Overnight Energy: Trump rollback of Obama mileage standards faces court challenges | Court strikes down EPA suspension of Obama greenhouse gas rule | Trump floats cutting domestic oil production

by Rachel Frazin - 04/07/20 5:15 PM ET

POSSIBLE MILEAGE IN COURT: President Trump’s rollback of Obama-era mileage standards last week may prove to be one of the administration’s most vulnerable environmental overhauls as opponents prepare to challenge it in court.

The Trump rule dramatically scales back the year-over-year improvements automakers must make in fuel economy, leaving consumers spending more on cars and gas while spewing more pollution into the air.

Environmental and watchdog groups say the rule falls short of laws requiring the government to set ambitious fuel efficiency standards.

They acknowledge the new rules will reduce the price of a new car for consumers and reduce costs for automakers. But they’ve also acknowledged in their analysis that consumers would take a $13 billion hit in the next decade, in part due to spending more on gas because of lower fuel economy standards. They also estimate that increased pollution under the accompanying emissions regulations would cost taxpayers $22 billion over the next decade.

“The [Obama-era] rule showed you can cut pollution significantly and save drivers billions of dollars, and in order to justify this rollback they’ve had to cut a lot of corners and skew their analysis,” said Ben Longstreth, an attorney with the Natural Resources Defence Council, arguing the rule violates the mandate of the Clean Air Act. “The result is a sloppy and extremely vulnerable rule.”

The changes: Under the Obama rule, automakers would have had to produce fleets averaging nearly 55 mpg by 2025. The Trump rule gives them an extra year to produce a fleet that averages 40 mpg.

This is less ambitious than what the auto sector says it can deliver.

While the Trump rule requires 1.5 percent year-over-year improvements in mileage — a figure they say is more attainable than the 5 percent required under the Obama rule — automakers said they could hit 2.4 percent without regulation.

Several automakers have also signed a deal with California to produce fleets that average 50 mpg by 2026.

Environmental groups have already pledged to sue over the rule, and automakers’ ability to meet more aggressive standards will likely be central to the case.

The Energy Policy and Conservation Act requires the National Highway Traffic Safety Administration (NHTSA), which writes the rule alongside the Environmental Protection Agency (EPA), to set the maximum standard that’s feasible for automakers while being economically practicable to consumers.

“You’ve got four automakers who have already publicly stated they can do significantly more and data shows industry can improve the efficiency of vehicles at 2 percent per year, so the reality of the marketplace and what automakers have already said show this isn’t the maximum feasible,” said David Freidman with Consumer Reports, which has opposed the rule due to the costs for drivers.

The administration’s side: The NHTSA told The Hill the administration considered economic practicability, technological feasibility, the need for the nation to conserve energy as well as environmental laws before concluding its new policy “represented the best balance of the factors and therefore was [the] maximum feasible.”

The Trump administration argues their weaker regulations will be better for consumers. Cheaper vehicles will prompt them to upgrade to newer cars that guzzle less gas than their current ride and come with better safety features.

Questions: Even when relying on the government’s own analysis, however, it may be difficult to make a case for the rule.

The Administrative Procedure Act requires sound reasoning to show that regulations have logical rather than just political backing — otherwise they risk being thrown out as arbitrary and capricious.

The government’s own analysis backing the rule shows it will cost consumers more than they will save. The regulations reduce the average price of a vehicle by $1,000 while raising the amount spent on gas by $1,400 — leaving consumers $400 worse off by model year 2030.

HAPPY TUESDAY! Welcome to Overnight Energy, The Hill’s roundup of the latest energy and environment news. Please send tips and comments to Rebecca Beitsch at rbeitsch@digital-staging.thehill.com. Follow her on Twitter: @rebeccabeitsch. Reach Rachel Frazin at rfrazin@digital-staging.thehill.com or follow her on Twitter: @RachelFrazin.

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BFD FOR HFCs: A federal court on Tuesday struck down the Trump administration’s move to suspend an Obama-era rule that restricted the use of a powerful greenhouse gas, saying the Trump administration did not follow the proper procedure.

After the court ruled in 2017 that part of a rule regarding the use of hydrofluorocarbons (HFCs) was too far-reaching, the Environmental Protection Agency (EPA) suspended the entire rule without giving the public time to weigh in.

A federal court in Washington, D.C., determined in a 2-1 decision that this was unlawful and reversed the EPA’s 2018 action.

“EPA had several options by which it could have attempted to address the perceived difficulties associated with implementing our decision,” wrote Judge Sri Srinivasan.

“But the one option EPA could not permissibly pursue was the one it chose: promulgating a legislative rule without abiding by notice-and-comment requirements and without invoking any exception to those obligations,” Srinivasan, an Obama appointee, added.

Trump appointee Neomi Rao dissented, writing that the agency had “simply interpreted the immediate and necessary consequences of our decision.”

What the rule did: The Obama rule in question would have phased down the use of HFCs in appliances. The chemicals are often used in refrigerators and air conditioners.

The court decided in 2017 that the federal government was permitted to prevent companies from switching to HFCs, but could not require those that had already switched to using HFCs to make an additional change.

After this, the EPA suspended the rule entirely.

React: An EPA spokesperson told The Hill in an email that the agency was “reviewing the decision.”

Meanwhile, Natural Resources Defense Council staff attorney Pete DeMarco hailed the decision as a “great victory for climate.”

OIL RECOIL: President Trump said Monday that the U.S. may consider cutting domestic oil production if it would help to solve international production disputes that have led to a steep decline in prices.

Reuters has reported that countries including Saudi Arabia and Russia, which have been engaged in a high-profile trade dispute, would probably agree to lessen their oil production if the U.S. joined them.

Asked whether he would ask U.S. producers to do so, Trump told reporters, “Maybe we will, maybe we won’t, but we’ll have to make that decision.”

He said that he thought production cuts would happen due to market forces and that he had not yet been asked to cut U.S. production.

“I think it’s happening automatically, but nobody’s asked me that question yet,” he said.