The Fix Is In: Trump and EPA Will Gut Tougher Mileage and Pollution Rules
Forget climate change, the Clean Air Act, or American competitiveness: at Scott Pruitt’s EPA, the industry foxes are running the henhouse.
The fix is in. There was never any doubt. Defying science, economic wisdom and common sense, the Trump administration—and scandal-plagued EPA Administrator Scott Pruitt—has reversed the Obama administration’s rules that would have nearly doubled the fuel economy of the average new car by 2025. Only California stands in Pruitt's way, along with a dozen disciple states that hew to California’s pollution rules. Pruitt, rattling sabers and vowing to bring California to heel, will now take the unprecedented step of challenging that state's longtime authority, granted under the original Clean Air Act of 1970, to set its own, stricter-than-federal standards.
Let’s think about that, in all its Kafkaesque glory: As the nation’s top environmental regulator, Pruitt is sworn to safeguard America’s lands, waterways, climate, consumers, and public health. Instead, the venal Pruitt will apparently fight California in court—along with battling dozens of green-minded state attorneys general and big-city mayors—to dismantle sensible, achievable fuel-economy standards that would help stem pollution and climate change, save consumers up to $1.7 trillion at the pump, and keep Detroit competitive in a global market that won't wait to ditch fossil fuels for electric and other alt-fuel cars.
“It’s a sad day for our country,” said Margo T. Oge, who, as an engineer and head of the EPA's Office of Transportation and Air Quality, was the nation's emissions chief from 1994 to 2012. “We live in an age of made-up facts. Unfortunately, science and actual data doesn’t play a role with this administration.”
Oge spoke with me via phone from New Zealand, whose natural wonders would probably get Pruitt dreaming about the world’s largest fracking operation. On paper, Obama's 2012 rules would have boosted the fleetwide fuel economy average to 51.4 mpg, down from an original 54.5 mpg target due to a rise in truck and SUV sales. Even that adjusted 51.4 mpg is a lab-tested fantasy figure. Throw in generous credits for automakers, as Oge emphasizes, and the standards would demand window-sticker economy of just 36 mpg. That would still require a roughly 1-mpg annual gain between 2016 and 2025—no small potatoes. But if you don't believe automakers have the means and technology to deliver 36 mpg by 2025, give or take, there’s a bridge near our Brooklyn office that I’d like to sell you.
Taking a dog-eared page from the automakers’ playbook, Pruitt & Co. have raised every discredited objection to higher-mileage cars—the ones automakers trotted out in the Seventies, Eighties, ad nauseum: the rules are unrealistic, or will cost automakers too much money; consumers won’t be able to afford a new car; the car business will tank, and unemployment lines will swell. Pruitt even came up with a new doozy the other day: if automakers are forced to spend money on fuel economy, they won't have enough left over to build safer cars.
You can’t make this stuff up.
“Let’s be realistic,” Oge said. “Pruitt didn’t take this job to protect the environment. He took it to move his career forward and look good to Mr. Trump.”
There’s barely a shred of data supporting Pruitt's industry-fed talking points, which is made up mostly of fudging and fear-mongering. In contrast, the projections of Oge's EPA are based on $30 million worth of intensive science and research, including the agency's reverse engineering of automakers’ own, internal product and technology portfolios. That EPA concluded that it would cost global automakers a not-insignificant $200 billion to meet the standards, but add just $800 to $1,150 to the showroom price of a car—not the ridiculous $4,000-to-$6,000 that automakers are suddenly pulling out of their collective, er, exhaust pipe.
Yet consumers would save $1.7 trillion at the pump, easily offsetting higher showroom prices. The rules would also dramatically reduce oil consumption and planet-warming emissions, saving America 2.2 million barrels of oil a day and keeping six billion tons of C02 out of the atmosphere.
