Federal agencies are not supposed to be overtly partisan. They are also not supposed to legislate. EPA Administrator Lisa Jackson and Department of Transportation Secretary Ray LaHood apparently didn’t get the memo. Or maybe they just don’t give a darn.

In a press release announcing their plan to raise fuel economy standards to 54.5 miles per gallon by 2025, the agency heads boast: “Today’s announcement is the latest in a series of executive actions the Obama Administration is taking to strengthen the economy and move the country forward because we can’t wait for Congressional Republicans to act” [emphasis added]. Jackson and LaHood even title their press release, “We Can’t Wait.”

‘What do we want? Energy independence! When do we want it? Now!’ Even if that means trashing the separation of powers, the essential constitutional foundation for accountable government.

Team Obama has turned the nation’s fuel economy law, the Energy Policy Conservation Act (EPCA), into a non-controlling legal authority.

EPCA specifically limits the setting of fuel economy standards to “not more than 5 model years.” EPA and DOT plan to establish fuel economy standards for model years (MYs) 2017-2025 — a nine-year period. No matter how long government lawyers squint at the page, five does not mean nine.

To get around the five-year EPCA limitation, the administration invokes EPA’s alleged authority to regulate greenhouse gases through the Clean Air Act (CAA). Yet EPCA delegates to DOT sole responsibility for prescribing fuel economy standards, and the CAA provides no authority for fuel economy regulation.

Contradictorily, EPA and DOT officials deny that greenhouse gas emission standards are even “related to” fuel economy standards. This easily refuted falsehood allows the administration to pretend that EPA did not defy EPCA when it authorized California and other states to regulate motor vehicle greenhouse gas emissions.

The administration’s proposed MY 2017-2025 fuel economy standards, like the current MY 2012-2016 standards, are explicitly designed to “harmonize” with the California Air Resources Board’s greenhouse gas emission standards. But greenhouse gas emission standards implicitly regulate fuel economy, and EPCA prohibits states from adopting laws or regulations “related to” fuel economy.

By threatening to allow states to create a “patchwork” of conflicting fuel economy requirements, EPA frightened auto makers into supporting the agency’s greenhouse gas emission standards as the lesser regulatory evil. EPA then parlayed its new role as de-facto fuel economy regulator into a mandate to regulate greenhouse gases from from stationary sources.

To pull off these power grabs, Obama officials negotiated with auto makers, California, environmental groups, and union labor behind closed doors, in defiance of federal accountability statutes.

The agencies’ press release should be re-written as follows:

We can’t wait for Congressional Republicans to amend EPCA. We want more power over the auto industry and consumer choice. So we’re going to amend EPCA by administrative action. To thwart congressional oversight, we’re also going negotiate these deals, er, “Historic Agreements,” in the Chicago style – mum’s da woid. And if you auto guys don’t come along quietly, we’re gonna let the California Air Resources Board muss ya up.

Earlier this week, House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.) sent letters to three Obama administration officials regarding the veracity of their testimonies at an October 12 subcommittee hearing on the administration’s fuel economy policies.*

Issa’s letters — to National Highway Traffic Safety Administration (NHTSA) Administrator David Strickland, EPA Assistant Administrator for Air and Radiation Gina McCarthy, and EPA Director of Transportation and Air Quality Margo Oge – are identical in content.

The gist of the letters is that each administration witness denied under oath that EPA and California’s greenhouse gas emission standards are “related to” fuel economy standards, whereas in fact, according to Issa, ”regulating greenhouse gases and regulating fuel economy is a distinction without a difference.”

This matters for three inter-related reasons: (1) EPA is currently regulating fuel economy by setting motor vehicle greenhouse gas emission standards even though the Clean Air Act provides no authority for fuel economy regulation; (2) EPA in June 2009 granted California a waiver to establish motor vehicle greenhouse gas emission standards despite the Energy Policy Conservation Act’s (EPCA’s) express prohibition (U.S.C. 49 § 32919) of state laws or regulations “related to” fuel economy; and (3) the California waiver, by threatening to create a market-balkanizing “regulatory patchwork,” enabled the Obama administration to extort the auto industry’s support for EPA’s new career as greenhouse gas/fuel economy regulator in return for California and other states’ agreement to deem compliance with EPA’s greenhouse gas/fuel economy standards as compliance with their own.

As I will demonstrate below, greenhouse gas emission standards are highly “related to” fuel economy standards, and the administration witnesses cannot possibly be ignorant of the relationship. Do their denials of plain fact rise to the level of perjury?

In his letters to the Obama officials, Issa excerpts pertinent exchanges between them and Members of the Subcommittee:

Chairman Jordan: I guess maybe here’s the question — I’m not a legal scholar on this — but it seems that when you read the statute [EPCA], it talks about a regulation related to fuel economy standards, and greenhouse gases are certainly related to fuel economy standards, is that right?

Administrator McCarthy: They are closely aligned but they are different, Mr. Chairman.

*  *  *

Vice Chair Buerkle: I just have a quick question for the three of you. It’s a yes or no question, if you wouldn’t mind. Are the greenhouse gas rules — either EPA’s or the California rules — are they they related to fuel economy? Mr. Strickland, yes or no?

Administrator Strickland: No, they regulate greenhouse gas emissions.

Administrator McCarthy: They regulate greenhouse gas emissions.

Ms. Oge: They regulate greenhouse gas emissions.

Vice Chair Buerkle: So they’re not related to fuel economy, under oath.

Administrator Strickland: No. They’re greenhouse gas emission regulations.

Administrator McCarthy: We do not regulate fuel economy standards.

