US to Tighten Fuel Rules
This story appears in the Feb. 24 print edition of Transport Topics.
President Obama last week said he would seek an additional set of carbon-dioxide emissions and fuel-economy improvements for heavy- and medium-duty trucks that would go beyond standards that take effect this year and in 2017.
Speaking about the truck rule at a Feb. 18 event at a Safeway distribution center in Upper Marlboro, Md., Obama said he had ordered his Transportation Department and Environmental Protection Agency to develop a second major rule by March 2016.
His remarks on the economy and the environment were a follow-up to a June speech on climate change, when he also mentioned trucks.
The president brought Transportation Secretary Anthony Foxx and EPA Administrator Gina McCarthy with him to the grocery chain’s facility, which was selected because of Safeway’s purchases of commercial vehicles with advanced fuel-efficiency technologies, calling them an “early leader.”
EPA and DOT’s National Highway Traffic Safety Administration wrote the 2011 rule that set carbon emissions and fuel standards for trucks effective this January and in 2017.
“We’re investing in research to get more fuel economy gains, and thanks to a partnership between industry and my administration, the truck behind me was able to achieve a 75% improvement in fuel economy over the last year — 75%,” Obama said in his 17-minute address.
“That’s why we call this Super-Truck. I mean, these are — first of all, they’re really big. You can see how they’ve redesigned the truck in order for us to save fuel economy,” he added, referencing trucks parked near him.
The president said he wants EPA and NHTSA to have a proposed rule completed by the end of March 2015 and the final rule done a year later — about 10 months before he is scheduled to leave office. While the effective date would be contained in the actual rule, people familiar with the regulatory process said January 2020 is a reasonable estimate for the probable effective date.
Obama said the rule would benefit the environment and lead to jobs that pay well. He praised several major corporations in addition to Safeway for their commitments to clean vehicles, including FedEx Corp. and UPS Inc., Coca-Cola Co. and PepsiCo, and AT&T and Verizon Communications.
After listing the three pairs of major business rivals, he added, “If they can join together on this, then maybe Democrats and Republicans can do the same. Maybe Democrats and Republicans can get together.”
Reaction from truck makers and fleets poured in, much of it positive. There also were cautions and warnings on how the process should work.
“We stood shoulder-to-shoulder with the president and his administration in 2011 when the historic first fuel-efficiency standards were set for heavy-duty vehicles,” said American Trucking Associations President Bill Graves. “As we begin this new round of standards, ATA hopes the administration will set forth a path that is both based on
the best science and research available and economically achievable.”
“Trucking is a very diverse industry,” ATA Chairman Philip Byrd Sr., CEO of Bulldog Hiway Express of North Charleston, S.C., said in the same Feb. 18 statement. “Whatever standards the administration sets should reflect that diversity, and whatever tests are devised should accurately reflect what drivers face on the roads every day.”
“Finalizing new fuel-efficiency standards for medium- and heavy-duty trucks will be an important milestone that should result in significant benefits to our economy, the trucking industry and the environment,” said Douglas Stotlar, CEO of Con-way Inc., in speaking for the Heavy-Duty Fuel Efficiency Leadership Group.
“The development of these new standards continues to demonstrate meaningful progress between government and industry. This collaborative approach will result in realistic, achievable goals and an effective regulatory framework to improve fuel efficiency and reduce greenhouse-gas emissions,” Stotlar added.
In addition to Con-way, the Leadership Group includes manufacturers Cummins Inc., Eaton Corp. and Wabash National Corp., as well as FedEx and refuse hauler Waste Management Inc.
Heavy-duty truck and engine makers — Daimler Trucks North America, maker of Freightliner and Western Star; Navistar Inc., maker of International Trucks; Volvo Group, maker of Mack and Volvo; and independent engine maker Cummins Inc. — were generally supportive of Obama’s remarks. They said they were happy to work with EPA and NHTSA, as they did for the 2011 rule, but wanted to make sure they were consulted again early in the process.
Truck dealer Eric Jorgensen said he worries about a three-part snowball effect in pricing, with new technology boosting the cost of a truck, which then is hit with a 12% federal excise tax on trucks, and then buyers have to pay interest on those first two components.
“It’ll cost more. The 2007 and 2010 regulatory changes together added about $21,000 to $22,000 to the cost of a new truck, plus interest,” said Jorgensen, the CEO of JX Enterprises in Hartland, Wis., and the new chairman of trade group American Truck Dealers.
