Representatives of the Auto Industry and an Environmental Group testified. Good morning. The joint subcommittee will now come to order. The chair to recognize himself for fibers for an Opening Statement. Good morning. I would like to think i witnesses for with us this morning. Today we are here to discuss with stakeholders the corporate average fuel Economy Program, or cafe, at the national highway Transportation Safety administration, and the Greenhouse Gas emissions standards at the u. S. Environmental Protection Agency that govern fuel economy standards. Nhtsas cafe program was established by congress in 1975. The goals of the program are to improve vehicle fuel economy, reduce oil consumption, and secure the Nations Energy independence. The cafe program has undergone major changes and modifications in the past four decades, both because of political and economic forces. Less than 10 years ago, and on top of the cafe program, the epa standards were created to incentivize the production of more efficient vehicles that will use less fuel and emit less Carbon Dioxide. In addition, various states have enacted their own standards with respect to automobile emissions. The combination of these requirements has created an incredibly complicated regulatory scheme. Improving fuel efficiency and achieving Energy Independence are important goals. That said, real world facts and data must drive regulatory decisions that impact such an important and farreaching part of the American Economy and consumers daily lives. The Previous Administration announced an attempt to create a National Standard which included a plan for nhtsa and epa to Work Together to avoid conflicting regulations. Whatever progress had been made on that front was undone, however, when earlier this year the epa issued its final determination that the standards for model year 20222025 are appropriate. Epa took this action without coordinating with nhtsa, clearly undermining the earlier pledge. The result is that automakers potentially find themselves in a position where they are in compliance with one federal program, but out of compliance and subject to penalties with anothers. This type of fragmented regulation harms our economy, our workers and consumers. The Automotive Industry is a huge source of american jobs including nearly 100,000 ohioans. A hallmark of the american Automotive Industry has been the ability to innovate and build cars that american drivers want to buy. But outdated, conflicting or impossibletomeet government regulations get in the way of this type of innovation. It is a rare event, to say the least, for policymakers in washington to have better ideas about how to meet consumer demand than consumer themselves. All too often washington stands in the way, particularly when it creates unnecessary confusion with conflicting rules. My constituents know what type of vehicle works best for their family and their budget. That may change over time and each American Family should be able to make their own choice without the federal government putting extra strain on their finances. Also, there is a real risk that the costs associated with duplicative federal and state fuel economy standards could force families to choose older cars without the benefits of new safety technologies. Nhtsas Safety Mission and statutory obligations must remain its guiding principle. When we are just starting to turn the corner after many challenging years, it is disheartening, but not surprising, to see the epa rush out a final determination in the waning hours of the last administration. I am interested in hearing from the witnesses about industrys experience attempting to navigate this tricky regulatory terrain, and what can be done to help support choice for American Consumers and jobs across the country. I can i want to thank eyewitnesses and a you at this time to the gentlelady from tennessee. Thank you, mr. Chairman. And i appreciate so much that you and chairman shimkus have called this hearing. Studies have shown that they Hire Purchase price of cars under a stricter cafe under these 2025 standards would eliminate a lot of consumers from buying new cars. There is between 3. 114. 9 million American Consumers that would fall out of the new car marketplace. Now, this is where theres attention and affection that we need to talk about. When is something counterproductive . In tennessee where a lot of auto manufacturers. This is what they tell me. Whether there with nissan or toyota or volkswagen or gm, it does not matter. They want realistic standards. They want something that they will be able to meet the expectation of American Consumers and deliver a product that is first of all safe. And i consumers are going to be safe. In these automobiles. And so i think the chairman for the hearing. I think this is time for us to talk about what is realistic, what is achievable and what will deliver a safe product for the American Consumer and i yield back. They get very much. The gentlelady yields back. The chair now recognizes the Ranking Member, the gentleman from illinois for five minutes for an Opening Statement. Thank you, mr. Chairman. Cafe and Greenhouse Gas emission standards have been critical tools to improve your economy and reduce carbon