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Nick Cunningham

Nick Cunningham

Nick Cunningham is an independent journalist, covering oil and gas, energy and environmental policy, and international politics. He is based in Portland, Oregon. 

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Trump To Undo Fuel Efficiency Standards

The Trump administration is set to undo one of former President Obama’s signature achievements. On Tuesday, the EPA and the Transportation Department are expected to jointly announce the rollback of fuel efficiency requirements for the nation’s auto fleet, a move that will not require the approval of Congress.

In the wake of the financial crisis and the crumbling of top U.S. automakers, the federal government bailed out General Motors and Chrysler, while other companies were severely damaged and barely survived the downturn. With their backs against the wall, the Obama administration was able to push through historic fuel efficiency requirements, known as corporate average fuel economy (CAFE) standards, the most stringent in decades. For cars made between 2012 and 2016, car companies had to achieve an average fuel economy of 35.5 miles per gallon, up from 25 mpg previously. For model years 2017-2025, fuel efficiency had to jump to 54.5 mpg.

The requirements have successfully boosted the efficiency of the nation’s auto fleet, with cars and trucks steadily achieving ever higher ratings on fuel efficiency. Car companies have ratcheted up efficiency on multiple fronts, introducing new electric vehicles and electric-hybrid models, while also boosting the fuel efficiency of traditional cars and trucks.

But at the behest of the auto industry, President Trump is set scrap those requirements. A coalition of 17 automakers sent letters to the EPA asking the agency to remove the CAFE standards, calling it “the single most important decision the EPA has made in recent history.” The car companies said the standards are unreachable, and that they would force the industry to spend $200 billion over the next decade in order to comply with them. Related: Where Is Tesla’s Model 3 Beta Prototype?

There is one other important element to watch. After the election of Donald Trump, many analysts speculated that such a move to scrap the fuel efficiency standards could be forthcoming, but the significance was downplayed due to one fact: the state of California has long been allowed to set its own standards. Because California typically implemented stricter standards than the federal government, the entire auto industry tended to adhere to the requirements because they couldn’t make different cars for different states. In effect, California could drag the rest of the country along with tighter fuel efficiency. This arrangement would prevent the Trump administration from backtracking on efficiency – the scrapping of the federal standards would be largely symbolic if California required carmakers to continue to tighten fuel efficiency.

However, there are reports that the Trump administration could target California’s ability to set its own standards, which would have far-reaching consequences if the federal government succeeds. California officials have already said that they would sue if Washington tries to take away their ability to implement their own fuel efficiency standards and they have retained the services of former U.S. Attorney General Eric Holder.

"If the Trump administration were to rely on facts and sound science, they would come to the same conclusion that the EPA staff and outside experts reached: The 2025 standards are achievable and in a way that will save consumers trillions in fuel costs," Margo Oge, former head of the EPA’s office of transportation and air quality, told the LA Times. Related: Why The U.S. Military Is Fully Backing Renewables

The implications of this fight are potentially enormous. The Obama administration argued that while the CAFE standards would cost the auto industry $200 billion over 13 years, they would save consumers some $1.7 trillion in avoided fuel costs over the life of the vehicles. According to the Union of Concerned Scientists, the CAFE standards put in place by the Obama administration could cut U.S. oil demand by 3 million barrels per day by 2030.

Even if those figures are overly optimistic, the trend is clear. The CAFE standards are arguably one of the single most important policy achievements at cutting oil consumption. But they will be undone if the Trump administration is successful.

Meanwhile, oil analysts at Wood Mackenzie expect U.S. gasoline demand to hit a peak in 2018, and global gasoline demand could peak by 2021 even though vehicle sales will continue to grow. But the flattening of gasoline demand is largely the result of more efficient vehicles, a development that can be attributed to fuel efficiency standards around the world.

