Earlier this month, the House Oversight and Government Reform Committee issued a staff report on the Obama Administration’s fuel economy/greenhouse gas (GHG) regulatory program. The report, A Dismissal of Safety, Choice, and Cost, is the product of a “multi-year Committee investigation” that includes three hearings, a transcribed interview of EPA Assistant Administrator Gina McCarthy, and a review of more than 15,000 documents obtained by the Committee from the EPA, the National Highway Traffic Safety Administration (NHTSA), the California Air Resources Board (CARB), and 15 automobile manufacturers.
Some key findings:
- The Administration performed an end-run around the law and ran a White House-based political negotiation, led by “czars” who marginalized NHTSA, the federal agency charged in statute with setting fuel economy standards.
- Contrary to the statutory scheme Congress created, the EPA became the lead agency in fuel economy regulation and NHTSA was sidelined. Contrary to Congress’s preemption of State laws or regulations “related to” fuel economy, CARB became a “major player” and an “aggressive participant in the process,” allowing unelected state regulators in Sacramento to set national policy outside the federal rulemaking process.
- The Administration violated the spirit – and possibly the letter – of the Administrative Procedure Act, Presidential Records Act, and Federal Advisory Committee Act by negotiating agreements on both the Model Year (MY) 2012-2016 and MY 2017-2025 standards behind closed doors with only a select group of stakeholders.
- The new fuel-economy/GHG standards will add thousands of dollars to the cost of new vehicles. Consumers are likely to incur net financial losses unless annual gasoline prices reach $5-$6 per gallon.
- Compliance with the new standards will require mass reductions that will, in turn, compromise vehicle safety. EPA and CARB officials mocked and belittled safety concerns raised by NHTSA.
In a law journal article and regulatory comment letter, I also make the case that the administration’s fuel-economy agenda trashes the separation of powers and administrative procedures. But the Committee’s report provides the first, detailed behind-the-scenes chronology of Team Obama’s fuel economy machinations, confirming what other critics suspected but could not document.
Some secrets of the sausage factory, though, may never come to light: “Despite multiple requests, the Executive Office of the President refused to provide any information on its involvement in developing the fuel economy and GHG emissions standards.”
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As noted here last week, the sparks flew at a Jan. 25 House Oversight and Government Reform Committee hearing titled “The Volt Fire: What Did NHTSA Know and When Did They Know It?” Three witnesses testified: National Highway Traffic Safety Administration (NHTSA) Administrator David Strickland, General Motors (GM) CEO Daniel Akerson, and John German of the International Council on Clean Transportation. My earlier post was based on newspaper accounts of the hearing. Over the weekend, I watched the archived video of the proceeding and read the testimonies and Committee Staff Report. Here are the key facts and conclusions as I see them:
- The Volt battery fire occurred on June 2, 2011 in the parking lot of a Wisconsin crash test facility. The car caught fire three weeks after the vehicle had been totaled, on May 12, in a side-pole collision. The fire caused an explosion that destroyed not only the Volt but three other vehicles. The blast hurled one of the Volt’s components (a strut) a distance of nearly 80 feet.
- The fire was caused by the leaking of coolant into the Volt’s powerful 300-volt battery, which had been punctured by the crash.
- NHTSA could have avoided the fire had it run down (“drained,” “depowered,” “discharged”) the battery after the crash. This raises obvious questions: Was NHTSA responsible for the fire? Was the agency’s six-month silence partly an attempt to hide regulatory incompetence?
- The Volt is a safe car; consumers should not fear to drive it. Gasoline-powered vehicles are more likely than battery-powered vehicles to burn after a crash. The post-crash explosion from a damaged gas tank can occur in seconds as opposed to weeks. Electric vehicle batteries are harder to puncture than gas tanks. NHTSA tried and failed to replicate the fire by crashing other Volt test vehicles. To induce another battery fire, NHTSA had to impale the battery with a steel rod and rotate it in coolant with special laboratory equipment.
- GM is retrofitting Volt batteries to make them stronger and more leak proof, and is updating safety protocols to ensure batteries are depowered after crashes.
- NHTSA kept silent about the fire for six months, acknowledging it only after Bloomberg News broke the story on November 11, 2011.
- GOP Committee members produced no smoking gun evidence of collusion to cover up the Volt battery fire, such as an email saying ‘We’ve got to keep this under wraps or it will depress Volt sales, jeopardize EPA’s fuel economy negotiations with automakers, and make President Obama look bad.’
- Nonetheless, the Obama administration’s heavy investment (financial and political) in GM in general and the Volt in particular creates an undeniable conflict of interest.
- NHTSA determined the cause of the fire in August 2011, yet waited until November 25 to advise emergency responders, salvage yard managers, and Volt owners how to avoid, and reduce the safety risks associated with, post-crash fires.
- Administrator Strickland’s protestations to the contrary notwithstanding, it is difficult to explain the agency’s secretiveness apart from political considerations that should not influence NHTSA’s regulatory deliberations.
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I keep coming back to this topic because fuel economy zealots are trashing our constitutional system of separated powers and democratic accountability. Only Congress can make them stop. Leading the counter-offensive is House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.), who has been watch-dogging the Obama administration’s fuel economy agenda since 2009. [click to continue…]
The Union of Concerned Scientists (UCS) and seven other green groups sent the National Automobile Dealers Association (NADA) a letter (dated October 19) criticizing NADA’s opposition to President Obama’s plan to increase new-car fuel economy standards to 54.5 miles per gallon by Model Year (MY) 2025.
