Next round of CAFE standards due this summer — Obama adviser

Source: Nick Juliano, E&E reporter • Posted: Wednesday, May 16, 2012

The next round of fuel economy rules for passenger vehicles will be released this summer, a senior White House adviser said today.

The standards, which would set a fleetwide target of 54.5 miles per gallon by 2025, were proposed in November, and U.S. EPA and the Department of Transportation have been reviewing comments submitted in February. That process should wrap up within the next two to three months, at which time a final rule would be published, said Heather Zichal, deputy assistant to the president for energy and climate change.

“Dual rulemakings, as I didn’t appreciate before I came into the White House, are a little more complicated than normal,” Zichal said this morning at a breakfast sponsored by Politico Pro. “But that rule is on target to be completed late July/early August.”

The rule would set tightening standards for fuel efficiency and greenhouse gas emissions from model year 2017 to 2025 cars and light-duty trucks that ramp up to the 54.5 mpg corporate average fuel economy standard (Greenwire, Nov. 16, 2011).

It follows an earlier Obama administration rulemaking that set CAFE standards for model year 2012 to 2016 vehicles that increase fuel economy to 35.5 mpg.

Enacting the 2012-16 rule — the first update to CAFE standards in decades — came about as the result of intense negotiations among administration officials, automakers, environmentalists and state regulators.

Zichal praised those stakeholders for their ability to reach an agreement on the 2012-16 CAFE rule and said industry and other interests deserve a lot of credit for returning to the table to work out a deal to set standards through 2025.

EPA power plant rule, lease sale also on tap this summer

As for other pending regulatory matters, Zichal predicted that EPA would meet a July 27 deadline to finalize a new Clean Water Act rule setting standards for cooling water systems at power plants and large industrial facilities.

The rule, which aims to reduce the number of aquatic organisms killed by the systems, has raised concerns among utilities that it may threaten the reliability of the electric grid in conjunction with new or upcoming air and waste rules from EPA. But EPA has dismissed those concerns as based on worst-case assumptions about what the rules would require (Greenwire, Nov. 29).

Zichal also said the administration’s interagency working group on unconventional natural gas would continue its work this year to research how to safely extract gas from shale formations using hydraulic fracturing. And she said the Interior Department would conduct a 25-million-acre lease sale in the Gulf of Mexico this summer.

Looking ahead to a potential second term for President Obama, Zichal indicated she would be interested in staying on as a White House adviser on energy issues.

The death of cap-and-trade legislation nearly two years ago has complicated the administration’s attempt for a comprehensive climate change policy, but Zichal pointed to Obama’s stated support for a “clean energy standard” that would require utilities to generate 80 percent of their electricity from emissions-free sources by 2035 as another possible avenue for a long-term policy that would boost renewable energy deployment and bring down emissions. In the near term, she said Congress needed to extend the production tax credit for wind energy, which expires at the end of this year, to prevent job losses and avoid stalling progress in the industry.

Zichal would not speculate on how prominent a role climate change would play in a second term, compared with other hot-button issues where progress has stalled, such as immigration.