Good For The Environment, Consumers, And Auto Companies, Bad For Oil Companies

Last week, a group of 15 conservative state attorney generals and oil companies legally challenged the U.S. Environmental Protection Agency’s (EPA) ambitious, new clean car emissions standards. Their effort is legally flawed, out-of-step with existing auto company investments, and dangerous for public health and the environment.

The legal challenge also comes at a particularly inauspicious time to be defending the global dependency on fossil fuels. That same day, the world’s number two oil producer, Russia, bombed and killed Ukrainian civilians. Since then, the challenge has aged even worse with President Biden’s ban on Russian oil imports and a reminder that the U.S. must reduce its foreign oil dependence.

Fortunately, the oil industry’s attack on EPA’s new clean car standards will fail, not just legally, but also because of the huge commitments countries and automakers have already made in transitioning toward zero-emission vehicles (ZEVs).

The clean car standards that the 15 states and coalition of fuel companies objected to were finalized by EPA in December 2021, covering passenger vehicles for just four model years from 2023 to 2026, and requiring a 28.3% reduction in emissions over that time. These standards will have a huge impact in the long-term push to cut transportation sector greenhouse gas (GHG) emissions, which are the United States’ largest source of GHGs. By 2050, the standards would eliminate 3.1 billion tons of carbon dioxide emissions, reduce U.S. gasoline consumption by more than 360 million gallons, and save Americans up to $420 billion on fuel costs.

The states and fuel lobbyists’ specific argument is that the EPA standards will unfairly “boost the sales of electric vehicles(EVs),” which will, in turn reduce demand for their products. As the former director of EPA’s Office of Transportation and Air Quality, these new flexible, fleet-wide emission standards are consistent with EPA’s long-standing legal interpretations under Republican and Democratic administrations.

Under the Clean Air Act, EPA establishes fleet-wide emissions performance standards for new motor vehicles and the auto makers determine the most appropriate and cost-effective way to achieve those standards. As with previous EPA actions under both political parties, the auto makers will decide how the pollution reductions are to be achieved and which technologies are cost-effective and appropriate.

In establishing emission standards for new motor vehicles, EPA carefully considers technological readiness, cost of compliance, consumer impacts, and safety, among other factors. That’s exactly what happened while determining these new emission standards. Hundreds of EPA engineers and scientists again analyzed all available automotive technologies capable of meeting emissions reduction targets, including improved internal combustion engines, hybrids, and EVs. Following the exhaustive review, EPA concluded that EVs have become more affordable and more efficient for consumers.

According to data from the US Department of Transportation, the US Energy Information Agency and the National Renewable Energy Laboratory, EVs are already more than $500 per year cheaper to drive than new gasoline cars at $3 per gallon gasoline. At $5 per gallon gasoline, which some analysts predict is possible if the EU joins the U.S. in banning Russian oil imports, EV owners would save nearly $1,500 a year compared to their gasoline car counterparts. The cost advantage of EVs will only increase over time as battery and other EV costs continue to plummet. Paradoxically, the oil companies and their allies seek to preclude EPA from considering solutions that are both zero emitting and more cost-effective.

Recognizing the availability of zero emitting vehicles is not the same as dictating how auto manufacturers meet their targets. In fact, when EPA Administrator Michael Regan announced these new standards, he had the support of Ford, GM, and Stellantis (Chrysler’s parent company). While EPA’s performance-based emissions standards are ambitious—and disliked by fuel company lobbyists—they largely reflect what is already taking place in the private sector. For example, the three automakers supporting EPA’s standards have also already committed to spend over $100 billion on ZEVs.

Many carmakers have, in fact, gone further in reducing fossil fuels and emissions than required by the U.S. and other nations. During last November’s climate conference in Glasgow, six manufacturers, including Ford, GM, Volvo, and Mercedes, pledged to phase out the sales of gasoline and diesel cars by 2035. Stellantis announced that they will only sell EVs in Europe by 2030. Globally, car companies are planning on spending over half a trillion dollars in the next five years toward an electrified and zero-emission future.

In other words, the transition to new zero emissions vehicles is already happening globally. By recognizing the availability of these industry-led solutions the new EPA emission standards provide additional certainty for U.S. companies to invest and drive innovation in advanced zero-emission technologies.

This investment to date is already paying off with consumers. After years of steady but incremental growth in the U.S., EV sales jumped 72% in the last quarter of 2021. In Europe, December 2021 saw European sales of EVs rise to 20%, surpassing sales of diesel cars— historically the top selling autos on the continent.

Speaking of Europe, this is a particularly horrible time for oil companies to be pushing back against electrification. The devastating Russian invasion of Ukraine has galvanized much of world against President Vladimir Putin, while making clear the dangers of Europe’s dependency on Russian fossil fuels.

The truth is that the current geopolitical and economic importance of oil makes it extremely difficult for Europe to ban Russian oil imports. Europe imported about 25% of its crude oil imports from Russia in 2020. While the European Union has drafted a plan to cut Russian gas exports by two-thirds before the end of 2021, talk of banning Russian oil exports is just that for now.

There are no easy solutions to force Russia to stop its invasion, but there is very simple way to get the US, Europe, and the rest of the world to kick our fossil fuel addiction: transition to renewable energy and electrify the transportation sector as soon as possible. Democracy, consumers, corporations, and the climate all win.

President Biden’s clear commitment to 50% ZEV new car sales by 2030 is a critical first step toward ending our addiction to oil, addressing climate change, and providing clean air for all Americans. EPA’s new clean car emission standards properly recognize our nation has available zero emitting solutions to help tackle pollution and will help speed the country’s journey toward clean transportation. Now is not the time to allow oil companies and their allies to pull us backwards.