February 2020

I pose this question because a recent report by the Rhodium Group describes the SAFE rule’s expected 1.5 percent annual increase in average fuel efficiency as a “roll back” from the 5 percent annual increase championed by the Obama administration.

If by “rollback,” Rhodium simply means the SAFE rule standards are less stringent than those advocated by the Obama administration, that’s fine. But if the Obama standards for model years 2022-2025 were not lawfully finalized, then those standards are legal phantoms. That means the SAFE rule would establish first-ever greenhouse gas and fuel economy standards for MY 2022-2025 vehicles. It would not weaken, roll back, or otherwise revise “existing” MY 2022-2025 standards, since those were counterfeit.

Under the October 2012 rulemaking that formalized the Obama-era fuel economy program, the Environmental Protection Agency (EPA) and National Highway Traffic Safety Administration (NHTSA) agreed to undertake a midterm evaluation (MTE), allowing the agencies to adjust their respective standards for MYs 2022-2025 in light of new information regarding technology, compliance costs, fuel prices, consumer acceptance, job impacts, and other relevant factors (77 FR 62628).

This was necessary given the 2012 rule’s “long [14-year] time frame” and NHTSA’s “statutory obligation to conduct a de novo rulemaking in order to establish final standards for MYs 2022–2025.” Moreover, in order to “align the agencies’ proceedings for MYs 2022–2025 and to maintain a joint national program,” EPA and NHTSA committed to “finalize their actions related to MYs 2022–2025 standards concurrently” (emphasis added).

However, the Obama administration flouted those legal commitments soon after Election Day 2016.

When EPA, NHTSA, and the California Air Resources Board (CARB) issued their Draft Technical Assessment Report for the MTE in July 2016, EPA officials told automakers it would issue a draft MTE in mid-summer 2017 and finalize the evaluation by April 1, 2018. That tallied with the official explanation and accompanying chart posted on NHTSA’s Web site in July 2016.

Scrapping those plans without warning, EPA instead published its proposed its final MTE in the Federal Register on December 6, 2016. The comment period closed on December 30, giving the public only 24 days (including Christmas week) to comment on the 268-page proposal and 719-page technical support document (TSD). Despite receiving more than 100,000 comments, EPA finalized the MTE on January 13, 2017, only two weeks after the comment period closed–and one week before Inauguration Day.

There was no statutory justification for the agency’s rush to judgment, since the final determination was not due until April 1, 2018 (77 FR 62787). This was clearly a political rulemaking undertaken to confront the incoming Trump administration with a regulatory fait accompli.

In short, the Obama EPA’s portion of the final midterm evaluation of the MY 2022-2025 standards was arbitrary, capricious, and conducted in bad faith.

Worse, as the Auto Alliance explained in a December 8, 2016 letter to then EPA administrator Gina McCarthy, EPA and NHTSA had not finalized their standards “concurrently,” as required by the agencies’ October 2012 joint rulemaking.

Consequently, the Alliance explained, EPA’s “early action” compelled NHTSA to choose between two unacceptable options: (1) produce an independent evaluation that “may be substantially different and not at all harmonized with EPA’s determination,” or (2) “align itself with EPA’s determination regardless of the existence of facts and analyses that would suggest the need for a different outcome.” Bottom line: “Either way, the process now bears no resemblance to the coordinated effort that was envisioned in the midterm evaluation.”

In a nutshell, EPA’s portion of the Mid-Term Evaluation was a “midnight regulation” rush job–a Self Evaluation in which the agency graded its own handiwork and got an “A.”  NHTSA never completed its portion of the Midterm Evaluation on the Obama administration’s watch.

Thus, the SAFE rule does not “rollback” the Obama administration’s MY 2022-2025 standards because those were legal phantoms. The SAFE rule will simply modify regulatory plans that were not legally executed. In so doing, it will establish MY 2022-2025 standards for the first time.

Updated 5/7/2020