Obama Starts Process to Grant California Waiver; Auto Industry Cries Foul 9

Posted by Wonk Room Mon, 26 Jan 2009 17:50:00 GMT

From the Wonk Room.

Today, President Obama took a step to reverse Bush-era intransigence on the fight against global warming, directing “federal regulators on Monday to move swiftly on an application by California and 13 other states to set strict limits on greenhouse gases from cars and trucks.” In 2002, California passed greenhouse gas standards for vehicle emissions, since adopted by 13 other states. However, they have been blocked since then by litigation from the automakers in concert with the Bush administration.

The auto lobby continues to fight this long-needed change. In an interview with National Public Radio, Charles Territo of the Alliance of Automobile Manufacturers claimed the California standard would bring catastrophe:

At this difficult time, what we need is certainty and consistency, not confusion and chaos. And I think we’re all concerned that this would create chaos, not only for consumers, but also for dealers and for manufacturers.
The auto industry has long been able to handle California’s higher emissions standards for other pollutants. Jerry Brown, California’s attorney general, retorted that Detroit’s problems have come in large part because of its failure to innovate:
The irony here is the auto companies want a bailout, in many ways because they weren’t building the kind of cars that were compatible with today’s energy market – and at the same time, they want to keep going with their lawsuits, which have already cost millions and millions of dollars.

These auto industry lawsuits against the adoption of AB 1493 include:

Massachusetts

Massachusetts et al v EPA et al
Status: Industry lost in federal appeals and Supreme Court.

In 2003, the Environmental Protection Agency ruled it would not regulate transportation sector greenhouse gases. Massachusetts and 11 other states sued the EPA in the U.S. Court of Appeals. Auto industry trade groups argued in favor of the EPA’s inaction. The Court of Appeals ruled for the EPA in 2005. In 2006, the U.S. Supreme Court heard the appeal, and on April 2, 2007 ruled that the EPA had to begin the regulatory process for greenhouse gases. On July 11, 2008, the Bush administration grudgingly published draft regulations.

California

Central Valley Chrysler Jeep, et al v Goldstene et al (No. 08-17380)
Status: Industry lost in district court, filed federal appeal.

Filed in California district court in 2006 and stayed until the Supreme Court Mass v. EPA decision, the judge found against the plaintiffs in December 2007. The plaintiffs filed an appeal in the Ninth Circuit on October 30, 2008.

Vermont

Green Mountain Chrysler-Plymouth-Dodge v. Crombie (No. 07-4342, filed 10/5/2007, Second Circuit)
Status: Industry lost in district court, filed federal appeal.

On September 12, 2007, a federal judge in Vermont ruled that the state may impose its own greenhouse gas emission standards on automakers. Vermont Chrysler and Ford dealerships, with the Alliance of Automobile Manufacturers, the Association of International Automobile Manufacturers, Chrysler, and General Motors appealed the decision to the Second Circuit Court of Appeals.

Rhode Island

Lincoln Dodge, Inc et al v. Sullivan (No. 06-00070, filed 2/13/20065, District of Rhode Island)
Status: In district court.

On November 25, the district court in Rhode Island dismissed the automakers from the lawsuit, holding that they are already suing in California and Vermont. The co-plaintiff auto dealers are maintaining the suit.

New Mexico

Zangara Dodge, Inc et al. v. Ron Curry et al. (No. 07-01305, filed 12/27/2007, in District of New Mexico)
Status: In district court.

New Mexico car dealers and the National Automobile Dealers Association sued to block the New Mexico Clean Car program in April 2008.

Maine

Status: State court denied stay.

The Kennebec County Superior court denied a request by the Alliance of Automobile Manufacturers to stay Maine’s standards, and refused to send the matter back to the Maine Board of Environmental Protection (BEP) for reconsideration.

When asked by the Wonk Room how much his group is spending on these lawsuits, Territo said, “It’s not relevant how much money AAM has spent because there are so many other groups participating.”

