Skip to main content

tv   Fuel Economy and Gas Emissions Standards  CSPAN  December 29, 2017 4:17pm-6:28pm EST

4:17 pm
>> the second session of the 115th congress starts next week. the senate is back on january 3 and will welcome to new democratic lawmakers, alabama's doug jones, and minnesota's tina smith. the house of representatives returns a few days later on january 8. in the new year congress needs to consider our government spending bill because current government funding runs out january 19. 19th. also on the calendar, this year's state of the union address. house speaker paul ryan has invited president trump to address a joint session of congress on january 30. when congress is back in session the senate is live here on c-span2, and the house is live on our companion network c-span. >> to house energy and commerce subcommittees held a joint hearing recently to look at idle fuel efficiency standards.
4:18 pm
representatives of the auto industry and an environmental group testified. >> good morning. the joint subcommittee will now come to order. the chair to recognize himself for fibers for an opening statement. good morning. i would like to think i witnesses for with us this morning. today we are here to discuss with stakeholders the corporate average fuel economy program, or cafe, at the national highway transportation safety administration, and the greenhouse gas emissions standards at the u.s. environmental protection agency that govern fuel economy standards. nhtsa's cafe program was established by congress in 1975. the goals of the program are to improve vehicle fuel economy, reduce oil consumption, and secure the nation's energy independence. the cafe program has undergone major changes and modifications in the past four decades, both because of political and
4:19 pm
economic forces. less than 10 years ago, and on top of the cafe program, the epa standards were created to incentivize the production of more efficient vehicles that will use less fuel and emit less carbon dioxide. in addition, various states have enacted their own standards with respect to automobile emissions. the combination of these requirements has created an incredibly complicated regulatory scheme. improving fuel efficiency and achieving energy independence are important goals. that said, real world facts and data must drive regulatory decisions that impact such an important and far-reaching part of the american economy and consumers' daily lives. the previous administration announced an attempt to create a national standard which included a plan for nhtsa and epa to work together to avoid conflicting regulations. whatever progress had been made on that front was undone, however, when earlier this year the epa issued its final determination that the standards
4:20 pm
for model year 2022-2025 are appropriate. epa took this action without coordinating with nhtsa, clearly undermining the earlier pledge. the result is that automakers potentially find themselves in a position where they are in compliance with one federal program, but out of compliance and subject to penalties with another's. this type of fragmented regulation harms our economy, our workers and consumers. the automotive industry is a huge source of american jobs including nearly 100,000 ohioans. a hallmark of the american automotive industry has been the ability to innovate and build cars that american drivers want to buy. but outdated, conflicting or impossible-to-meet government regulations get in the way of this type of innovation. it is a rare event, to say the least, for policymakers in washington to have better ideas about how to meet consumer demand than consumer themselves. all too often washington stands in the way, particularly when it creates unnecessary confusion with conflicting rules. my constituents know what type of vehicle works best for their family and their budget.
4:21 pm
that may change over time and each american family should be able to make their own choice without the federal government putting extra strain on their finances. also, there is a real risk that the costs associated with duplicative federal and state fuel economy standards could force families to choose older cars without the benefits of new safety technologies. nhtsa's safety mission and statutory obligations must remain its guiding principle. when we are just starting to turn the corner after many challenging years, it is disheartening, but not surprising, to see the epa rush out a final determination in the waning hours of the last administration. i am interested in hearing from the witnesses about industry's experience attempting to navigate this tricky regulatory terrain, and what can be done to help support choice for american consumers and jobs across the country. i can i want to thank eyewitnesses and a you at this time to the gentlelady from tennessee. >> thank you, mr. chairman. and i appreciate so much that
4:22 pm
you and chairman shimkus have called this hearing. studies have shown that they hire purchase price of cars under a stricter café under these 2025 standards would eliminate a lot of consumers from buying new cars. there is between 3.1-14.9 million american consumers that would fall out of the new car marketplace. now, this is where there's attention and affection that we need to talk about. when is something counterproductive? in tennessee where a lot of auto manufacturers. this is what they tell me. whether there with nissan or toyota or volkswagen or gm, , it does not matter. they want realistic standards. they want something that they will be able to meet the expectation of american consumers and deliver a product that is first of all safe. and i consumers are going to be
4:23 pm
safe. in these automobiles. and so i think the chairman for the hearing. i think this is time for us to talk about what is realistic, what is achievable and what will deliver a safe product for the american consumer and i yield back. >> they get very much. the gentlelady yields back. the chair now recognizes the ranking member, the gentleman from illinois for five minutes for an opening statement. >> thank you, mr. chairman. café and greenhouse gas emission standards have been critical tools to improve your economy and reduce carbon pollution. the program was born out of the energy crisis in the 1970s. now the standards are helping us address the even greater threat of changing climate. strong standards have a more immediate consequences for american consumers. big savings at the pump. in the midterm evaluation
4:24 pm
finalize in january, the environmental protection agency estimated a model year 2022-2025 greenhouse gas emission standards will save consumers $92 billion over the over the lifetime of their vehicle. industry has obviously not together, 92 beleaguered industry has criticized the standard for 2022-2025 as too costly. that criticism is not supported by the facts. the epa found that meeting the standards is not only technologically feasible, but also cheaper than expected. in fact, the cost estimates per vehicle has gone down over $200 since 2012. ambitious standards have driven innovation which has in turn lowered costs. the last time we held a hearing in september of 2016, john german of the international council and clean transportation
4:25 pm
testified, quote, , during the course of my four year career initial cost estimates for complying with emissions and efficiency requirements have consistently been overstated. not some of the time or even most of the time, but all of the time. nevertheless, the standards-based resistance. i often hear companies call for greater regulatory certainty and more time to comply with the rules, , but this time the epa actually finished its work ahead of schedule. so what did the automakers do? petition for review. and the trump administration was all too happy to comply. no matter how epa administrator scott pruitt or others want to explain the decision to reopen the midterm evaluation, the end result is clear. dirtier, less efficient vehicles, cause for harmonization between cafe and greenhouse gas standards are
4:26 pm
just for the efforts to weaken the standards. i am especially confused why the outer industry would be so opposed to strong standards when automakers are promising fleets of energy efficient autonomous vehicles. if avs, if av are actually going to be electric vehicles, i would think compliance should be easy. as we discussed the future of the standards, , family budgets and public health hangs in the balance. this is not the time to ignore facts under the industry pressure. we need to continue the progress toward greater fuel efficiency and lower greenhouse gas emissions. and i now yield to congresswoman matsui. >> thank you very much, ranking member schakowsky. nixes cafe standards and epa greenhouse gas emission standards for light duty
4:27 pm
vehicles are a win-win. they are good for consumers who save billions at the pump over the lifetime of the vehicle. they are good for the environment. standard significant reduce emissions for the transportation sector picked the only sector which energy efficiency has grown worse over the past 15 years in this country. and are good for the american workers. they sparked the development of innovative technologies that create profits and support jobs. many companies understand this and support the nhtsa and epa standards, even those companies critical of the standards are shifting to sufficient engines and electric vehicles in response to consumer demand for cleaner cars. in light of the widespread support for improving fuel economy i'm disappointed with the trump administration's decision to revisit the standards for model year 2022-2025. it is clear that the administration is simply ten of weakening the progress we've made so far. that's why i will be introducing
4:28 pm
a bill to codify the nhtsa and epa standards if these standards are written in 2012 with the support of outer industry, environmental groups and states. my legislation maintains that federal government and auto manufacturers promised to the american people. they promise for cleaner and efficient cars that cost less at the pump and out of better for the environment, health, and the future of our children and grandchildren. i look for to continue to engage with the committee on this issue. thank thank you, and i yield ba. >> thank you. gentlelady just back in the chairman now recognizes the chairman of the environment subcommittee, the judgment from illinois for five minutes for an opening statement. >> did forget opening statement i get 15 seconds for . of personal privilege. >> without objection. >> thank you. two pictures i want to identify for folks. you will all appreciate this. this is between backup for my colleague from texas not paying
4:29 pm
attention. talking about the next street, and then the next photo, if you put that up, that's actually -- mr. olson, are you paying attention? yeah, so i thank you for correcting the record and starting a new streak. [inaudible] >> sixteen years. >> i which is, we saw your tweet earlier. [laughing] i know my colleagues because of mr. olson at how he asked, we appreciate that. so thank you very much. >> the gentleman is recognized. [laughing] one of the costliest energy and environmental regulations from the obama administration is the one we will address today that targets fuel efficiency and greenhouse gas emissions from cars and light trucks. epa estimated total costs in excess of $200 billion by 2025, much of which will show up in the form of higher sticker prices for new vehicles. and although the agency claims offsetting consumer savings from
4:30 pm
lower fuel costs, we now know that this was based on inaccurate projections of rising gas prices as well as other assumptions that are proving to be off the mark. it is time to review these rules to see if they are a good deal for consumers and whether they can be improved upon. fortunately, the regulations contained just such a review, the so-called mid-term evaluation. the regulations were finalized in 2012 and included progressively stricter standards all the way out to 2025, more than a decade into the future. for this reason, it was decided to revisit the standards mid-way through the process to see if the standards for model years 2022-2025 need to be adjusted in light of changed circumstances. in 2016 epa commenced its mid-term evaluation and was poised to make a final determination by april of 2018. >> ..
