Tuesday, August 28, 2007

Suddenly, EPA writes mpg rules

Richard Truett and Harry Stoffer
Automotive News
August 27, 2007 - 12:01 am EST

WASHINGTON -- While Congress debates massive changes in fuel economy law, the EPA is writing up broad new rules to limit fuel consumption.

The EPA has mustered 75 regulators to execute President Bush's so-called "20-in-10" plan to reduce gasoline consumption by 20 percent in 10 years.

The move, sparked by a landmark U.S. Supreme Court ruling this spring, signals the Bush administration's desire for a historic shift of responsibility for fuel economy standards from transportation officials to clean-air regulators, a top EPA official told Automotive News last week.

"It is a pretty historic effort to set the first regulatory program for greenhouse gas emissions under the Clean Air Act," Margo Oge, director of the EPA's Office of Transportation and Air Quality, said in an interview.

The office long has been responsible for traditional tailpipe pollutants, such as oxides of nitrogen. It now is writing rules to limit emissions of carbon dioxide, a byproduct of burning fuel that contributes to global warming.

Oge says the 20-in-10 plan is the centerpiece of planned greenhouse gas emissions rules for cars and trucks. In an executive order in May, Bush instructed that the 20-in-10 plan be "a starting point."

The plan, unveiled in his State of the Union address in January, calls for production of 35 billion gallons of alternative fuels by 2017, about five times today's amount. It also calls for fuel economy increases of up to 4 percent a year for 2010-17 cars and for 2012-17 trucks.

Automakers call 4 percent annual increases too aggressive. Vehicles would have to average more than 32 mpg in 2017. Today's vehicles average about 24 mpg.

Bush, a longtime opponent of mandatory controls on greenhouse gases, appears to have changed course as his presidency wanes.

Up in the air
Automakers must plan future products amid these unprecedented uncertainties.
  • EPA: Drafting first-ever clean air rules to limit greenhouse gases
  • Federal courts and EPA: Considering whether states can adopt their own greenhouse gas limits
  • Congress: Debating bills requiring vehicles to average as much as 35 mpg by 2020
  • Rep. John Dingell, D-Mich.: Pushing for fuel economy to be part of broad national cap on CO2 and other greenhouse gases

Key court case

In April, it became clear that EPA would have a hand in fuel economy regulation.

That's when the Supreme Court, in a case brought by 12 states and 13 environmental groups, ruled EPA has the obligation to determine whether greenhouse gases from vehicles threaten public health and, if so, to regulate them.

It's too early to tell if Congress will step in to modify the law to change the administration's efforts.

Bush's May order directed that rules be drafted this year and be completed by the end of 2008. He instructed EPA to work with other agencies, including the Department of Transportation. The department's National Highway Traffic Safety Administration has been responsible for the corporate average fuel economy program, or CAFE, since it was created by a 1975 energy law.

Oge's remarks suggest a dominant role for EPA. In a telephone interview, she said her agency is working with automakers and suppliers to review product plans and available technology and to craft regulations that are fair and reasonable.

One senior industry lobbyist, who asked not to be named, said he was told EPA has mustered 75 officials and staffers for the rule-writing effort. An environmental lobbyist confirms the agency is in an all-hands-on-deck mode.

Normally, NHTSA has a handful of people administering CAFE.

NHTSA is expected to retain some authority for enforcing fuel economy standards. Automakers that miss standards face fines under the energy law.

Still, the industry lobbyist said the Bush administration may use its Clean Air Act authority to make changes in fuel economy standards that are difficult or impossible under the 1975 energy law, such as setting different standards for cars of different sizes.

The administration did manage to impose such a provision on trucks. It will be phased in during the 2008-11 model years.

Many moving parts

EPA's rule-writing is another heavy dose of uncertainty for automakers, trying amid a sagging market to plan products for the coming decade.

They still don't know whether a large group of states, led by California, will be allowed to have their own greenhouse gas emissions rules for cars and trucks. The industry has challenged those rules in federal courts. And the EPA has yet to rule on California's request for a waiver under the Clean Air Act to enforce state regulations.

Further, Congress returns next week and will try to finish work on a new energy law. A Senate-passed version would require cars and trucks to average 35 mpg by 2020. The House-passed version has no similar provision. Most automakers back an alternative that would require vehicles to average 32 to 35 mpg by 2022.

How new greenhouse gas rules from the administration and a new energy law from Congress might work together "has yet to be determined," said Charles Territo, spokesman for the Alliance of Automobile Manufacturers. The organization represents the Detroit 3, Toyota and five other automakers.

No comments: