Reaction to Reported EPA Fuel Efficiency Rule, Part 1: The Politics of the Matter

In 2012, the Obama administration finalized fuel efficiency standards for cars and trucks of 54.5 miles per gallon by 2025. The standards exceed what is currently technologically feasible given consumer preferences, so a key safety valve of the 2012 regulation is a requirement that the federal government undertake a midterm evaluation by April 2018, pursuant to which federal regulators would decide whether the 2025 goal was achievable.

On November 30, the U.S. Environmental Protection Agency (EPA) unexpectedly announced that it had conducted a midterm review, and was proposing to adjust the 2025 standard to 51.4 mpg, and thus largely maintain the existing rules. Yesterday, Bloomberg’s Ryan Beene and John Lippert reported that the EPA today will issue a “final determination” that upholds its November 30 proposal.

The politics of the matter are clear: The EPA is desperately and unfairly trying to salvage President Obama’s climate legacy. The midterm evaluation for the 2025 fuel efficiency standards wasn’t due for more than a year from now. Why, then, would the EPA perform an ultra-rushed midterm evaluation during Obama’s lame duck period? The obvious answer is that the agency is trying to lock in the standards before President-elect Trump takes office in a week. I strongly suspect the effort is futile, as I see no legal basis why the Trump administration cannot reopen the rulemaking and change course.

The EPA’s midnight midterm evaluation raises another political point: It serves to again demonstrate the duplicity of EPA Administrator Gina McCarthy’s rhetoric to the American public. As I noted earlier this week, McCarthy says that one of her most lasting legacies is the “unprecedented outreach” the agency has performed to all sectors of society regarding environmental policy making. The midterm evaluation process makes a mockery of McCarthy’s claim.

As I noted above, the midterm fuel efficiency evaluation was due on April 2018, more than a year from now. In 2012, the EPA told automakers that the proposal would be published in mid-2017. The automakers relied on this information to commission their own technical analyses in order to inform the agency’s decision making. However, very little of this research was completed before the agency’s surprise announcement on November 30 that it proposed to effectively maintain the existing standards. The upshot is that the agency pulled the rug out from automakers.

But it gets worse. Concomitant with the EPA’s proposal, the agency published an administrative record that includes a nearly 1,000-page technical support document that relies on almost 1,100 studies. For any complex determination of this sort, the agency typically allows 90 to 120 days for comment. For the midterm evaluation, the EPA only allowed for a 30-day comment period, which is simply unfair because it deprives regulated entities of the time necessary to provide thorough comment. When automakers and auto dealers, among others, asked for an extension of the comment period, the EPA refused.

Accordingly, the comment period ended on December 30. Given the importance of the underlying policy, it is almost certain that the agency received scores of thousands, perhaps even hundreds of thousands of pages of comments and supporting documentation on its proposal. And yet, according to Bloomberg, the EPA will today issue a final determination. Therefore, in a mere 13 days, the EPA supposedly will have thoughtfully considered all this information. I sincerely doubt this is even possible.

In sum, the agency is ramming through this enormously consequential regulatory action without even having attempted any legitimate outreach with stakeholders. Instead, the agency is rushing as fast as it can, in order to promulgate its predetermined decision in the final week before the White House changes hands. Such a farcical administrative process puts the lie to EPA Administrator Gina McCarthy’s claim that her Orwellian claim that her legacy is founded in part on the agency’s “unprecedented outreach.”

In a subsequent post, I will discuss the policy of today’s expected decision. In particular, I will address the question of whether the EPA has consummated a power grab from its sister agency, the National Highway Traffic Safety Administration (NHTSA). Until 2009, NHTSA was, by law, the only federal regulator able to set fuel economy standards. But thanks to the 2009 endangerment finding, the EPA and NHTSA jointly promulgated fuel efficiency standards.

Technically, the EPA’s authority is limited to setting greenhouse gas emissions standards from vehicle tailpipes, but, in practice, this is the same as setting fuel efficiency. The decision for EPA and NHTSA to jointly promulgate fuel efficiency/tailpipe emissions standards was administrative—that is, it does not reflect the express will of Congress (and may even contradict it).

With today’s expected decision, the EPA appears to be acting solo and without NHTSA. If this is so, then it will mark an important expansion of EPA authority, one that was achieved at the expense of another federal agency.