4:31 pm
>> after which the agency may proceed to a rulemakinging to change the targets for 2022 through 2025. part of this hearing is to get input from those who make cars and trucks as well as those who sell them about their contributions to the midterm evaluation and what they would like to see come out of the process. the stakes are high for automakers and auto dealers, but they are higher still for consumers. the average price of a new vehicle has risen to $35,000 in 2017. these regulations are a contributor to the increase. epa estimated cumulative price increases of nearly $3,000 per vehicle by 2025. and the real number may prove to be higher. worst of all, the biggest sticker shock may be on the vehicles that matter most to
4:32 pm
middle america. granted, a toyota prius or a smart car may be fine for some people, but many of my constituents need family-sized vehicles or pickup trucks for work, and it's these larger vehicles that may take the biggest hit. we need to make sure that the future targets under this program maintain vehicle choice and affordability. in addition to the midterm evaluation, we also need to evaluate whether we have a uniform set of rules for the nation. recall that since the 1970s the national highway traffic safety administration, or nhtsa, had exclusive authorities that set economy standards. but the obama administration decided that the epa and the california air resources board should do so as well. is now we have three agencies, all regulating the same thing, and not surprisingly there are discrepancies emerging. look ahead -- looking ahead, we need to ask whether we still want three agencies involved in the fuel economy and why we gave california so much more power
4:33 pm
than the other states in the union. it all comes down to what is best for the consumer. vehicle purchases are second only to home purchases in terms of their consumer impact, and i hope this hearing helps us strengthen our understanding of what we need to do to make these regulations as consumer-friendly as possible. thank you, mr. chairman, and i yield back the balance of my time. >> thank you. the gentleman yields back the balance of his time. the chair now recognizes the environment subcommittee ranking member, the gentleman from new york, for five minutes for an opening statement. >> thank you, and thank you to our witnesses. thank you, chair shimkus, for holding today's hearing. nhtsa's corporate average fuel economy or cafe standards and epa's greenhouse gas emissions standards have played a critical role in saving consumers money at the pump while reducing carbon pollution. cafe standards were established in 1975 by the energy policy and conservation act to reduce our nation's reliance on foreign oil. and since 2009epa's greenhouse
4:34 pm
gas emission standards have become increasingly important in our nation's efforts to address climate change. last year transportation surpassed the electricity sector as the largest source of greenhouse gas emissions in our cup. according to -- in our country. according to the epa's inventory of u.s. greenhouse gas emissions, light duty vehicles accounted for nearly 60% of the united states transportation emissions and approximately 16.5% of total domestic emissions in 2015. no serious effort to reduce emissions can ignore emissions from light duty vehicles. the current standards are estimated to lead to the reduction of carbon emissions by 6 billion metric tons for vehicles within model years 2012 is-2025. in addition to the pollution reduction, cafe standards are estimated the save consumers some $1.7 trillion at the pump for vehicles produced between 2011 and 2025. improving vehicle efficiency has
4:35 pm
truly been a win-win outcome. we have come a long way since 1930s. over the past four decades, the federal fuel economy program has evolved considerably to give automakers significantly greater flexibility. today manufacturers are not forced into a single compliance path. each manufacturer has its own fleet-wide standard that reflects the vehicles it produces to meet its customers' demands. but in the 15 months since our last hearing on this subject, we have seen major changes at epa. as participant of the 2012 -- as part of the 2012 agreement between michelle obama and the auto industry -- president obama, epa agreed to determine whether assumptions made about technology development and costs in 2012 were still accurate and still republican. last summer epa began its midterm review. the agency examined a wide range of back factors and built an extensive public record on the appropriateness of greenhouse gas standards for model years
4:36 pm
2022-2025 vehicles. along with nhtsa and the california air resources board, epa issued the july 2016 draft technical assessment report and sought public comment. epa also sought public comments on the proposed determination that the greenhouse gas standards for model years 2022-2025 vehicles remain appropriate. the technical assessment and ensuing comments provide a robust and conclusive record. epa's standards are feasible and can be met at lower cost than originally estimated. epa's current estimate is an average per-vehicle cost of $875 to meet these standards. this estimate is lower than the initial estimate of $1100 per vehicle which epa found reasonable in its 2012 rule and much lower than consumers can expect to save at the pump over the life of the vehicle. in january former epa
4:37 pm
administrator gina mccarthy issued a determination that the target should remain in place up to 2025. but despite the extensive record established by epa in march, administrator pruitt announced his decision to reopen the midterm review. weakening these standards would be bad for consumers, the environment and, certainly, american competitiveness. i have tremendous faith in america's manufacturers. there is no doubt they will continue to be able to meet these achievable goals. in fact, the evidence is clear that technology adoption rates have occurred more quickly than epa's initial expectation. last year former epa acting assistant administrator janet mccabe testified before this committee that there are more than 100 individual model year 2016 vehicle versions already meeting model year 2020 standards or later. as automakers continue to innovate, it is clear that multiple technology pathways
4:38 pm
including existing off-the-shelf technologies will allow them to achieve existing model years 2022-2025 standards particularly given the flexibility of the program. so thank you again to the chairs for today's joint hearing, and thank you to our witnesses for being here. these are incredibly important programs for the sake of our constituents' wallets and our nation's efforts to reduce pollution. with that, i yield back. >> thank you. ing the gentleman yields back. the chair now recognizes the chairman of the full committee, the gentleman from oregon, for five minutes for an opening statement. >> thank you, chairman. good morning, everyone. today's hearing touches on a prominent point of frustration for many americans, and that's the duplicative government programs that increase costs and decrease choices for consumers. specifically, the economy standards under programs administered by the environmental protection agency. while nhtsa has been charged with implementing fuel economy standards for motor vehicles since 1978, i believe, the
4:39 pm
obama-era epa developed its own standard under the clean air act in 2009. so in order to coordinate these different requirements, the obama administration created the national program. unfortunately, the national program has failed in its attempt to develop a single national standard which causes uncertainty around the multiple policies and creates barriers to innovation and growth. under the current scheme, it is possible that automakers will find themselves in full compliance with one federal regulatory standard but running afoul of another. this is true even though the previous administration explicitly told this committee during a hearing last congress that they would work together to avoid this very result. since then we've seen activity that completely undermines the national program and works against the obama administration's promise of coordinated regulatory efforts. under the midterm evaluation schedule, nhtsa and epa were to jointly issue their respective determinations on the model
4:40 pm
years 2022-2025 standards. this was supposed to happen in april of 2018. however, epa then abandoned this commitment and rushed through its final determination without coordination with the national highway traffic safety administration just seven days before president trump was sworn into office. i look forward to receiving an update from our witnesses today on how they are dealing with different requirements. we want to know how these different regulatory schemes impact consumers and learn more about better ways to insure the federal fuel economy standards are met without creating unnecessary paperwork or administrative burdens that serve only to drive up costs for american families. as currently constructed, it's been estimated these programs will raise the average price of a new vehicle by almost $3,000. that's no small amount and one that will undoubtedly price many americans out of the new car market. although goals of these varying programs are important, we must never the forget that we do in washington have a real impact on
4:41 pm
consumers across the country. government works best when it identifies clear problems and offers clear instructions for how to solve those problems. federal programs that overlap or conflict do nothing to help protect the american people. it's our job to insure that our laws and the implementation of them advance public policy goals, and if they need correction or clarification, it's what we're here to do. so i want to thank our witnesses again for participating in our discussions today, and the american people deserve a government that removes barriers to innovation and growth and avoids unnecessarily driving up costs for consumers. look forward to your testimony. and i, unless any other member wants the balance of my time, i will turn the balance of my time and yield back. >> the gentleman yields back balance of his time, and the chair now recognizes the ranking member of the full committee, the gentleman from new jersey, for five minutes. >> thank you, mr. chairman. a little over a year ago the committee held a hearing on the technical assessments report produced by the national highway transportation and safety
4:42 pm
administration, the epa and the california air resources board, and that report formed the basis for all three agencies' decision in january to move forward with the proposed light-duty vehicle standard for models produced from 2022 and 2025. unfortunately, as with many other decisions and regulations needed to improve public health, the environment and consumer benefits, the trump administration is moving to weaken these important standards. the administration complied with a request from from the the auto industry to reopen the midterm review and reconsider the current greenhouse gas emission target for light-duty vehicles equivalent to 51.4 miles per gallon by model year 2025. and this review could potentially lead to a weakening of standard. i believe that if u.s. oil industry is to remain competitive in the global market, we plus reject -- we must reject effort toss move backwards. these targets are critical to removing greenhouse gas emissions that contribute to the
4:43 pm
ongoing threat of climate change, and we must meet these goals to reduce harmful emissions that endanger public health. emissions from the transportation sector are significant in many of the world's urban areas. the fastest growing markets are in asia, especially in india and china. these are are the same countries whose large cities experience chronic poor air quality that creates significant public health problems. understandably, several countries -- including britain, france, india and china this year -- announced ambitious goals to restrict or eliminate sales of new gas and diesel cars within the next few decades. and the auto industry claims it can't meet stricter fuel efficiency and emission reduction goals by 2025, but their effort toss seek harmonization through credit banking will only serve to undermine and erode the laudable goals previously set by the obama administration. meanwhile, the auto industry has already received a sizable advantage from the trump administration, an indefinite
4:44 pm
delay of the civil penalty increases for café violations that were finalized at the end of last year. industry must find ways to continue their investment in vehicles that are more fuel efficient, particularly those that don't rely on fossil fuel for power. the joint standards developed by nhtsa and epa in conjunction with the state of california are ambitious but clearly achievable. they will deliver tremendous benefits to consumers and make our nation more energy secure. they will also play a critical role in our effort to slow the pace and severity of climate change and lowering emissions will improve air quality and public health. we know that technologies to produce more efficient and less polluting vehicles are available and affordable today. those vehicles must be produced, and they must be marketed with at least the same level of resources used to market the large, inefficient sport utility vehicles currently being pushed by industry. and there's simply no justification for easing up on this important effort that will benefit the public, help the environment and american
4:45 pm
manufacturers who will reap the benefits of our nation being out front instead of being dragged behind. i don't know if anybody else wants my time? if not, i'll yield back, mr. chairman. >> thank you. the gentleman yields back. and the -- this now concludes our member opening statements. the chair would like to remind members that, pursuant to rules, opening statements will be made part of the record. again, we want to thank all of our witnesses for being with us today and taking time to testify before our subcommittee. today's witnesses will have the opportunity to give five-minute opening statements. our witness panel will include mr. mitch bainwol, president and ceo of the alliance of automobile manufacturers, mr. forrest mcconnell iii on behalf of the national automobile dealers association, dr. dave cooke, senior vehicle analyst, union of concerned
4:46 pm
sciences, and mr. john bozzella, the president and ceo of global automakers. we thank you for being here and, mr. banewol, you are recognized. >> thank you, chairman. i have an extensive deck to go through, so i ask for your patience, because i'm going to zip through it fairly quickly. i'm here today on the behalf of the alliance of automobile manufacturers, 12 manufacturers from the u.s., europe and japan who represent about 80% of the cars on the road in the u.s. i've got eight points to make. the first point, next slide, is that sales have peaked. we went new seven years of growth, we're a cyclical industry. we've now peaked. if you look at the bottom right, you'll see that year-over-year we're now down about a point from the first nine months of '16. you also see a very significant shift in the fleet mix.
4:47 pm
cars over the five years are down 19%, trucks over the five years are up 38%. point two, there's been very broad and strong support for harmonization from environmental voices. a senior career guy at epa opens up his presentations around the country with a picture of the planet and talks about the importance of saving the planet. so his bone feeds in this area are strong. he says i'm all in on harmonization. it should not be acceptable for an automaker to pay penalties under café. the icct, testified here before, said based on the well-designed epa flexibilities, a harmonized national program would beth be addressed with -- best be addressed with nhtsa's program matching epa's. helping to reduce costs and regulatory complexity. carol browner, clearing uniform national policy is not only good news for consumers, or but also
4:48 pm
good news for the auto industry which will no longer be ultimate success to a costly patch work. we still are. and, of course, the president of the united states, president obama when he was in office, clear certainty that will allow these companies to plan for a future which are building cars in the 21st century. so there's strong support from really both sides of the aisle. point three, the determination as has been suggested in some of the opening statements, was rushed. on november 29th, that was a screen shot of the epa web site which talked about the determination coming out in april of 2018 simultaneously with nhtsa. november 30th, the screen shot disappeared. it was like those old soviet photos where the picture of the guy leaves and, by go, they're gone. so the process changed. the determination was rushed. the industry is completely united on the idea of rebooting the mtr. eighteen ceos from all the major companies that operate in the u.s -- some of whom are based here, some of whom choose to invest here -- all signed a letter asking that we do not prejudge the outcome, but that
4:49 pm
we reboot the mtr to the original schedule that was promised when the deal was done in 2011. next slide. point four, reality is now contradicting theory. when the final determination came out in january, the line was the automakers are overcomplying. everything is fine. a few weeks later, nhtsa came out with new evidence on compliance and showed that for '16 and '17 we're now undercomplying. so the reality on the ground is undercompliance in '6 and '17 -- '16 and '17. point five. the math here is really, really important. if you go from 10 to 20 -- i'm sorry, from 10-20 mpg over 1,000 miles, you save 50 gallons. 40-50, you save five gallons. there's a 10 to 1 multiplier focusing on the front end of the curve rather than the back end of the curve. that suggests the most important
4:50 pm
thing you guys can do is to insure that fleet turnover happens as rapidly as possible. this next slide shows that the bulk of the savings through 2025 has already been realized. nhtsa's proposed through 2025 in terms of gallons saved 179 million gallons. if you take 2021 and plus it up 1, 2 or 3%, you get somewhere between 97-99% of the savings. so we can talk about this big gap in terms of the politics of the issue, but in terms of the substance through 2025, we're 97-99% there. that's pretty impressive. i am really running out of time. gas prices were profoundly wrong, point six. that's changed the fleet mix in a dramatic way. what you see here in this next slide is a, four lines. the 54 line is the original deal, the 51.4 line is the same
4:51 pm
deal recappslated with the change in the fleet mix, and the third line is if you recalculate based on the subsequent flight mix changes where the deal now is. that's not astringency adjustment, that's where the number now is roughly 50. the final point here is that consumers have a very important role in this. this is a program that gets measured by what consumers buy, not by what we produce. they are saying a like fuel economy where they're not willing to pay for it. i'll go through, if i can, just two slides. one in three say they would pay nothing for additional fuel economy. one in ten would be willing to pay more than $2500. and then finally, because they say they like fuel economy, it's important to understand contextually where it fits. affordability and reliability are top priorities. fuel economy and safety follow. so when a consumer goes into the showroom, they're looking for lots and lots of factors and lots of features. fuel economy is one of those, but it's not the sole determiner of their choice. thank you very much -- >> thank you very much.
4:52 pm
mr. mcconnell, you're recognized for five minutes. >> mr. chairman, ranking members of this joint subcommittee, thank you for allowing me to testify on the topic of fuel economy. thank you. my name is forest mcconnell, i'm a third generation honda dealer from montgomery, alabama. i'm also former chairman of the national automobile dealers association which represents over 16,000 dealers who employ 1.1 million people. i've been in the car business for about 40 years selling fuel efficient hondas through good times and bad, but one thing never changes. people buy new vehicles based on two factors. one, does it fit their needs and, two, can they afford it. so how fuel economy is regulated is very important to my customers. mr. chairman, rube gold berg would be proud of the convoluted way our nation regulates fuel economy. as members know, there are not one, but three fuel economy
4:53 pm
programs that automakers must follow. these different fuel economy programs are administered by three different agencies, nhtsa, epa and the california air resource board under three different sets of rules pursuant to three different laws intentionally resulting in three different standards, all of which must be separately followed. these sometimes contrary regulations labeled by the obama administration as one national program but they're actually three separate programs. when congress established café, they gave nhtsa the sole authority for setting fuel economy standards to avoid a patchwork of state standards congress also correctly preempted states from regulating fuel economy. since 2009 we've had something very different. multiple regimes under the one national program flow from judicial and executive branch actions.
4:54 pm
this program put epa in charge of setting fuel economy be policy. -- economy policy. and allowed california for the first time to set its own standard. these actions have undermined the café program that congress created. congress should return to one actual fuel economy program. there are benefits to having regulatory clarity. for example, the café program was written to regulate fuel economy. when setting standard, nhtsa must balance job loss, consumer choice, safety and market demands. in contrast, the clean air act was not designed to regulate fuel economy. the epa is not required to balance factors such as consumer choice, safety or job loss when setting a standard. california's regulation only considers economic factors in that state which is why it makes poor national policy. california and every state is
4:55 pm
expressly, expressly preempted from regulating fuel economy, yet this has been ignored since 2009. all this unnecessary regulation costs money. multiple fuel economy regimes harm customers because auto manufacturers must charge more for the cars that customers want to sub is citytize the cars -- subsidize the cars the regulators demand. these regulatory costs help make the one national program the most expensive set of rules ever at a cost of $209 billion. now, i've never seen a billion dollars, but i understand it's a lot of money. the average, this will raise the average price of a vehicle nearly $3,000 and will price over six million people entirely out of the new car market. america will benefit from returning to one real national
4:56 pm
fuel economy program established by congress. this is not a new idea. in 2011 the house passed a bipartisan bill sponsored by congressman upton that would have reestablished café as the sole fuel economy program. mr. chairman, we can do better than this rube goldberg way of setting fuel economy policy. let's bring accountability back by returning to one national policy. this program will continue -- this approach create the continuous fuel economy improvements that customers want and that they can afford. the power rests with you. thank you. >> thank you very much. and at this time, dr. cooke, you're recognized more five minutes. thanks for your testimony. >> great, thanks. good morning, mr. chairman and ranking members. my name is dr. dave cooke, and i am a senior vehicles analyst with a nonprofit advocacy organization whose primary
4:57 pm
mission is to insure that policy is crafted on the best available science without political interference. i appreciate the opportunity to comment this morning on the current fuel economy and emissions standards. transportation is now the leading source of carbon dioxide emissions in the united states, and the 2012-2025 light-duty vehicle standards represent the largest single step towards reducing greenhouse gas emissions and oil use in the u.s. one national program recognizes the independent authorities of the national highway traffic safety administration, environmental protection agency and california as well as the states that follow california's lead on tailpipe pollution regulations. at the same time, it helps provide a coordinated approach to achieving reductions in oil use and emissions that allows manufacturers to be able to design a single fleet capable of complying with all fuel economy and greenhouse gas regulations should they choose to. separately, california and other states have adopted a zero emissions vehicle program in order to address air quality
4:58 pm
issues. these states currently face $37 billion in annual health impacts related to passenger vehicle pollution. by 2030 the zeb program will cut that by 35%. while increasing the sales of electric vehicles ultimately help manufacturers comply with greenhouse gas regulations, that is not the program's primary purpose and it appropriately is not part of one national program. of course, the implications of one national program extend beyond national security and under greenhouse gas emissions you should the clean air act. -- under the clean air act. these standards help put money back into the hands of consumers by saving them money at the gas pump. improving the efficiency of new vehicles is especially critical for lower and middle class families who spend a greater share of their income on fuel. and these standards disproportionately benefit those individuals by making both the new and used car market more fuel efficient. the efficiency of cars and trucks continues to improve as a result of these standards. with suvs showing some of the
4:59 pm
greatest levels of improvement year-over-year precisely because these size-based standards encourage manufacturers to offer more fuel efficient options in all vehicle classes. and even as the fleet is becoming more efficient, automakers are setting sales records. at the same time, the success of these standards cannot be taken for granted. suppliers have invested nearly $50 billion building and expanding factories around the u.s. as a result of the certainty these standards provide. growing manufacturing jobs by more than 20%. anything done to weaken the standards and undermine those investments could have a drastic -- could have drastic consequences for a supplier based with a broad national footprint and, in turn, the u.s. economy. this technology investment is part of why we are confident that manufacturers can achieve the 2025 standards. automakers have barely begun deploying many off-the-shelf technologies that can improve the efficiency of convention algas leap-powered vehicles, and new developments continue to
5:00 pm
emerge that can reduce fuel use even further. as a result of this progress, nhtsa and epa were able to jointly show in the technical assessment report that costs to comply with fuel economy and greenhouse gas emission standards had declined. as required under the midterm evaluation process agreed to by all parties to the one national program, epa reviewed the comments and moved forward with a determination on whether its standards for 2022-2025 remained appropriate. based on the best available economic and technical data including that it provided by manufacturers, epa concluded that the 2025 standards remained appropriate. in fact, epa agreed with our assessment that the data shows that manufacturers could meet even stronger standards by 2025. but the agency chose instead to leave the standards as is, to provide the certainty needed for continued investment and efficiency. by seeking to renegotiate the terms of the one national program, automakers are injecting uncertainty into the process, forestalling investment.
