And now, the state that once legislatively fostered General Motors’ EV1 electric car – that was prematurely “killed” and now witnessing “revenge” by the Chevy Volt – has ratcheted up its strictest-of-all emissions laws yet again.
In a unanimous ruling Friday, the California Air Resources Board (CARB) approved standards for combustion-powered vehicles beginning in 2015 through 2025. In the same pen stroke, it required from 2018-onward a ramping up of zero- or very low-emission vehicles with the goal that by 2025 they comprise 15.4 percent of all vehicles sold – up from less than 1 percent today.
Described as a “historic” decision by board Chairwoman Mary D. Nichols, California’s vision for its “advanced clean car rules” actually extends 38 years into the future, and is intended to complement if not amplify pending federal emissions and mpg rules being set by the Corporate Average Fuel Economy (CAFE) standards.
Although California has been known to modify such dictates on the fly to keep expectations within reason, the board estimates annual “clean car” sales will increase to approximately 1.4 million in state by 2025. Of these, 500,000 would be battery-electric or fuel-cell vehicles, with the balance being plug-in vehicles that qualify as transitional zero-emission vehicles.
Taking effect sooner is the mandate to slash emissions from gasoline and diesel automobiles, SUVs, minivans and pickups. Effective from 2015-onward are to be incremental cuts in smog-forming emissions leading to 75-percent reduction by 2025 and for this same period, decreasing of CO2 and greenhouse gas emissions by 50 percent.
“Today’s vote to adopt the package of clean-cars standards represents a new chapter in California and the nation,” said Nichols.
Nichols said “the nation” because California swings an especially big stick, and knows it. Its emissions standards have in past years been mirrored by Washington, Oregon, Arizona, New Mexico, Maryland, Pennsylvania, Maine, Vermont, Massachusetts, New Jersey and New York.
Thus far, 10 of these states including New York and New Jersey have said they intend to adopt the latest California standards, and these would reportedly mean that state mandates will call for more than 3 million “clean cars” by 2025.
In previous years California’s emissions guidelines have effectively created a second set of standards alongside federal emissions guidelines.
This time around, California’s regulators collaborated with the U.S. Environmental Protection Agency, 13 automakers, and other stakeholders so when federal CAFE rules pass later this year, they will match to create one national emissions standard.
Although California’s new rules are not without critics, opposition appears to be less than it has been for its previous environmental mandates.
Pending 2013 Spark EV.
Some automakers expressed concerns, while most have said they will go along, and for their part, General Motors and Chrysler could not directly oppose if they wanted to.
As a condition of federally assisted bankruptcy restructuring, GM and Chrysler agreed to not sue California to block any new rules. So even though they do have some concerns, they will air them via other channels – like through third-party advocacy organizations, among others.
CARB’s emissions rules differ from federal rules in that CAFE stipulates emissions plus fuel efficiency at “54.5 mpg” which winds up being in the low 40s on the sticker.
Note California’s tighter guidelines include not just gas and diesel cars, but also larger vehicles including pickups and SUVs. Although these rules pertain to emissions, they will also effectively speak to vehicles’ mpg.
Fact is, a large part of engineering tweaks to decrease emissions involves increasing mpg.
Over the weekend we were not able to get commentary on whether CARB rules may or may not create a narrower mpg hoop for light-duty trucks to jump through compared to pending federal CAFE mpg rules which also set limits on trucks.
What is more clear is motivation behind what critics might describe as activist regulators in California – who are also sympathetic with sensibilities held by European regulators and those in the Obama administration – is all about reducing oil usage.
“The steady drumbeat of the need to get off the dependence on petroleum is really what is driving this,” said Nichols. “It’s taken longer than we’ve hoped.”
CARB’s 9-to-0 vote in favor of stricter mandates has heartened its members that they are using their position to leverage broad policy ramifications.
The program actually goes beyond federal goals that look to 2025, and projects all the way to 2050. CARB’s actions on Friday thus ambitiously set the foundation for a goal to see 87 percent of the state’s new vehicles propelled by electricity, hydrogen fuel cells or other clean technologies by mid century.
“This regulation is planned over a 40-year horizon, and that is extremely unusual,” said board spokesman David Clegern. “But it gives us time to put the pieces in place with no surprises. The individual companies can plan for changes and develop the technology, and over the long haul, it will shift us away from reliance on petroleum.”
So if California gets its way, it has effectively given notice to OPEC and other foreign oil producers that the day is coming when their products will no longer be required.
Thus while CARB is “green” legislation, it is also targeting energy independence. This therefore means people who focus on curtailing global warming and people who focus on national energy security are actually kissing cousins, whether they see eye-to-eye on the details or not.
But political sentiment leading to potential sweeping reforms cannot escape scrutiny from those who say government is overstepping it bounds toward what are also marketing and engineering decisions to be made by corporations trying to succeed.
Among critics is the House Oversight and Government Reform Committee headed by Republican U.S. Rep. Darrell Issa, who last week headed a House subcommittee inquiry into alleged improprieties surrounding the Volt.
