Energy Act Addresses Fuel Economy Standards; EPA Denies Calif. Waiver Request

January 14, 2008 // Published as a news service by IHS

The act requires the U.S. Department of Transportation (DOT) to set tougher fuel economy standards, starting with model year 2011, until the standards achieve a combined average fuel economy for model year 2020 of at least 35 miles per gallon (mpg), according to the U.S. Department of Energy (DOE) Office of Vehicle Technologies (OVT) Program.

The standards apply to the total fleet of passenger and non-passenger automobiles manufactured for sale in the U.S. for that model year up to a gross vehicle weight of 10,000 pounds.

Currently, passenger automobiles must achieve an average of 27.5 mpg while "light trucks"- a category that includes pickup trucks, sport utility vehicles and minivans - must achieve 22.5 mpg bringing the average for cars and light trucks to about 25 mpg.

The Alliance to Save Energy (ASE) claims that the improved fuel economy standards will reduce U.S. oil consumption by 1.1 million barrels per day by 2020 saving consumers $22 billion per year.

Starting in model year 2015, the new act starts to phase out the automakers' credit for manufacturing flex-fueled automobiles, which can run on gasoline or an alternative fuel (usually the ethanol-rich E85). The credit is phased out completely by model year 2020 placing additional pressure on automakers to improve fuel economy.

To help consumers maximize their fuel economy, the act requires the U.S. Environmental Protection Agency (EPA) to create rules for a national labeling system for tires to show their impact on fuel economy.

For federal fleets, the act prohibits agencies from purchasing light-duty vehicles or medium-duty passenger vehicles that do not achieve low greenhouse gas (GHG) emissions and it requires new regulations to cut the petroleum consumption of federal fleets by 20% by 2015 while boosting alternative fuel consumption by 10%.

The act also calls for studies by the National Academy of Sciences on the technologies available to meet the new standards and on the possibility of increasing the fuel economy of medium- and heavy-duty trucks.

In addition, the act establishes incentives and loan guarantees for advanced vehicle technologies but those measures will depend on future appropriations of funds. See Title I of the new Energy Act on the Library of Congress web site at http://thomas.loc.gov/cgi-bin/bdquery/z?d110:h6:.

As noted by the ASE, the new fuel economy standards are designed to reduce GHG emissions by an amount equivalent to removing 28 million of today's cars from the road. A separate requirement to boost renewable fuel use will also lower GHG emissions.

California Waiver Request
Given these national regulations, the EPA denied a request for a Clean Air Act waiver that would have allowed California to set its own GHG emission limits for vehicles.

The Clean Air Act (Title II) generally prohibits states from adopting or "attempt[ing] to enforce" their own emission standards for new motor vehicles or engines, according to the EPA. In general, it allows only federal standards for motor vehicle emissions.

There is an exception to this rule in Section 209(b) (42 U.S.C. 7543(b)), which provides that:

The [EPA] administrator shall, after notice and opportunity for public hearing, waive application of this section to any state that has adopted standards (other than crankcase emission standards) for the control of emissions from new motor vehicles or new motor vehicle engines prior to March 30, 1966 if the state determines that the state standards will be, in the aggregate, at least as protective of public health and welfare as applicable federal standards.

Unless:

• California was "arbitrary and capricious" in determining that its standards will be, in the aggregate, at least as protective of public health or welfare as applicable federal standards.
• California does not need such state standards to meet compelling and extraordinary conditions.
• Such state standards … are not consistent with section 202(a) of the act.

Only California adopted such standards before March 30, 1966 so only California can seek such a waiver, said the EPA. California previously requested waivers under Section 209(b) and while the EPA never fully denied a waiver request, the agency said it did not always grant waivers in full.

On at least six occasions prior to the 1977 Clean Air Act amendments, the agency granted a waiver in part, while denying other parts of the request. In 1975, it denied a waiver for the 1977 model year but granted it for 1978.

Since the 1977 amendments - when the act was amended to require that the California standards will be, in the aggregate, at least as protective of public health and welfare as applicable federal standards - there was one instance in which the EPA made a determination that California's requirements were technologically feasible in part granting a waiver for the 2007 through 2011 model years but making no decision for model years after that, said the EPA.

Since 1967 California submitted approximately 50 full waiver requests and another approximately 45 requests for "within the scope" (of prior waiver) determinations. Six of these were granted with conditions or partial approvals, said the EPA.

Conditions/partial approvals were based on need for more lead time or lack of technological feasibility to meet the standard on the full time period such as waiver granted but with a limited time period, said the EPA.

With regard to length of time of the process, in two waiver decisions - the Low Emission Vehicle I and II programs (LEV I and LEV II) and Zero Emission Vehicle Program (ZEV) - where California significantly modified its regulations - the EPA took six to nine months between the beginning of the comment period and a final determination, said the EPA.

Source: U.S. Department of Energy (DOE) Energy Efficiency and Renewable Energy Vehicle (EERE) Technologies Program.