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Trump administration to freeze fuel-efficiency requirements in move likely to spur legal battle with states

California and 18 other states said Aug. 2 that they would sue to stop a Trump administration proposal to weaken Obama-era federal fuel efficiency standards. (Video: Reuters)

The Trump administration announced plans Thursday to freeze fuel-efficiency requirements for the nation’s cars and trucks through 2026 — a massive regulatory rollback likely to spur a legal battle with California and other states, as well as create potential upheaval in the nation’s automotive market.

The proposal represents an abrupt reversal of the approach during the Obama administration, when regulators argued that requiring more-fuel-efficient vehicles would improve public health, combat climate change and save consumers money without compromising safety.

President Trump’s plan also would attempt to revoke California’s long-standing legal ability to set its own, more stringent tailpipe standards and restrict the ability of other states to follow its lead.

During the Obama administration, the federal government worked with California and the auto industry to craft a uniform set of national fuel-economy standards. The White House’s latest proposal threatens to blow up that delicate compromise.

Debbie Sease, the Sierra Club’s senior lobbying and advocacy director, decried the Trump administration’s plan to freeze fuel efficiency standards through 2026. (Video: Reuters)

If California were to prevail in the likely legal clash to come, the state could set tougher standards than the federal government, leaving automakers with the prospect of manufacturing vehicles that meet different rules in different states — something the industry has said it does not want.

On Thursday, a group of 19 attorneys general joined California Attorney General Xavier Becerra (D), who vowed that the state would “use every legal tool at its disposal to defend today’s national standards and reaffirm the facts and science behind them.”

California Gov. Jerry Brown (D) was more emphatic, saying his state “will fight this stupidity in every conceivable way possible.”

State leaders from both parties have backed California’s right to set its own tailpipe standards, and 13 states and the District of Columbia have adopted California’s standards in recent years.

“The reporting that we’re reversing Obama-era fuel-efficiency standards and preempting the tougher California standards is simply false,” White House spokeswoman Sarah Huckabee Sanders said Thursday, adding that the proposal released Thursday detailed a range of possible options in addition to the administration’s preferred path. “We’re simply opening it up for a comment period, and we’ll make a final decision at the end of that.”

Bill Wehrum, the Environmental Protection Agency’s assistant administrator for the Office of Air and Radiation, said officials in Washington and California had agreed earlier that once the proposal was made public, “we’re all going to get together again and begin talking in earnest about whether we can find that middle ground.”

The Trump administration’s proposal argues that forcing automakers to increase the fuel economy of their fleets to reach an average of roughly 54 miles per gallon by 2025, as the Obama administration proposed in 2012, would make new vehicles more expensive and encourage people to drive older, less-safe cars and trucks.

The new analysis, published jointly by the National Highway Traffic Safety Administration and the EPA, estimates that halting fuel-efficiency targets at 2020 levels could save $500 billion in “societal costs,” avert thousands of highway fatalities and save an estimated $2,340 on each new automobile.

It acknowledges that easing the Obama-era standards would increase U.S. fuel consumption by roughly half a million barrels of oil per day, an increase of 2 to 3 percent, and would lead to an increase in greenhouse-gas emissions.

Public-health experts and environmental groups condemned the White House proposal, arguing that it ignores the health benefits from less-polluting cars and would lead people to spend more money at the gas pump. They said the rollback would allow more carbon dioxide to spew from the nation’s vehicles, squandering a chance to combat climate change in the transportation sector, which has emerged as the nation’s largest source of carbon dioxide emissions.

“By 2030, the pollution equivalent of this rollback will be like firing up 30 coal power plants,” Paul Cort, a lawyer with the group Earthjustice, said in a statement. “It’s a boon for big oil that ordinary Americans will pay for with their health and their wallets.”

Some automakers have expressed unease about an abrupt freezing of fuel-economy standards and the specter of having to meet different requirements in different states. Industry representatives commended the Trump administration Thursday for putting out multiple options for public comment but stressed that they continue to support fuel-economy increases.

“With today’s release of the Administration’s proposals, it’s time for substantive negotiations to begin,” Gloria Bergquist, spokeswoman for the Alliance of Automobile Manufacturers, said in a statement. “We urge California and the federal government to find a common-sense solution that sets continued increases in vehicle efficiency standards while also meeting the needs of America’s drivers.”

