Trump administration, states headed for showdown over fuel rules

Source: By David Shepardson, Reuters • Posted: Thursday, September 7, 2017

WASHINGTON (Reuters) – The Trump administration and major U.S. states appear to be headed for a showdown over landmark rules aimed at doubling the fuel efficiency of vehicles sold in the United States.

At an Environmental Protection Agency public hearing on Wednesday on the fuel rules in Washington, California air resources board official Annette Hebert warned that the state could withdraw from a nationwide vehicle emissions program if the EPA weakens the regulations or ignores the technical record. New York state also urged the administration not to weaken the rules.

“Science doesn’t change based on election results,” Hebert said, referring to the November election of Republican President Donald Trump.

In March, Trump ordered a review of U.S. vehicle fuel-efficiency standards from model year 2022 through 2025 established under the Obama administration, and suggested he would reduce regulatory requirements.

“The assault on the American auto industry is over,” he told automakers in Michigan.

Automakers want the White House and California to reach agreement on revisions because a legal battle over the rules could result in lengthy uncertainly for the industry. They also want changes in the rules to address lower gas prices and a shift in U.S. consumer preferences to larger, less fuel-efficient vehicles.

Federal law prohibits states from setting their own vehicle emissions rules, except for California, which can seek waivers to federal policy under the Clean Air Act. Other states can choose to adopt California’s rules.

Julia Rege of Global Automakers, a group representing automakers including Toyota Motor Corp (7203.T) and Hyundai Motor Co (005380.KS), said at the hearing that automakers need national rules, and urged U.S. regulators and California to “be as actively involved in the process as before, and work to keep the national program intact.”

With just over six months before the 2025 rules must be finalized, there have been no vehicle emission talks between California, automakers and U.S. officials. The White House has held talks with automakers about the review in recent months, Reuters reported last month.

In June, New York state’s attorney general, Eric Schneiderman, and 12 other top state law enforcement officials said they would mount a court challenge to any effort to roll back vehicle emission rules.

United Auto Workers legislative director Josh Nassar said at the hearing that the national program should be continued to “prevent chaos, lawsuits, uncertainty.”

The Obama administration’s rules, negotiated with automakers in 2011, were aimed at doubling average fleet-wide fuel efficiency to about 50 miles (80 km) per gallon by 2025.

The Obama administration said the rules would save motorists $1.7 trillion in fuel costs over the life of the vehicles but cost the auto industry about $200 billion over 13 years.

A number of environmental advocates and retired military leaders at the hearing urged U.S. regulators not to weaken the standards.

Automakers want changes.

“To keep costs reasonable for buyers and maximize future production levels and fleet turnover, it is vital to clearly focus on consumer preferences and market realities,” said Chris Nevers, an official with the Alliance of Automobile Manufacturers, a trade group representing General Motors Co (GM.N), Toyota, Volkswagen AG (VOWG_p.DE) and others.

U.S. regulators disclosed earlier that they may revise fuel efficiency requirements starting with the 2021 model year, a year earlier than Trump announced in March.

Reporting by David Shepardson; Editing by Jonathan Oatis