States want to flatten Biden-era rule they say unfairly tips the scales for electric vehicles

(CN) — A Biden administration’s energy rule greatly exaggerates the fuel efficiency of electric vehicles compared to gas-powered ones, a coalition of states and a free-enterprise advocacy group told an Eighth Circuit panel Wednesday.

The states are asking the court to vacate a U.S. Department of Energy mandate for average fuel economy standards, saying U.S. auto manufacturers are forced to overinvest in electric cars to meet the requirements.

The rule has its roots in the 1973-74 Arab oil embargo that caused gasoline prices to skyrocket. Congress enacted legislation to increase fuel efficiency, including electric vehicles in its overall calculations. Since 2000, those formulas have favored electric vehicles as part of the government’s effort to provide incentives for moving away from gasoline to electric power.

With sales of electric vehicles continuing to rise, the Department of Energy aimed to correct the imbalance of that calculation. But the petitioners claim the latest rule did not go far enough.

The department intended to get rid of the 2000 rule that used a fuel-content factor multiplying the “real-world efficiency” of electric vehicles by over 666%, Michael Buschbacher, a lawyer with Washington, D.C.-based Boyden Gray representing the American Free Enterprise Chamber of Commerce, told the three-judge panel.

But the department didn’t get rid of the disparity, Buschbacher said, and instead reapplied the 666% factor.

U.S. automakers complained, saying “it would make the CAFE [Corporate Average Fleet Efficiency] standard too stringent in real-world terms and would cost them billions and billions in fines and penalties. And the automakers said it would get in the way of the current administration’s push to electrify the nation’s vehicle fleet by 2030 to 50%."

U.S. Circuit Judge Ralph Erickson, a Donald Trump appointee, challenged the Department of Energy thinking that oil was a finite resource.

“Just take North Dakota, where I come from,” Erickson said. “In 1990, before the advent of modern methods of extraction of shale oil, it was said North Dakota was basically sitting on energy that would only be viable if oil got to … $35 or $40 a barrel.”

He said that after fracking methods improved, people say the state’s extractable oil reserves are bigger than those of Saudi Arabia.

“So, how scarce is oil today?” Erickson asked.

Joshua Koppel, a U.S. Justice Department attorney, responded: “The Department of Energy acknowledges that the United States has approximately five years of oil petroleum reserves in the country, but it explained that oil petroleum fuels are a global market, and [oil and fracking] are subject to marketing restraints and shocks caused by natural disasters or events.”

Patrick Valencia, Iowa deputy solicitor general arguing on behalf of the states, told the court the final rules don’t meet the government’s goal of producing safe, affordable and efficient cars.

“Electric vehicles are still significantly more expensive to make than gas-powered vehicles, but car manufacturers need to use electric vehicles to comply with the regulatory requirements,” Valencia said. “So they increase the cost of gas-powered vehicles, thus forcing our citizens who buy gas-powered cars to subsidize the cost of electric vehicles.”

The states petitioning the court are Iowa, Florida, Idaho, Kansa, Mississippi, Missouri, Montana, Nebraska, Ohio, Oklahoma, Texas and Utah.

The other members of Wednesday’s Eighth Circuit panel were U.S. Circuit Judge Lavenski Smith and U.S. Circuit Judge Duane Benton, both George W. Bush appointees. The court did not say when it would issue a ruling.

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