Public to Obama Administration: Adopt New Auto Fuel Efficiency and Carbon Standards

Greetings from the Motor City! Obama Administration officials are in Detroit to gather public input on the EPA and Department of Transportation proposal to raise new automobile efficiency standards to the equivalent of 54.5 mpg by 2025, nearly double that of today’s new vehicles. As I’ll be testifying later today, the standards are a huge step forward. They will dramatically cut U.S. oil consumption and dangerous emissions carbon pollution. The standards are good for consumers and the economy and will spur job creation. The Obama Administration should keep the standards strong and adopt them as final regulations this summer.

The Detroit hearing is the first of three public hearings, including Philadelphia on January 19th and San Francisco on January 24th. Anyone is invited to testify or submit written comments to the agencies. NRDC makes it easy to send in written comments, just click here.

Today, I expect to hear support for the standards from a broad range of stakeholders. Thirteen automakers and individual dealers have already recognized that the standards are good for business. Labor leaders, local elected officials, economists and consumers will add their supportive voices.

Not everyone is on the same page, however. The National Automobile Dealers Association (NADA) and a few House Republicans have opposed the proposal. Others in the automotive industry want them to reconsider. Writers at Automotive News have urged NADA to be “reasonable” and let the standards move forward. As they say, “there is general agreement that the most reasonable approach for the industry is to get on with it.”

I agree. Below is my testimony, as prepared for delivery:

Testimony of Luke Tonachel

Hearing on EPA and NHTSA Proposed Rule for 2017 and Later Model Year Light-Duty Vehicle Greenhouse Gas Emissions and Corporate Average Fuel Economy Standards

January 17, 2012, Detroit, MI

Good morning. Thank you for the opportunity to testify today. My name is Luke Tonachel, and I am a senior analyst in the Energy and Transportation program at the Natural Resources Defense Council. I am pleased to be here on behalf of NRDC’s 1.3 million members and online activists.

The model year 2017 to 2025 car and light truck standards, proposed jointly by EPA and NHTSA, are a giant step forward. The standards are good for the environment, consumers, and the economy. The standards ensure that, as a nation, we are investing in our future instead of being beholden to a status quo of our heavy dependence on oil which is fueling dangerous emissions of carbon pollution and draining our economic wealth.

These standards present the U.S. with a choice of how to spend a half trillion dollars over the next 20 years. A half trillion dollars is a conservative estimate of the value of the fuel savings from this program from 2017 to 2030. Without the standards, we will unneccessarily send $350 billion overseas to OPEC and other oil producing countries. We will also pad the revenues of the oil industry by another $150 billion.

By strengthening these standards to the equivalent of 54.5 mpg by 2025, we will invest that $500 billion back into our economy and create almost 500,000 new jobs while cutting carbon pollution by the equivalent of 76 coal power plants. Under the rule, the U.S. would invest about $300 billion in new vehicle technologies, bringing cleaner, more fuel-efficient cars and trucks to the marketplace. Consumers would have an additional $200 billion in their pockets to spend in the economy, thanks to the fuel-sipping vehicles.

Making better vehicles means more U.S. jobs. A recent report from the investor group Ceres estimates that auto industry investments and consumers savings triggered by the proposed standards would generate 484,000 jobs across the country.[1]

This is not surprising. NRDC recently partnered with the UAW and National Wildlife Federation to quantify the jobs being spurred by the current 2012 to 2016 standards. In our joint report, Supply Ingenuity, we found that over 150,000 workers are currently employed in 300 automotive supply companies across 43 states to make parts that enable cars and trucks to cut pollution and go farther on a gallon of gas.[2]

Consumers win under this proposal because they will have more choices of cleaner, fuel-efficient offerings in the showroom. As the agencies’ analysis shows, consumers will have net savings of up to $4,400 over the life of their vehicles under the standard. Importantly, for most consumers that finance their vehicles, the net savings will be brought home immediately. Under the standards, the combination of fuel expenditures and new car loan payments will be lower in the first month. By 2030, the aggregate national savings will provide the equivalent of an annual tax rebate of $330 for every American household.[3]

Consumers want cleaner, more fuel-efficient vehicles and they are buying them. According to data from the University of Michigan, the average fuel economy of new vehicles since data was first collected in October 2007 has been increasing year-over-year.[4]  

Improved efficiency is being achieved across the fleet. Gone are the days when V-8s were king. Six- and four-cylinder engines are the norm, with thrifty four-cylinders being the most popular choice. Adding turbochargers to gasoline direct injection engines can provide the same power as larger engines while reducing fuel consumption and carbon dioxide pollution. Transmissions are evolving with more gears that allow engines to stay longer in efficiency sweet spots. Automakers are improving aerodynamics and increasing the use of lighter weight, high-strength materials to reduce load while maintaining or improving safety.

The agencies analysis shows that internal combustion engine vehicles will continue to reign through the 2017 to 2025 standards. Over 80 percent of new vehicles in 2025 will be internal combustion engine-powered vehicles with more advanced and innovative engines, transmissions and bodies. Hybrid electric and plug-in electric vehicles will continue to grow in the marketplace but most new cars and trucks will run solely on gasoline, just less of it.

In addition to using less gas, these new vehicles will cut emissions of dangerous global warming pollution in half compared to today’s average vehicles. NRDC estimates that the 297 million metric tons of greenhouse gas reductions in 2030 from the standard is equivalent to the avoiding the annual emissions from 76 coal-fired power plants. These standards will help protect our economy by helping to reduce extreme weather events such as hurricanes, heat waves and floods.

