July 9, 2018 4:45 PM, EDT

Trump-Ordered Talks on Future of Fuel Economy in California Stuck in Neutral

Olivier Douliery/Abaca Press/TNS

Talks between the U.S. and California on auto emissions standards have made little progress since President Donald Trump told his agencies to pursue a deal, according to a top state official, who’s holding out hope that the Environmental Protection Agency will get more involved.

Mary Nichols, chair of the California Air Resources Board, said in an interview July 9 that the EPA hasn’t weighed in with its own technical analysis to underpin the administration’s proposed changes to fuel economy and tailpipe emissions rules.

She said she’s hopeful this will change after the departure of Administrator Scott Pruitt.

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In a White House meeting with top auto industry executives in May, Trump told federal regulators to seek a deal with officials from the state. Such talks have not occurred, said Nichols in a meeting with Bloomberg News reporters and editors in New York.

“There has been no substantive progress on that at all since the time that the president spoke with the companies,” she said.

New Course

Pruitt’s resignation last week won’t have an immediate impact, but his replacement, acting EPA administrator Andrew Wheeler, may give the agency a chance to change course, Nichols said.

“The key question is whether bringing in a new administrator will cause the EPA to decide they should take another look at the situation and see if they want to be more active in trying to use their resources, which are considerable, to develop alternative proposals,” Nichols said.

The White House’s Office of Management and Budget is reviewing joint proposals by the EPA and National Highway Traffic Safety Administration to weaken federal auto efficiency standards. The proposals also call for revoking California’s authority to set its own limits on vehicle emissions, people familiar with the matter have said, a move the state is vowing to fight in court.

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California announced last year that, after reviewing the tailpipe emissions standards to which it had agreed with President Barack Obama, it saw no reason to change them. State officials have vowed to fight a push by the Trump administration to roll back the standards.

Conflict between Washington and Sacramento over the rules could lead to a messy court battle or a balkanized market with federal requirements in most states and differing rules set by California that are followed by 12 other states that together account for more than a third of U.S. auto sales. Colorado also plans to adopt California’s clean-car rules.

Taking Action

In August, California plans to propose revoking the ability of carmakers to automatically comply with California’s tailpipe standards if they meet EPA’s rules, Nichols said.

“If the federal rules go away, we then will be faced with a situation where we can’t any longer accept compliance with the federal rules as equivalent to California,” she said. “We have to take action to protect ourselves against that eventuality.”

During a meeting in San Francisco on June 29, Pruitt said discussions about the vehicle rules ought to take place after the federal agencies release their proposal, according to Nichols. That document could be released in the coming weeks.

Nichols decried a lack of rigor and analysis in the EPA’s work under Pruitt compared with prior administrations, including when she was an assistant administrator during President Bill Clinton’s first term. Back then, the EPA successfully updated emission standards by holding voluntary negotiations with industry — the first time the agency had done such a thing without direction from Congress.

She said the EPA had the credibility and confidence to negotiate with industry because of its vast in-house expertise.

Officials were able to independently verify industry information and go beyond it to bring their own analysis to bear on talks.

‘Depressing Situation’

During the Obama administration’s development of national standards, the EPA drew on expertise from the national laboratories and industry consultants, who “were able to call to literally take apart and cost out every single piece of a car that could possibly have an impact on fuel economy, in order to make a finding that the standards that were adopted were cost-effective and technically feasible,” she said.

She said the EPA showed none of this rigor under Pruitt in its midterm review of automotive greenhouse gas emissions, which published in April.

“It was really a very depressing situation from the perspective of those of us who have worked with EPA over the years,” she said.

Nichols did credit Trump’s EPA — and, reluctantly, “Mr. Pruitt’s office” — for still maintaining focus on enforcement of existing agency regulations.

“They continue to find and to prosecute violations that they found on the emissions side, which I think is worth noting,” she said. “But when it comes to anything that has a regulatory flavor to it, they just were just missing in action.”

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