When Trump’s deregulation is at odds with industry

Source: Camille von Kaenel, E&E News reporter • Posted: Monday, August 28, 2017

The big rig manufacturers President Trump once cheered on the White House lawn could face years of disarray if he rolls back climate change regulations.

U.S. EPA’s announcement last week that it will reconsider parts of the greenhouse gas standards for big rigs left the trucking industry scrambling and sparked the risk of a prolonged legal fight with California and environmentalists.

Manufacturers of trailers and glider kits, which are new truck frames fit with old engines, are seeking exemptions from the rules that were finalized in October (Climatewire, Aug. 18). But EPA Administrator Scott Pruitt’s proposal is facing opposition from the wider trucking industry, which sees a better bottom line in higher fuel efficiency and regulatory certainty.

“This is one of the very few if not the only regulation in the history of EPA that’s ever had the opportunity to give a payback to fleets,” said Glen Kedzie, the vice president and environmental counsel at the American Trucking Associations (ATA). “There will be winners and losers if there’s a change.”

Pruitt’s decision comes as part of an administrationwide push to roll back environmental regulations with the promise of boosting jobs. Exempting glider kits from regulation could bolster the small businesses that manufacture them. And many of the firms lobbying for relief — including the flagship, Tennessee’s Fitzgerald Glider Kits — are located in regions that voted overwhelmingly for Trump.

The possible change, however, also circumvents bigger manufacturers that supported the rule when it came out and injects uncertainty into the wider trucking industry that employs tens of thousands more people across the country. The Truck Engine Manufacturers Association (EMA) and ATA have already said they’re worried Pruitt’s move will disrupt their production plans and create a patchwork of rules.

Kedzie said the administration’s announcement came as a surprise, sending him scrambling to check with members on crafting a new position. He is concerned EPA might reconsider other parts of the regulation, as well.

“It’s a different EPA, and we’ve come to expect the unexpected,” he said.

Part of the reason the industry is divided is that the phase 2 fuel efficiency regulation sets separate rules for engines, trailers and trucks. The measures require up to a 25 percent reduction in carbon emissions for tractor-trailers over the next 10 years, and smaller reductions for delivery trucks, school buses and other large vehicles.

Trailers and glider kits would have to comply to EPA emissions rules for the first time ever in 2018.

Eyes on Calif.

The Truck Trailer Manufacturers Association Inc. argued EPA was overreaching by regulating trailers because they don’t have a tailpipe to emit. It sued the agency and cheered Pruitt’s review.

The Trump administration’s decision to delay implementation and start a new rulemaking risks furthering a divide with California.

“Clearly there will be legal challenges to such EPA action, again bringing uncertainty to the industry that needs to be making the investments today,” said Margo Oge, the former head of EPA’s transportation office under Obama.

Acting under its special Clean Air Act authority that Trump allies have threatened to revoke, the Golden State is set to adopt stringent rules for both trailers and trucks this fall.

That has manufacturers worried about a patchwork.

“Truck and engine manufacturers have significant concerns that reopening the federal rules could lead to the promulgation of different requirements across the nation,” said Jed Mandel, the president of EMA, which represents truck and engine manufacturers.

The Truck Renting and Leasing Association also raised the concern that Pruitt’s move would backfire, provoking California into enacting more stringent standards.

California had been regulating trailers since 2008 but largely stopped to align with the first phase of federal standards in 2013.

On Thursday, the California Air Resources Board will consider how it will regulate the industry through 2027. Staff has proposed establishing a different set of standards — more stringent and accelerated than the federal standards — were EPA to make a change, according to the agenda for the workshop.

Dave Clegern, a spokesman for the regulator, said the state would continue its rulemaking.

Other states, like the 12 that have adopted California’s emissions rules for light-duty vehicles, have yet to choose to adopt its heavy-duty rules, but that could change. The ARB and the states of Connecticut, Iowa, Massachusetts, Oregon, Rhode Island, Vermont and Washington said they had a “substantial interest” in seeing that the federal standards are left in place in a motion to intervene in the lawsuit brought by the trailer manufacturers.

Trailers account for more than 10 percent of the global warming emissions benefits of the rule, according to an analysis by the Union of Concerned Scientists.

Wabash National, the largest manufacturer of trailers, had worked closely with EPA to craft the standard and belonged to a Heavy Duty Fuel Efficiency Leadership Group that cheered the rules when they came out last year. Jamie Scarcelli, vice president of corporate development and strategy at Wabash, said last year the firm wasn’t involved with TTMA’s lawsuit.

A spokeswoman said Wabash would not comment on the review. Dave Cooke, senior vehicles analyst at UCS, called the silence “frustrating” because the firm has invested in so much efficient technology.

Political win for niche industry

Certain groups in the trucking world were able to sway the administration to reopen the rulemaking, despite meetings between the big manufacturers and fleet managers that supported the rule in its entirety and the new administration.

Because they have not had to comply with modern-day emissions standards so far, glider kits are 25 percent cheaper than a new truck. That has made them increasingly popular over the past 15 years, going from a few hundred on the road to 10,000. Regulators estimated they would represent around one-third of the nitrogen oxides and particulate matter emissions from the truck fleet by 2025.

That would be more, per year, than the lifetime illegal emissions from the Volkswagen scandal.

Fitzgerald Glider Kits told EPA the new regulation, which would cap production per firm at 300 a year, “would effectively destroy the glider industry.”

Rep. Diane Black (R-Tenn.), who is running for governor in her home state, intervened, introducing legislation to protect glider kits from being regulated and helping the firm petition EPA for relief.

“To say that I am grateful for the hard work of Administrator Pruitt and his team is an understatement,” Black said in a statement.

She distributed a press release quoting Pruitt saying, “EPA is committed to revisiting rules that may not fall under the Agency’s jurisdiction and have negative impacts on businesses across the country.”

Her office did not respond to repeated requests for comment for this story.