The numerous and large benefits of the 2017 to 2025 standards has resulted in very broad support. Since the agreement was forged to reach this proposal, support has come from almost all of the auto industry[5], and from prominent Republicans and Democrats[6], consumer advocacy groups[7],[8], national security groups[9],[10], economists[11], business leaders[12], small business owners[13], the UAW[14], and environmental organizations[15]. A poll from the publishers of Consumer Reports is just the most recent example of this support. Of the respondents, 77 percent wanted the government to raise and enforce stronger fuel efficiency standards.[16]

The National Program and this latest set of standards are example of good government. Despite the gridlock in Congress, the EPA, NHTSA and the California Air Resources Board have demonstrated an effective partnership to develop policy that meets the objectives of the Clean Air Act and the Energy Policy and Conservation Act. Each agency has played an important and critical role in shaping this proposal. The proposal is also a product of discussions with automotive industry, labor, environmental and consumer stakeholders and the result is strong set of standards.

In conclusion, the U.S. has an opportunity to invest half a trillion dollars over the next 20 years. Implementing the 2017 to 2025 standards will allow us to invest that money in America. It will promote vehicle technology leadership, protect the environment, help consumers and create U.S. jobs. Some in Congress seek to disrupt this standards-setting process. If they were to succeed, Americans would be robbed of more choices in cleaner, more efficient vehicles, the automotive industry would struggle under market uncertainties driven by volatile fuel prices, and the nation would be faced with greater oil dependence and pollution. The agencies should forge ahead, keep the model year 2017 to 2025 vehicles standards strong and make them final this summer.

Thank you for your attention.

[1] Ceres. More Jobs per Gallon: How Strong Fuel Economy/GHG Standards will Fuel American Jobs. July 2011.

[2] NRDC, NWF and UAW. “Supplying Ingenuity: U.S. Suppliers of Clean, Fuel-Efficient Vehicle Technologies.” August 2011. www.nrdc.org/transportation/autosuppliers.

[3] NRDC and UCS. “Saving Money at the Gas Pump: State-by-State Consumer Savings from Stronger Fuel Efficiency and Carbon Pollution Standards”. September 2011. http://www.go60mpg.org/docs/NRDC_UCS-State_by_State_Savings-FINAL_9-11.pdf.

[4] University of Michigan Transportation Research Institute, “Average sales-weighted fuel economy of purchased new vehicles for October 2007 through December 2011”. http://www.umich.edu/~umtriswt/EDI_sales-weighted-mpg.html.

[5] Commitment letters from 13 automakers to Secretary LaHood and Administrator Jackson. Dated July 2011 . Letters from BMW, Chrysler, Ford, GM, Honda, Hyundai, Jaguar Land Rover, Kia, Mazda, Mitsubishi, Nissan, Toyota Volvo. http://epa.gov/otaq/climate/regulations.htm

[6] Bipartisan Joint Letter to President Obama. Signed by The Honorable Diane Feinstein, US state Congress, D-California, et al. Dated July 25, 2011. http://feinstein.senate.gov/public/index.cfm/2011/7/feinstein-snowe-call-for-maximum-feasible-fuel-economy-standards.

[7] American Consumer Advocacy Groups.  Joint Letter to President Obama. Signed by Consumer Federation of American, et al. Dated September 22, 2010. http://www.consumerfed.org/pdfs/60MPG-Obama.pdf.

[8] Consumer Union. Consumers Reports Says 56 Miles-Per-Gallon Vehicle Standard is Good, but 62 MPG is Better Aggressive Fuel Economy Standard by 2025 Will Save Consumers Money and Dramatically Cut Oil Consumption. Press Release. June 30, 2011. http://www.consumersunion.org/pub/core_telecom_and_utilities/017853.html.

[9] Securing America’s Future Energy. Oil Savings from the Proposed 2017–2025 Fuel Economy Standards. Issue Brief. June 8, 2011. http://www.secureenergy.org/sites/default/files/SAFE-Oil-Savings-from-Fuel-Ecomony_Standards.pdf.

[10] Ashley Howe. Truman Thanks Obama in POLITICO.  Blog. Truman Project. August 3, 2011. http://www.operationfree.net/2011/08/03/truman-advertisement-featured-in-politico/

[11] American Economist Group Joint Letter to President Obama. Signed by Michael Anderson, Ph.D. University of California, Berkley, et al. Dated June 7, 2011. http://www.ucsusa.org/assets/documents/clean_vehicles/clean-cars-economists-letter-2011.pdf.

[12] Environmental Entrepreneurs (E2) Joint Letter to President Obama. Signed by Curtis Abbott, Lucesco Lighting Inc., et al. Date June 30, 2011. http://www.e2.org/jsp/controller?docName=petition%28Go60_2011%29.

[13] Small Business Majority. Small Businesses Strongly Support Raising Fuel Efficiency Standards. Press Release. July 29, 2011. http://smallbusinessmajority.org/reports/Fuel_Efficiency_Poll_Exec_Sum_072911.pdf.

[14] UAW. UAW supports administration proposal on light-duty vehicle CAFE and greenhouse gas emissions reductions. Press Release. July 29, 2011. http://www.uaw.org/articles/uaw-supports-administration-proposal-light-duty-vehicle-cafe-and-greenhouse-gas-emissions-r.

[15] Environmental Advocacy Groups Joint Letter to President Obama. Signed by Cindy Shogan Alaskan Wilderness League, et al. Dated September 9, 2010. http://docs.nrdc.org/energy/files/ene_10090903a.pdf.

[16] Consumers Union. “Consumer Reports Survey: Large Majority of Consumers Support Stronger Fuel Economy Standards to Save Money, Lower Fuel Costs”. November 14, 2011. http://www.consumersunion.org/pub/core_other_issues/018227.html.