In the middle, Consumer Reports figured the fuel-saving tech might cost as much as $2,000, but that consumers would still come out well ahead, saving $4,600 at the pump over the life of a car, or $700 a year. Pruitt has been responding that gasoline prices, if they stay stubbornly low, will lessen those projected fuel savings. Even if he's right, so what? Apparently we should party like it’s 1999, or 2006, and delude ourselves that pump prices will never spike again. Anyone who remembers Cash for Clunkers knows what happens when they do: Detroit gets caught with its pants around its ankles, its showrooms filled with thirsty pickups and SUVs they suddenly can’t give away. My perennial question: if the industry and government won't invest in fuel efficiency and advanced technology now, when automakers are awash in sales and profits, when should they do it? During the next global recession?
Oge also disputes the view that mileage standards are some socialist plot that will compel automakers to stop building popular trucks and force consumers to buy small cars they don’t want. Instead, the standards operate on a relative scale, requiring cars and trucks of varying sizes and footprints to deliver percentage gains in efficiency. Light trucks, meaning pickups, SUVs and minivans, would still be allowed to burn nearly one-third more gasoline and emit one-third more C02 than passenger cars.
“The standards won’t force any car company to get out of the SUV business,” she says. “If you buy an SUV in 2025, it will just be more fuel efficient than the one you buy today.”
Automakers have been a too-willing party to this sad charade. Ford, GM, and others continue to say the right things in public, and their PR crews continue to cast them as innocent, passive observers to what's going on in Washington. But let's not forget: Acting as a united front, foreign and domestic automakers began lobbying to unwind fuel-economy rules within President Trump’s first two days in office. Oge says that, in her ongoing discussions with automakers, many do privately voice support for maintaining 2025 rules. They'd prefer some flexibility, of course, and continued incentives to help them develop and popularize electric cars and green technology. Yet Oge is frustrated that automakers continue to hide behind the skirts of their powerful lobbying arm, the Alliance of Automobile Manufacturers, rather than speaking out in defense of standards that will ultimately help their own industry.
As for the crocodile tears from automakers—that the poor American consumer won’t be able to afford a new car—I have to ask to which models they’re referring; might those be the full-sized pickups, priced from $30,000 to nearly $80,000, that are overwhelmingly the best-selling vehicles in America? If you can afford a freaking Ford F-Series, would the prospect of paying $1,000 extra for significantly higher mileage—or even $2,000 or $3,000—really force you into a Smart ForTwo, instead?
Just yesterday, Ford boasted that the brand’s average transaction price has soared to a record $36,300, spurred by sales of (wait for it) full-size pickups and SUV’s, like the new Expedition. According to Kelley Blue Book, consumers shelled out a record $36,113 for the average new car in December 2018. Fast forward to 2025, and that figure will likely be closer to $40,000. And that's the average car, not some Mercedes S-Class whose buyers won't even blink at spending a bit more.
Now, let's even grant the dubious idea that an extra $1,000 or $2,000 on the sticker might radically change your approach to a $40,000 car that you've already decided you love. That shopper could forego one or two non-essential options—the leather trim, the surround-view camera, the upgraded audio system—totally defray the cost of the mileage-goosing technology, and still pocket thousands of dollars in fuel savings. Hell, dealers might easily subsidize some of the cost in rebates or lease deals to keep you interested, as they've always done to move the metal.
The point is that the "affordability" argument is a total canard, yet I've seen one auto analyst after another sniffing in approval over this crock of industry bullshit. Some analysts raise the specter of consumers being forced to hang onto vehicles a bit longer, or even (gasp!) choosing a used car instead. Oh, the horror.
Yes, we're all aware that many Americans would rather spend their precious auto dollars on anything but fuel efficiency, such as those leather seats and audio systems. All that requires is a little attitude adjustment. Let's not forget another point of regulation and taxation, the carrot-and-stick approach to influencing consumer behavior: if the price of fuel-saving tech, or an inevitable spike in gasoline prices, forces some people to reconsider their priorities, whether by ditching some frivolous options, downsizing, or choosing a slightly more-affordable model, so be it. Personally, if the feds raised gas taxes by 50 cents per gallon overnight to help repair our sorry-ass roads and bridges, I'd support it. And I wouldn’t feel a whit of sympathy for the poseurs who buy mammoth pickups and SUVs to cart groceries, or commute solo—buy a conventional car, or a more-efficient truck, and join the rest of the rational world. If you can still afford your over-scaled, low-mileage truck, go for it, just don't expect the rest of us to subsidize your hobby, your self-image, or your carbon-dioxide emissions.