Energy independence implications of the auto bailout proposal

Posted by Brad Johnson Tue, 09 Dec 2008 15:00:00 GMT

As Congress considers a multi-billion dollar program of loans to America’s auto industry, many measures of success or failure exist for the industry and the government’s attempts to help the automakers. Chief among those measures of success is how effectively America’s auto industry, and the industry as a whole, is transformed to build cars for the future that reduce our dependence on oil. Will the auto industry meet the fuel economy rules passed by Congress and signed into law nearly a year ago, which could revitalize the industry? Should American taxpayers expect even higher fuel economy performance in return for their investment of additional billions in loans? Do the auto companies’ plans impair their ability to meet the current fuel economy regime?

A panel of auto industry and fuel economy experts will discuss these issues and other energy implications of the automotive industry loan program at a hearing tomorrow before Chairman Edward J. Markey (D-Mass.) and the Select Committee on Energy Independence and Global Warming. Chairman Markey authored the House language that became the current fuel economy standards of at least 35 mile per gallon by 2020.

Today an analysis of the car companies’ own data revealed that General Motors and Ford are now positioned to comply with California’s landmark global warming standards if they are applied nationwide, which could represent a significant increase in fuel economy. According to the analysis of the companies’ data released today by the Natural Resources Defense Council (NRDC), the two major automakers are in a position to meet the California global warming tailpipe standards. This analysis is important because some lawmakers in the House and Senate have proposed imposing a condition on the auto bailout that would grant the California waiver or prohibit the automakers from fighting the waiver in court or in state legislatures.

Witnesses
  • Joan Claybrook, President, Public Citizen
  • Reuben Munger, Chairman and Co-founder, Bright Automotive
  • Dr. Peter Morici, Professor of International Business, Robert H. Smith School of Business, University of Maryland
  • Geoff Wardle, Director of Advanced Mobility Research, Art Center College of Design
  • Richard Curless, Chief Technical Officer, MAG Industrial Automation Systems

"EPA Likely to Lose Suit"

Posted by Warming Law Thu, 20 Dec 2007 21:53:00 GMT

(Cross-posted from Warming Law, which focuses on covering and analyzing the fight against global warming from a legal perspective.)

by Tim Dowling

“EPA Likely To Lose Suit.”

So said EPA, or at least EPA’s legal staff, when it briefed Administrator Johnson on the legal ramifications of a waiver denial. The quoted language comes from a powerpoint slide used during that briefing. As the Washington Post reports, Johnson’s waiver denial flew in the face of “the unanimous recommendation of the agency’s legal and technical staff.”

California’s legal challenge to the waiver denial will be filed in the U.S. Court of Appeals for the D.C. Circuit, and one large reason for believing EPA will lose can be found in the D.C. Circuit’s opinions in previous waiver cases. Unlike Administrator Johnson, the D.C. Circuit clearly recognizes the special, leading role California plays under the Clean Air Act with respect to controls on tailpipe emissions.

For example, in Motor & Equipment Mfrs. Ass’n v. Nichols, 142 F.3d 449, 543 (D.C. Cir. 1998), the D.C. Circuit ruled that waiver process is designed “to afford California the broadest possible discretion in selecting the best means to protect the health of its citizens and the public welfare.” (quoting the House Report).

In a more comprehensive discussion in Engine Mfrs. Ass’n v. U.S. EPA, 88 F.3d 1075 (D.C. Cir. 1996), the court explained:
Congress recognized that California was already the “lead[er] in the establishment of standards for regulation of automotive pollutant emissions” at a time when the federal government had yet to promulgate any regulations of its own. California’s Senator Murphy convinced his colleagues that the entire country would benefit from his state’s continuing its pioneering efforts, California serving as “a kind of laboratory for innovation.” This function was enhanced by the 1977 amendments, which permitted other states to “opt in” to the California standards by adopting identical standards as their own. Thus, motor vehicles must be either “federal cars” designed to meet the EPA’s standards or “California cars” designed to meet California’s standards. Rather than being faced with 51 different standards, as they had feared, or with only one, as they had sought, manufacturers must cope with two regulatory standards under the legislative compromise embodied in § 209(a). Id. at 1079-80 (citations and footnotes omitted).