5:01 pm
this directly harms consumers and risks long-term impacts for the industry. ceding leadership as the rest of the world moves forward signals a repeat of failings that required american taxpayers to bail out the industry in 2008. and suppliers could exit to china or europe in response. rather than wriggling out of their commitment to seek relief, as the alliance puts it any way we can get it, manufacturers should be doubling down on improving efficiency to protect american investment and american jobs. one national program is working now to provide fuel savings for americans, improve national security and reduce emissions, but this progress is in jeopardy as a direct result of automakers' recent actions to undermine these standards. it is critical to continue to hold automakers accountable for the promises they've made to the american people. >> thank you very much for your testimony. and mr. bozzella, you're recognized for five minutes. >> thank you, chairman and ranking members.
5:02 pm
on behalf of the association of global automakers, thank you for the opportunity to testify today. global automakers represents the u.s. operations of international automobile manufacturers that design, build and sell cars and light trucks in the united states. our member companies have invested $59 billion in u.s.-based facilities and directly employ over 1000,000 americans -- 100,000 americans. our members are building cars and trucks that are more fuel efficient and cleaner than ever and making tremendous strides in vehicle electrification. our future progress in reducing emissions in fuel consumption fends on a number of factors -- depends on a number of factors, some of which are not fully within the control of manufacturers. the most important factor is the customer. as we have seen when gas prices are low, fuel economy is less important to customers when they purchase a new car or truck. government regulations are also important. manufacturers are required to produce vehicles to meet regulatory requirements that may
5:03 pm
have been set in different times and under very different circumstances. to that end, as we talk about the fuel efficiency of vehicles, we should also talk about the efficiency of public policy. the auto industry, federal government and state of california established one national program, onp, to address the fact that multiple agencies across 15 jurisdictions were using different tools to to regulate similar aspects of the vehicle. the resulting program aims to harmonize café and ghg standards for light-duty vehicles. the onp provides substantial year-over-year reductions in petroleum consumption across the nation for all light-duty vehicles while reducing unnecessary regulatory duplication. recognizing the nationwide benefits produced by the federal program, california accepts compliance with federal standards as compliance with its ghg program. but despite onp's efforts to
5:04 pm
better align notable differences among the programs remain. that makes no sense. the current scheme creates friction and drag in the system that slows innovation and imposes unnecessary compliance costs ultimately borne by consumers with no added environmental or energy benefits. in fact, under the current standards as you've heard, a manufacturer could comply with one standard but not the other. this is a prescription for wasted time, talent and resources which would be more productively directed toward engineering and other challenges associated with actually reducing vehicle emissions. some of these problems can be solved in a straightforward manner. in mid 2016 global automakers and the auto alliance jointly submitted a petition to epa and nhtsa is requesting regulatory changes permissible within the statutory constructs of each relating primarily to the
5:05 pm
banking accruing and applications of credits and process improvements that will promote additional innovative technologies with real fuel savingsings benefits. the agencies should respond to this petition without delay. these regulatory changes, however, cannot fully address the differences in federal statutes which means that legislation is necessary. global automakers supports congressional action to provide greater certainty and consistency between the federal programs. these problems all have solutions. we simply haven't put them to action. and that creates a dilemma. the auto industry is in the middle of fundamental transformations to electrification and automation. the cars we sell today to need to be able to generate the resources to fund these transitions. and we need to be thoughtful about public policy to support these efforts. finally, it's critically important that all of the parties remain at the table to
5:06 pm
work through these issues. it's far preferable that we resolve these issues without litigation or a retreat from one national program. those paths would only create uncertainty which would discourage investments in innovation and freeze further progress in emissions reductions. global automakers remains committed to a harmonized national approach, and we look forward to working with you toward that goal. thank you, and i'll be happy to answer any questions. >> thank you very much. and we appreciate your testimony, and is we'll now move into our question and answer portion of the hearing. i will begin the questioning and recognize myself for five minutes. mr. mcconnell, as a dealer, how can you tell the subcommittee about consumer trends especially with respect to the types of vehicles they are purchasing today? is your mic on, please? >> thank you very much for your question. you know, the customer makes their own decision on what car to buy.
5:07 pm
you can build cars. that doesn't mean that the customers -- the demand is there. so the two things that i've found is customers buy a car, for example, we had a customer the other day, she was pregnant, having her -- with her second child. big soccer mom. you know, they had moved from a smaller car up toed city minivan that suits their needs. but the demand for cars right now is 63% of the people are trucks versus about 34% cars. so it's changed tremendously in the last couple years, and that's because the price of gas went down from $4 a gallon, basically, into the $2s. >> thank you. mr. bainwol, with the current rules and regulations in place, do we, in fact, have one national standard for café and greenhouse gas emission standards? >> we do not effectively. >> and how did the epa's less
5:08 pm
than seven week process to final determination impact the midterm review? >> well, it disconnected, first, from nhtsa is. so if you go back to 2011, there was essentially a trade. and the agreement was the industry would agree to very ambitious with, aggressive targets over a very long period of time, through 2025. and in exchange, the industry would get a common sense analytic lookback to make sure that the projections were accurate, and we would get one national program. what we've gotten is neither. we're pledged to try to get there, but we do not have one national program, and the midterm review was premature. when the t.a.r. came out, we asked for an extension, we were told, don't worry, there's going to be plenty of time. the request was denied. when the original proposed determination came out, we asked for an extension, and it was denied. and over the course -- we had about 20 days over the course of the christmas holidays. of everything was very
5:09 pm
compressed, and there was a very strong disagreement about the substance of the report which we never really got to work our way through. >> let me ask you this, because i believe that you made some comments. and were any of the flawed assumptions that you raised addressed by the agency? >> not really. and i think it's worth pointing out this there's been an attitun the part of some that the t.a.r. and the subsequent work was the holy grail or that it was without dispute. and i'd just simply like to point out that epa made many assumptions. and if you go through and just look at the points, they've been proven false. there was a massive failure on projecting gas, there was -- the fleet mix question was completely butchered. there was a view that we were overcomplying and we were undercomplying. so we can talk about the substantive value of that report under which the midterm was set
5:10 pm
and was finalized, but they made mistakes that were really quite profound. >> let me ask you because you're pointing out all these mistakes, and you're pointing these mistakes out, what do they say? >> well, originally they said there'd be time to talk about it later on, and we kind of lost that time. there are subsequent disagreements. we believe i think the most important mistake, in our view, is the amount of electrification needed to comply. they believe they can comply with minimal electrification. we believe much more is required. and if you look at the purchase pattern in the marketplace, that's the real problem. >> mr. bozzella, if i could, in my last minute here, by having different standards leads to manufacturers making cars consumers are not buying. what effect does that have on the industry? >> i think it could have a fairly significant impact on
5:11 pm
jobs and on the growth of the industry. you know, the -- what's happening here is we're having to waste time and resources on compliance when we ought to devote that time and resources to innovation that improves fuel economy. so with one standard what you can do is focus that investment, and it's massive investment. all of you know and many of you, on both sides of the aisle, have praised that investment, and many of you represent states and communities where you see that investment firsthand. what we want to make sure is every dollar of those investments are focused on improving fuel economy as opposed to efforts to to comply for the sake of compliance with no benefit. >> thank you very much. my time has expired. and at this time, the chair recognizes the ranking member of the subcommittee, the gentlelady from illinois, for five minutes. >> i'd just like to point out this is the two-year anniversary of the paris accords, and unfortunately, in my view, the
5:12 pm
united states is no longer part of that. and it seems to me that what's being considered today might actually increase the pollution caused by weakening fuel economy standards. so the plea for harmonization between epa's and nhtsa's program isn't about aligning different regulations, it's about weakening fuel economy standards. all the credits that the automakers want to be added to nhtsa's program are going to cause stagnation of fuel economies goals and not harmonization. dr. cooke, let me first ask you are these programs working, and are u.s. cars more efficient and less polluting than they used to be? >> absolutely. vehicles have gotten significantly more efficient over the past five years. >> are the yearly goals for the
5:13 pm
two programs stifling innovation or actually helping to drive it? >> i think the fact that fuel economy is improving and that you see continued new research every, you know, announcements from automakers show that they're investing and that this is driving innovation. >> and as i understand, the carmakers want to reinstate expired credits from earlier years when standards were much more lax, and they want to extend the lives of those credits from 5 to 11 years. and they want to add a whole new category of credits to the mix. and they want to relax the caps on their ability to transfer the cents they earn on their cars to their pickup trucks. dr. cooke, have i left anything out in that list of what they want? >> no, i think that sounds about right. >> do automakers, dr. cooke, really need such a substantial expansion of credits to meet the
5:14 pm
fuel economy standards? >> no. i think the t.a.r. and the work since the vast body of evidence show that there are plenty of technologies that they could be applying to their vehicles in order to meet the standard. and if they met the café standard which they're trying to weaken through these credits, they would be in compliance with the epa's standard as well, so -- >> thank you. if automakers were to get all the retroactive credits they're asking for, what would this mean for real improvements in fuel economy going forward? >> the vast volume of credits could really offset, forestall continued investment in efficiency. and so you could see manufacturers using their credits to, you know, stall progress on the fuel economy of the pickup trucks that many drivers are looking to purchase. and that affects our ability in the long term as through the
5:15 pm
midterm review process, that would set up a trajectory where we have weaker vehicles going into the 2022 model year, and the standards are then further weakened through this lack of progress. and we could see, you know, 8-10 mile per gallon reduction in the '20-'25 target as well. >> while we're on the topic of credits, carmakers have complained about the fact that the epa has allowed them to get extra credits for using or certain technologies like stop/start ignition systems, but nhtsa has not given them credits. i'm referring to off-cycle credits. we are told that nhtsa's needs to harmonize with the epa and allow these credits to count retroactively toward both emissions goals and fuel economy standards. so, dr. cooke, aren't these off-cycle technologies already factored into nhtsa's fuel
5:16 pm
economy goals? >> yeah, that's right. nhtsa explicitly excluded them from the 2012-2016 regulations when they set the standards. >> and, in fact, didn't nhtsa intentionally set its fuel economy goals lower than epa's emission goals precisely because its program didn't include these credits? >> that's right. its standard was about one mile per gallon lore as a result. >> and if nhtsa -- [inaudible] yeah. if nhtsa were to allow off-cycle credits to apply retroactively to its already discounted fuel economy standards, shouldn't it also reset those standards to make them more stringent? >> that's correct. >> so do you buy the estimate that this would raise the cost of a car $3,000? does that take into account what the lower gas price would be? >> i have no idea where that $3,000 number is coming from.
