President Donald Trump is scheduled to visit Detroit on Wednesday and, once there, will meet with the auto industry’s top brass at the American Center for Mobility — the future site of a massive testing facility for self-driving cars.
Once complete, the 335-acre Willow Run site, west of Detroit and home to a B-24 bomber assembly plant during World War II, will be one of the most-advanced automotive testing facilities in world.
{mosads}From the earliest days of his campaign, Trump has engaged in an interesting, awkward dance with the auto industry, at times attacking and, later, praising its biggest players. Many in the Motor City don’t know what to make of the new president, but his pro-business, reduced-regulation approach has been music to automakers’ ears.
On Wednesday, the administration is widely expected to take the first steps to reopen the debate on long-term greenhouse gas and light-vehicle emission standards locked into place by the Environmental Protection Agency (EPA) in the final days of the Obama administration — an 11th-hour move that rankled many in the industry.
Last month, when speaking of healthcare reform, Trump famously opined, “Nobody knew healthcare could be so complicated.” Well, in resurrecting the debate on vehicle emissions standards, the president will likely find out the auto business can be hugely complicated as well.
Currently, the National Highway Traffic Safety Administration (NHTSA) is the gatekeeper of Corporate Average Fuel Economy (CAFE) and the EPA controls fuel efficiency by limiting vehicle emissions. While the two terms are often used interchangeably, it’s not entirely accurate to do so.
CAFE standards, first enacted in 1975, grew out of a need to conserve gasoline in light of the 1973 oil embargo. The emphasis was not on reducing pollution, but, rather, reducing gasoline use. Hence, fuel economy, which measures how many miles a vehicle travels on a gallon of gas, was born. Carmakers are required by the NHTSA to meet CAFE standards. If they miss, fines are levied.
Fuel consumption can be lowered by a variety of methods, including making a vehicle smaller and lighter, which could arguably make it less safe. That is why the NHTSA governs CAFE to ensure safety is not compromised by a push to lower consumption.
Fuel efficiency, on the other hand, is regulated by the EPA and measures how well your vehicle uses fuel. By advocating improved fuel efficiency, the EPA is protecting the environment by forcing automakers to reduce greenhouse gas emissions (GHG). To meet tougher standards, light vehicles must become more efficient, i.e., burn less fuel, or pay a Gas Guzzler tax.
But the NHSTA and the EPA are not the only players in the internal-combustion game. California’s Air Resources Board (CARB), established in 1967, has repeatedly petitioned and won a waiver from the EPA for the right to enforce its own air pollution regulations, becoming the only state permitted to issue emissions standards under the federal Clean Air Act.
Under Section 177 of the Clean Air Act, other states are allowed to adopt California’s motor vehicle emissions standards; currently 13 states (representing roughly one-third of all vehicle sales in the U.S.) are following California’s lead.
Known as “Section 177 states”, they are primarily in the Northeast and Northwest — Connecticut, Delaware, Maine, Maryland, Massachusetts, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Vermont, and Washington. The District of Columbia also follows CARB’s standards.
Yes, it’s complicated: Three powerful entities all regulating essentially the same thing — how much fuel your vehicle burns — as you run your daily commute. The last time fuel economy and emission standards were in the spotlight was 2011. Then, automakers and regulators agreed to a highly-ambitious goal of 54.5 miles per gallon for cars and light-duty trucks by model year 2025.
As part of the agreement, a mid-term review of the progress being made by the industry was commissioned, and, on July 18, 2016, the EPA, NHTSA, and CARB jointly released a Draft Technical Assessment Report (TAR), the first step in the mid-term review process scheduled to wrap up in April 2018 with agreement on long-term, 2025 goals.
However, when the EPA locked in greenhouse gas and light-vehicle emission standards for the years 2022-2025 at the end of the Obama administration’s second term, it effectively shut down the review process that was created to bring all the relevant parties together.
When speaking with automakers, it’s clear that a single, national standard vetted and agreed by all parties — the NHTSA, the EPA, CARB — is the desired result. In such a scenario, the “California Waiver” would not be necessary. By resurrecting the debate and formally finishing the mid-term review already begun with the TAR, the administration could open the door to that possibility.
President Donald Trump has boldly stated his desire to reduce regulations. Finally establishing a single, federal standard would go a long way toward fulfilling that campaign pledge. Can we get there? Well, it’s complicated. But a formal review of the long-term goals, with all parties at the table, would certainly help.
Rebecca Lindland is executive analyst for Kelley Blue Book (KBB.com), a Cox Automotive™ brand. Cox Automotive is a subsidiary of Cox Enterprises. For more information, please visit https://www.coxautoinc.com/.
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