Upton: Roll mpg rules back to ‘reasonable’ levels

Keith Laing, Detroit News Washington Bureau
1:47 p.m. EDT September 22, 2016

Washington — Michigan’s top-ranking congressional Republican called Thursday for federal regulators to roll back a requirement that mandates automakers to achieve a fleetwide average of 54.5 miles-per-gallon for cars and light-duty trucks by 2025.

U.S. House Energy and Commerce Committee Chairman Fred Upton, R-St. Joseph, said during a hearing on Thursday that the stringent gas mileage rules should be adjusted “to more reasonable and achievable levels” when they come up for a Congress-mandated review in April 2018.

“There is no question that improved vehicle fuel efficiency is a worthy goal, but not if it is reached in a way that harms consumers. With the average cost of a new car at $34,000 and rising, we don’t need any unnecessarily costly Washington mandates,” said Upton.

“Being from Michigan, I also worry about the impact these standards could have on the long-term health of the auto sector,” he continued. “The industry is doing well now, thanks in large part to pent-up demand after the last recession and very low interest rates that make financing about as cheap as it has ever been. But these two temporary factors will not last, and the industry will be stuck with these costly standards that increase every year.”

 

The gas-mileage rules, known as Corporate Average Fuel Economy (CAFE) standards, are beginning to take effect with the 2017 model year. The rules, which are locked in for the model years between 2017 and 2021, call for ramping up from the current fleet-wide average of about 34 mpg for cars and trucks that were required in 2016, to the eventual goal of more than 50 mpg by 2025.

The increase starts with a rise to an average of more than 35 mpg for the 2017 models that already are being rolled out. They gradually rise to 41 mpg by 2021.

Automakers have a chance to argue for reductions for the model years between 2022 and 2025 during a review that is set to take place April 2018.

Auto companies that do not meet the higher emission standards will be fined $5.50 for each one-tenth of a mile-per-gallon their average fuel economy falls short of the standard for a model year, multiplied by the total volume of vehicles that are in the fleet that fail to meet the new requirements. Automakers will be allowed to purchase credits from other auto companies that have come in under the mileage requirements to cover pollution deficits.

Thursday’s hearing follows a projection from federal regulators which stated that automakers may only be able to achieve a fleet-wide average of between 50 and 52.6 mpg by the deadline that was set by the Obama administration in 2012.

Auto companies have seized upon the projection to argue that federal regulators should consider scaling back the stringent mileage rules when they come up for a mid-term review in 2018.

Mitch Bainwol, president and CEO of the Alliance of Automobile Manufacturers said Thursday, “The most critical fact about CAFE is that it is effectively a mandate on consumption. It doesn’t matter what we put into those showrooms, it matters what your constituents take out.”

Environmental groups have countered that complaints from automakers about the mileage rules are disingenuous because they were consulted on the emission targets before they were finalized.

“In 2012, automakers stood with President Obama as he signed critical fuel-efficiency safeguards into action. Now claiming the standards are unrealistic, automakers are trying to pump the brakes on climate progress,” Andrew Linhardt, Sierra Club associate director for legislative and administrative advocacy, said in a statement released as Thursday’s hearing was unfolding.

Officials from the National Highway Traffic Safety Administration and U.S. Environmental Protection Agency defended the emission requirements to lawmakers on Thursday, arguing that early returns have already shown the higher standards are feasible.

“The draft report shows that automakers are adopting CO2-reducing technologies very rapidly,” Janet McCabe, EPA Acting Assistant Administrator for the Office of Air and Radiation, told the panel.

Democrats on the panel took aim at a system of credits that is included in the emission rules during Thursday’s hearing, arguing that the buyouts weaken the overall goal of reducing pollution from cars and trucks.

“Should an eco-friendly sedan excuse a gas-guzzling SVU?” Rep. Jan Schakowsky, D-Ill., asked.

Other Republicans on the panel suggested eliminating the mileage rules altogether, arguing that Republican presidential nominee Donald Trump would likely ditch the requirements if he is successful in his White House bid.

“You could make a good intellectual case to just replace CAFE and let the market work. But we need a new president,” Rep. Joe Barton, R-Texas, said. “If Mr. Trump is president, we’ll be back.”

http://www.detroitnews.com/story/business/autos/2016/09/22/cafe/90842938/

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