5:17 pm
it is outdated. >> thank you. i yield back. >> thank you very much. the gentlelady yields back. the chair now recognizes the chairman of the subcommittee on environment, the gentleman from illinois, for five minutes. >> yeah, thank you, mr. chairman. i guess, first, following a couple of the lines of questions, to the automakers -- first of all, it's just a thank you and to the auto dealer. you represent america in which you raise capital, assume a risk, try to produce a good and try to sell a good. you pay living wages, many times you pay health benefits. you're paying taxes to the country. you're paying local taxes that fund our schools, our towns and our communities. you probably are supporting local sport leagues and sports teams and stuff like that. so i always get frustrated when we bring people before us who are doing everything we ask, and
5:18 pm
they seem like they're on trial. and that they're under attack. it just, it's unfortunate. so, first of all, thank you. now, to the point finish part of in this debate is that the obama administration moved the goalpost in this midterm review, is that correct? mr. bainwol and then mr. bozzella. >> yes, it is correct. >> correct. >> and your request is what? >> our request is simply to go back to the original obama timeline. >> and have a fact-based, evidence-driven process. >> because -- and you want that because? >> because we need to get it right. it's critically important to the customer, it's important to investors who are investing in this country, and it's important for all of us who care about reducing greenhouse gas emissions and improving fuel economy, that's why. >> and isn't it safe to say that when you do a formula over time, variables in the formula could change? >> that's correct, and they have
5:19 pm
changed. >> and then give me some examples of those changes in those areas. >> well, we talked about the gas price reality, and there's nothing that drives behavior in the marketplace more than the price of gas. so that's, that's the biggest factor. and that has changed the fleet mix. and that has changed, ultimately, the compliance reality. so we are now undercomplying. and i think it's important to point out there are two different programs. epa was estimated to save is something like 65.6 billion gallons. the nhtsa program was going to save something like 65.3 billion. essentially, the same thing. and we are complying with the more numerically stringent epa program. so on the discussion of harmonization, that doesn't change. we're not touching epa at all. >> let me go to mr. mcconnell just from your observations of the consumers in this process. and based upon the discussion, the consumer have changed in
5:20 pm
their choices of what they want to, you know, pull off the lot, right? and you give me that observation? >> yes. the one thing i wanted to mention, the $3,000 additional cost to my customers is from the three rules, the total cost. it's in the federal registry. the t.a.r. isn't a rule. customers, as you in life, they make decisions. times change, you have different stages, you have different desires. but, you know, congress got it right the first time by not having a patchwork. you want to consider affordability to customers and their consumer choice. they get the car that fits their needs, and the one thing i want to point out is this is the customer's money. you can, a regulator can demand a certain car gets built, but a customer has the right to spend his money. maybe it's a prius that works for you. maybe you have to have a truck because you have a business, and that's how you earn your -- >> yeah, let me reclaim my time,
5:21 pm
because i'm running short. i'm from rural america. we like big vehicles, big trucks. so is i know what's being sold in my neck of the woods with. let me finish with this with the i auto manufacturers, and this may not be a surprise to some of my friends. there's a government initiative which is underway to define and understand the costs and benefits of high compression engines and high-octane, low-carbon fuels. if your industry were to go in that direction, what do you think it would mean in terms of emission reductions or consumer affordability for vehicles in the model year 2021 and beyond? >> well, high octane absolutely has value in terms of fuel efficiency, and i've seen it estimated something in the order of 4 or 5% as a plateau shift. so there's real value on high octane. and then there's a question of how you get it. and on that question we're a little agnostic, but we'd be happy to work -- >> certainly is part of that process too, right? mr. bozzella? >> yes.
5:22 pm
i think you have the look at the vehicle and the fuel are one system, and so that's what's driving that type of work, right? so you have more efficient engines and cleaner engines. you want to have a fuel that matches one system. >> excellent. thank you, chairman. >> thank you. the gentleman yields back. the chair now recognizes the ranking member of the environment subcommittee, the gentleman from new york, for five minutes. >> thank you. dr. cooke, as i mentioned in my opening statement, this committee received testimony that automakers are already ahead of schedule to meet standards for upcoming model years. did the t.a.r. find that the targets for later model years can be met by mostly efficiency improvements to gas-powered p gins? >> yeah, that's correct. there's not a significant deployment needed of electrification. >> thank you. and numerous comments to the t.a.r. and proposed determination outline the number of technologies that reduce greenhouse gas emissions that are commercially available. your testimony mentions a number of proven technologies have not been widely deployed.
5:23 pm
some of these have existed for years but still are only found in 10 or 20% of new vehicles. dr. cooke, can you discuss how off the shelf technologies could be more widely adopted? >> sure. i think you look at what ford has done with its eco-boost, turbo-charged, downsize engines where you can provide the equivalent amount of power from smaller engine, even they haven't sort of moved that technology across the board, and they're certainly a leader. and other vehicle manufacturers can either move in that same direction with something that's proven or define a new pathway, and we're seeing those developments routinely come out in new announcements, you know, every few months. >> why haven't these commercially available technologies been adopted more quickly? >> i think one of the challenges is that product cycles are long. they're about five years.
5:24 pm
and so it does take time to redesign a vehicle. but, you know, at the same time we've seen instances where, for example, toyota's large trucks haven't seen a power train upgrade in a decade. so i think there's inconsistency in the industry in how quickly they're moving these technologies through. >> thank you. and would additional vehicle models meet higher fuel efficiency standards if more of these commercially available technologies were more broadly utilized? >> yeah, absolutely. there's plenty of room for them to meet the standards. >> thank you. it's also my understanding that there are also several other well known technologies that are under development and will will very likely provide alternative, cost effective pathways toward meeting these standards. dr. cooke, is that accurate? >> yeah. i think one of the things that the modeling shows and the fact that the t.a.r. was done both by nhtsa and epa using slightly different assumptions and different modeling results
5:25 pm
resulted in a number of different pathways that manufacturers could choose to meet the standards. so it's a robust analysis that proves that there are multiple pathways of getting there. >> and despite the likelihood of these technologies becoming available in the near future, is it accurate that epa did not consider them when determining the appropriateness of the model years 2022-2025 standards? >> i think there are a number of technologies which epa -- which have been developed since epa's proposal that show that we can go even further. and, you know, developments that were completely unanticipated not just when the agencies wrote the original rule, but even since the final determination. >> and why do you believe epa and manufacturers have consistently underestimated how fast technologies can be developed? >> it's obviously in their interest to only provide regulators data which will
5:26 pm
result in the standards that are most easily achievable. so there's, you know, at the same time, yeah, i don't understand why, fully why they underestimate what their engineers are capable of, but history has certainly shown that to be true. >> well, thank you, dr. cooke. i think it's clear that these standards are achievable. they're cost effective and appropriate. i have full faith in american automakers as well as the existing flexibility of the program to reach these standards, so i can't support the uncertainty created by reopening the midterm review determination. dr. cooke, last week administrator pruitt testified before this committee that the midterm evaluation process was flawed because it did not happen at the april 2018 deadline. i know we're used to epa missing deadlines, but is there anything in the regulations that prevented epa from evaluating the appropriateness of the standards before april 2018? >> no, absolutely not. and given the long product
5:27 pm
cycles, more advanced notice is preferable. >> and do you think there's anything included in the t.a.r. or the determination that makes it incomplete or inaccurate? >> i think there was a fairly thorough analysis. it was 1200 pages and four-plus years of careful technical and economic analysis, many studies, many peer-reviewed studies, many benchmarking, you know, tests in their own labs. there was a lot of data that this was based on. >> thank you very much. with that, i yield back. >> the gentleman yields back. the chair now recognizes the gentleman from west virginia more five minutes. >> thank you, mr. chairman. i want to deviate a little bit from this issue over the '22-'25 and it was a comment earlier in one of the opening statements about safety. i'm still curious, i see there are competing reports out there depending upon your perspective
5:28 pm
of whether or not the efficiency efficiency -- and congressman tonko and i work together frequently on legislation over efficiency, so i'm, as an engineer here in congress, i like the idea of efficiency, but i also want to measure the, i suppose the benefit ratio, cost benefit ratio of what's it doing on safety. because our cars are, some cars are getting lighter, they're using more aluminum, less steel. you'll hear some reports will talk about the fact that in the real world conditions there are more accidents. last year we had an increase in deaths on the highways. others say if, under a model situation if all cars are the same size on the highway, there wouldn't be -- that's not the real world. so i'd like the hear back a little bit from you about the safety aspects. when we continue this, because i want us to continue down the road of increasing the
5:29 pm
efficiency of our cars. but i don't want to do it at the risk of our people that are driving the cars. so that's my first question. and i want to get, if we could, just some quick responses back to safety. >> i'll jump in. you've hit, obviously, a very important point, and it's one of the reasons why nhtsa jumping ahead -- i'm sorry, epa jumping ahead of nhtsa was a problem. nhtsa, under statute, has to look at a range of factors including safety. epa does not. so your concern about safety is valid, and it ought to be incorporated in the analysis. >> [inaudible] >> he's 100% right. the good thing about where congress set it up with café is you had to consider -- safety was one of the factors. epa does not. california duh not have to -- does not have to consider anything but economic factors only in that state. and as you know, they've reduced the mass of cars --
5:30 pm
>> let me if, if i could, reclaim -- let me ask a more definite rather than keep it open-ended. do you think the increasing efficiency has caused or contributed to the increased accident rate of fatalities on our highways? >> i don't know if i have the expertise to answer that question, but i will say that the congress got it right, because they required café to consider safety, and epa does not have to consider safety at all. >> okay. i'm running out of time on this. >> there's no evidence to support the question, the conclusion that these are having an adverse effect on the accidents. ..
