollution over the lifetimes of the vehicles sold in those years. 

    U.S. Transportation Secretary Ray LaHood said, "These unprecedented standards are a remarkable leap forward in improving fuel efficiency, strengthening national security by reducing our dependence on oil, and protecting our climate for generations to come. We expect this program will not only save consumers money, it will ensure automakers have the regulatory certainty they need to make key decisions that create jobs and invest in the future. We are pleased that we've been able to work with the auto industry, the states, and leaders in the environmental and labor communities to move toward even tougher standards for the second phase of the president's national program to improve fuel economy and reduce pollution."

    EPA Administrator Lisa Jackson said, "By setting a course for steady improvements in fuel economy over the long term, the Obama Administration is ensuring that American car buyers have their choice of the most efficient vehicles ever produced in our country. That will save them money, reduce our nation's oil consumption and cut harmful emissions in the air we breathe. This is an important addition to the landmark clean cars program that President Obama initiated to establish fuel economy standards more than two years ago. The progress we made with the help of the auto industry, the environmental community, consumer groups and others will be expanded upon in the years to come -- benefitting the health, the environment and the economy for the American people."

    The proposed program for model year 2017-2025 passenger cars and trucks is expected to require increases in fuel efficiency equivalent to 54.5 mpg if all reductions were made through fuel economy improvements. These improvements would save consumers an average of up to $6,600 in fuel costs over the lifetime of a model year 2025 vehicle for a net lifetime savings of $4,400 after factoring in related increases in vehicle cost. Overall, the net benefit to society from this rule would total more than $420 billion over the lifetime of the vehicles sold in model year 2017-2025.

    Today's action builds on the success of the first phase of the Obama Administration's national program(2012-2016), which will raise fuel efficiency equivalent to 35.5 mpg by 2016 and result in an average light vehicle tailpipe CO2 level of 250 grams per mile. These standards are already in effect and saving consumers money at the pump now. Combined with 2011 fuel economy standards and the standards in effect for 2012-2016, today's proposal represents the most significant Federal action ever taken to reduce greenhouse gas emissions and improve fuel economy. Taken together, these actions would reduce greenhouse gas emissions by half and result in model year 2025 light-duty vehicles with nearly double the fuel economy of model year 2010 vehicles.

    The national policy on fuel economy standards and greenhouse gas emissions created by DOT and EPA provides regulatory certainty and flexibility that reduces the cost of compliance for auto manufacturers while reducing oil consumption and harmful air pollution. By continuing the national program developed for model year 2012-2016 vehicles, EPA and DOT have designed a proposal that allows manufacturers to keep producing a single, national fleet of passenger cars and light trucks that satisfies all federal and California standards. It also ensures that consumers will continue to enjoy a full range of vehicle choices with performance, utility and safety features that meet their individual needs.

    The standards will rely on innovative technologies that are expected to spur economic growth and create high-quality jobs across the country. Major auto manufacturers are already heavily invested in developing advanced technologies that can significantly reduce fuel use and greenhouse gas emissions beyond the existing model year 2012-2016 standards. In addition, a wide range of technologies are currently available for automakers to meet the new standards, including advanced gasoline engines and transmissions, vehicle weight reduction, lower tire rolling resistance, improvements in aerodynamics, diesel engines, more efficient accessories, and improvements in air conditioning systems. The standards should also spur manufacturers to increasingly explore electric technologies such as start/stop, hybrids, plug-in hybrids, and electric vehicles. The model year 2017-2025 proposal includes a number of incentive programs to encourage early adoption and introduction of "game changing" advanced technologies, such as hybridization for pickup trucks.

    The proposal released today follows President Obama's announcement in July that the administration and 13 major automakers representing more than 90 percent of all vehicles sold in the U.S. have agreed to build on the first phase of the national vehicle program. EPA and DOT worked closely with a broad range of stakeholders to develop the proposal -- including manufacturers, the United Auto Workers, the State of California, and consumer and environmental groups.

