Calif. meets with White House on cars. Can they cut a deal?

Source: Camille von Kaenel, E&E News reporter • Posted: Thursday, May 24, 2018

Top officials from California and the White House me yesterday on fuel economy rules that the Trump administration is preparing to roll back.

Mary Nichols, the head of the California Air Resources Board, is scheduled to meet with Francis Brooke, the White House’s new aide on domestic energy policy, according to an ARB spokesman. Representatives from EPA and the National Highway Traffic Safety Administration, who are putting the finishing touches on their proposal for the fuel efficiency rules, might attend, added the spokesman, Stanley Young.

The meeting could signal renewed interest from the White House to cut a deal with California to avoid a regulatory and legal mess over the tailpipe standards. President Trump, after meeting with automaker CEOs worried about facing two different sets of requirements, asked administration officials to seek out talks with the Golden State.

But people close to California remain concerned the talks are lip service. Regulators are getting ready to send a proposal to freeze fuel economy at 2020 levels through 2025 to the White House for review as early as this week without incorporating California’s input. The proposal could include an attack on California’s authority to set its own rules on vehicle pollution, according to earlier drafts and sources familiar with the current version.

Last week, Bill Wehrum, EPA’s air chief, told Congress that finding a deal with California that avoids two sets of requirements was a priority of his, but he wasn’t speaking for the agency as a whole. California and federal staff have not been working on the technical aspects of the rules together, as they have in the past.

Nichols has floated a compromise to the Trump administration. She has asked for rules out to 2030 in exchange for slight tweaks and added flexibilities to the existing rules.

Brooke replaced Mike Catanzaro, who had been seeking a deal between California and the federal government, as the White House energy aide last month.

Nichols is also scheduled to meet tomorrow with the two automaker trade groups, the Alliance of Automobile Manufacturers and the Association of Global Automakers.

The meetings come as industry groups are also pressing the Trump administration on a middle-of-the-road option.

The Edison Electric Institute, Alliance of Automobile Manufacturers, American Public Power Association, Association of Global Automakers and National Rural Electric Cooperative Association asked EPA and the Transportation Department to offer a “suite of flexibilities” in their proposal to support electric vehicle technology.

“We believe these flexibilities will further deployment of electric vehicles (EVs) and other advanced vehicles, provide GHG reductions, and maintain a single national program for fuel economy and GHG standards,” the coalition wrote in its letter yesterday.

Separately, trade groups for automotive parts suppliers asked regulators to maintain “robust standards” while providing manufacturers “additional compliance flexibilities” in a letter last week.

The letter from the Motor & Equipment Manufacturers Association, Manufacturers of Emission Controls Association, Advanced Engine Systems Institute and Emissions Control Technology Association is significant because they have asked for a more moderate rollback of the rules than their clients, the automakers themselves. The auto parts suppliers have invested millions in fuel-efficient technology and say they could lose jobs if the Trump administration loosens the rules significantly.

Both coalitions asked the government to provide more credits for technologies that reduce greenhouse gas emissions but aren’t necessarily related to the engine, like more efficient air conditioning. Environmentalists call some of these credits “loopholes” because their benefits aren’t well-verified.

Neither asked for a full preservation of the Obama-era rules in their entirety. Any change to the rules will lessen the original projected reductions in greenhouse gas emissions.

Reporter Maxine Joselow contributed.