EPA Emissions Proposal Should Protect Americans and Add Energy Technologies Instead of Restricting Them

Mark Green
Posted April 20, 2023

EPA’s newly announced tailpipe emissions proposal is an opportunity to renew a point we’ve been making recently – that U.S. energy policy actions, including those aimed at the transportation sector like EPA’s, should be about adding energy technologies, not selectively restricting or eliminating some and harming Americans along the way.

Expressed another way: As America works toward a lower carbon future – which API supports (see our Climate Action Framework) – we should adopt policies that reduce emissions without risking negative impacts to families and businesses. That was a key point in a post last week by Amanda Eversole, API executive vice president and chief advocacy officer:

EPA’s new proposed tailpipe emissions rule is the latest move by the Biden administration to hurt consumers with higher costs and increased reliance on unstable foreign supply chains. … EPA’s proposed rule is deeply flawed and a major step toward a ban on the gasoline vehicles that Americans rely upon. … Americans need dependable transportation fueled by affordable, reliable, American-made energy sources. Americans deserve tech-neutral policies and should not be penalized through unrealistic proposals that serve to restrict market choices and pick winners and losers.

Eversole raised specific questions about the tailpipe proposal, which appears intended to ensure that two-thirds of light duty vehicles, including 78% of sedans and 68% of pickup trucks, and a fourth of heavy trucks sold in the U.S. are all-electric by 2032:

• U.S. security – America would be moved into greater dependence on supply chains controlled by China.
• Critical minerals – The U.S. is heavily dependent on imported lithium, cobalt, manganese, nickel and graphite to make batteries for electric vehicles (EVs). (China dominates the global market for processing lithium, cobalt, copper and rare earth elements.)
• Market realism – U.S. automakers would be challenged to expand EV sales (less than 6% of total sales in 2022) by more than 10 times the current level in less than a decade.
• Charging stations – Is it realistic the U.S. can build a network of EV charging stations that a recent report estimated would need to number in the millions?

Certainly, a proposal to reverse the balance between gasoline/diesel-fueled engines (about 99% of vehicles today) and electric vehicles (about 1% of today’s vehicles) should have answers, not nagging questions. Washington should advance the goal of reducing greenhouse gas emissions from all vehicles while promoting all energy technologies.

Reporting over the weekend in the Washington Post and New York Times, neither of which should ever be mistaken for natural gas and oil industry mouthpieces, raised similar concerns – about inadequate battery-charging infrastructure, procuring the materials to manufacture EV batteries, legal challenges and significant hurdles for automakers. The Post:

The initiative is being launched at the same time the nation’s electricity grid — which would fuel all these new EVs — is wheezing, with destabilizing power outages and developers of wind and solar projects often stuck waiting years to connect to transmission lines. It is uncertain how car companies will secure all the minerals needed to build EV batteries, with federal plans to bring onshore supply chains facing major obstacles. … And of course there is the charging station conundrum: Can enough of them be built and kept functional to help car buyers overcome range anxiety?

Complicating matters is that all of this is, frankly, very complicated with lots of moving parts trying to come together over a relatively short timeline. S&P Global’s Stephanie Brinley told the Times:

“This was always a transformation that was going to happen over decades. Putting this aggressive a timeline on it means that there are a lot of things that have to happen consecutively and concurrently.”

More from the Times:

The risks of accelerating the transition away from gasoline-powered vehicles are “high, if not very high,” for the industry, said Matthias Heck, a vice president at Moody’s Investors Service, “because electrification will require further substantial investments into new battery electric vehicles, battery technology, supply chain and manufacturing capacity, and charging infrastructure.”

The sheer numbers are daunting. Last year less than 6% of new cars sold in the U.S. and 2% of trucks were all-electric. EPA’s tailpipe emissions proposal is designed to accelerate progress toward a goal of having EVs account for 67% of new car sales and 25% of heavy truck sales in 2032.

Yet, it’s more than the numbers. It’s all the areas of serious uncertainty noted above, how fast changes are being mandated by Washington and, most importantly, the potential cost and lifestyle impacts on millions of Americans who are least positioned to absorb them.

On affordability, EPA expects the program’s technology costs will increase the average purchase price for Americans on new and used vehicles. “[W]e assume in our modeling that increased vehicle technology costs will fully impact purchase prices paid by consumers,” EPA says on page 494 of the pre-Federal Register version of the proposal. The agency also expects Americans lacking access to charging at home or where they work could be hit by additional charging costs.

EPA also acknowledges the downside of public charging – the agency’s terminology is “estimated disbenefits” – that drivers could experience “relatively long” delays in recharging their vehicles (p.499). Then there’s also the notion of “range anxiety” mentioned in the Post article – the fear of being stranded by a vehicle battery that’s out of juice. The Times:

While the Biden administration is betting that electric vehicle costs will come down with mass production, Carlos Tavares, chief executive of Stellantis, said the difficulty of sourcing materials worked against that. “The affordability is not there because the raw materials are scarce and very expensive, and, I would add, very volatile,” Mr. Tavares said at a recent conference in Detroit.

Our industry is not opposed to EVs, yet we are concerned with policy proposals that could eliminate some energy technologies and significantly impact Americans in the process. Mike Sommers, API president and CEO:

“This deeply flawed proposal is a major step toward a ban on the vehicles Americans rely on. As proposed, this rule will hurt consumers with higher costs and greater reliance on unstable foreign supply chains.”

Instead of a head-long, haphazard rush toward an ill-defined future that could feature a lot less choice and much higher costs for Americans, Washington should set reasonable goals and timelines that support a common-sense approach to decarbonizing the nation’s transportation sector in the future.

Whether it’s Russia’s invasion of Ukraine, the pandemic or other events, recent and seismic global developments have shown that Washington must prioritize energy affordability and reliability. U.S. energy policy should be based on American-made energy, including opportunity for all energy technologies to accelerate progress toward a lower carbon future, not policies that move away from one fuel or technology – as EPA’s tailpipe emissions proposal essentially does.