OVERNIGHT ENERGY: States, green groups sue Trump over rollback of Obama fuel efficiency regulations | Oil lobby says low prices still hurting industry | Conservative group wants Trump to go further in rolling back key environmental law

HAPPY WEDNESDAY! Welcome to Overnight Energy, The Hill’s roundup of the latest energy and environment news. Please send tips and comments to Rebecca Beitsch at rbeitsch@digital-stage.thehill.com. Follow her on Twitter: @rebeccabeitsch. Reach Rachel Frazin at rfrazin@digital-stage.thehill.com or follow her on Twitter: @RachelFrazin.

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IT SUITS YOU: Two separate coalitions made up of 23 states and a dozen environmental groups sued the Trump administration Wednesday over its rollback of a key Obama-era climate measure that required automakers to meet ambitious fuel efficiency standards.

The March rule cuts the year-over-year improvements expected from the auto industry, slashing standards that require automakers to produce fleets that average nearly 55 mpg by 2025. Instead, the Trump rule would bring that number down to about 40 mpg by 2026, bringing mileage below what automakers have said is possible for them to achieve.

Attorneys general say the rule conflicts with laws requiring the government to set the maximum possible standard for automakers.

California Attorney General Xavier Becerra (D) told reporters the state would take the administration to court “with our three best allies by our side: the facts, the science and the law.”

A coalition of 12 environmental groups, including the Sierra Club and the Natural Resources Defense Council, filed a similar suit just moments later.

The Trump administration standards, finalized by both the Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA), are considered particularly vulnerable in court because they cost consumers some $13 billion more than they would save.

“The day that the administration released this rule, EPA Administrator Andrew Wheeler claimed that ‘This final rule will save lives, reduce pollution and provide significant benefits to the American economy.’ He’s wrong on all of those counts,” Becerra said.

“EPA’s approach risks lives, it increases pollution, and it’s jocular. This rule will increase air pollution. The agency’s own analysis states that.”

Internal government documents recently reviewed by The Hill showed the White House questioned the legal justification behind the rule.

The documents also show a number of concerns raised by EPA staff were not addressed before the rule was finalized.

Becerra, joined by Michigan Attorney General Dana Nessel (D) and Colorado Attorney General Phil Weiser (D), said they would seek to uncover any other documents showing a disconnect between staff analysis and what the administration chose to implement.

“Playing games with the facts is a short game. The courts are playing the long game. And you can’t be making stuff up and hiding the facts and get away with it over the long term,” Weiser said, noting it was the same strategy that helped states win their case against the Trump administration challenging adding a citizenship question to the census.

The NHTSA would not comment on the cases, while the EPA said its rule “provides a sensible, single national program that strikes the right regulatory balance, protects our environment, and sets reasonable targets for the auto industry, while supporting our economy and the safety of American families.”

Read more on the suits here. 

TODAY IN OIL & GAS:

Still hurting… Mike Sommers, president of the major oil and gas industry group American Petroleum Institute (API), acknowledged on Wednesday that lower prices are hurting the oil and gas industry.

“Prices still are at historic lows. … We’re still only in the $30 to $35 range, and it’s very difficult for producers to make money with those kinds of oil prices,” Sommers said during a webinar. 

Oil prices have dropped since the beginning of this year due to the coronavirus pandemic and international disputes. On Wednesday afternoon, U.S. crude oil was trading at about $33 per barrel, though prices in April dropped to as low as negative $40 a barrel. 

Sommers also defended his group’s advocacy for regulatory changes during the coronavirus pandemic. 

In March, API wrote to both President Trump and the Environmental Protection Agency (EPA) asking the government to ease certain “compliance obligations” such as record-keeping and training. 

Days later, the EPA announced that it might not seek penalties against companies that don’t monitor their pollution. The agency has stressed that polluters will have to prove that the lack of monitoring was linked to the coronavirus pandemic, but opponents of the move argue that by then, the damage will have already been done. 

Sommers stated on Wednesday that some of the issues the agency advocated for were “mainly paperwork issues” and said that they were “similar to the IRS changing Tax Day from April 15 to July 15.”

Read more on that here. 

Playing favorites… House Natural Resources Committee Chairman Raúl Grijalva (D-Ariz.) is urging the White House not to approve a proposal that would delay payments for companies that drill on public lands. 

Last week, a possible final rule from the Office of Natural Resources Revenue (ONRR) titled “ONRR Reporting and Royalty Payment Delay Related to Coronavirus Disease 2019 (COVID-19),” was sent to the White House for review. 

In his letter, Grijalva stated that the administration has “refused” to give staffers information about the rule.

The department also did not immediately respond to The Hill’s request for comment. However, industry sources have told Argus Media that the rule would allow companies to postpone paying royalties for three months. 

“There is no need to provide an additional benefit to oil and gas companies by giving them three additional months to pay their royalties,” the chairman wrote.

“It is not clear why the coronavirus pandemic would make it difficult to pay royalties,” he added. “Royalty payments are made electronically, and coronavirus does not make it more difficult to comply with current payment standards. ONRR’s silence makes it impossible to understand the administration’s position on this issue.”

Grijalva called on the White House’s Office of Management and Budget to reject the proposal, which he characterized as “blatant favoritism.”

Read more on that here. 

ACCELERATE THOSE ROLLBACKS: An influential conservative group wants the Trump administration to be more aggressive with its proposed rollback of a key environmental law that dates back to 1970.

Club for Growth President David McIntosh said Wednesday he would like to see additional changes to the National Environmental Policy Act (NEPA), a 50-year-old law that requires federal agencies to analyze the environmental impact of construction projects.

The White House in January proposed a major rollback to NEPA, and President Trump this month signed an executive order taking aim at regulations that “inhibit economic recovery.”

But McIntosh told reporters on a press call that he thinks the administration should “take another look and see what more can be done” to limit environmental regulations and speed up the permitting process.

McIntosh said his group was putting together suggestions for agency-specific regulations that can either be suspended or permanently cut.

Trump last week signed an executive order saying agencies should address the coronavirus pandemic by “rescinding, modifying, waiving, or providing exemptions from regulations and other requirements that may inhibit economic recovery.”

Experts have told The Hill that they expect the order to face court challenges.

Read more about their ask here. 

OUTSIDE THE BELTWAY:

US lets corporations delay paying environmental fines amid pandemic, The Guardian reports

Pro-gas states pass laws barring local natural gas bans, limits, Bloomberg Law reports

Exxon, climate activists in showdown over independent board chair, Reuters reports

EU will fight COVID recession with green investment, Forbes reports

ICYMI: From Wednesday…

Record drop in energy investment expected this year: analysis

FROM THE HILL’S OPINION PAGES: 

“The Trump administration has just opened a new front in its war on environmental regulations, offering polluters a windfall with an executive order freezing or cutting back environmental regulations, ostensibly to help the economy recover from COVID-19,” writes David F. Coursen, a retired EPA attorney and a member of the Environmental Protection Network.