5:31 pm
the ability to move turnover is crucial. >> i am sorry, during your testimony, i saw your body language was very illuminating. you were shaking your head. do you want to express in the time i have one minute and some seconds left? >> again, i appreciate doctor cook's testimony. i think there is a fundamental misunderstanding of the notion of credits. it is almost as if they are being, they are gifts that had been delivered some magical place. the fact of the matter is that these credits are the result of investments that car companies have made that have resulted in progress. they have made more achievement
5:32 pm
and so this credit is a reward for innovation. it is actually earned for the investment that companies are making. and so the point of this is not, or almost having abstract conversation about credits. it is really important to recognize that these are important tools in the toolbox. because what they do is encourage innovation and they also help balance and smooth the ups and downs of product development cycles in a program where year-over-year fuel economy increases are required. >> do you have anything to add to that? >> my body language was i was just imagining dr. cooke running a car company because he seems to have a vision that is off the table but car companies apparently do not have the capacity to do that. >> thank you. the gentleman yields back to the chair now recognizes this
5:33 pm
young lady from california for five minutes. >> thank you very much, mr. chairman.the clean air act gives epa the authority the waiver to adopt air pollution standards for vehicles. approximately dozen states have adopted california's standards as well. mr. cook, kate tells her california was given the ability to have their own admissions standards? >> california's leadership predates the clean air act. they were the first state, the first body to regulate tailpipe emissions from the vehicle industry. >> also because of the pollution that they had in the state also. >> exactly.>> when california applies right waiver to set its own standards what has epa considered while deciding whether to grant that waiver? >> first, it is important to point out that the fault of the waiver is accepted unless it meets one of three criteria. it is the regulations were arbitrary and capricious, not a well thought out --
5:34 pm
inconsistent with epa's authority under the clean air act were not compelling or extraordinary circumstances. i think it is very clear we look at the wildfires burning, why the greenhouse gas emissions standards are compelling and clearly, the air quality issues in california create extraordinary circumstances. >> have ever had revoked waivers? >> no waiver has been revoked once granted. it is not even clear what the process would be to do so. >> okay. there are over 25 million cars and licensed drivers in the state of california.i'm particularly interested in standards and greenhouse gas emissions standards how it impacts drivers in my state and across the country. mr. cooke i think we've heard this before but i've heard the argument that the vehicle standards raise costs for consumers. i understand that your organization has found
5:35 pm
otherwise. you know how much money drives the state because of the standard on a per vehicle basis? >> yeah, consumers stand to save about a little over $3000 on the purchase of a new car or about nearly $5000 over the lifetime of the purchase of a new truck. that is gas prices that we are at now. clearly, if the increase in the meantime, that would be significantly higher. >> and j generally support strong fuel efficiency standards? >> absolutely. pulls show that seven in 10 americans specifically support government settings strong fuel economy standards and the finding and sloth crosses isles. >> mr. cooke you mentioned the epa in your organization found
5:36 pm
that many factors can have stronger stands than currently written for 2025. what data and information do study to come to this conclusion? >> sure. the analysis that has been conducted been expensive. each, each month that passes point. the theft of both epa and these models confirm that the cost had come down. it shows evidence, a vast amount of peer review, literature that epa has been generating. the indiana university study that was funded by the alliance, actually shows the hundreds of thousands of jobs are created as a result of the standards. so it is a positive economic outcome, new data based on what has been put out.
5:37 pm
the list is extensive. >> okay. as i mentioned earlier, the international agency has found that the transportation sector is the only one in which energy efficiency has been in this country over the past 15 years. have you seen a factor here in the united states to explain this trend? why do you think that we have become less efficient in the transportation space? while more efficient elsewhere? >> i think one of the things that is critical is the result of a makeshift. we are seeing a swing back to the purchase of larger cars and trucks. suvs and pickups. and so it is really critical that the standards remain strong because they drive improvements across the vehicles and ensure that cars, trucks and suvs get more efficient over time. and so we have seen a plateau as a result of that mix but these standards will continue to drive that and put us back
5:38 pm
on the right course. >> thank you. i yield back. >> and you are recognized. >> thank you for being here in this important issue.let's start with mr. mcconnell. i know it has been mentioned prior but in your testimony you state that the national program set by the last administration raised the price of each vehicle by nearly $3000. and there is a will price out over 6 million people from the new car market. can you please explain how you arrived at those numbers and how consumers will react based on your experience? >> well, $3000 is the total cost for the three rules. it has been noted in the federal register. the customer that most important thing to know is fleet turnover.
5:39 pm
everybody here would be in agreement on one thing. we want the fleet to turn over faster to get more people and more fuel-efficient cars. if you make them unaffordable or you make them not as desirable with the customer you have less people buying cars. that is it. to give you an example, the structure that you had set up under fa was the right one. i don't think you california setting the standard for the rest of the country and i will give you an example. there are probably many of you in here the only black car. california car had proposed a regulation called cool paint. they would eliminate black cars because they become hotter and you have drawn the air conditioner a little longer. i do not know what uber would do without a black car but -- >> was really actually considered banning black cars. >> yes. black paint. it is called a cool paint. you can look this up.
5:40 pm
>> is it fair to say that the dealers are concerned that the roles are pushing them into a position in which they will not be able to provide cars and trucks for people that want to buy it at prices they can afford? >> that's right. ultimately, we buy the cars that the manufacturers make. we own them. but ultimately, to put them in a fleet the customer has to make a decision. any business that is successful has to consider what the customer wants. can they afford it? 90 percent of the cars are financed in this country. there is not one bank i have asked at least 12 banks, they will not loan additional money just because your car gets better gas mileage. >> most of the people in this room could probably afford a more expensive car. the vast majority it seems like kind of a regressive tax in essence. from automakers, engineers in the department of energy and many other technical experts and i know that this was touched on but i understand there's been an ongoing elevation of how different fields can help reduce
5:41 pm
emissions and improve efficiency when used with new optimized engines. the most recent request for comments on the midterm evaluation. epa specifically asked for information on the impact of high octane fuel and it was also mentioned, what types of work have automakers undertaken to help evaluate the benefits of high octane fuels? >> thank you congressman. as you are aware, we are constantly researching and working on the combinations of the vehicle systems powertrain systems and fuels. i mentioned in response to a question that you have to think of this as one system. hardware and software. engines and fuels. and so, we are constantly evaluating new fuel and engine combinations. with end octane certainly contributes to efficiency. so there is an opportunity there. the way to think about it is, that brings additional benefits
5:42 pm
to the process while we are still working on gasoline powered engines. >> obviously talk about the innovation, experimentation. he stated customer the current system is stifling innovation. resulting in increased costs for consumers. can you explain what factors are predominantly driving this increase cost for consumers? >> primarily the bureaucratic dread of trying to comply with three different fuel economy systems as well as technology forcing mandate managed by three different agencies across 15 jurisdictions. it doesn't really make much sense. i think if we can get further alignment and ultimately one national program as we all, with the aspiration we all had, we will be able to devote that investment. those substantial resources to improving fuel economy. >> in a couple of seconds i have left. what existing gap between federal and state programs if
5:43 pm
they are not harmonized, do you expect to see that increase over the years?>> no question about it. >> thank you.i yield back. >> the chair recognizes the gentleman from california. >> thank you chairman. i think the members of the panel this morning. dr. cooke, duping the current standards have helped make the american auto manufacturers more competitive? >> i do. i think we saw what happened when they are allowed to stagnate. >> thank you. how do you think -- and you have already answered this but how do you think the regulations have given employment with us automakers and is this hurting the industry? >> i'm sorry, he said employment, correct? >> yes how is this with employment? >> the fact that you're moving forward with new research and development, are new
5:44 pm
technologies, is providing a catalyst for increased investment. not just automakers but specifically it is drawing suppliers to invest in the us as well. and they are critical tool, and they outnumber manufacturing 221. by doing this it is supported in increased job growth. >> is it hurting the automakers i had to hire these people? >> they do not seem to be, a lot of -- many automakers are seeing profits right now. i defer to them and whether they feel like their industry is failing. >> what about harmonization? how difficult you believe it is for automakers to meet the different sets of standards that we are hearing about this morning? >> it is not very difficult at all. particularly when it is pointed out explicitly in the
5:45 pm
rulemaking exactly the pitfalls that would face them and exactly the differences between the two programs. that was finalized when they signed off on one national program and nothing has changed about one national program since they signed off on those rules. they were well aware of the differences between the two programs and it seems that they are choosing instead of to invest in compliance in just one. >> okay. your answer my questions pretty directly here. i appreciate that. you mentioned that off-the-shelf technology is already available and it would greatly increase fuel efficiency if it was employed. can you expand on that a little bit? >> yes. the fact that automakers have invested in, that there are proven technologies shows that the potential is there but it
5:46 pm
takes time to move them across the remainder of their platforms because they new car is designed with four redesigned every five years. there is a significant point at the three year mark. but because of that it takes a long time for even technology that is ready to go, to get in the fleet. what we have seen established is that there is a plethora of these technologies that are well established. everyone understands and are still in the low fraction of the fleet. and so over time, there's plenty of room for improvement without having to resort to most expensive technologies. >> there is an internal combustion research facility in livermore which is near my district. how effective is that, do you know in terms of providing technology that automakers can
5:47 pm
use to increase their efficiency? >> i am not aware of that specific lab but the national labs in general to play significant proving ground for some of the more advanced types of combustion technologies. and there certainly you know i think we have heard the program that was in coronation with national labs and investment in that basic science just as in any other field, certainly plays a strong role in development of advanced technologies. >> the fuel economy and greenhouse gas emission centers have benefited our economy and environment and save consumers billions. since these are working, why is the industry seeking to move backwards? and maybe hurt itself? >> that is a very good question. i think, you look at what, what
5:48 pm
the industry could be doing. they could be moving forward but we also look at the history of what they have done in the past. i think there is a little bit of a return to that mindset when you look at testimony in front of house committees over the past you know 35 or 40 years. this is par for the course. they continue, automakers routinely say we cannot possibly hit that target. and they are still standing. >> i will yield back because you're going to cut me off. >> i did not cut you off. >> the chair recognizes mr. jones. >> thank you, mr. chairman. a lot of good questions on both sides. my perspective here for a moment, i was cochair for a lot of years.
