EPA Greenhouse Gas/NHTSA Fuel Economy Standards: ‘Harmonized and Consistent’?

by Marlo Lewis on June 24, 2011

in Blog, Features

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This post updates my June 14 post on the mantra intoned by EPA, the California Air Resources Board (CARB), and the National Highway Traffic Safety Administration (NHTSA) that EPA/CARB’s greenhouse gas (GHG) motor vehicle emission standards are “harmonized and consistent” with NHTSA’s fuel economy standards.

EPA Associate Administrator David McIntosh recently sent written responses to questions from House Energy and Commerce Committee members following up on a May 5, 2011 hearing entitled “The American Energy Initiative.”

In a nutshell, EPA defines “harmonized and consistent” as “whatever we say it is.”

The 2007 Energy Independence and Security Act (EISA) extended the Corporate Average Fuel Economy (CAFE) credit granted to manfacturers of flexible-fueled vehicles (FFVs), phasing it out in 2020. 

In his question to EPA, Rep. John Shimkus (R-Ill.) notes that EISA extended the FFV credit “specifically because Congress wanted to encourage the production of vehicles that can run on E-85 [motor fuel blended with 85% ethanol].” He further notes that EPA’s GHG emission standards program allows FFV credits “only during the period from model years 2012 to 2015.” After model year 2015, “EPA will only allow FFV credits based on a manufacturer’s demonstration that the alternative fuel is actually being used in the vehicles.” Congress included no such limitation in EISA.

Shimkus asks:

How can this rule be characterized as “harmonized and consistent” if the way EPA treats FFV [credits] is markedly different than the way Congress mandated FFV credits be treated under CAFE?

EPA’s response:

EPA treats FFVs for model years 2012-2016 the same as under EPCA [Energy Policy Conservation Act of 1975, which EISA amended]. Starting with model year 2016, EPA believes the appropriate approach is to ensure that FFV emissions are based on demonstrated emissions performance, which will correlate to actual usage of alternative fuels. This approach was supported by several public comments.”

Starting in 2016, EPA will not give an automaker a CAFE credit for building FFV vehicles unless the automaker can demonstrate that its customers actually use alternative fuels — a requirement not only not included in EISA but inconsistent with it. Several people submitting comments on EPA’s GHG standards supported this approach. And that, apparently, is all the justification EPA needs to override the policy set forth in law.

As discussed in my previous post, EPA’s deviation from EISA partly explains how it is possible for EPA’s GHG standards to reduce fuel consumption more than NHTSA’s CAFE standards, even though EPA, CARB, and NHTSA all profess to believe that GHG standards are not sub-rosa fuel economy standards.

So…

In 2016-2020, NHTSA gives credits for building FFVs.

In 2016-2020, EPA doesn’t give credits for building FFVs.

EPA defines the above two policies as harmonized and consistent.

And 2 + 2 = 5. 

As also discussed in the previous post, since automakers cannot comply with EPA’s GHG standards and also offset their CAFE standards with FFV credits, the two sets of standards are “harmonized and consistent” only in the sense that EPA’s rules trump both NHTSA’s rules and the CAFE program Congress authorized in 2007.

But this is getting into the weeds. The big picture is this. Motor vehicle GHG standards are almost 95% fuel economy standards by another name (because 94.9% of all motor vehicle GHGs are carbon dioxide from the combustion of motor fuel). This means that EPA can effectively tighten NHTSA’s fuel economy standards just by tightening its GHG standards. Yet the Clean Air Act provides no authority to EPA (or any other agency) to regulate fuel economy. And although EPCA/EISA authorize EPA to test automakers’ compliance with CAFE standards, those statutes reserve the authority to prescribe CAFE standards to NHTSA.

Among other questions, Shimkus asked: “Could the logical reason for Congress’s silence on FFVs in section 202(a) [of the Clean Air Act] be that Congress never envisioned the Clean Air Act would be used to regulate fuel economy?”

A rather straightforward question, yes? Unsurprisingly, it’s the one question from Rep. Shimkus that EPA Associate Administrator McIntosh chose not to address.

Klaus June 24, 2011 at 12:04 pm

EPA strikes again. We could get back on sound financial footing if we simply eliminated 90% of all regulations issued by agencies such as EPA. Also abolishing Department of Energy, Education, Interior, Commerce, Labor, did I miss any?

BobRGeologist July 4, 2011 at 7:42 pm

If I had the power, the first agency I would defund for its arrogance combined with incompetence is the EPA.

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