California and 16 states sue the EPA on fuel standards: Will your next car get 50 mpg?

In this April 23, 2018, photo, a car is filled with gasoline at a station in Windham, N.H. Crude oil prices are at the highest level in more than three years and expected to climb higher. (AP Photo/Charles Krupa)

In the latest clash over climate change, California led a coalition of 16 states and the District of Columbia in a lawsuit challenging the Trump administration's rollback of greenhouse gas emission standards for automobiles.

The lawsuit follows Environmental Protection Agency (EPA) Administrator Scott Pruitt's April announcement that the federal government is halting the implementation of stringent Obama-era fuel economy standards that require car manufacturers to increase fuel efficiency to 54.5 miles per gallon by 2025.

According to Pruitt, the fuel efficiency standards put in place at the end of President Barack Obama's presidency are "too high" and were rushed through with "politically charged expediency." After evaluating the standards, Pruitt determined "the current standards are not appropriate and should be revised." His agency has not yet outlined new recommendations or proposed a new timeline, saying the announcement was just the beginning of the process.

California Attorney General Xavier Becerra, in announcing the lawsuit, argued the Obama-era clean car standards are "achievable, science-based and a boon for hardworking American families. But the EPA and Administrator Scott Pruitt refuse to do their job and enforce these standards."

The lawsuit accused Trump's EPA of acting "arbitrarily and capriciously" in stopping the implementation of the standards and revising the rules. The parties asked the court to "set aside and hold unlawful the U.S. EPA’s effort to weaken the existing clean car rules."

California was joined by Connecticut, Delaware, District of Columbia, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia and Washington.

The 54.5 miles per gallon requirement by Obama's EPA represents an average across a manufacturers' entire fleet. Former EPA Administrator Gina McCarthy estimated automakers could achieve the goal by adding zero-emission vehicles into production and boosting the miles per gallon average for cars and light trucks to about 36.

The lawsuit has been described as a warning shot from the group of states representing approximately 43 percent of new U.S. auto sales. The message they are sending is that the states will take steps to curb carbon dioxide emissions, even if the federal government opposes it.

The lawsuit is part of a larger political battle that has been brewing since President Donald Trump took office promising to repeal "job-killing" regulations and set EPA Administrator Scott Pruitt to the task of repealing President Obama's extensive climate change agenda. On both sides of the lawsuit, the stakes are high.

In 2012, President Obama announced new fuel economy standards requiring an equivalent of 56 miles per gallon for cars and light trucks by 2025. The plan was promoted as a way to curb U.S. dependence on foreign oil and reduce carbon dioxide emissions by about 6 billion metric tons over approximately 15 years, the lifetime of the program.

Working with stakeholders in the auto sector, including Ford, General Motors and the United Auto Workers, the Obama administration promised a new generation of cars that would save consumers money at the pump and produce fewer emissions.

"Over the lifetime of these standards, it would save more carbon dioxide pollution and more gasoline than any other step by any other country," said Daniel Becker, director of the Safe Climate Campaign and a longtime advocate for fuel-efficient cars. The Obama administration estimated by 2025 U.S. oil consumption would be cut by 2 million barrels per day and carbon dioxide emissions reduced by 6 billion metric tons in the out years of the program.

"It's the biggest single step any nation has ever taken to cut oil use and to cut pollution," Becker said. "So, it's a big deal."

The decision was celebrated by California and about a dozen other states that follow California's strict clean air regulations and zero emission vehicles program. Automakers also supported the rule, on the condition that the targets were reassessed in 2018.

The problem came in November 2016. After Donald Trump won the election, the Obama administration fast-tracked the review process that was supposed to take place in 2018. On Jan. 12, 2017, days before leaving office, President Obama issued a final determination mandating the new fuel standards go into effect for vehicles made between 2022 and 2025.

The announcement shocked the auto industry, which objected to the final determination and appealed to President Trump asking him to reconsider the emissions targets and timeline.

In February 2017, the Auto Alliance, the largest trade organization for car manufacturers, argued the greenhouse gas standards were too challenging to meet and "riddled with indefensible assumptions." The Alliance told President Trump it would cost $200 billion for automakers to comply, threatened production and put as many as a million jobs at risk.

Shortly after automobile manufacturers reached out, the EPA and Department of Transportation announced they were reopening the review process to determine if the Obama standards are "realistic." Last month, they concluded they were not.

"I don't think the states have much of a leg to stand on, legally," said Sterling Burnett, a senior fellow on environmental policy at the Heartland Institute.

"First, the Obama administration implemented the standards two years before it was supposed to," he said, describing it as an effort to "bind the hands" of the Trump administration on climate policy. "Second, California should have never been granted a waiver to implement greenhouse gas emissions on motor vehicles," he explained.

Under the 1970 Clean Air Act, California was given a waiver to implement tougher pollution targets than those that apply to the rest of the country. Under the Obama administration, that waiver was used to allow California to set higher fuel economy standards and about a dozen other states following California's lead, also got a waiver.

Burnett argued that the waivers were issued in direct violation of a 1975 law that preempts states from regulating their own fuel economy standards. "If it eventually reaches the Supreme Court, and I suspect it will, if they read the law they'll see they don't have a right to set fuel economy standards," Burnett said.

The possibility of a drawn-out legal fight over automobile emissions has reignited fears among car manufacturers at the prospect of having to produce one model of fuel efficient vehicle for a third of the country, and a different model for the rest. After applauding the administration's April decision to revise the fuel standard, the Auto Alliance stressed, "Maintaining a single national program is critical to ensuring that cars remain affordable."

Daniel Becker is more optimistic the states will prevail potentially in court but even more in the long run.

"In reality, I don't think the Trump administration is going to succeed in blocking these standards. And even if they do, it will only be temporary," he said. "The states and ultimately the federal government will come back and say, we need to continue to reduce the amount of fuel we use and the pollution that comes out of the tailpipe."

As important as uniform, predictable regulations are for the producers, many have already made plans for a clean energy future.

Traditional auto manufacturers have already invested billions of dollars into electric and hybrid cars. GM has its eye on a mass-produced electric vehicle by the early 2020s. Volvo announced by 2019 it would shift production entirely to hybrid and electric vehicles. Luxury car producers including Mercedes, BMW and Jaguar are also rolling out new electric and hybrid models. And Tesla continues to steal market share.

"Even if you don't care about the environment, these are very important standards," Becker said. The 56 mpg standard would save drivers $6,000 on average over the life of their vehicle and reduce U.S. oil consumption by 12 billion barrels over the estimated 15-year life of the program.

The fuel efficiency rules created costs up front, the manufacturers and consumers, but as foreign automakers adapt to a growing clean energy market, Becker said there's a "big risk" U.S. companies will fall behind.

"If American manufacturers are discouraged by the President of the United States from competing with foreign manufacturers, I don't think that's good for the United States," he said.

The California lawsuit was filed in the D.C. District Court of Appeals and does not yet have a hearing date set.

The next step for the EPA is drafting a new proposal to revise the fuel efficiency standard and issue a notice of proposed rule-making. According to reports, the EPA may recommend holding fuel standards at previous 2016 levels of 35.5 miles per gallon.

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