pollution. The program was born out of the Energy Crisis in the 1970s. Now the standards are helping us address the even greater threat of changing climate. Strong standards have a more immediate consequences for American Consumers. Big savings at the pump. In the midterm evaluation finalize in january, the environmental Protection Agency estimated a model year 20222025 Greenhouse Gas emission standards will save consumers 92 billion over the over the lifetime of their vehicle. Industry has obviously not together, 92 beleaguered industry has criticized the standard for 20222025 as too costly. That criticism is not supported by the facts. The epa found that meeting the standards is not only technologically feasible, but also cheaper than expected. In fact, the cost estimates per vehicle has gone down over 200 since 2012. Ambitious standards have driven innovation which has in turn lowered costs. The last time we held a hearing in september of 2016, john german of the International Council and clean transportation testified, quote, during the course of my four year career initial cost estimates for complying with emissions and efficiency requirements have consistently been overstated. Not some of the time or even most of the time, but all of the time. Nevertheless, the standardsbased resistance. I often hear Companies Call for Greater Regulatory certainty and more time to comply with the rules, but this time the epa actually finished its work ahead of schedule. So what did the automakers do . Petition for review. And the Trump Administration was all too happy to comply. No matter how epa administrator scott pruitt or others want to explain the decision to reopen the midterm evaluation, the end result is clear. Dirtier, less efficient vehicles, cause for harmonization between cafe and Greenhouse Gas standards are just for the efforts to weaken the standards. I am especially confused why the outer industry would be so opposed to strong standards when automakers are promising fleets of Energy Efficient autonomous vehicles. If avs, if av are actually going to be electric vehicles, i would think compliance should be easy. As we discussed the future of the standards, Family Budgets and Public Health hangs in the balance. This is not the time to ignore facts under the industry pressure. We need to continue the progress toward greater fuel efficiency and lower Greenhouse Gas emissions. And i now yield to congresswoman matsui. Thank you very much, Ranking Member schakowsky. Nixes cafe standards and epa Greenhouse Gas emission standards for light duty vehicles are a winwin. They are good for consumers who save billions at the pump over the lifetime of the vehicle. They are good for the environment. Standard significant reduce emissions for the transportation sector picked the only sector which Energy Efficiency has grown worse over the past 15 years in this country. And are good for the american workers. They sparked the development of Innovative Technologies that create profits and support jobs. Many Companies Understand this and support the nhtsa and epa standards, even those companies critical of the standards are shifting to sufficient engines and electric vehicles in response to consumer demand for cleaner cars. In light of the widespread support for improving fuel economy im disappointed with the Trump Administrations decision to revisit the standards for model year 20222025. It is clear that the administration is simply ten of weakening the progress weve made so far. Thats why i will be introducing a bill to codify the nhtsa and epa standards if these standards are written in 2012 with the support of outer industry, Environmental Groups and states. My legislation maintains that federal government and auto manufacturers promised to the American People. They promise for cleaner and efficient cars that cost less at the pump and out of better for the environment, health, and the future of our children and grandchildren. I look for to continue to engage with the committee on this issue. Thank thank you, and i yield ba. Thank you. Gentlelady just back in the chairman now recognizes the chairman of the environment subcommittee, the judgment from illinois for five minutes for an Opening Statement. Did forget Opening Statement i get 15 seconds for. Of personal privilege. Without objection. Thank you. Two pictures i want to identify for folks. You will all appreciate this. This is between backup for my colleague from texas not paying attention. Talking about the next street, and then the next photo, if you put that up, thats actually mr. Olson, are you paying attention . Yeah, so i thank you for correcting the record and starting a new streak. [inaudible] sixteen years. I which is, we saw your tweet earlier. [laughing] i know my colleagues because of mr. Olson at how he asked, we appreciate that. So thank you very much. The gentleman is recognized. [laughing] one of the costliest energy and environmental regulations from the Obama Administration is the one we will address today that targets fuel efficiency and Greenhouse Gas emissions from cars and light trucks. Epa estimated total costs in excess of 200 billion by 2025, much of which will show up in the form of higher sticker prices for new vehicles. And