Largest US Oil Trade Group Sues to Block Biden's EV Push

June 13, 2024

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by Jarrett Renshaw (Reuters) The nation's largest oil trade group, which includes Exxon Mobil (XOM.N) and Chevron (CVX.N), filed a federal lawsuit on Thursday seeking to block the Biden administration's efforts to reduce planet-warming emissions from cars and light trucks and encourage electric vehicle manufacturing, the group said.

The U.S. Environmental Protection Agency issued new tailpipe emission rules in March that will force the nation's automakers to produce and sell more electric vehicles to meet the new standards. Under the rule, the administration projects up to 56% of all car sales will be electric between 2030 and 2032.

The American Petroleum Institute (API) says the EPA has exceeded its congressional authority with a regulation that will eliminate most new gas cars and traditional hybrids from the U.S. market in less than a decade.

The lawsuit was filed on Thursday in the D.C. Circuit Court of Appeals. The EPA did not immediately respond to requests for comment on the lawsuit.

The National Corn Growers Association and the American Farm Bureau Federation will join API as co-petitioners. The two groups rely on gas-powered cars to support the corn-ethanol industry.

“By approving tailpipe standards that focus exclusively on electric vehicles, EPA has ignored the proven benefits corn ethanol plays in reducing greenhouse gas emissions and combating climate change,” Minnesota farmer and National Corn Growers Association President Harold Wolle said.

In April, Republican attorneys general from 25 states on sued the EPA to block the same rules.

The regulations are among the most significant environmental rules implemented under President Joe Biden, who has made tackling climate change a key pillar of his presidency. It has also complicated his relationship with a key ally, the United Auto Workers, who have been slow to embrace the transition to electric vehicles.

In the final rule, Biden slashed its target for electric vehicle adoption amid auto worker backlash, but the watering down of the measure did little to pacify an oil industry that needs gas-powered cars to survive.

For both Biden and his Republican rival, Donald Trump, the road to the White House goes through industrial states Michigan, Wisconsin and Pennsylvania where workers fear that the EV transition threatens jobs.

Trump has repeatedly excoriated electric vehicles and promised to rollback the new tailpipe standards. READ MORE

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Excerpt from American Petroleum Institute/PR Newswire: The American Petroleum Institute (API) today filed a lawsuit in the D.C. Circuit Court of Appeals challenging the U.S. Environmental Protection Agency's (EPA) light-duty and medium-duty vehicle emissions standards for model years 2027-2032.

"Today, we are taking action to protect American consumers, U.S. manufacturing workers and our nation's hard-won energy security from this intrusive government mandate," API Senior Vice President and General Counsel Ryan Meyers said. "EPA has exceeded its congressional authority with this regulation that will eliminate most new gas cars and traditional hybrids from the U.S. market in less than a decade. We look forward to making our case in court."

The National Corn Growers Association, American Farm Bureau Federation and a group of six auto dealers representing sixteen brands and collectively operating dozens of dealerships in major markets across the country join API as co-petitioners in today's lawsuit. The auto dealers include Mickey Anderson, president and CEO of Baxter Auto Group; Thomas Maoli, president and CEO of Celebrity Motor Cars; Roger Elswick, president and CEO of Community Auto Group; Steve Gates, owner of Gates Automotive Group; Phillip Tarver, owner of Lake Charles Toyota; and Bob Loquercio, owner of Bob Loquercio Auto Group.

"By approving tailpipe standards that focus exclusively on electric vehicles, EPA has ignored the proven benefits corn ethanol plays in reducing greenhouse gas emissions and combating climate change," Minnesota farmer and National Corn Growers Association President Harold Wolle said. "While it could take decades to get enough electric vehicles on the road to significantly lower GHG emissions, ethanol is a critical and effective climate solution that is available now. We have tried to make this case to EPA to no avail, and now we will make our case in court."

"Farmers answered the call to help America be more sustainable by growing the crops necessary for renewable fuels. Now, the rug is being pulled out from underneath them with unrealistic emissions goals that put years of investment at risk," American Farm Bureau Federation President Zippy Duvall said. "Impractical standards for light-duty and medium-duty trucks will drive up the cost of farm vehicles and force farmers to rely on a charging network that does not yet exist in rural areas."

In March, the Biden administration finalized new federal vehicle emissions standards for light- and medium-duty vehicles that require 68% of new passenger vehicles and 43% of new medium-duty trucks and vans to be electric by 2032.