Issa has launched an investigation into CARB’s new rules and contends that because it worked closely with the Obama administration, CARB has effectively been setting fuel economy standards in violation of federal law.
“Your refusal to subject yourself and your office to congressional scrutiny is emblematic of the core concern that many in Congress share … that CARB, as a state actor, is unresponsive to congressional concerns and unappreciative of congressional priorities,” Issa wrote.
Nichols has countered by citing a 2007 U.S. Supreme Court decision upholding California’s right to regulate greenhouse emissions.
Issa gave the board until Nov. 23 to answer specific questions and provide documents, thus the inquiry’s outcome is to be determined.
More certain is that CARB’s requirements will jack up car prices just like CAFE will. In question is by how much, and will manufacturers be left with unsalable vehicles?
Foreseeing this objection, the California air board predicted technologies needed to meet its new standards will add $1,400-$1,900 to the price of a new car in 2025. But this will more than pay for itself, CARB said, by being offset by $5,900 in estimated fuel savings over the life of the vehicle.
Hence CARB effectively says it is benevolently imposing top-down policies that will bring more choices to the public that are both sustainable yet cost-effective.
“The fact that we are going to change what consumers can buy is one of the most important things we can do,” said board member Ken Yeager.
But on these assertions also, it’s unlikely everyone will agree. We recently saw similar cost/benefit justifications refuted at a federal CAFE hearing by the National Auto Dealers Association.
The NADA’s Don Chambers, chairman of its government relations committee, contradicted U.S. EPA assertions that a 2025 vehicle would cost $2,023 more, but save $6,600 in fuel costs over its lifetime – a statement close to what California is making.
Chambers cited an NADA study showing CAFE will raise average prices by up to $5,000 per vehicle, so do not be surprised if we hear higher estimates for California’s proposal as well.
And what ever cost/benefit scenarios prove to be, some in the auto industry say they are doubtful they will be able to adequately sell ultra-clean vehicles if made at the government’s behest.
“Automakers are mandated to build products that consumers are not mandated to buy,” said Gloria Bergquist, a spokeswoman for the Alliance of Automobile Manufacturers, which includes Chrysler Group, Ford Motor Co. and General Motors Co. “If the electric vehicle infrastructure is not in place, consumers may be reluctant to buy these technologies.”
Further, Jack Nerad, a market analyst for Kelly Blue Book, predicted “the added expense and lesser versatility of the ‘environmental’ vehicles” will continue to make them less desirable.
Automakers may be required to lose money in order to sell clean cars, Nerad said, and “buyers of conventional cars will pick up the remainder of the tab.”
But overall, automakers – including GM, Ford and Chrysler – have spoken in qualified terms in favor of CARB’s rules, as have others, including Toyota.
“Yes, the cars will be lighter, compact, far more fuel efficient,” said Toyota spokesman Michael Dobrin, “That’s what the mandate will be. It’s not enforced by the government but really by the economics of the future.”
And as one would expect, environmental advocacy groups have largely applauded the CARB rules, saying they are feasible and necessary. Some even note a weakness that could give automakers an easy way around the guidelines.
One concerning clause stipulates earlier years, credits will be granted to automakers who reduce their fleets’ greenhouse emissions more than required. These credits would then reduce the required number of electric, fuel cell and plug-in hybrids the companies otherwise might have had to offer in California.
Plug In America’s Legislative Director, Jay Friedland, said this clause is “a loophole you can drive a truck through” and will therefore undermine the goal of 15 percent ultra-clean cars sold in California by 2025.
So while CARB’s rules are touted as a big step forward for advocates, as always, time will tell how they play out, whether opposition will prevail, or if standards will be “watered down” as 1990s mandates were said to have been.
Regarding hydrogen fuel cell vehicles for which California also intends to pave the way, oil companies will be required to install hydrogen pumps at existing gasoline stations no later than when a certain minimum of FCVs is reached. The air board estimates each pump could cost $1-2 million.
Affected oil companies include BP Plc, Chevron Corp., Tesoro Corp., ConocoPhillips, Valero Energy Corp., Royal Dutch Shell Plc and Exxon Mobil Corp.
CARB board member Hector De La Torr said he’d prefer to see voluntary hydrogen pump installations sooner rather than when absolutely required.
“I hope the oil industry will get on board rather than dragging its feet,” La Torr said.
Oil industry representatives however said CARB may yet find itself having to defend itself in court, according to Businessweek, citing this assertion from Cathy Reheis-Boyd, president of the Western States Petroleum Association, a trade group with some members that would have to comply.
“We strongly oppose the clean fuels outlet requirement,” Reheis-Boyd told the board Friday.
As for automakers, clean car rules starting in 2018 apply to the six largest, all from the U.S. and Japan. Mandates will in time apply to the top 12, including German and Korean automakers.
Failure to meet regulations could be dealt with by fines, and as an extreme measure, California holds out the right to set sales limits for automakers who do not comply.
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