Can Congress Veto EPA’s Fuel Economy Rush Job?

The Environmental Protection Agency’s recent proposal, published eight months ahead of schedule, to keep in place the agency’s model year (MY) 2022-2025 greenhouse gas (GHG) emission standards for new motor vehicles, is the epitome of a “midnight regulation.” In a previous post, I assumed EPA’s action, known as the Mid-Term Evaluation, is not a “rule,” merely an evaluation of a rule, and hence is immune to legislative veto via the Congressional Review Act. I now believe otherwise.

Background

In October 2012, EPA and the National Highway Traffic Safety Administration (NHTSA) finalized a joint rule establishing GHG and fuel economy standards for MY 2017-2025 motor vehicles. Due to the rule’s long timeframe and NHTSA’s lack of authority to establish fuel economy standards for more than five consecutive years, the joint rule committed the agencies to undertake a Mid-Term Evaluation (MTE), allowing them to adjust the MY 2022-2025 standards in light of new information regarding technology, compliance costs, fuel prices, consumer acceptance, job impacts, and other factors.

When EPA, NHTSA, and the California Air Resources Board (CARB) issued their Draft Technical Assessment Report for the MTE in July 2016, EPA told automakers, Congress, and the public that it would issue a draft MTE in mid-2017 and finalize the evaluation by April 1, 2018.

Instead, EPA proposed the MTE on November 30, 2016. Moreover, EPA has limited the comment period to 30 days. That is way too little time for the public to adequately vet and thoughtfully respond to the agency’s 268-page proposal and 719-page technical support document—especially during holiday season.

One can only conclude—and EPA has not denied—that the agency will finalize the MTE by January 20, 2017—Inauguration Day. Apparently, EPA plans to confront the incoming Trump administration with a fait accompli, thereby preempting mid-course corrections to motor vehicle GHG standards adopted 10 to 14 years before the targeted vehicles are even built. Note that GHG standards are de-facto fuel economy standards, because, to quote EPA and NHTSA, carbon dioxide constitutes 94.9% of vehicular greenhouse gas emissions, and “there is a single pool of technologies . . . that reduce fuel consumption and thereby CO2 emissions as well” (75 FR 25372).

Auto Alliance: Withdraw the MTE

The Alliance of Automobile Manufacturers, an association of 12 leading manufacturers of cars and light trucks, recently asked EPA administrator Gina McCarthy to withdraw the proposed MTE, or, failing that, to extend the comment period from the current 30 days to at least 120 days.

The Alliance contends that, in addition to denying the public an adequate opportunity to comment, EPA has reneged on its obligation to implement a “harmonized and consistent national program” for motor vehicles.

The auto industry is effectively subject to fuel economy regulation by three agencies under three sets of rules. The industry agreed to this cockamamie system under duress, but was promised that EPA, NHTSA, and CARB would coordinate their standards and, indeed, their schedules. As the 2012 joint rule states:

In order to align the agencies proceedings for MYs 2022–2025 and to maintain a joint national program, EPA and NHTSA will finalize their actions related to MYs 2022–2025 standards concurrently [77 FR 62784].

Due to EPA’s rush to judgment, however, that’s not going to happen. As the Alliance observes:

Clearly, EPA and NHTSA now are on different tracks. As the Alliance has stated publicly, and reiterate here, the two pillars of the joint 2012 GHG and Fuel Economy Rule, since the beginning, has been the concept of One National Program and the equally important commitment to a rigorous, fact-based MTE. EPA’s early action has compromised both pillars: there is now neither a harmonized, single national program, nor the appearance of a credible midterm review.

NHTSA now has two choices. The agency can produce an independent evaluation that “may be substantially different and not at all harmonized with EPA’s determination.” Alternatively, “NHTSA may feel unduly constrained to align itself with EPA’s determination regardless of the existence of facts and analyses that would suggest the need for a different outcome.” Bottom line: “Either way, the process now bears no resemblance to the coordinated effort that was envisioned in the midterm evaluation.”

Congressional Review Act

The Congressional Review Act, enacted as part of the Small Business Regulatory Reform Act of 1996, created an expedited procedure whereby Congress can veto a final agency rule before it can take effect. To block a rule, Congress has 60 legislative days in which to pass a joint resolution of disapproval. To pass in the Senate, the resolution only needs a simple majority, not the 60 votes required for cloture. Moreover, Senate debate on a resolution of disapproval is limited to no more than 10 hours.

As mentioned, I initially thought the CRA did not apply to the MTE because the latter is an evaluation of a rule rather than a rule itself. That, however, now strikes me as EPA propaganda. They can fool even us skeptics some of the time!

In the CRA (5 U.S. Code § 804), the term “rule” has the same meaning it has in section 551 of the U.S. Code. In § 551, “rule” means “the whole or a part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy.”

The MTE easily fits within that definition. It is a statement of general applicability and future effect designed to implement and interpret the GHG/fuel economy policy adopted by the agencies in 2012.

EPA’s MTE flouts the agency’s duty, under both the 2012 joint rule and the Clean Air Act, to implement a coordinated program based on a rigorous assessment informed by a comment period commensurate with the economic significance and complexity of the issues. Congress should place the MTE on the CRA chopping block along with several other late-term Obama administration energy and climate rules.