The UCS letter parrots the administration’s claims about the many wonderful benefits more stringent fuel economy standards will achieve during MYs 2017-2025. In a letter dated November 2, NADA points out that the claimed benefits depend on assumptions, such as future gasoline prices and, most importantly, whether consumers will want to buy the cars auto makers are forced to produce.
The UCS letter neglects to mention that, according to the administration’s own estimates, the MY 2025 standard would add at least $3,100 to the average cost of a new vehicle. NADA also notes other likely consumer impacts:
- Vehicles that currently cost $15,000 and less effectively regulated out of existence.
- Weight reductions of 15%-25%, with potential adverse effects on vehicle safety in collisions.
- 25% to 66% of the fleet required to be hybrid or electric, even though hybrids today account for only 2-3% of new vehicle sales.
The “concerned” scientists also completely ignore NADA’s critique of the legal basis of Obama’s fuel economy agenda. [click to continue…]
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? [click to continue…]
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.”
In a sharply worded letter (August 11, 2011) to White House Counsel Kathryn Ruemmler, House Oversight and Government Reform Committee Chairman Darrel Issa (R-Calif.) contends that “the new Corporate Average Fuel Economy (CAFE) and EPA vehicle greenhouse gas (GHG) standards announced by President Obama and select automobile manufacturers on July 29, 2011, were negotiated in secret, outside the scope of law, and could generate significant negative impacts for consumers.”
Issa is also concerned “that the government’s ownership interest in General Motors and Chrysler at the time these negotiations were conducted creates a troublesome conflict-of-interest.”
Accordingly, Issa is launching “an investigation into the activities of the Administration leading up to the agreement for new CAFE standards for model years (MY) 2017-2025.”
I won’t try to summarize Issa’s 8-page letter, which among other things developes a detailed case that the 54.5 mpg fuel-economy deal will adversely affect vehicle prices, consumer choice, vehicle safety, and, hence, automotive sales and auto industry jobs. This post will only discuss the legal issues that Issa spotlights. My concern here — as in numerous previous columns — is with bureaucratic ‘lawmaking’: the trashing of the separation of powers and democratic accountability in the illusory pursuit of climate stability and energy independence. [click to continue…]
Earlier this week, Politico published an op-ed by former Sen. Majority Leader George Mitchell (1989-1995) and former EPA Administrator William Reilly (1989-1993) that is as intellectually mushy as it is politically devious.
In “Calif. Must Again Lead Way on Emission Standards,” Mitchell and Reilly pretend that the California Air Resources Board’s (CARB’s) proposal to establish a 62 mpg fuel economy standard is the moderate middle between automakers who “protest that the proposal is too demanding” and environmentalists who “want something more stringent.” Horsefeathers!
In September 2010, CARB, EPA, and the National Highway Traffic Safety Administration (NHTSA) issued an Interim Joint Technical Assessment Report where they considered raising the passenger car fuel economy standard from 35.5 mpg in 2016 to 47 mpg, 51 mpg, 56 mpg, or 62 mpg in 2025.
Let’s not forget that the 2016 standard imposed by EPA, CARB, and NHTSA accelerated by four years the standard Congress set in the 2007 Energy Independence and Security Act, which was itself 27% more stringent than the previous standard (27.5 mpg). In May 2011, the Auto Alliance, citing a U.S. Energy Information Administration assessment (p. 26), cautioned EPA Administrator Lisa Jackson and Transportation Secretary Ray LaHood that a 62 mpg standard would depress auto sales in 2025 by 14%. Team Obama subsequently settled on a 56 mpg standard. That’s a tad less extreme than the 62 mpg standard championed by CARB, but it’s still over the top.
A remarkable study by the Center for Automotive Research (CAR) — The U.S. Automotive Market and Industry in 2025 (June 2011) — reveals how cockamamie these proposals are. [click to continue…]
The California Air Resources Board (CARB) boasts that its greenhouse gas (GHG) emission standards save more fuel than the National Highway Traffic Safety Administration’s (NHTSA) Corporate Average Fuel Economy (CAFE) standards – but denies that GHG standards are fuel economy standards. Huh?
Well, of course, CARB denies it, because the Energy Policy Conservation Act (EPCA) prohibits states from adopting laws or regulations “related to” fuel economy.
But CARB has to trumpet the fuel savings from its GHG standards to attack H.R. 910, the Energy Tax Prevention Act. H.R. 910, says CARB, would make America more dependent on foreign oil by prohibiting CARB and EPA from adopting tougher GHG standards.
H.R. 910 opponents talk as if policymaking were a game in which the regulatory option with the biggest fuel savings wins. By that criterion, why not just let EPA and CARB impose a de facto 100 mpg CAFE standard and declare America to be “energy independent”?
If Congress thinks NHTSA’s standards don’t go far enough, there is a simple fix. Pass a law! What H.R. 910 opponents want is for EPA and CARB to legislate in lieu of Congress. That is neither lawful nor constitutional. [click to continue…]
What should drive fuel efficiency? Select the answer you think is correct:
(b) Markets; or
(c) Please pass the sweet and sour shrimp.
If you chose (a), then go straight to www.allsp.com (Season 10) and watch my favorite South Park episode, “Smug Alert.”
If you chose (c), then you’re on your way to a promising career as a diplomat.
Today, on National Journal’s energy blog, I explain why the correct answer is (b).