The D.C. Circuit also examined the waiver process in Motor & Equipment Mfrs. Ass’n v. EPA, 627 F.2d 1095 (D.C. Cir. 1979), an unsuccessful industry challenge to EPA’s waiver grant for California rules concerning in-use maintenance of motor vehicles. Tracking the language of the statute, the court observed that EPA must grant a waiver request unless it makes one of the three findings set forth in Section 209(b)(1)(A)-(C). Id. at 1106. The issue is emphatically NOT whether the California rules are a good idea as a matter of policy, but whether EPA discharged its duties under the CAA. Id. at 1105.

Johnson’s bogus concern that a waiver grant here would create a “confusing patchwork” simply cannot be reconciled with the Clean Air Act and the applicable precedents that construe the waiver provisions in Section 209. Expect the D.C. Circuit to make short work of it.

Waxman Opens Investigation into EPA Decision

Posted by Brad Johnson Thu, 20 Dec 2007 16:13:00 GMT

House Oversight Committee chairman Henry Waxman has just launched an investigation into EPA administrator Stephen Johnson’s decision to deny the California waiver to implement its Clean Cars Campaign.

In his letter to the EPA, Waxman writes:
Yesterday, you announced a decision to reject California’s efforts to reduce greenhouse gas emissions from automobiles. Prior to making this decision you assured the House Oversight and Government Reform Committee, as well as the state of Califomia and many others, that you would make this decision on the merits.

It does not appear that you fulfilled that commitment. Your decision appears to have ignored the evidence before the agency and the requirements of the Clean Air Act. In fact, reports indicate that you overuled the unanimous recommendations of EPA’s legal and technical staffs in rejecting California’s petition.

Your decision not only has important consequences to our nation, but it raises serious questions about the integrity of the decision-making process. Accordingly, the Committee has begun an investigation into this matter. To assist our Committee in this inquiry, I request that you provide us with all documents relating to the California waiver request, other than those that are available on the public record. This request includes all communications within the agency and all communications between the agency and persons outside the agency, including persons in the White House, related to the California waiver request. And all agency staff should be notified immediately to preserve all documents relating to the California waiver request.

You should produce to the Committee all responsive documents from your office by January 10, 2008. All responsive documents from the Office of Transportation and Air Quality and the Office of General Counsel should be produced by January 17,2008, and all other responsive documents should be produced by January 23,2008.

Further California Waiver Denial Responses

Posted by Brad Johnson Thu, 20 Dec 2007 16:01:00 GMT

Further responses (see California responses) to the waiver denial, including praise from Detroit’s lobby group.

Environmental Defense:

EPA is not following science or the law . . . This decision is like pulling over the fire trucks on their way to the blaze . . . The Administration’s first bold act on global warming – and it’s to stop the states who are trying to do something about the problem. It is just plain shocking. . . New CAFE standards, if they go into effect, do not fully phase in until 2020. The California greenhouse gas limits will occur earlier – beginning in 2009 and fully phased in by 2016. With the mounting evidence of climate change impacts occurring now, it is imperative that we are take action immediately.

NRDC:

This rejection represents bald-faced political interference with California’s decades-long authority to enforce its own clean air rules . . . The California standards are the single most effective step yet taken in the United States to curb global warming. By blocking the California standards, the administration has stuck a thumb in the eye of 18 governors from both red and blue states who have led the way on global warming by adopting these landmark rules.

Friends of the Earth:

There is absolutely no reason for the Bush administration to block California’s effort to fight global warming. Today’s EPA decision is a major setback in the global warming fight and a slap in the face to all of the states that have moved forward when the federal government would not. This decision cements the United States’ reputation as the nation that is holding the rest of the world back at a time when our leadership is desperately needed. One can only hope that the next administration will play a more constructive role.

Sen. Sheldon Whitehouse (D-R.I.):
The EPA’s ruling is disgraceful. The Bush administration’s refusal to carry out the duties imposed on it by the Clean Air Act have polluted our air and water, further endangered the health of millions of Americans, and cost us precious time in our fight to address the looming threat of global warming. We can’t afford to delay strong steps to address global climate change. We will keep fighting to pressure this administration to do the right thing and allow states like Rhode Island to take action.

Alliance of Automobile Manufacturers:

We commend EPA for protecting a national, 50-state program. Enhancing energy security and improving fuel economy are priorities to all automakers, but a patchwork quilt of inconsistent and competing fuel economy programs at the state level would only have created confusion, inefficiency, and uncertainty for automakers and consumers. . . Under the new national fuel economy law, automakers will make dramatic, 30-percent reductions in carbon dioxide.

