E9-6061. Corporate Average Fuel Economy Standards; Effect Upon State Laws and Regulations

AGENCY:

National Highway Traffic Safety Administration (NHTSA), Department of Transportation (DOT).

ACTION:

Notice of intent.

SUMMARY:

In a notice of proposed rulemaking published on May 2, 2008, proposing Corporate Average Fuel standards for model years 2011-2015, NHTSA set forth its previously stated view regarding preemption under the Energy Policy and Conservation Act of State standards regulating carbon dioxide emissions from motor vehicle tailpipes and proposed to include a summary statement of those views in the Code of Federal Regulations. However, in a January 26, 2009 memorandum requesting that NHTSA complete its rulemaking in two phases, the President further requested the agency to reconsider its views. In accordance with that request, NHTSA will re-examine the issue of preemption in the context of its forthcoming rulemaking to establish Corporate Average Fuel Economy standards for model year 2012 and later years.

FOR FURTHER INFORMATION CONTACT:

Stephen P. Wood, Acting Chief Counsel, National Highway Traffic Safety Administration, U.S. Department of Transportation, 1200 New Jersey Ave., SE., Washington, DC 20590.

SUPPLEMENTARY INFORMATION:

The Energy Independence and Security Act (EISA) amended the Energy Policy and Conversation Act (EPCA) by mandating that the model year (MY) 2011-2020 Corporate Average Fuel (CAFE) standards be set sufficiently high to ensure that the industry-wide average of all new passenger cars and light trucks, combined, reaches not less than 35 miles per gallon by MY 2020. NHTSA published a notice of proposed rulemaking (NPRM) on May 2, 2008 to begin implementing the EISA mandate by establishing CAFE standards for MYs 2011-2015.^[1] In the proposal, NHTSA set forth its previously stated view that State standards regulating carbon dioxide emissions from motor vehicle tailpipes are expressly and impliedly preempted and proposed to include a summary of that conclusion and the underlying reasoning in the Code of Federal Regulations.

On January 26, 2009, President Obama issued a memorandum concerning the completion of the rulemaking.^[2] In light of the requirement in EPCA to prescribe CAFE standards for 18 months in advance,^[3] i.e., by March 30, 2009 for MY 2011, and in order to provide additional time to obtain new information and consider anew the appropriate approach to establishing future CAFE standards, the President requested NHTSA to complete its rulemaking in two phases: (1) standards for MY 2011, and (2) standards for MY 2012 and beyond. The President further requested that NHTSA consider, as part of both phases, whether any provisions regarding preemption are consistent with the EISA, the Supreme Court's decision in Massachusetts v. EPA and other relevant provisions of law and the policies underlying them.

Massachusetts v. EPA,^[4] was a case involving a 2003 order of the Environmental Protection Agency (EPA) denying a petition for rulemaking to regulate greenhouse gas emissions from motor vehicles under the Clean Air Act.^[5] The Court ruled that greenhouse gases are “pollutants” under the Clean Air Act and that the Act therefore authorizes EPA to regulate greenhouse gas emissions from motor vehicles if that agency makes the necessary findings and determinations under section 202 of the Act.

The Court considered EPCA briefly, stating

[T]hat DOT sets mileage standards in no way licenses EPA to shirk its environmental responsibilities. EPA has been charged with protecting the public's “health” and “welfare,” 42 U.S.C. § 7521(a)(1), a statutory obligation wholly independent of DOT's mandate to promote energy efficiency. See Energy Policy and Conservation Act, § 2(5), 89 Stat. 874, 42 U.S.C. § 6201(5). The two obligations may overlap, but there is no reason to think the two agencies cannot both administer their obligations and yet avoid inconsistency.

549 U.S. at 537.

In keeping with the President's remarks on January 26 regarding the need for new national policies to address the closely intertwined issues of energy independence, energy security and climate change, and for the initiation of serious and sustained domestic and international action to address them, NHTSA will develop CAFE standards for MY 2012 and beyond after collecting new information, conducting a careful review of technical and economic inputs and assumptions and standard setting methodology. It is reasonable to anticipate that this process will lead to changes, given the further review and analysis that will be conducted pursuant to the President's request, and given the steady evolution in technical and policy factors potentially relevant to the next CAFE rulemaking. NHTSA may consider numerous factors, including, but not limited to, energy and climate change needs and policy choices regarding goals and approaches to achieving them, developments in domestic legislation and international negotiations regarding those goals and approaches, technologies for reducing fuel consumption, the capacity and condition of the automotive industry, fuel prices, and climate change science and damage valuation.

The goal of the review and re-evaluation will be to ensure that the approach used for MY 2012 and thereafter produces CAFE standards that contribute, to the maximum feasible extent, consistent with the legal requirements of EPCA/EISA, to meeting the energy and environmental challenges and goals outlined by the President. We intend to craft our program with the goal of creating the maximum incentives for innovation, providing reasonable flexibility to the regulated parties, and meeting the goal of making substantial and continuing reductions in the consumption of fuel sufficient to achieve at least 35 mpg not later than model year 2020. To that end, we are committed to ensuring that the CAFE program for beyond MY 2011 is based on the best scientific, technical, and economic information available, and that such information is developed in close coordination with the Environmental Protection Agency, Department of Energy and other federal agencies and our stakeholders, including the public and the vehicle manufacturers.

In response to the President's request that NHTSA consider whether any provisions regarding preemption are consistent with EISA, the Supreme Court's decision in Massachusetts v. EPA and other relevant provisions of law and the policies underlying them, NHTSA is reconsidering its views regarding preemption under EPCA of state standards regulating motor vehicle tailpipe emissions of carbon dioxide. Accordingly, the agency will neither include any discussion of preemption in the preamble to forthcoming final rule establishing CAFE standards for MY 2011 nor include any provisions addressing preemption in the amendments made by that rule to the Code of Federal Regulations. This course of action will permit the agency to address the issue of preemption in a deliberate, comprehensive manner in the context of its forthcoming rulemaking to establish CAFE standards for 2012 and later model years.

Issued on: March 16, 2009.

Stephen R. Kratzke,

Associate Administrator for Rulemaking.

Footnotes

1.  73 FR 24352.

2.  The memorandum is available at: http://www.whitehouse.gov/​the_​press_​office/​The_​Energy_​Independence_​and_​Security_​Act_​of_​2007/​ (last accessed March 12, 2009).

3.  49 U.S.C. 32902(a).

4.  549 U.S. 497 (2007).

5.  68 FR 52922 (September 8, 2003).