The Oil Industry’s Covert Campaign to Rewrite American Car Emissions Rules

Source: By Hiroko Tabuchi, New York Times • Posted: Friday, December 14, 2018

Marathon, the country’s largest oil refiner, has backed the Trump administration proposal to roll back car efficiency standards.Erin Kirkland for The New York Times

When the Trump administration laid out a plan this year that would eventually allow cars to emit more pollution, automakers, the obvious winners from the proposal, balked. The changes, they said, went too far even for them.

But it turns out that there was a hidden beneficiary of the plan that was pushing for the changes all along: the nation’s oil industry.

In Congress, on Facebook and in statehouses nationwide, Marathon Petroleum, the country’s largest refiner, worked with powerful oil-industry groups and a conservative policy network financed by the billionaire industrialist Charles G. Koch to run a stealth campaign to roll back car emissions standards,a New York Times investigation has found.

The campaign’s main argument for significantly easing fuel efficiency standards — that the United States is so awash in oil it no longer needs to worry about energy conservation — clashed with decades of federal energy and environmental policy.

“With oil scarcity no longer a concern,” Americans should be given a “choice in vehicles that best fit their needs,” read a draft of a letter that Marathon helped to circulate to members of Congress over the summer. Official correspondence later sent to regulators by more than a dozen lawmakers included phrases or sentences from the industry talking points, and the Trump administration’s proposed rules incorporate similar logic.

The industry had reason to urge the rollback of higher fuel efficiency standards proposed by former President Barack Obama. A quarter of the world’s oil is used to power cars, and less-thirsty vehicles mean lower gasoline sales.

In recent months, Marathon Petroleum also teamed up with the American Legislative Exchange Council, a secretive policy group financed by corporations as well as the Koch network, to draft legislation for states supporting the industry’s position. Its proposed resolution, dated Sept. 18, describes current fuel-efficiency rules as “a relic of a disproven narrative of resource scarcity” and says “unelected bureaucrats” shouldn’t dictate the cars Americans drive.

A separate industry campaign on Facebook, covertly run by an oil-industry lobby representing Exxon Mobil, Chevron, Phillips 66 and other oil giants, urged people to write to regulators to support the rollback.

The Facebook ads linked to a website with a picture of a grinning Mr. Obama. It asked, “Would YOU buy a used car from this man?” The site appears to have been so effective that a quarter of the 12,000 public comments received by the Department of Transportation can be traced to the petition, according to a Times analysis.

Gary R. Heminger, Marathon’s chairman and chief executive, said in a statement that the company supported “sound fuel economy standards” and wanted to “help ensure they are achievable and based on existing technology.”

He added, “We appreciate the administration’s willingness to conduct a thorough review in order to ensure future standards are achievable and will actually benefit American consumers.”

Marathon’s chief executive, Gary Heminger, third from right, at the New York Stock Exchange on Dec. 3 to note an acquisition that made the company the nation’s largest refiner.Richard Drew/Associated Press

A spokesman for Koch Industries, the energy conglomerate led by Mr. Koch, said the company had “a long, consistent track record of opposing all forms of corporate welfare, including all subsidies, mandates and other handouts that rig the system.”

The oil industry’s campaign, the details of which have not been previously reported, illuminates why the rollbacks have gone further than the more modest changes automakers originally lobbied for.

The standards that the Trump administration seeks to weaken required automakers to roughly double the fuel economy of new cars, SUVs and pickup trucks by 2025. Instead, the Trump plan would freeze the standards at 2020 levels. Carmakers, for their part, had sought more flexibility in meeting the original 2025 standards, not a categorical rollback.

The Trump plan, if finalized, would increase greenhouse gas emissions in the United States by more than the amount many midsize countries put out in a year and reverse a major effort by the Obama administration to fight climate change.

The energy industry’s efforts also help explain the Trump administration’s confrontational stance toward California, which, under federal law, has a unique authority to write its own clean-air rules and to mandate more zero-emissions vehicles.

California has pledged to stick to the stricter standards, together with 13 other states that follow its lead. But President Trump’s plan challenges California’s rule-writing power, setting up a legal battle that threatens to split the American auto market in two.

That is a prospect automakers desperately want to avoid.

But for gasoline producers like Marathon, a shift toward more efficient vehicles poses a grave threat to the bottom line. In October, the company acquired a rival, Andeavor, making it the biggest refiner in the United States, with sales of 16 billion gallons of fuel a year.

