Changes to Fuel Standards Debated in House Hearing

WASHINGTON (CN) – Lawmakers said Thursday that nearly 500,000 direct and indirect automotive jobs could be lost by 2025 if the Trump administration’s proposed fuel-economy rule takes effects and rolls back energy standards that have been in place for years.

An employee works on a 2018 Ford F-150 truck being assembled at a plant in Dearborn, Mich., on Sept. 27, 2018. (AP Photo/Carlos Osorio, File)

Panelists discussed the Corporate Average Fuel Economy, or CAFE, standards in a joint hearing of the House Energy and Commerce Subcommittee on Consumer Protection and Commerce and the Subcommittee on Environment and Climate Change.

If the standards are reversed through the administration’s proposed Safer Affordable Fuel-Efficient Vehicles Rule, U.S. automakers will have a disadvantage with manufacturers in other countries keeping up with worldwide emissions standards, some lawmakers and experts say.  

Citing data from the Motor & Equipment Manufacturers Association, an Energy and Commerce Committee memo released ahead of Thursday’s hearing says the proposed rule would eliminate 500,000 “direct, indirect, and induced” automotive jobs by 2025.

The CAFE standards, established in 1975 through the National Highway Traffic Safety Administration, mandate a uniform size for tailpipes and other vehicle specifications across the country. Fourteen other states plus the District of Columbia have adopted a higher standard for emissions set by California, which the Environmental Protection Agency allows through a state-specific waiver.

In 2010, the nationwide specifications were finalized for vehicles made from 2012 to 2016, and mandated a 35.5 miles per gallon standard for light-duty vehicles.  Two years later, the proposed specifications for vehicles made from 2017 to 2025 rose to 54.5 miles per gallon.

In January 2017, the EPA agreed to keep some of these standards and closed a midterm review of them.But former Administrator Scott Pruitt said in March of that year the standards were “not appropriate in light of the record before EPA” and should be revised, reopening standards for vehicles made from 2022 to 2025 under the proposed Safer Affordable Fuel-Efficient, or SAFE, Vehicles Rule.

The SAFE rule would freeze fuel-efficiency standards at the 2020 requirement of 43.7 miles per gallon. It would also revoke the California waiver.

William Wehrum, assistant administrator of the EPA’s Office of Air and Radiation, said at Thursday’s hearing that the SAFE rule is an attempt to deliver on a promise President Donald Trump made to constituents to “fix the current fuel economy and greenhouse gas emissions standards.”

The rule also attempts to bring down vehicle prices, Wehrum said.

But Congresswoman Debbie Dingell, D-Mich., said she does not believe that good-faith conversations are happening between the EPA and states to determine a happy medium for fuel standards.

Dingell said the Trump administration needs to be more cognizant of treating California as an equal partner in these conversations along with automakers.

“This is going to the courts, you and I both know that this is going to end up in the courts and that’s an uncertainty they don’t want. They’ve written you and written the president and told you that’s not what they want,” Dingell told Wehrum. “The auto industry is very fragile right now…and we can’t take its health for granted.”

During the second of two panels, United Auto Workers Legislative Director Josh Nassar agreed with Dingell, saying the last thing auto workers or those retired from the industry want to see is litigation. Lawsuits push uncertainty of market standards to investors, who are then less likely to invest in the industry, he said.

“They’re just looking at where the most stable investments for growth could be and if it’s less desirable here, they’ll go elsewhere,” Nassar said.

David Freidman, vice president of advocacy for Consumer Reports, a national nonprofit that observes market practices, also said if the investment in cleaner cars is diminished, investors will turn away.

“Standards encourage the development of new technologies and vehicles here, and there is real danger that if you don’t have standards, the standards don’t push at all, they will be done elsewhere,” Freidman said.

Eight other witnesses rounded out the hearing Thursday. They included  Heidi King, deputy administrator for the National Highway Traffic Safety Administration; Mary Nichols, chairwoman of the California Air Resources Board; Ramzi Hermiz, president and CEO of Shiloh Industries Inc.; and Shoshana Lew, executive director of the Colorado Department of Transportation.

Other panelists included Louisiana Attorney General Jeff Landry; David Schwietert, interim CEO of the Alliance of Automobile Manufacturers; and Nick Loris, deputy director of the Heritage Foundation’s Thomas A. Roe Institute for Economic Policy Studies.

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