Vice Chair Buerkle: And all three of you agree with that?

Ms. Oge: Yes.

Administrator Strickland: Yes.

When asked if EPA and California’s standards are “related to” fuel economy standards, the administration witnesses offer a tautology: Greenhouse gas emission standards regulate greenhouse gas emissions. It is as if John Smith were asked whether he is related to Joe Smith and replied, “I am not my brother, I am me.”

Motor vehicle greenhouse gas emission standards implicitly – and inescapably – regulate fuel economy. EPA and NHTSA confirm this – albeit not in so many words – in their joint May 2010 greenhouse gas/fuel economy Tailpipe Rule.

As the agencies acknowledge (Tailpipe Rule, pp. 25424, 25327), no commercially proven technologies exist to filter out or capture carbon dioxide (CO2) emissions from fossil fuel-powered vehicles. Consequently, the only way to decrease grams of CO2 per mile is to decrease fuel consumption per mile, i.e., increase fuel economy. Carbon dioxide constitutes 94.9% of vehicular greenhouse gas emissions, and “there is a single pool of technologies . . . that reduce fuel consumption and thereby reduce CO2 emissions as well.”

That EPA and CARB are regulating fuel economy is also evident from the administration’s current plan to increase average fuel economy to 54.5 miles per gallon by 2025. The plan derives from EPA, NHTSA, and the California Air Resources Board’s (CARB’s) Interim Joint Technical Assessment Report, which proposed a range of fuel economy targets from 47 mpg to 62 mpg. The mpg targets are determined by – are simple reciprocals of – CO2 reduction scenarios:

Four scenarios of future stringency are analyzed for model years 2020 and 2025, starting with a 250 grams/mile estimated fleet-wide level in MY 2016 and lowering CO2 scenario targets at the rate of 3% per year, 4% per year, 5% per year, and 6% per year [p. viii].

The 54.5 mpg target represents a negotiated compromise between the 4% per year (51 mpg) and 5% per year (56 mpg) CO2 reduction scenarios (p. ix).

That the California greenhouse gas motor vehicle emissions law, AB 1493, is highly “related to” fuel economy is obvious from CARB’s 2004 Staff Report presenting the agency’s “initial statement of reasons” for its regulatory program.  The Staff Report’s recommended options for reducing greenhouse gas emissions (Table 5.2-3) are identical in substance, and often in detail, to fuel saving options presented in the National Research Council’s (NRC’s) 2002 fuel economy report (Tables 3-1, 3-2). A few options in the CARB list are not included in the NRC list. In each case, however, the CARB option is a fuel-saving technology, not an emission-control technology.

In addition, the text of AB 1493 clearly implies that CARB is to regulate fuel economy. AB 1493 requires CARB to achieve “maximum feasible” greenhouse gas reductions that are also “cost-effective,” defined as “Economical to an owner or operator of a vehicle, taking into account the full life-cycle costs of the vehicle.”  CARB rightly interprets this to mean that the reduction in “operating expenses” over the average life of the vehicle (assumed to be 16 years) must exceed the “expected increases in vehicle cost [purchase price] resulting from the technology improvements needed to meet the standards in the proposed regulation” (Staff Report, p. 148). Virtually all of the “operating expenses” to be reduced are expenditures for fuel. The CARB program cannot be “cost-effective” unless CARB regulates fuel economy.

Strickland, McCarthy, and Oge could not acknowledge what they must know to be true because otherwise they would have to admit:

1. EPA is regulating fuel economy, which is outside the scope of its delegated authority; and
2. CARB is regulating fuel economy, which is prohibited by EPCA.

Since EPA contends that its greenhouse gas/fuel economy motor vehicle standards compel the agency to regulate greenhouse gas emissions from large stationary sources, the administration witnesses also could not acknowledge the obvious without admitting that EPA’s entire greenhouse gas regulatory agenda rests on shaky legal grounds.

* I testified at the Subcommittee’s October 12 hearing on the first, private-sector witness panel, which also included Jeremy Anwyl (Edmunds.Com), Roland Hwang (Natural Resources Defense Council), and Scott Grenerth (Independent Trucker). The three Obama officials testified on the second, public-sector witness panel.   

On Monday, I noted that Team Obama plans to set new-car fuel-economy standards for model years (MYs) 2017-2025, a nine-year period, despite the fact that the authorizing statute, the Energy Policy Conservation Act, 49 U.S.C. 32902(b)(3)(B), restricts the setting of fuel-economy standards to “not more than 5 model years.” No matter how hard or long government lawyers squint at the text, 5 does not mean 9. In the words of House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.), the standards proposed for MYs 2022-2025, which reach 54.5 mpg in 2025, are “outside the scope of law.”

Since writing that post, I have learned that Team Obama will try to finesse the legal problem by basing the MYs 2022-2025 fuel economy standards solely on EPA’s authority to set emission standards under CAA Sec. 202. This is Bizarro World jurisprudence.

EPA will be setting de-facto fuel-economy standards, pretending that GHG standards are not fuel-economy standards, but specifying CO2 reduction percentages that the agency avows, and everybody knows, convert directly into percentage increases in fuel economy.

Nobody but the judicial activists who gave us Massachusetts v. EPA can say with a straight face that when Congress enacted CAA Sec. 202, it meant to transfer the power of setting fuel-economy standards from the National Highway Traffic Safety Administration (NHTSA) to EPA. Nor would any non-Bizarro lawyer contend that CAA Sec. 202 authorizes EPA to set fuel economy standards as many years into the future as the agency sees fit, despite EPCA’s explicit limit of “not more than 5 model years.”

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.