5:49 pm
bipartisan caucus. we all want better fuel efficiency. consumers want that. we've made some wonderful strides and for where we are. frankly because we have gas prices, this we can be southern from 2000 $0.24 a gallon. a lot better than $3.84 a gallon. almost 9 years ago. i would you know, when we work with the industry and with the administration on getting better fuel economy standards, it was never the intent of this congress and frankly, i do not think it was the intent of the administration. the obama administration. to have something that was different than one national program. we thought that that was going to be the case. i think they indicated that back in 2009 and again in 2012. and i would you know, your testimony here, i think that we are all surprised. based on their testimony early on and where they ended up that
5:50 pm
early as the chairman said just a week before the election. a week before the end of the obama presidency. when we worked with the industry, with the administration on establishing the timeframe for mileage, we put in the provision that in 2018, years down the road, that there would be a look back. and the industry actually, can they make these changes at what will hopefully be a reasonable price for consumers? i would not say that it was to halt the progress. it was that it actually measured the science, the efficiencies and they new vehicles as to whether they would meet those. then it was 54 miles per gallon. it was revised down a little
5:51 pm
bit so it is about 50. i'm averaging here. but under the rules, i mean, i think that your best answer is the industry, if you do not have that look back, what will it take to actually meet 50 miles per gallon literally and in year, 2024 or 2025? >> that is a tough question. i think the premise that will help progress is false. the only question here is the degree of the slope. and what the slope of progress to be one is consistent with selling cars and encouraging turnover. that is really what all of this boils down to. i understand we live in a system with rhetoric that gets heated. we are talking about getting to these numbers and beyond. at some point over time, the question is how do we manage is an infection consistent with
5:52 pm
marketplace realities? and just to add to that, i think that we are making outstanding progress. there is no question about that. the question really, is, are we making, are we testing the assumptions that we made? for example, it is unclear to us really, what types of technologies will be into the cars and trucks that people will need to buy in 2025. there is not a single gasoline powered engine that meets those standards today. i think we should be honest and straightforward about the types of technology pathways we will see forward. more electrification, more hybrids and so, really this is about not only making sure that we get the assumptions right for innovators and investors but also that the customers recognize what the marketplace will look like and are prepared. >> as you know, my colleague and friend from michigan, we have introduced legislation
5:53 pm
called the fuel economy harmonization act of 2017. it is designed to correct inconsistency of having three different standards in essence. and go back to one. what is your thoughts on that legislation? >> we think it is a terrific bill. we think of the impact of the ability to reduce friction and bite reducing that friction, it allows for the strategies that make sense and you end up reducing the cost of product, enhancing the ability of people to buy those cars. and that is crucial to employment in your states. it really is very valuable. and in terms of dollars, i was told the other day, i am not sure where the data comes from but if it's anywhere near the magnitude is right, $1 billion in savings in terms of cost translates into $1000 on the bonus for a guy that works on
5:54 pm
the line. this is a multibillion-dollar savings in terms of the regulatory friction. that means real disposable income for the workers in this industry. >> thank you.i yield back. >> i recognized the young lady from michigan. >> think, mr. chairman. i have a lot of questions outlets in the last one first because i want to follow-up. when we are talking about -- first of all i'm an idealist. someday we'll have permanent peace between michigan and california.because i think that we all want to have a better environment. we talked about -- this is one example of a technology i would like to pursue. but all of you answer this question quickly? was it not assumed that there would be a far higher penetration in the market of electric vehicles? if people keep making this comment that the companies are not building -- but is not affected the consumer is not
5:55 pm
buying dvds? they do not believe that there is infrastructure in place and those that want to put them in the fleet are not buying them? quickly? >> yes, yes and yes. >> absolutely you are correct. >> dr. cooke? >> there was little penetration assumed. 4 and a half percent in california right now electric vehicle penetration. >> and a half a point nationwide. >> and it was. as part of the problem. i've talked to governor brown. and we are eliminating this for the ed in the tax bill. right now we are losing money on these electric vehicles. how do we get it back dr. cooke? >> say that again? >> how to get a making the consumer want to buy the electric vehicle? >> i think the fact that we are at five percent in california shows that if you put the incentives in place you do >> incentives are in place. quite frankly, sir. >> the tax credit, the
5:56 pm
infrastructure needs to be built, do have to work together or -- outlets about the question because i think that we are, actually think we are more together than people are thinking. i would like to ask. other members of your trade association committed to continue fuel economy improvements? that are balanced both technological capability and consumer affordability? >> the light does not end in 2025. we know that. >> are you for post 2025? which by the way i am and want to talk about. >> the conversation has to happen, yes. >> i reach above points. we want to improve this over the long haul. >> this for all witnesses please answer yes or no. deeply there is a benefit for having a single set fuel economy standards across the country? >> absolutely. >> yes. >> dr. cooke?
5:57 pm
>> yeah. yes. >> is and what the obama administration tried to do in 2010 and 2012 -- isn't that what they tried to do? >> it was the goal but it was broken at the end of the administration. >> i believe congress had it right the first time not to have a pitchfork. >> dr. cooke? >> it is the goal and it is still in place. >> was the aspiration has not been realized. >> in fact, if he admits they both. stated joint npr issued in 2012 i have here. we need to create a unified approach that this manufacture could design one fleet of vehicles to comply with both programs. isn't it true that the 212 joint final rule had two main phases? the first being standards for modeling is 217 to 221 and separate projected standards from model years 222 to 25?
5:58 pm
>> yes. >> dr. cooke? >> yes. >> is my understanding that when the 212 joint final rule reserves that the 222 february 2, 2025 standards is what was called estimated. which represent the best estimate of what would be feasible at the time. is that correct? >> yes. >> the consumer who wants to be able to afford the vehicle. >> okay. dr. cooke? >> yes. >> okay. we are going to right now we are going through the midterm review as we speak and whether some of you like it or not, it is very important. the early process is important that it play out. and encourage stakeholders to engage responsibly towards a negotiated solution that
5:59 pm
continues the gainsb as to 12 here with current conditions in real-world into account your people are not talking about who is at the table. we need all of the stakeholders including california and quite frankly governor brown and mary nichols you can quote - me on this today for the trump administration, automakers in the automakers of california, around the table are working productively in order to make it happen. was that not the original agreement? all of the players at the same table giving people certainty and investing for the customer? a failure to reach a negotiable result in weaker standards and less savings at the pump for consumers. with that being said there's two ways that we can improve the fuel economy system while the midterm review is playing out. this is for all of the witnesses. even though we all, and i am out of time.
6:00 pm
>> you're close to out of time. was that a question or you just filibustering? >> actually had a bunch more but i will put them in the record. thank you. >> time has expired. >> thank you. >> how fortunately of the gentleman from texas recognized for five minutes. >> congratulations 11 ton to the big victory saturday on the has been leaving out the second conquered with all due respect to my friend from michigan, i am a big optimist. i believe that we can have the screen. california and texas together as opposed to california and michigan on these issues. >> held out -- how about all three two. >> that works. and a special welcome transport we share a special bond
6:01 pm
lifeline. my first question, when you talk about how the 2012 projected a very different mix of cars and trucks than we see today. and the consumer comes first. that is the model. can you talk about how consumer preferences shipped your ability to make these rules work? how do these put the consumer first? >> so, the programs that are mandates are not only on what we produce but on what people by. in effect the consumers, is not just a phrase the consumer is king. they dictate the success of these programs appear when consumers do not buy with policy makers want, it is not the consumers both. they're expressing on market opinions for what is right for their families. what we are seeing over time with plummeting and the price of gas is a very different measure purchases in the
6:02 pm
marketplace. so pickups, trucks, suvs, crossovers. that is made life more complicated. there is something called a footprint. this accommodates some of the fleet mix but does not accommodate other dimensions including powertrain choices. >> does not show the need for united responsive set of rules across the country? >> yes, it sure does. >> another question. i would like to discuss the harmonization of rules that you all work under. to what extent does the lack of this -- >> it is the government externality. they have a cluster consumers then have to absorb. so it is a problem. it makes fewer people able to buy cars. and retards the process of fleet turnover and bad
6:03 pm
outcomes. i would add to that, why, if we are trying to achieve one goal, we have different tools and different toolboxes? what that does is it creates compliance for the sake of compliance without benefit to consumers. i think we have to get back to benefits for consumers. >> this is so controversial. and why, the obama admission, your consideration, your petition last december. any idea why? >> had there been a different outcome of the election perhaps we would have a more rational conversation. i think this gets filtered through the lens of national politics. >> i agree with that congressman. yes a great question. we are very close! we have the same aspirations and desires and what we want to do is to create better benefits, more fuel economy and reduced emissions for consumers.let's focus on that. >> to add? >> yes, sir.
