How Trump Will Go after California's Auto GHG Authority

April 30, 2018

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by Kelsey Tamborrino (Politico's Morning Energy) The Trump administration plans to argue that California does not have the authority to enforce stringent greenhouse gas emissions standards for cars, despite the Obama administration's 2009 waiver, according to a source familiar with a forthcoming proposed regulation. The draft, which is a National Highway Traffic Safety Administration document but also names EPA, includes eight regulatory options for future CAFE standards. The preferred option would freeze the standards at model year 2020 levels through at least model year 2026 vehicles, erasing some of the biggest climate-related policies of the Obama administration, according to the source.

As part of that freeze, the document goes after California's authority to enforce its own more stringent regulations within its borders and in a dozen other states that follow its rules. The proposal argues that the 1975 law that created NHTSA's CAFE program, the Energy Policy and Conservation Act, preempts the states from creating their own fuel economy standards, and that should include the California GHG standards.

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Their two cents: Mary Nichols, the chair of California's Air Resources Board, took to Twitter on Friday to poke EPA Administrator Scott Pruitt about his Thursday testimony about negotiations with California on the auto rules.

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GOP California Rep. Ken Calvert , who oversees EPA funding atop a House Appropriations subcommittee, also responded to the notion EPA is poised to challenge his state's waiver late Friday: "Like many Californians from across the political spectrum, I support our state's long-standing waiver and I have shared my views with Administrator Pruitt on many occasions," he said in a statement to ME.

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IN SOLIDARITY: A host of Senate Democrats, lead by Sen. Ed Markey, piled on their support for current emissions standards and pledged to defend them against any effort by the Trump administration to undo them.

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Read the letter here.

FUELS UNITED WILL NEVER BE DEFEATED: Will Gang Grain and the oil industry link arms against a common foe? The Fuels Institute and an automakers group made presentations Friday to a broad swath of ethanol and oil interests, as well as staff for Sens. Chuck Grassley, Jim Inhofe, Mitch McConnell, John Cornyn, Joni Ernst and Deb Fischer and representatives from the American Petroleum Institute and the Renewable Fuels Association, according to a Republican congressional aide. The meeting was organized by Cornyn, and focused on the possibility of setting a national octane standard to 95, well above than the typical unleaded fuel of 87 or 88 octane.

As ME followers are keenly aware , these groups have been battling over the Renewable Fuel Standard for years, but this meeting was not directly about that program. Instead it focused on octane as a possible common ground: Automakers are looking at high compression engines that burn high octane fuels as the best way to meet higher mileage standards. Ethanol producers believe they have the best source of octane on the market (though they want to raise octane levels even higher than 95). "The common threat - EVs - was identified and all the stakeholders are individually assessing what the areas of compromise are among them to address it," an oil industry source who attended the meeting told ME. "I think it fair to say that the refiners and autos were quicker to see this than the ethanol folks, but the latter now get it and seem to be genuinely interested in talking a national octane standard. This by itself is some progress."

How about a bill? A different Republican aide told Pro's Anthony Adragna and Eric Wolff on Friday that there was talk at the meeting of pushing a bill this Congress. John Eichberger, executive director of the nonprofit Fuels Institute, said his group does not do advocacy and did not push for any legislation. He told ME he presented some early data from a research project whose results will be out in June. "What is absolutely clear is it will take many years before electric vehicles become a substantial part of the transportation system, and in that time frame improving the efficiency of internal combustion engines is in the best interest of consumers," he told ME in an email. READ MORE

Trump's First Salvo in Push to Weaken Vehicle Standards Struck Down by Court (Inside Climate News)

Ethanol Blog: Ethanol Groups Weigh in on California's Low-Carbon Fuel Standard (DTN The Progressive Farmer)

RFA Urges CARB to Use More Ethanol (Energy.Agwired.com)

Trump and California are set to collide head-on over fuel standards (Los Angeles Times)

Trump to Propose Freezing Auto Standards at 2020 Levels, Source Says (Bloomberg)

U.S. lawmakers seek details from EPA chief on fuel economy rule changes (Reuters)

Trump administration drafts plan to unravel Obama-era fuel-efficiency rules, challenge California (The Washington Post)

Excerpt from Inside Climate News: A federal appeals court in New York on Monday blocked the Trump administration's efforts to delay penalties against automakers that fail to meet carbon-cutting emissions standards in new cars.