Ah, you're a hard-working contractor? Why didn't you say so? I know where you can find a nice, used Toyota Tacoma, or heavy-duty Chevy diesel, for very little money. The idea that working folks "need" a brand-new Ford Super Duty King Ranch to do the job is just part of Detroit's insidious, self-serving propaganda regarding trucks, from Chevy's Heartbeat of America to today's halftime exhortations from Denis Leary.
I can understand Trump and his regulators being sensitive to the needs and realities of business, the economy, employees, and shareholders; that’s actually a great thing. But with this EPA, there’s not even a pretense of balancing the interests of automakers and the economy with those of the environment and global competitiveness. It’s only fair to ask: if these 2025 standards were so unreasonable, what would a reasonable standard be?
The EPA won’t say, and neither will automakers. For the security- and secrecy-obsessed Pruitt, all private conversations with automakers were surely conducted on his Cone of Silence phone booth he installed at taxpayer expense. But as the EPA looks to erase Obama's proudest environmental legacy and start from scratch with new rule-making, I have a worrying hunch: the new, loosened standards are whatever General Motors and ExxonMobil say they should be.
While their green sincerity is always in question, automakers are admittedly in a tough spot. Quite rightly, they don’t want to have to design and manufacture cars to two (or more) sets of environmental standards—one for California and its disciple states, another for the rest of America. My own executive sources assure me that external forces, from Chinese competition to the uncertain outcome of a California fight, may compel them to proceed as though 2025 was still written in stone. Yet no automaker wants to draw the wrath of the mercurial Trump, and be awakened by a 3 a.m. tweet, especially if he refers to GM's chief executive as Yogi Berra.
Still, as Oge suggests, if GM’s Mary Barra and other executives really believe their big talk about electrification and green leadership, it’s time for them to speak out, clearly and publicly. Offer a reasonable, progressive solution. By continuing to lobby behind closed doors for a regulatory rollback that will soon go public, automakers are playing a dangerous game. Trump, Pruitt and their science-denying, regulation-slashing minions won't be around forever: Pruitt's own cesspool of scandal is growing so deep that an EPA hazmat crew might be required. Just yesterday, even some GOP lawmakers took the remarkable step of calling on him to step down or be fired, with one terming his corruption and conduct "grossly disrespectful to American taxpayers."
Further down the road, if Detroit especially is seen as having been complicit in the destruction of reasonable emissions standards, a future administration might be anything but reasonable. For Detroit's CEO's, a Washington introduction to a new, legitimately green EPA chief—and the agency's thousands of revitalized, freed-from-Pruitt employees—would be an unmatched fly-on-the-wall opportunity. The EPA's new sheriff, having seen the agency's rules shredded and its very legitimacy challenged, might consider those automakers as eager co-conspirators, and be in no mood to let bygones be bygones. "Forget 2025. I'll give you six months to get your environmental act together. Are we agreed? Good. Now get the fuck out of my office and get to work."
The wary dance was beautifully illustrated in The New York Times. Pruitt was forced to cancel his planned victory lap, at a Chevrolet dealership in Virginia, because some Chevy dealers were angry and aghast that their brand would be associated with Pruitt, his political baggage, and his stance on the environment. Plenty of Chevy customers, whatever their political persuasion, might view saving fuel and money as a great idea, and wonder why anyone opposes it. The Times quoted Adam Lee, chairman of Lee Auto Malls in Maine: “They don’t want the EPA to highlight Chevy,” Lee said. “They don’t want to be the bad guys.”
“Trump has been saying these standards are crushing the auto industry. But we’ve had record years for the past four or five years, in terms of sales and profit," Lee continued. "It almost makes you think he doesn’t have the facts.”
For once, I have nothing to add.