By Nick Cunningham of Oilprice.com


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  • NickSJ on March 06 2017 said:
    Left out of the article is the fact that fuel economy standards have led to the deaths of thousands of Americans in smaller cars. One study estimated the toll at between 2,000 and 4,000 additional deaths per year, in addition to tens of thousands of additional serious injuries. Of course, greens don't have any concern for the dead bodies piling up as a result of their dictates, and their media acolytes simply parrot their propaganda.
  • Dan on March 06 2017 said:
    Obama is insane, a criminal multiple times over and we thank Trump for trying to return this country to the rule of law, something socialist Vermont doesn't like. Don't tell the rest of America how much they can drive with their money. Stop trying to tax everyone so Nancy Peelowski can go shopping and Obama can have 3 homes on an ex president salary.
  • Peter Breedveld on March 06 2017 said:
    Great news for consumer who will now have a much wider range of vehicle sizes and engine sizes to choose from.
  • Bill Simpson on March 07 2017 said:
    Great news. People who don't drive a lot, or who are rich enough to afford a gas guzzler, should be able to buy one. These ever increasing millage standards are making all cars dangerously small and light. Any bigger vehicle hits you, and you're dead. Hybrids are too complex, and expensive too. Some reasonable rules are OK, but they are getting crazy with the latest ones of over 30 miles per gallon. That gets a lot of people injured and killed in tiny, light, weak vehicles.
    Just remember that the cost of gasoline will be going back up within a few years before you get that Dodge Hellcat.
  • TM on March 07 2017 said:
    Great news for electric cars. The less efficient ICE cars are, the sooner Tesla and other EVs will become cost competitive. Low fuel efficiency could also help increase demand for oil, pushing up oil prices, which would again result in faster EVs adoption in the future. I bet Elon Musk is laughing right now (BTW perhaps even sitting next to President Trump at Trump's economic advisory council)
  • TM on March 07 2017 said:
    Great news for electric vehicles. Lower fuel efficiency among ICE vehicles means EVs will become cost competitive with them even faster than predicted. Lower fuel efficiency also means higher oil demand and potentially higher fuel prices, which would also accelerate the adoption of EVs. Elon Musk must be laughing out loud today (BTW Musk is a member of Trump's advisory council).
  • Jonas on March 07 2017 said:
    It will be a little like peeing in your pants for the fossil car companies.

    Very warm and nice in the beginning but after awhile it gets very cold and unpleasant and they stand ashamed on the side of the road while the electric car companies zoom past laughing at them.
  • Zinsky on March 07 2017 said:
    Obama's policies "have hurt the auto industry"?? What planet are you living on? The Big Three American car companies were bankrupt when Obama took office. They literally owe their EXISTENCE to Barack Obama! And as far as the delusional Trumpheads who post idiotic nonsense about smaller cars leading to more auto deaths, two points: (1) You have no idea what you are talking about - deaths in auto accidents have fallen significantly under Obama. In 2008, Bush's last year as president (Thank God!), auto deaths were 37,423. They haven't been over 35,000 since. Here are the statistics: https://en.wikipedia.org/wiki/List_of_motor_vehicle_deaths_in_U.S._by_year
    (2) Even if they were up (and they aren't) did you factor in the decrease in deaths from cancers, leukemia, etc. that can be traced to burning less fossil fuels? Of course you didn't because you are low-information, brainwashed lemmings who get led around by the nose by FoxNews. Sad!
  • NickSJ on March 08 2017 said:
    Zinsky It is you who don't know what you're talking about. First, Ford never went bankrupt, so that your supposed facts on that subject are just as incorrect as your ignorant statement that smaller cars don't result in higher death rates. Your statistics don't mean anything because there are other factors which affect overall death rates. When cars are ranked by model for death rates per mile, the smallest cars are always at the top of the list, and the largest cars at the bottom. It's simple physics. As for your claim that burning fossil fuels causes significant deaths from cancers etc. the EPA is infamous for using bogus studies for which they refuse to release the raw data and algorithms used to produce their supposed results. Environmentalism has been taken over by scam artists who prey on fools like you.

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