Even while doubling down on gasoline, Marathon has projected an environmentally friendly public image. “We have invested billions of dollars to make our operations more energy efficient,” Marathon said in a recent report. The company’s Twitter account recently highlighted a gardening project and the creation of a duck pond at one of its refineries.

On a conference call with investors last week, Mr. Heminger, the Marathon chief executive, was already counting the extra barrels of fuel a Trump rollback would mean for the industry: 350,000 to 400,000 barrels of gasoline per day, he said.

“However, you have another side who doesn’t want to pivot away” from the stricter rules, Mr. Heminger said. “So we have a lot of work to do to keep this momentum going.”

Marathon began its outreach to the Trump administration early, asking to meet with Scott Pruitt at the Environmental Protection Agency soon after he became its administrator in early 2017. Marathon had been a top donor to Mr. Pruitt in Oklahoma, a state where oil is so prominent that a well stands on the grounds of the capitol building.

“Our CEO, Gary Heminger, would be very glad for an opportunity to visit with the Administrator,” a Marathon lobbyist wrote in an email to Mr. Trump’s transition team on May 8, 2017. “I believe this would be a constructive dialogue.” The E.P.A. helps oversee fuel economy rules along with the Transportation Department.

Mr. Pruitt was scheduled to meet with the Marathon chief at least twice — once in June 2017 as part of a meeting with the board of a powerful fuel-industry group, American Fuel and Petrochemical Manufacturers, and again in September for a more private talk, according to emails and schedules released in a lawsuit filed by the Sierra Club.

A Marathon spokesman, Chuck Rice, said Mr. Heminger did not discuss auto-efficiency rollbacks with Mr. Pruitt. An E.P.A. official did not respond to a question about whether the auto rules were discussed.

Marathon then turned its focus to Congress, hiring the firm Ogilvy Government Relations to lobby legislators in Washington on fuel-economy standards, according to Ogilvy’s disclosure forms. The firm did not respond to a request for comment.

Over the summer, Marathon representatives also approached legislators about an industry talking-points letter, according to six people familiar with that effort. The file properties of a Microsoft Word version of one letter, provided by a Congressional delegation, show that it was last edited by a Marathon lobbyist, Michael J. Birsic, on June 11, 2018.

Mr. Rice of Marathon said the company did not write the letter, and the company declined to say who did. It did not offer an explanation for Mr. Birsic’s digital fingerprint on the document file.

Nineteen lawmakers from the delegations of Indiana, West Virginia and Pennsylvania sent letters to the Transportation Department that included exact phrases and reasoning from the industry letter. The lawmakers’ letters, sent in June and July, all make the point that oil scarcity is no longer a concern.

 The Trump administration’s proposed rollback echoes the post-conservation theme. While energy conservation is significant, the proposal says, the downside of additional petroleum consumption would be dwarfed by the rollback’s benefits.

Representatives from the three state delegations either declined to comment or did not respond to requests.

Senator Tom Carper of Delaware, the top Democrat on the Senate Environment and Public Works Committee, criticized the industry’s campaign. “It appears as though oil interests are cynically trying to gin up support in Congress for the weakest possible standards to ensure that cars and SUVs have to rely on even more oil,” he said.

“If this attempt is successful, the outcome will be a blow to the auto industry, consumers, and our environment.”

The Facebook Campaign

The Facebook ads, featuring Mr. Trump waving alongside the message, “SUPPORT OUR PRESIDENT’S CAR FREEDOM AGENDA!,” appeared the week after the administration made public its fuel economy plan in August. At least 10 times during the two-month public comment period on the plan, the ads, which did not state their oil industry origins, asked people to write to the government to back weaker emissions standards.

Public comments matter in federal rule-making. The law requires that citizens’ views be taken into account before a rule is finalized.

“File an official comment to SUPPORT our President’s plan for safer, cheaper cars that WE get to choose,” read one ad, which ran for seven days in early October. The ad leads to a page that providesbasic language to submit.

More than 3,300 of the 12,000 public comments that D.O.T. has made public contain language identical to that petition, an analysis of the files showed.

The campaign was a product of the fuel and petrochemical manufacturers trade group, widely known as AFPM. However, neither the Facebook ads nor the site identified the industry group. Instead they name a group called Energy4US, which describes itself as “a coalition of consumers, businesses and workers” promoting affordable energy.