although the Agency Claims offsetting consumer savings from lower fuel costs, we now know that this was based on inaccurate projections of rising gas prices as well as other assumptions that are proving to be off the mark. It is time to review these rules to see if they are a good deal for consumers and whether they can be improved upon. Fortunately, the regulations contained just such a review, the socalled midterm evaluation. The regulations were finalized in 2012 and included progressively stricter standards all the way out to 2025, more than a decade into the future. For this reason, it was decided to revisit the standards midway through the process to see if the standards for model years 20222025 need to be adjusted in light of changed circumstances. In 2016 epa commenced its midterm evaluation and was poised to make a final determination by april of 2018. After which the agency may proceed to a rulemakinging to change the targets for 2022 through 2025. Part of this hearing is to get input from those who make cars and trucks as well as those who sell them about their contributions to the midterm evaluation and what they would like to see come out of the process. The stakes are high for automakers and auto dealers, but they are higher still for consumers. The average price of a new vehicle has risen to 35,000 in 2017. These regulations are a contributor to the increase. Epa estimated cumulative price increases of nearly 3,000 per vehicle by 2025. And the real number may prove to be higher. Worst of all, the biggest sticker shock may be on the vehicles that matter most to middle america. Granted, a toyota prius or a smart car may be fine for some people, but many of my constituents need familysized vehicles or pickup trucks for work, and its these larger vehicles that may take the biggest hit. We need to make sure that the future targets under this program maintain vehicle choice and affordability. In addition to the midterm evaluation, we also need to evaluate whether we have a uniform set of rules for the nation. Recall that since the 1970s the national highway Traffic Safety administration, or nhtsa, had exclusive authorities that set economy standards. But the Obama Administration decided that the epa and the California AirResources Board should do so as well. Is now we have three agencies, all regulating the same thing, and not surprisingly there are discrepancies emerging. Look ahead looking ahead, we need to ask whether we still want three agencies involved in the fuel economy and why we gave california so much more power than the other states in the union. It all comes down to what is best for the consumer. Vehicle purchases are second only to home purchases in terms of their consumer impact, and i hope this hearing helps us strengthen our understanding of what we need to do to make these regulations as consumerfriendly as possible. Thank you, mr. Chairman, and i yield back the balance of my time. Thank you. The gentleman yields back the balance of his time. The chair now recognizes the environment subcommittee Ranking Member, the gentleman from new york, for five minutes for an Opening Statement. Thank you, and thank you to our witnesses. Thank you, chair shimkus, for holding todays hearing. Nhtsas corporate average fuel economy or cafe standards and epas Greenhouse Gas emissions standards have played a Critical Role in saving consumers money at the pump while reducing carbon pollution. Cafe standards were established in 1975 by the Energy Policy and conservation act to reduce our nations reliance on foreign oil. And since 2009epas Greenhouse Gas emission standards have become increasingly important in our nations efforts to address Climate Change. Last year transportation surpassed the Electricity Sector as the largest source of Greenhouse Gas emissions in our cup. According to in our country. According to the epas inventory of u. S. Greenhouse gas emissions, light duty vehicles accounted for nearly 60 of the United States transportation emissions and approximately 16. 5 of total domestic emissions in 2015. No serious effort to reduce emissions can ignore emissions from light duty vehicles. The current standards are estimated to lead to the reduction of Carbon Emissions by 6 billion metric tons for vehicles within model years 2012 is2025. In addition to the pollution reduction, cafe standards are estimated the save consumers some 1. 7 trillion at the pump for vehicles produced between 2011 and 2025. Improving vehicle efficiency has truly been a winwin outcome. We have come a long way since 1930s. Over the past four decades, the federal fuel Economy Program has evolved considerably to give automakers significantly greater flexibility. Today manufacturers are not forced into a single compliance path. Each manufacturer has its own fleetwide standard that reflects the vehicles it produces to meet its customers demands. But in the 15 months since our last hearing on this subject, we have seen major changes at epa. As participant of the 2012 as part of the 2012 agreement between Michelle Obama and the Auto Industry president obama, epa agreed to determine whether assumptions made about Technology Development and costs in 2012 were still accurate and still republican. Last summer epa beg