California Reponses to California Waiver Denial

Posted by Brad Johnson Thu, 20 Dec 2007 15:21:00 GMT

Selected responses from the California congressional delegation and executive branch to EPA’s denial of the California waiver yesterday.

Rep. Henry Waxman (D-Calif.), chairman of the Committee on Oversight and Government Reform:
EPA’s decision ignores the law, science, and commonsense. This is a policy dictated by politics and ideology, not facts. The Committee will be investigating how and why this decision was made.
Sen. Dianne Feinstein (D-Calif.):
Candidly I find this disgraceful. The passage of the Energy Bill does not give the EPA a green light to shirk its responsibility to protect the health and safety of the American people from air pollution.
Gov. Arnold Schwarzenegger (R-Calif.):
While the federal energy bill is a good step toward reducing dependence on foreign oil, the President’s approval of it does not constitute grounds for denying our waiver. The energy bill does not reflect a vision, beyond 2020, to address climate change, while California’s vehicle greenhouse gas standards are part of a carefully designed, comprehensive program to fight climate change through 2050 . . . California sued to compel the agency to act on our waiver, and now we will sue to overturn today’s decision and allow Californians to protect our environment.
Sen. Barbara Boxer (D-Calif.), chair of the Committee on Environment and Public Works:
With Members of Congress leaving town, and with the news on global warming getting worse with each passing day, EPA Administrator Stephen Johnson has delivered the worst possible news to the good people of California and the 12 other states who have proven they are leaders in fighting for the survival of the planet.

It is ironic that this waiver denial comes during the season when we are supposed to work to make our country and the world a better place. And to hide behind the newly-passed Energy Bill as an excuse flies in the face of the Supreme Court’s findings and the Energy Bill itself.

This ill-advised denial turns its back on science, turns its back on fairness, turns its back on states’ rights, and turns its back on precedent.

I have informed the state of California that I am prepared to take all measures to overturn this harmful decision.

Calif. Attorney General Jerry Brown (D):
It is completely absurd to assert that California does not have a compelling need to fight global warming by curbing greenhouse gas emissions from cars. There is absolutely no legal justification for the Bush administration to deny this request – Governor Schwarzenegger and I are preparing to sue at the earliest possible moment.

EPA Admin Denies California Waiver 23

Posted by Brad Johnson Thu, 20 Dec 2007 14:37:00 GMT

EPA administrator Stephen Johnson’s denial of California’s petition to regulate tailpipe greenhouse gas emissions following the White House energy bill signing ceremony was deservedly front page news from coast to coast. The Supreme Court forced the EPA to consider California’s December 2005 Clean Air Act waiver request in April 2007 (Massachusetts v. EPA). In testimony before the Senate and the House earlier this year, Johnson signaled his lack of desire to grant the waiver. Now that decision has come in, with justifications even EPA’s own laywers and policy staff don’t believe. This is the first time in the history of the Clean Air Act that the EPA has denied a section 209 California waiver request.

[Ed.—Warming Law has superior analysis of the decision, from which I’ll steal some key insights.]

The EPA, which is yet to release the formal denial, announced in its press release that the increased CAFE standards in the new energy law to justify its denial of the California waiver:
EPA has determined that a unified federal standard of 35 miles per gallon will deliver significant reductions in greenhouse gas emissions from cars and trucks in all 50 states, which would be more effective than a partial state-by-state approach of 33.8 miles per gallon.

Warming Law says “EPA appears to be attempting to add a new test to the Clean Air Act” in requiring that California prove a local interest in addition to the “compelling” and “extraordinary” standards the Supreme Court said this problem meets.

Warming Law’s Tim Dowling notes that Johnson’s claim the waiver would create a “confusing patchwork of state rules” is typical industry rhetoric that is specious—only two sets of standards, national and California, would apply. “Johnson failed to explain how EPA has been able to grant EVERY other 209 waiver request in history without creating a confusing patchwork, but can’t do so here.”