Ross Eisenberg, vice president for energy and resources policy at the National Association of Manufacturers, said that while the industry wanted to revisit the Obama-era standards, “ultimately, manufacturers need a single national program that provides regulatory certainty and maintains vehicle affordability.”

Karl Brauer, executive publisher of Autotrader and Kelley Blue Book, said in a statement that the unpredictable outcome of the legal and regulatory wrangling ahead “will keep courtrooms busy and boardrooms nervous for the foreseeable future.”

The Trump administration’s push to ease fuel-economy standards got a warm reception from several Republican lawmakers and oil and gas interests.

“What started as a mandate in the mid-1970’s to reduce foreign imports of oil morphed into a costly and unworkable environmental regulation thanks to bureaucrats in the previous administration and in Sacramento,” Thomas J. Pyle, president of the free-market American Energy Alliance advocacy group, said in a statement. “President Trump should be commended for standing up for American consumers by reducing the regulatory burden placed unnecessarily on automakers.”

In recent years, as gas prices remained low, Americans have shown a clear preference for larger vehicles. Data shows that Ford’s F-series trucks are the best-selling vehicles in the United States, followed by Chevrolet and Ram pickups and a collection of SUVs. Further down the list are smaller vehicles such as the Honda Civic and Toyota Corolla.

Trump administration officials fought for weeks behind the scenes over the details of how to relax Obama-era standards. Top officials at the Transportation Department and the EPA clashed over whether the White House’s justifications for the new policy can stand up to legal scrutiny.

In one recent internal presentation, part of which was obtained by The Washington Post, officials at the EPA’s Office of Transportation and Air Quality warned that the proposal at that point contained “a wide range of errors, use of outdated data, and unsupported assumptions.”

Ultimately, the two agencies published Thursday’s proposal jointly, and acting EPA administrator Andrew Wheeler publicly defended the proposal this week, including during testimony before the Senate Environment and Public Works Committee.

Over thousands of pages, the administration proposal argues that the costs of meeting federal mileage requirements over the next few years would boost the sticker price of vehicles, prompting people to continue driving older cars and trucks rather than buying newer, more efficient ones. That would in turn increase the risk of accidents, it says.

EPA officials questioned some of those estimates, as well as the Transportation Department’s idea that officials could block California from imposing its own, tougher vehicle tailpipe standards on the grounds that a 1975 energy law reserved that right for the federal government.

One key proponent of the new plan is Deputy Transportation Secretary Jeffrey Rosen, who oversees the department’s deregulatory efforts. NHTSA Deputy Administrator Heidi King also helped scale back the fuel-efficiency regulations, which were among the Obama administration’s most significant climate-change initiatives.

“The unrealistic goals set in 2012 have to change to reflect the information available to us now,” King told reporters Thursday. Responding to a critique of the proposal’s foundations from some within the EPA, King said she encourages a “rigorous review” of the numbers used in the plan and noted that “it’s been a great pleasure” working with EPA and Transportation Department experts.

The administration argues that its proposal to freeze the fleetwide average of 37 miles per gallon in 2020 would prevent roughly 12,700 traffic fatalities in vehicles built through model year 2029. But some experts said those numbers appeared based on difficult-to-decipher analytical approaches.

Trump’s sparring over trade with Mexico, Canada and much of the rest of the world, his steel and aluminum tariffs and his threat to impose 25 percent auto-related tariffs have exacerbated automakers’ concerns. The automobile tariffs alone could add thousands of dollars to the price of a car, General Motors told regulators this month.

In 2016, the EPA estimated that complying with the tighter tailpipe standards would cost roughly $900 per car by 2025, with NHTSA putting the figure at $1,200. Two years later, Trump officials argue that keeping the Obama-era standards could raise costs by more than $2,300 per vehicle.

Last year, 37,150 people died on U.S. roads, and several factors contributed far more to that toll than any potential impact related to tailpipe regulations. More than half of all road deaths were connected to drunken driving or speeding, according to the Centers for Disease Control and Prevention.

The Trump administration said Thursday that it will accept public comment on its latest proposal for 60 days. NHTSA and the EPA plan to hold public hearings in Washington, Detroit and Los Angeles.

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