Former EPA official urges Bill Ford to lead on emissions standards
AutomotiveNews - Eric Kulisch - Sept 25, 2017
WASHINGTON — Former EPA official Margo Oge says the auto industry needs "an adult" to help sort out differences over the federal greenhouse gas program and boldly reaffirm automakers' commitment to stricter emissions standards.
She's got someone in mind.
"We need a real leader in the industry to stand up," said Oge, who helped broker the 2011 deal between the Obama administration and the auto industry that envisioned doubling fleetwide average fuel economy to 54.5 mpg by the 2025 model year. "And given the politics right now, it has to be a Detroit company. The one I see shaping this dialogue is Bill Ford."
Oge told Automotive News she wants to see the executive chairman of Ford Motor Co., a longtime environmental advocate, "stand up and help California and the federal government negotiate any flexibilities for 2025 and set the road map for 2030."
"I believe if he does that, we will see the investor community respond with a stock price increase in Ford," Oge said, "because investors are looking for companies that are not behaving like the traditional OEMs with competition from Silicon Valley, Tesla and China."
'Walk the talk'
Automakers this year successfully pushed the Trump administration to reopen the midterm review of 2022-25 model year greenhouse gas standards, arguing that Obama administration officials rushed to lock them in without considering whether initial assumptions about compliance costs and fuel prices — and their effect on consumer demand for cleaner vehicles — panned out.
As part of its review, the EPA held a public hearing here Sept. 6 and has opened up the 2022-25 standards, as well as those for 2021, to public comment. That 45-day comment period expires Oct. 5.
But the industry's effort is self-destructive and will ultimately fail, Oge said, because there is wide recognition that the program is working.
Manufacturers "would do much better if they walk the talk that they are building cool, clean and smart cars," she said. "In the end, the markets will reward those that unequivocally embrace the future, not ones who keep sending out mixed messages."
Oge — the former director of the EPA's Office of Transportation and Air Quality and author of the book Driving the Future: Combating Climate Change with Cleaner, Smarter, Cars — criticized automakers for giving in to fears among their less progressive competitors that complying with upcoming corporate average fuel economy and greenhouse gas standards would be too costly.
She blamed the Alliance of Automobile Manufacturers for instigating industry backsliding on the standards, but predicted that legal challenges, as well as automakers' need to keep up with rising emissions standards in California other countries, will keep the industry on track.
"It is in the alliance's self-interest to keep everyone believing that this is a fight they can win," she said.
In crafting the 2011 agreement and the standards that were finalized in 2012, Oge recalled, U.S. officials met one-on-one with engineers rather than bring companies to group discussions, which would have stifled sharing of confidential technical data by competitors. Engineers had to prove to the government's technical experts their claims that certain efficiency improvements were unattainable.
That process, she said, was objective compared with the Auto Alliance's assertions now that the regulations will cost sales and jobs. (Automakers cite a study by the industry-funded Center for Automotive Research concluding that the tougher standards would put 1 million jobs at risk.)
"The alliance represents the lowest common denominator, so you don't have the dynamics and the trust we had when setting the standards," said Oge, an engineer who worked at the EPA for more than 30 years until 2012.
The EPA faces an April 2018 deadline to determine whether to affirm the existing rules or start a new rule-making process to modify them. Fourteen states and environmental groups are expected to sue the administration if the standards are rolled back.
Oge said she is confident courts will rule to sustain the existing program because it is successful and the January determination was based on extensive technical analysis in accordance with the agreement.
Room for relief
The industry wants the government to account for the rising cost of fuel- saving technology and the impact on the affordability of cleaner vehicles.
Oge said the CAFE and carbon emissions program could be adjusted in positive ways that give the industry some of the relief it's seeking without undermining the goals of the program or throwing automakers' investment plans into disarray.
For example, she suggested not counting upstream greenhouse gas emissions for electric vehicles — that is, the environmental impact of producing the electricity that powers them — "because EVs are a new technology and car companies should not be held responsible for emissions coming from the energy sector." She also recommended more government incentives for EVs.
But there is no leadership within the White House to bring together the EPA, the Transportation Department, California air-quality regulators and the industry, she lamented.
That's where Bill Ford could play a key role, she said.
"It will take an adult in the car industry to stand up and I'd like Bill Ford to do that," said Oge, noting that former Ford CEO Alan Mulally was "big in helping us set the standards in 2012."
This year's executive shake-up at Ford Motor Co. returned Bill Ford to an operational role in overseeing external communications and government relations.
Spokespeople for the Auto Alliance and Ford Motor Co. pointed out that CEOs from 18 automakers signed the Feb. 10 letter to President Donald Trump requesting that the administration reopen the midterm review.
"We have consistently supported everyone working together to further reduce greenhouse gas emissions while keeping transportation affordable. And we have been an advocate for keeping California at the table as future standards are reviewed," Ford Motor Co. said in a statement to Automotive News.
The Auto Alliance said a robust midterm review is consistent with the spirit of the 2011 agreement. Said Gloria Bergquist, a spokeswoman for the alliance: "We feel strongly that we signed up to these ambitious targets in the future knowing they were built upon many assumptions, knowing we would have a midterm review to check those assumptions against reality."