Trump Auto Plan Would Increase Fuel Use by 500,000 Barrels a Day

Source: By Ryan Beene, Bloomberg • Posted: Monday, July 30, 2018

A draft proposal by federal regulators to roll back U.S. automobile efficiency requirements contends that their preferred plan would reduce “societal costs” by roughly half a trillion dollars through 2029, while increasing U.S. fuel consumption by 500,000 barrels per day.

The assertions are detailed in an undated draft of the National Highway Traffic Safety Administration and Environmental Protection Agency forthcoming joint proposal to halt higher auto efficiency requirements after 2020.

The draft was obtained and published earlier by the New York Times. Sources familiar with the administration’s planning say the document appears to be a version sent to the White House for review in May, and cautioned that its contents could change somewhat by the time it’s released next week.

The agencies are poised to propose a dramatic overhaul of tough efficiency rules set during the Obama administration — freezing mileage targets from 2020 through 2026 instead of raising them each year. As Bloomberg reported on July 23, the plan will also propose revoking California’s authority to regulate carbon dioxide emissions from cars and light trucks and its mandate for electric vehicle sales in the state.

Different Information

“Put simply, the information available today is different from the information before the agencies in 2012, and even from the information considered by EPA in 2016 and early 2017,” the agencies wrote in the draft.

Under the proposal, new cars and light trucks would be required to average about 37 miles per gallon from 2020 through 2026, instead of increasing over time to roughly 47 mpg under standards adopted by the Obama administration, according to the draft.

In the preamble, the administration says the changes “would reduce societal costs by about half a trillion dollars and reduce highway fatalities by up to a thousand lives annually.’’

The estimate required projecting costs out through 2029. Societal costs can include elements including estimates of rising or falling air pollution, traffic accidents, road congestion, noise and energy security threats.

NHTSA and EPA submitted their joint proposal for review by White House regulatory officials in late May. That process is still ongoing, according to a government website that tracks those reviews.

700 Pages

The 700-page draft details the rationale for the rollback and the estimated effects on automakers, car buyers and society more broadly. The largest single source of the estimated savings comes from future spending on technology by the auto industry that can be averted by abandoning the Obama administration’s standards. Those savings are mitigated in part by higher consumer spending on fuel, the draft shows.

The proposal is based on a new analysis by the agencies, the draft says. It draws significantly different conclusions about costs and benefits than were made during the Obama administration, which estimated the rules would result in net benefits of about $98 billion.

The Alliance of Automobile Manufacturers and the Association of Global Automakers, two carmaker trade groups, declined to comment on the draft proposal. In May, the Alliance said that “automakers support continuous, year-over-year improvements in fuel economy, but future standards must account for marketplace realities.”

Dan Sperling, a member of the California Air Resources Board, disputed the administration’s claims about cost savings. “All the government analyses that were done on the Obama standards in 2011 and 2012 showed that the savings at the gas pump for consumers were far greater than the extra cost of the technology,’’ he said.

The administration’s proposal reduces chances that California and Trump officials can find a middle ground that would allow them to keep linking their tailpipe emission goals, Sperling said. “It’s hard to imagine how this can lead to negotiation or discussion.”

Luke Tonachel, a staff scientist for the Natural Resources Defense Council disputed the administration’s claims that rolling back the higher fuel standards would make U.S. roads safer. “They’re creating a bogus and false choice. We have cleaner and safer vehicles today, and we can continue to have them under the current fuel-economy standards,” he said.

The administration’s plan will prompt yearslong lawsuits that will delay the delivery of gas-saving technologies to consumers, Tonachel said.

“This proposal will increase what Americans have to pay at the pump and it will only benefit the oil industry,’’ he said. “It increases pollution and threatens our health.’’