WASHINGTON — During an otherwise routine congressional hearing last week, Texas Republican Joe Barton let slip how he really felt about the Obama administration’s signature fuel economy program.
“I personally think we could repeal the CAFE standards in their entirety,” the congressman told EPA and National Highway Traffic Safety Administration officials from the dais.
“If Mr. Trump is president,” he said, “we’ll be back.”
That comment drew a laugh in the hearing room, but it spotlighted an important reality: Key pieces of President Barack Obama’s regulatory and policy agenda will soon be handed over to a new administration.
And where they go from there could have big implications for the auto industry.
At the top of the list are the coordinated fuel economy and greenhouse-gas emission standards administered by the EPA and NHTSA, which aim to boost the new light-vehicle fleet’s average fuel economy to more than 50 mpg by 2025. When the standards were finalized in 2012, Obama hailed them as “the single most important step we’ve ever taken to reduce our dependence on foreign oil.”
The program has also been a key part of Obama’s push to combat climate change, an issue that has taken on greater importance since the president this month signed on the U.S. to the Paris Agreement, an ambitious international pact to slash carbon emissions.
Automakers have already poured billions of dollars into r&d and dramatically increased vehicle fuel efficiency since the rules were put into effect. Yet as the U.S. consumer market leans heavily toward light trucks and away from cars and hybrid vehicles, the industry is struggling to attain the fleetwide fuel efficiency gains envisioned in the 2012 standards.
That has opened the standards up to challenges that will ultimately be adjudicated by whomever the next president appoints as EPA administrator.
A 1,200-page draft Technical Assessment Report published by federal and California regulators in July kicked off a required midterm evaluation to determine whether the rules for 2025 should be loosened, tightened or left intact. As part of that review, automakers and other stakeholders will get to weigh in before the next EPA chief makes a proposed decision on the rule next year. A final decision is due in April 2018.
With the midterm review, “we’re just starting the process now of trying to understand where we really end up and that obviously carries into the next administration,” said John Bozzella, CEO of the Association of Global Automakers, a Washington-based trade group representing several foreign-owned carmakers. “The interesting thing about this election is that there is a lot at stake for the auto industry.”
If elected, Democratic nominee Hillary Clinton will likely continue what Obama started. She has vowed to cut greenhouse-gas emissions up to 30 percent from 2005 levels by 2025 and implement standards set in motion by Obama, including those for autos.
Republican nominee Donald Trump, by contrast, has dismissed man-made climate change as a hoax. He has also pledged to “pause” new regulations and review current ones to cut those that threaten jobs. He hasn’t been specific, but the mpg and greenhouse-gas standards could be among those that get scrutinized.
Last week’s long-awaited Transportation Department guidelines on autonomous cars will also be subject to interpretation under the next White House administration and a new secretary of transportation, who will play a big role in determining how fast and how widely self-driving vehicles can be deployed in the marketplace.
Automakers, suppliers and technology companies racing to develop autonomous cars had long sought federal leadership on the issue to keep the technology on track, and got most of what they wished for in the policy guidelines issued last week.
Transportation Secretary Anthony Foxx called the policy an “unprecedented step by the federal government to harness the benefits of transformative technology.”
Yet he and other officials made clear that the guidelines — subject to a 60-day comment period — are meant to evolve over time. And with just 116 days left in Obama’s term (as of Monday, Sept. 26), much of that evolution will occur under his successor’s administration.
“Throughout the guidance and the policy, I think we’re mapping next steps,” a senior DOT official said last week. “There’s a recognition that many of those steps are going to take place beyond the current administrator and the current secretary."