Automakers urge frequent evaluations of 2017-2025 program

Source: Jason Plautz • E&E  • Posted: Wednesday, January 18, 2012

Automakers commended the Obama administration for including a midterm review in its 2017-2025 fuel economy program but said they face too many uncertainties in their effort to meet the target, 54.5 mpg.

At a public hearing on the corporate average fuel economy, or CAFE, program in Detroit today, Mike Robinson, General Motors Co. vice president for environment, energy and safety policy, urged U.S. EPA and the National Highway Traffic Safety Administration to evaluate the program using periodic “check-ins.”

Going beyond a one-time review, Robinson said, could eliminate some uncertainty for automakers and make it less likely that companies will be stuck with cars consumers do not want.

Small, detailed reviews would “allow the program to stay on track and lead to best long-term results,” Robinson said at the hearing, the first of three on the 2017-2025 CAFE program. He added that the automaker would only seek “adjustments,” not a wholesale change in the program or its target.

Throughout negotiations with the administration, automakers had pushed for at least one midterm review period, citing a high degree of uncertainty for a program that would begin in five years and end eight years after that. Companies were concerned about variables — gasoline prices, technological innovations, consumer demand and the price of materials — playing major roles in their ability to meet the standard

At today’s hearing, other automakers praised the inclusion of the midterm review, with Ford Motor Co. sustainability chief Sue Cischke calling it “important” given the “unprecedented time frame” of the standards.

Automakers also called for tweaking rules governing air conditioning systems, saying automakers should get greater credit if they surpass current targets. Robinson also called on EPA to adjust its rules on upstream emissions in producing cars because automakers have little control over the source of manufacturing plants’ power.

About 90 other witnesses testified, including consumer groups and military veterans. Several environmentalists praised the high mileage target, with BlueGreen Alliance Executive Director David Foster calling it “the best possible outcome for American workers, our communities, the economy and the environment.”

Mark Cooper, director of research for the Consumer Federation of America, presented new data showing that fuel-efficient cars would give drivers an immediate payback. According to Cooper’s data, the smaller gas expense on a 54.5 mpg car would mean an average savings of $800 in the first five years on a standard auto loan.

However, auto dealers struck out against the rules, saying they could force the production of unpopular cars.

“While EPA and NHTSA can mandate what automakers must build, no one can dictate what customers will buy. If our customers do not purchase these products, we all lose,” said Don Chalmers, who chairs the government relations committee of the National Automobile Dealers Association. “NADA supports fuel economy increases as long as they take consumer demand and vehicle choice into account.”

The officials were also serenaded by a local chapter of the Raging Grannies, a protest group. The protesters sang a variation of “Wheels on the Bus Go Round and Round” with lyrics “the people on the street go ‘cough, cough, cough.'”

EPA and NHTSA will hold two more hearings on the standards — one Thursday in Philadelphia and a third next Tuesday in San Francisco. The administration will finalize the rule by July.