API represents all segments of America's natural gas and oil industry, which supports nearly 11 million U.S. jobs and is backed by a growing grassroots movement of millions of Americans. Our approximately 600 members produce, process and distribute the majority of the nation's energy, and participate in API Energy Excellence®, which is accelerating environmental and safety progress by fostering new technologies and transparent reporting. API was formed in 1919 as a standards-setting organization and has developed more than 800 standards to enhance operational and environmental safety, efficiency and sustainability. READ MORE

Excerpt from American Farm Bureau Federation: The American Farm Bureau Federation, National Corn Growers Association and six auto dealers representing 16 brands and collectively operating dozens of dealerships in major markets across the country joined the American Petroleum Institute today in filing a lawsuit in the D.C. Circuit Court of Appeals challenging the U.S. Environmental Protection Agency’s light-duty and medium-duty vehicle emissions standards for model years 2027-2032.

The groups said EPA exceeded its congressional authority with the regulation and rendered a decision that values one tool for fighting climate change over others.

“By approving tailpipe standards that focus exclusively on electric vehicles, EPA has ignored the proven benefits corn ethanol offers in reducing greenhouse gas emissions and combatting climate change,” Minnesota farmer and National Corn Growers Association President Harold Wolle said. “While it could take decades to get enough electric vehicles on the road to significantly lower GHG emissions, ethanol is a critical and effective climate solution that is available now. We have tried to make this case to EPA to no avail, and now we will make our case in court.”

The groups also noted that EPA’s standard will hurt America’s farmers.

“Farmers answered the call to help America be more sustainable by growing the crops necessary for renewable fuels. Now, the rug is being pulled out from underneath them with unrealistic emissions goals that put years of investment at risk,” American Farm Bureau Federation President Zippy Duvall said. “Impractical standards for light-duty and medium-duty trucks will drive up the cost of farm vehicles and force farmers to rely on a charging network that does not yet exist in rural areas.”

Leaders at API emphasized the impact the agency’s standards would have on American consumers.

“Today, we are taking action to protect American consumers, U.S. manufacturing workers and our nation’s hard-won energy security from this intrusive government mandate,” API Senior Vice President and General Counsel Ryan Meyers said. “EPA has exceeded its congressional authority with this regulation that will eliminate most new gas cars and traditional hybrids from the U.S. market in less than a decade. We look forward to making our case in court.”

Read the full briefing here. READ MORE

Excerpt from Detroit News: The EPA rule does not prescribe one technological solution for reducing greenhouse gas emissions. In other words, it does not ban gas-powered cars or mandate electric vehicles. It is expected, however, to push the auto industry into greater adoption of hybrids and EVs into the next decade.

The final rule, which was scaled back from its initial proposal, suggests that EVs will make up between 35% and 62% of new car sales by 2032. Electric vehicle adoption has increased significantly over the past several years, though growth has slowed recently and remains well short of the EPA's target market share.

Fully electric vehicles made up about 8.2% of new U.S. car sales last month, per data from Argonne National Laboratory. That's down from a high-water mark of 10.6% in December 2023.

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The AFPM suggested the lawsuit will probe at the "major questions" doctrine affecting federal agencies' regulatory authority and specifically challenge the EPA's broad approach to capping emissions.

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“EPA also overstepped in finalizing fleetwide average standards, rather than concrete standards that all cars and trucks must meet. Since no gas, diesel or traditional hybrid today can meet 85 grams/mile, EPA’s averaging scheme — which is already being contested for the 2023-2026 standards — is clearly meant to force EV adoption," said Chet Thompson, president and CEO of AFPM. "And the choice to ignore all other vehicle lifecycle emissions, save those from the tailpipe, puts internal combustion engine vehicles at an arbitrary disadvantage."

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More challenges — in the courts, legislatively from Congressional Republicans and politically from presumptive Republican presidential nominee Donald Trump — are likely for President Joe Biden's regulatory push aimed at curbing pollution from consumer vehicles, which account for about 16% of U.S. greenhouse gas emissions.

Last week the Biden administration finalized new standards for vehicle fuel economy. It also, in March, adjusted a key calculation for determining the fuel economy scores for EVs and finalized stricter emissions standards for heavy-duty vehicles.

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Trump, for his part, said at a rally in Las Vegas, Nevada, last weekend that he's a "big fan of electric cars" even though he has often bashed them and vowed to rescind Biden's pro-EV policies. He also echoed common consumer concerns with EVs during the rally — that they're too heavy, too expensive and do not have enough range. READ MORE