    There will be an opportunity for the public to comment on the proposal for 60 days after it is published in the Federal Register. In addition, DOT and EPA plan to hold several public hearings around the country to allow further public input. California plans to issue its proposal for model year 2017-2025 vehicle greenhouse gas standards on December 7 and will finalize its standards in January.
    The National Automobile Dealers Association (NADA) issued a statement saying, "America's auto dealers support continuous improvement in the fuel economy of the fleet of vehicles that drive on the nation's roads. To this end, we are concerned that adding about $3,000 to the average cost of a car will price millions of Americans out of the market, which could reduce fleet turnover and delay environmental gains. This regulation gambles that millions of consumers will be able to afford thousands more for generally smaller, more expensive vehicles that may not meet their needs. This policy is contrary to what most consumers are actually buying today, despite the wide availability of more fuel efficient models. We need fuel economy policies that encourage the sales of fuel efficient vehicles, instead of risky mandates that frustrate consumer demand and depress fleet turnover.  The number one question that must be asked is: How many people will no longer be able to afford a new vehicle if the government raises the price of a new car by about $3,000? We will analyze the rule with this principal question in mind. We urge Congress to do the same."
    President and CEO Michael Stanton of the Association of Global Automakers, representing international motor vehicle manufacturers, issued a statement saying, "Global Automakers and its members have always endorsed a comprehensive and harmonized national approach to reducing GHG emissions and improve fuel economy. We have been working diligently with the Environmental Protection Agency, Department of Transportation and the California Air Resources Board to create a program that meets our national environmental and energy objectives while providing manufacturers the needed flexibility and lead-time to design and build advanced technology vehicles so they can continue to provide consumers with a full range of vehicle choices. Though we need time to review the details of the proposed rule, we are pleased that the agencies have aligned their processes to eliminate redundancies and coordinate schedules to create one harmonized national program."
    Mitch Bainwol, President of the Auto Alliance, representing both U.S. and foreign manufacturers said, "This proposal continues the approach of establishing a single national program for fuel economy and greenhouse gas emissions, which is the right overall direction. The proposed regulations present aggressive targets, and the Administration must consider that technology break-throughs will be required and consumers will need to buy our most energy-efficient technologies in very large numbers to meet the goals."
    Michelle Robinson, director of the Union of Concerned Scientists (UCS) Clean Vehicles Program said, "If you love going to the gas station, you are going to hate these standards. President Obama continues to take the burden of America's oil addiction seriously. The benefits we'll see show how essential the Clean Air Act is for protecting American's health. Seven years ago, California used its Clean Air Act authority to set the nation's first vehicle global warming pollution standards. Now, President Obama has used his combined authority on fuel efficiency and auto pollution to pave the way for cleaner cars through 2025."
    Derek Walker, Environmental Defense Fund (EDF) Director of Strategic Climate Initiatives said, "Fortunately, when it comes to climate and energy policies, what happens in California doesn't stay in California. The Golden State's leadership charting the path to cleaner cars that will make our nation more prosperous and secure have led to one of President Obama's greatest energy and environmental successes. Consumers and businesses are rightly concerned about our dependence on imported oil and rising energy prices. These standards will address those concerns, save them money and create a healthier environment."
    EDF notes that California and 13 other states -- Arizona, Connecticut, Maine, Maryland, Massachusetts, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Vermont, and Washington -- adopted state clean car standards that provided the foundation for the national emission standards.

    Access a release from EPA & DOT (click here). Access the NHTSA and EPA's notice of proposed rulemaking (click here). Access more information from EPA (click here). Access more information from NHTSA (click here). Access a release from NADA (click here). Access a release from Global Automakers (click here). Access a statement from the Auto Alliance (click here, posted soon). Access a lengthy release from UCS with more information (click here). Access a release from EDF with more information (click here).  [#Energy/CAFE, #Climate, #Air]