A three-judge panel of the United States Court of Appeals for the 2nd Circuit threw out a decision, announced by the Department of Transportation last July, to postpone increases in the penalties that automakers are required to pay if they don't meet efficiency standards under the Corporate Average Fuel Economy (CAFE) regulations.

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In the final days of the Obama administration, the department increased the penalty by nearly 150 percent for exceeding the emissions standards—a hefty, inflation-matching bump intended to prod automakers to meet the standards for newer model years.

As the increased penalties were set to kick in, the Trump administration announced in July it was delaying the effective date. It said then that companies had paid more than $890 million in CAFE penalties. Five states—New York, California, Maryland, Pennsylvania and Vermont—and environmental groups sued, saying the administration had failed to provide adequate public notice, as required by law, and violated another federal law requiring civil penalties to rise with inflation.

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Earlier this month, the Environmental Protection Agency issued a "final determination" that it would revise the standards, saying the Obama administration's decision "didn't comport with reality."

Though it's unclear what any new standards might look like, the move puts the administration at odds with several states, notably California. Under a special waiver, California is allowed to maintain more stringent standards than those required by the federal government. The state—and others that typically follow its lead—has said it intends to maintain the existing standards. READ MORE

Excerpts from DTN The Progressive Farmer: "Ethanol is also a superior low-carbon source of high-octane fuel which can help automakers meet tailpipe emission and fuel economy standards," ACE (American Coalition for Ethanol) writes. "We urge CARB to consider the far-reaching low-carbon high-octane advantages higher ethanol blends could provide in helping the state fulfill LCFS implementation and broader goals to reduce petroleum use and reduce emissions."

Currently, E10 is the only ethanol blend other than E85, allowed into the California market. ACE said, however, scientists at Argonne National Laboratory found the use of E25 and E40 cuts GHG emissions by 4% and 8%, respectively.

Argonne concluded, "The analysis shows that ethanol can be a major enabler in producing high-octane fuel and E25 and E40 can result in additional reductions in well-to-wheel GHG emissions compared to regular E10 gasoline."

CARB is considering an update to the LCFS to require fuel carbon intensity reduction to 20% below 2010 levels.

The Renewable Fuels Association said in comments to CARB that data shows ethanol is responsible for reducing GHG emissions by 14.5 million metric tons, or 45% of the total reductions achieved in the LCFS to date.

CARB released data this week that shows ethanol used in California has an average carbon intensity that is 31% lower than gasoline. READ MORE

Excerpts from Los Angeles Times: "I find this to be an outrageous intrusion," Sen. Dianne Feinstein (D-Calif.) said in an email.

"California has its own authority under the Clean Air Act to continue the tough standards that are in place today. We will take this fight to the courts if the Trump administration challenges that authority," she said. "This is going to have a real impact both on global warming and the air we breathe. It's one bad move."

Feinstein has successfully pushed in the Senate for bipartisan legislation for aggressive mileage targets.

Under federal law, California has long been allowed to set tougher tailpipe emission rules than the federal government. Other states are allowed to adopt California's standards, and a dozen currently do. Those states account for more than a third of cars and trucks in the country.

The administration proposal would revoke the ability of any state, including California, to impose rules different from those made in Washington.

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Environmental and consumer advocacy groups strenuously dispute Pruitt's characterization of the program, pointing to record car sales and increased automobile safety. Officials in California and the other states eager to keep the existing mileage targets in place point to thousands of pages of federal and state data and analysis confirming the targets are within reach and would benefit the economy.

They say the uneasiness with the EPA proposal even among auto companies should give the administration pause.

"It isn't every century we and the auto companies agree on anything," said Dan Becker, director of the Safe Climate Campaign. "But we appear to agree that what they are proposing here is a dreadful set of ideas."

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California has been in this fight with the federal government before, and it has prevailed. The administration of George W. Bush also resisted aggressive mileage targets the state sought. But the courts ultimately ruled that federal law required such action to combat climate change.

Testifying before Congress on Thursday, Pruitt assured lawmakers he does not plan to revoke the special waiver California was granted by the EPA that allows the state to set its own mileage targets.

What he didn't say is that the proposal the EPA and NHSTA are poised to deliver to the White House would sidestep the waiver by relying on a different set of legal authorities to block California's plans.

The administration's legal case rests on the law, passed in the 1970s amid the OPEC oil embargo, that first created the country's fuel economy standards.

Administration lawyers argue that the law gives NHTSA power to preempt California's authority to set its own rules. NHTSA's authority, according to the draft plan, supersedes the waiver the EPA has given California. READ MORE