Energy4US has close ties to the industry group. According to internet domain records, Victor Adams, listed as an AFPM web manager, registered in 2015 using his work email address. Energy4US lists the group as a coalition member, along with about 50 other groups including energy interests, labor groups, a sheriff’s association and even a recreational fishing alliance.

The AFPM board includes representatives from Exxon, Chevron, Phillips 66, Marathon and Koch Industries. The companies all referred queries to the group.

Derrick Morgan, a senior vice president at AFPM, said the group “regularly works with policymakers, coalition groups and individuals to promote shared goals,” and also will “lead and join groups like Energy4US.”

The Department of Transportation said it was “generally aware” that there were groups urging the public to make comments through online campaigns, but said it does not regulate them.

Taking the Fight On the Road

House bill 1593 is just eight words long: “To repeal the corporate average fuel economy standards.” Koch Industries, a petroleum empire with interests as diverse as gasoline, pipelines, fertilizer and Stainmaster carpets, is the bill’s sole corporate backer.

The measure, which would eliminate fuel standards altogether, is not expected to go far. But it underscores the company’s stance on the matter. And Koch interests are fighting that battle not only in Washington but increasingly in statehouses and even local policy meetings nationwide.

 In Dearborn, Mich., at a September meeting on the Trump fuel-efficiency rollbacks, Annie Patnaude of Americans for Prosperity, a Koch-funded group, spoke in favor. “This is a step in the right direction to protect consumers and workers against government mandates that would limit choice,” she said.

In Iowa, Americans for Prosperity joined the fight over whether to make it easier for gas stations to install chargers for electric vehicles. In Illinois, it discouraged state officials from considering subsidies for electric vehicles.

And last month an Americans for Prosperity representative trekked to a public hearing in Colorado, where regulators were thinking about becoming the 13th state to follow California’s stricter standards. The representative, Shari Shiffer-Krieger, a field director for the group, argued that people in the rugged state wanted SUVs, not tighter emissions rules. “Coloradans deserve much better,” she said.

The oil industry lost that fight. Colorado allied itself with California.

But Americans for Prosperity said fights like these get to the heart of its free-market philosophy. “We believe in a level playing field so all Americans have the equal opportunity to succeed,” said Bill Riggs, a spokesman for the group, in a statement. The organization will keep fighting “mandates that unfairly pick winners and losers in any industry,” he said.

Drafting Pro-Oil State Legislation

On August 6, a Marathon lobbyist, Stephen D. Higley, emailed a Wisconsin state representative an explainer of American fuel economy law. The memo didn’t mince words.

“It’s a relic,” the memo said, particularly at a time when the United States was “poised to become the largest oil producer in the world.”

The Wisconsin representative, Mike Kuglitsch, participates in the American Legislative Exchange Council, a Koch-funded group that helps companies write model legislation for state lawmakers to use as a basis for their own laws.

Emails obtained by the Times show that Marathon has been working with members of the legislative exchange council to build support for the Trump fuel-efficiency rollback in state legislatures and to denounce California’s power to write its own rules for cars. The emails were made public under Wisconsin’s open records law to Documented, a watchdog group that tracks corporate influence in public policy.

California’s special authority could effectively split the American auto market in two, since 13 other states — representing roughly 35 percent of nationwide car sales — have agreed to follow California’s stricter rules. That means automakers might find themselves making cars to two competing standards.

“Who should decide what cars and trucks consumers should buy, consumers themselves or unelected bureaucrats in Sacramento, California or Washington, D.C.?” the memo sent by Marathon said.

In a statement, Bill Meierling of the legislative exchange council said that mandating fuel economy was a rule that “many state legislators believe doesn’t make sense for working Americans.”

Just days after the emails between Marathon and the Wisconsin lawmaker, some 1,500 state legislators and other officials from across the country gathered in New Orleans to cheer on Elaine Chao, the Secretary of Transportation, at the legislative exchange council’s annual convention. Marathon sponsored the event.

The Transportation Department was determined to cut government regulations, said Ms. Chao, a former fellow at the Heritage Foundation, which has received Koch funding and has long opposed the fuel economy rules.

Mr. Trump’s proposed rollback, she said, “ranks as one of the most significant regulatory reforms that this administration is undertaking.” The room erupted in applause.

Hiroko Tabuchi is a climate reporter. She joined The Times in 2008, and was part of the team awarded the 2013 Pulitzer Prize for Explanatory Reporting. She previously wrote about Japanese economics, business and technology from Tokyo. @HirokoTabuchiFacebook