API Suit Seeks Repeal of New Fuel Efficiency Standards

The American Petroleum Institute (API), joined by farming and car dealership groups, filed Wednesday a lawsuit seeking the cancellation of new fuel economy and efficiency standards by the United States road regulator.

The API, a lobby group of nearly 600 oil and gas companies, says the National Highway Traffic Safety Administration’s (NHTSA) new regulations, finalized earlier this month, effectively ban new liquid fuel-powered vehicles.

Under the NHTSA’s Corporate Average Fuel Economy Standards, passenger car models with year designations that fall anywhere under 2027–31 must raise their fuel economy standards at a rate of two percent a year. The same rate applies to light trucks with model years 2029–31.

“These increases will bring the average light-duty vehicle fuel economy up to approximately 50.4 miles per gallon by model year 2031, saving passenger car and light truck owners more than $600 in fuel over the lifetime of their vehicles”, the Transport Department sub-agency said in a statement June 7. The final rule was published in the Federal Register on Monday, setting it for effectivity after 60 days.

Additionally, augural standards, or the levels of stringency that may be the maximum feasible in the future based on current information, are eyed for passenger cars and light trucks with the model year 2032 at a rate of two percent per year.

Under the Heavy-Duty Pickup Trucks and Vans Fuel Efficiency Standards, the improvement rate for standards has been set at 10 percent a year for model years 2030–32 and eight percent for model years 2033–35.

Model year designations could be less than two years relative to the car’s calendar year of production, according to a rule interpretation on the NHTSA’s website.

The NHTSA’s new fuel economy and efficiency standards come on the heels of new vehicle emission standards finalized by the Environmental Protection Agency (EPA) last March. The EPA’s move to accelerate the transition to cleaner vehicles is also the subject of a litigation filed by the API last week.

“American consumers are now facing a slew of unreasonable vehicle mandates that will only restrict choices and make it harder to afford new cars and trucks at a time of persistent inflation”, API senior vice president and general counsel Ryan Meyers said in a statement Wednesday for the new legal action.

“Combined with tailpipe emissions standards from D.C. and California bureaucrats, this is yet another attempt to circumvent Congress and effectively ban new vehicles using liquid fuels that American drivers rely on every single day”, Meyers added.

Before the federal government tightened fossil fuel car regulations this year, California had already put in place similar regulations over a decade ago, starting with the Advanced Clean Cars 1 regulations in 2012 for model years 2015–25. In 2022, the state passed Advanced Clean Cars 2, setting emission standards for model years 2026–2035 so that all new passenger cars, trucks and SUVs sold in California will have zero emissions by 2035.

The suit against the NHTSA argues that the move to enforce new fuel economy and efficiency standards exceeds “the agency’s statutory authority and is otherwise arbitrary, capricious, an abuse of discretion, and not in accordance with law”, per the court filing.

The suit was filed before the U.S. Court of Appeals for the Fifth Circuit against the NHTSA, NHTSA Acting Administrator Sophie Shulman, the Transport Department and Transport Secretary Peter Buttigieg.

“Today I am challenging this overreaching government regulation and the unelected Washington bureaucrats who exceeded their congressional authority to force another unrealistic mandate on American consumers”, said Tom Maoli, president and chief executive of Celebrity Motor Cars, one of the plaintiffs.

Harold Wolle, president of co-petitioner National Corn Growers Association, warned that the phaseout of cars using gasoline blended with ethanol produced from corn paves the way for the elimination of corn demand in the auto industry.

“Because ethanol effectively lowers greenhouse gas emissions and combats climate change, it accounts for one-third of corn growers’ demand”, Wolle argued.

The Texas Farm Bureau said, “The supply of farm vehicles that by necessity need to have internal-combustion engines will be more scarce and more costly to purchase”.

“In addition, rural America lacks a functional electric charging network”, the nongovernmental group added.

To lower greenhouse gas emissions in the transport sector, the API has instead advocated for policies that do not discriminate against hydrocarbons. The oil and gas alliance “will continue to advocate for a range of solutions to reduce emissions”, Meyers, the API counsel, said in Wednesday’s statement.

The NHTSA had said that besides helping the country achieve climate neutrality targets, the new regulations will help motorists save money at the pump and will curb the need for the country to import oil.

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