Juliet Eilperin of the Washington Post reveals that Johnson overrode his staff.
In a PowerPoint presentation prepared for the administrator, aides wrote that if Johnson denied the waiver and California sued, “EPA likely to lose suit.”

If he allowed California to proceed and automakers sued, the staff wrote, “EPA is almost certain to win.”

The technical and legal staffs cautioned Johnson against blocking California’s tailpipe standards, the sources said, and recommended that he either grant the waiver or authorize it for a three-year period before reassessing it.

“Nobody told the administration they support [a denial], and it has the most significant legal challenges associated with it,” said one source, in an interview several hours before Johnson’s announcement, who spoke on the condition of anonymity because the official is not authorized to speak for the agency. “The most appropriate action is to approve the waiver.”

Lieberman-Warner Bill Moves to Full Committee

Posted by Brad Johnson Thu, 01 Nov 2007 14:41:00 GMT

At today’s markup of Lieberman Warner (S 2191), changes were made to win the support of Sen. Lautenberg (D-N.J.), ensuring passage by a 4-3 vote (Sanders, Isakson, and Barrasso voting no) to send the bill to the full Committee on Environment and Public Works.

The changes, according to CQ:
  • Extending the scope of the bill to cover all emissions from the use of natural gas. The introduced bill covered natural gas burned in power plants and industrial processes but not in commercial and residential buildings.
  • Requiring the EPA to make recommendations to Congress based on periodic reports from the National Academy of Sciences. The bill already would direct the academy to evaluate whether changes in the law are necessary, based on the state of the environment and available technology.

These were two of the four specific changes called for by NRDC at the initial hearing on the bill.

Amendments were introduced by Sen. Sanders (I-Vt.) and Sen. Barrasso (R-Wyo.). Changes made by amendments adopted at the markup:
  • Advanced tech auto funding limited to vehicles with minimum of 35 mpg (Sanders 3)
  • More allocations given to states, taken from international forest protection (Barrasso 4)
  • Definition of lower-rank coal eligible for 25% of CCS funding changed from “for example, bituminous and lignite” to coal with a heat content below 10000 BTU/lb (Barrasso 3)

Sen. Isakson reiterated his passion for nuclear power, and Barrasso argued for stronger coal subsidies, a sentiment supported by Sen. Baucus. Lautenberg compared their role to that of doctors faced with a sick patient who could become terminal, asking why anyone would withhold the necessary medicine. The Senators often laughed about their needs to compromise and balance each others’ parochial interests.

Sanders and Barrasso introduced several other amendments which were not adopted. Here are some:

Sanders Update: See this post for more on the Sanders amendments
  • Amendment 1 would have designated most of the funds in the zero/low-carbon emissions fund for solar, wind, and geothermal energy. Sanders pointed out that the bill has explicit funding for coal, cellulosic ethanol, and the auto industry but none for renewables.
  • Amendment 2 would have replaced the advanced tech auto funding with funding for local and state energy efficiency grants. Sanders argued that the auto language was too weak to ensure any benefits, saying “If we do not act aggressively Detroit will be shutting down and moving to China.”
  • Amendment 4 would give EPA authority to revise targets. Withdrawn after suggestion to work on issue by Lautenberg to have EPA action with Congressional veto
  • Amendment 5 would have moved to full auction of allowances by 2026
  • Amendment 6 would have put a moratorium on new coal-fired power plants that do not capture and sequester at least 85% of their emissions.
  • Amendment 8 would have replaced the 15% offset allowance for companies with a system-wide cap on total offsets purchased. The amendment was supported by U.S. PIRG, UCS, and NRDC.
  • Amendment 9 would have required economy-wide cuts by 15% by 2020 and 80% by 2050. Lieberman voted no, arguing that the 63% cuts would keep concentrations below 550 PPM by 2100 and saying “Your amendment would break the coalition and have possible other negative impacts.”
Barrasso
  • Amendment 1 would have set up the Rocky Mountain Center of Coal Studies at the University of Wyoming.
  • Amendment 2 would have supported high-altitude Western state (Wyoming) coal gasification demonstration projects.
  • Amendment 5 would have pushed back coal capture and sequestration targets.
  • Amendment 8 would have sunset the bill in five years. Barrasso said that China and India need to implement cap-and-trade programs in that time period.