Federal Appeals Court Throws Out Fuel Efficiency Hikes

Posted on November 28, 2007 by LCT Staff - Also by this author - About the author

WASHINGTON — A federal appeals court recently threw out the Bush administration's standards to improve the fuel efficiency of pickups, vans and SUVs, saying the rules didn't take into account the impact of auto emissions on the environment, and decrying the so-called “SUV loophole.”

The court also said the National Highway Traffic Safety Administration (NHTSA) didn't justify the lower mileage standards for the light-truck category compared with passenger cars, and failed to set standards for heavier commercial trucks and vans.

NHTSA was ordered to rewrite the rules as soon as possible for light trucks built through 2011. If upheld by the U.S. Supreme Court, the rewrite will almost assuredly boost the planned increase in light-truck fuel economy. And it means automakers — who have already planned their fleets through the next three years — may have to incorporate stricter standards.

The decision is the latest blow to automakers struggling on multiple fronts to fight off aggressive efforts to increase what are called Corporate Average Fuel Economy (CAFÉ) standards. NHTSA and the Environmental Protection Agency have been working on new Bush administration rules, while Congress has been battling all year over CAFE legislation. Thursday's court ruling could put pressure on lawmakers to reach a compromise and pass new rules.

Thursday's 90-page ruling by a three-judge panel of the 9th U.S. Circuit Court of Appeals in San Francisco was a victory for the states and environmental groups who challenged NHTSA's decision last year to modestly increase light-truck fuel economy.

In April 2006, the agency released new rules requiring automakers to increase the mileage requirement for light trucks, which include SUVs, small pickups and minivans, from 22.2 miles per gallon in 2008 to 24 mpg by 2011. Passenger cars are required to meet a 27.5 mpg average. Eleven states, two cities and four environmental groups sued the administration, calling those rules inadequate. The appeals court appeared to agree.

The court said that in conducting its assessment of what was the "maximum feasible" fuel economy, NHTSA failed to assign an economic value to reducing carbon emissions.

"(NHTSA) cannot put a thumb on the scale by undervaluing the benefits and overvaluing the costs of more stringent standards," Judge Betty Fletcher, an appointee of President Jimmy Carter, wrote for the court.

'SUV loophole' revisited:

Besides rewriting the rules, NHTSA also must conduct the first-ever environmental impact study of U.S. automobile tailpipe emissions and revisit whether the light truck standard should be lower than that for passenger cars, called the "SUV loophole."

NHTSA had argued that it considered the intent of the manufacturer in making light trucks, rather than their actual highway use, in developing the new fuel standards.

"But this overlooks the fact that many light trucks today are manufactured primarily for transporting passengers," Fletcher wrote.

It also must reconsider fuel economy regulations for heavier trucks that weigh between 8,500 and 10,000 pounds. NHTSA has agreed to regulate for the first time SUVs in that category, but declined to extend the rules to medium- and heavy-duty pickups and vans that are used for commercial purposes.

Setbacks for automakers:

Environmentalists hailed the court’s decision. "The ruling is a strong rebuke to the Bush administration, which has been missing in action on both global warming and vehicle fuel economy," said Joan Claybrook, president of Public Citizen.

David Friedman, research director for the Union of Concerned Scientists' clean vehicle program, said the court's decision proved "once again, the courts have ruled that the government cannot ignore its responsibility to raise fuel economy standards."

Automakers, on the other hand, said the ruling will set back progress toward increasing fuel efficiency. The Alliance of Automobile Manufacturers, the trade group that represents Detroit's Big Three and Toyota among others, questioned how they would be able to meet an increase before 2012.

"Any further changes to the program would only delay the progress that manufacturers have made towards increasing fleet-wide fuel economy," said the group's CEO and president, Dave McCurdy, who noted that the regulation "represented the largest fuel economy increase in the history of the CAFE program. It has become the basis for product planning through 2011."

Rep. Mike Rogers, R-Brighton, sharply criticized the ruling.

"This reckless decision overturns an important increase in fuel efficiency and an essential improvement in vehicle safety," Rogers said. "It is further proof of why we need a real energy bill that embraces innovation and stops California politicians and judges from designing American cars and trucks."

NHTSA Administrator Nicole Nason declined to comment.

Battles in Congress:

This is the third serious setback in the federal courts to automakers this year, on top of battles in Congress and with federal regulators over new regulations to limit emissions.

In June, the Senate passed an energy bill that hikes fleet-wide CAFE standards by 40% to 35 mpg by 2020. It also does away with separate standards for light trucks and passenger cars — the "SUV loophole" addressed by Thursday's ruling.

The House hasn't passed new CAFE rules, in part because of support for a softer increase backed by domestic automakers and Toyota that would raise the standards to between 32-35 mpg by 2022 and retain separate standards for light trucks and cars.

"This ruling puts pressure on Congress to throw out the SUV loophole," Rep. Ed Markey, D-Mass., a leading advocate of higher fuel economy standards in the House, said in an interview. He said he was confident Congress would pass higher fuel economy standards, acknowledging the "auto industry is making a full-court press."

The CEOs of the Big Three have all been in Washington in recent weeks to plead their case, meeting with congressional leaders. Ford and Chrysler's CEOs both met with Vice President Dick Cheney, while United Auto Workers President Ron Gettelfinger was in Capitol Hill this week as well.

House Speaker Nancy Pelosi said Congress would consider energy legislation before it adjourned next month. House and Senate staffers are working behind closed doors to reach agreement on several contentious energy issues.

SOURCE: The Detroit News

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