6:04 pm
>> the conversation we're having today has a bill that somehow there's a problem and we really do understand is, we should be celebrating success. i had the one slide that showed if you take the 2021 numbers and you had one two or three percent we are at 90 percent realization of fuel savings. that is pretty darn good! we have invested hundred million dollars a year and safety fuel economy, technologies and we are reducing dividends for the marketplace. that is a good story and we should be thankful for the success of this we are talking about doing is finding a way to make the economics of the program, they let regulatory peace more efficient so more consumers can benefit from new cars. >> and my first car was in 1977 a pickup truck. this one.nothing behind the seats. that truck, and watched the gas gauge go down. as you hit the gas pedal, maybe
6:05 pm
eight miles per gallon. i now have a 2014 silverado with a big cab is a big truck. i drove from houston texas to arthur my high school play in san antonio and drove back on one tank of gas. i would like to close mr. chairman by asking your consent to enter to record a federal register -- i was talking about the 2016 0135. >> is their objection? hearing on, so ordered. time expired. i recognize a german from california for five minutes. >> thank you very much. i'm proud to represent california but also equally proud that california has led the way. sometimes it pickups and california has improved its emissions standards and has set the tone quite often. let me give you one example.
6:06 pm
there are three generations between me and my grandson now. myself, our four children and our grandson. i used to tease my kids that we used to not be allowed to play outside from times. i grew up in los angeles when i was little boy because of the smog. i used to tease my kids that they never had that problem. they never had to deal with the smog alert. but yet, we have to be careful because the last thing i want is for my 18 month old grandson or me or his parents or teachers to say, you cannot play outside. we have to be careful and make sure that whatever we do, we preserve the environment for our children and make sure that whatever it is that we do improves on everything that we have done in the past. the knowledge, technology that we are capable of. my statement is that fuel efficiency is an important goal across the board. it allows low income and middle-class families to have
6:07 pm
access to cars that run economically. less money goes to the gas pumps and more stays in their pockets. that is a good thing. the one national program also gives local folks access to use cars are efficient. it also impacts the air that we breathe, my district and many in southern california had dealt with wildfires late in the season. last week an ongoing as we speak it is no coincidence that these fires are devastating our community with greater frequency and ferocity. california has been a leader fuel efficiency and standards in the nation needs to follow suit. dr. cooke, can you please talk a little bit about the california emissions standards? >> yes. so, tailpipe standards that were originally set and formed the basis for federal action and the reason why we can breathe in washington d.c., is largely a result of the fact
6:08 pm
that california set those standards way back in the 60s. and that trend has continued with tier 1 standard and tier 2 standards that were first set in california. essentially they were codified by federal agencies. and it again happened with standards that are part of the cars program for we have seen this trend over and over. at the same time, california is still struggling to meet its air quality goals for 2030. so that is why we have the emissions view full program. >> california has approximately, it purges about 40 million people. it is still the sixth largest economy. it bounces around there. bottom line is anything without large and that impactful especially economically with all of the issues going on with the population and also with the business, which to me is a good thing, i'm very proud to be from california and the fact
6:09 pm
that we are our country would be ranked the sixth largest economy in the world. that being the case, it is complicated. it is not possible for us to continue to thrive and to be better and cleaner and more efficient and to drive the markets as well. dr. cooke, i would also like to see if you could respond to the ideas that the former standards with rules that were designed by congress were with the current national program. who does the formal standards benefit by and large? >> the single number standard in one of the reasons why we moved to a size-based standard wells especially detrimental to the domestic manufacturers. and in advantaged imported vehicles. folks who are to self more cars and light trucks for the fact that we have a standard now helps drive investments and
6:10 pm
competitiveness of the big three as well as it does honda and toyota. >> so, if i heard you correctly, the one national program benefits mostly foreign cables to mapquest you know, prior to the program had to be. it is not a-based standard. the old cafc program is to benefit primarily the imported vehicles. which is why frankly, cafc stalled for 20 years. >> okay. thank you very much. and to go off of what one of my colleagues, to add a famous quote. you cannot always get what you want. but you can get what you need. i think that is what he balance we are trying to strike here. thank you, very much. i yield back. >> i recognize the german from oklahoma for five minutes. >> thank you, mr. chairman.
6:11 pm
we're talking about achieving certain fuel standards and we have kind of bounced around with it. there has to be a balance between the two. and so, when you're trying to get our standards, there set forth and congress has to look back on 2018. i think it was a look back of not only seeing, is it feasible for the industry to hit it? what is it cost productive also? looking forward, what is this going to cost consumers? if we can -- and this is open. i am not too worried about he takes it. what is this going to cost us? i mean, we see vehicles rising each day in cost. i drive a f-250. the same vehicle i have driven for the last i would say 17 years. the exact same vehicle i bought in 2000 versus today it is
6:12 pm
about $50,000 difference in price. is that due to the regulations that we are putting on us? is that passed on to consumers? mr. cooke, would you like to take that? >> yes, i think one of the important things to recognize is what is causing the increase in retail price today. entry-level vehicles today cost the same when adjusted for inflation as they did 10 years ago. it is not the technology that is driving people out of the market. if you want to look at the biggest factor causing the increase in retail price, it is the fact that we are now selling more suvs and pickup trucks which do have higher profit margins. >> no, my f-250, crew cab, four-wheel-drive. i paid just below $30,000 for that vehicle. in 17 years, the inflation has increased $50,000 for we have seen that increase across with
6:13 pm
pay wages and grocery prices? all of that has inflated what, someone help me with the map here. well over 100 percent? >> i just want to flag that. i specifically told the entry-level vehicles. when you look at trucks and suvs, we are seeing a large increase in profit margin as a result of going to a higher luxury trend. so when you have a $60,000 f-150, those suvs have always been higher profit margins. >> what i'm saying though is this being passed on to the consumer? what we are seeing by fuel saving spirits about keeping more money in our pockets. they say that they cannot afford the vehicle right now, what difference does it make? >> you are right.
6:14 pm
there is more technology today than ever. these are cleaner and more efficient cars. and of course it has to be some cost associated with that. zero question is, not only cost but the cost combined with where the market ultimately needs to go. and this is to your question, i think we need to be clear that we need more electric vehicles. more higher-priced, more expensive technologies in order to really drive the shift that we are looking for here. >> mr. mcconnell? >> yes. >> you make a great point. i would say the cars that are $15,000 or less have been regulated out of existence. the cost is extremely -- dr. cooke is a extremely intelligent gentleman.
6:15 pm
but you keep talking about what this costs. but 6.8 million people will be knocked out by a three dollar price increase. and that is that because 90 percent of the people find is a vehicle and that takes peoples debt to income ratio out. it knocks them out of the new car market. we are all about fleet turnover. until somebody buys something. as he said a smart business has to listen to the customer. >> will be trying to do here, is it reasonable to say that the customer will see the cost savings? to build or pay the difference of what we will spend trying to get to fuel standards. what they will save on gas. >> the reality from the market though, when the price of gas goes from four to close to two, savings or cut in half. people make a decision based on what is best for them, as they should. and we are the national
6:16 pm
association and dealers. we want to sell whatever the customer wants. whatever it may be. but it is the customer. and that is the one thing where i am. i live my life here we want higher gas mileage. but we need to listen to the customer and what they want. not necessarily what washington wants what california wants. >> time has expired. mr. green, five minutes.>> thank you, mr. chairman. you have a couple of guys from texas. one from oklahoma. i want to thank the chairman ranking member for holding his hearing. transportation is a leading source of carbon dioxide emissions. i have a very urban district in houston. an industrial district. by the way, our gasoline over the weekend, the lowest price i found was a dollar 99 per gallon.
6:17 pm
even with the oil, there is a benefit from having a refinery down the road. but, houston is a car dependent city. 94.4 percent of our households have a corporate each household has at least 1.8 car. i think my wife and i share five cars in different locations. after hurricane harvey hit nearly a million cars will be replaced in houston metro area. with a 30 to 40 percent will be new vehicles. standards are more important than ever when it comes to helping the air quality in houston. one of the things i am concerned about, the lower market penetration for electric vehicles. anywhere except in california. we have some in houston. but you are not going to drive from houston to san antonio,
6:18 pm
199 miles on electric car that may not you know, you have to sit and let it charge up for a few hours when you get there. so, how has the low price of gas effective purchasing habits among consumers when they come to fuel economy? >> so, in a profound way. so, the average age of a car is 11 years old. the engine, there are two factors. if you have a camaro for a camaro or a civic for a civic, over 11 years of a 25 percent increase of economy on average. you have a combination of two facts. what is the improvement of the engine and the second is the lower price of gas. the combination of the two is made either -- the two factors,
6:19 pm
the starkness of the improvement and low price of combined impact the purulent application of the fleet nationwide in 2017 is.5. if you look at the numbers of gas in 2008 it was 97.6 of the marketplace. in 2017 is less than a point higher. and we are at a very slow uptake in terms of the alternative powertrains. at some point it may take off but we are not there yet. >> people will typically vote with their pocketbook. but you are right. all of us have different cars. again, i like big trucks and so in texas, i bought a tahoe in 2006. i cannot get better than 16 miles per gallon. but the new tahoe i bought in
6:20 pm
2016, we are getting 24 miles per gallon. at certain times. and so, you are right. people will vote with their pocketbook. and unless you can have a product that -- followed up, were there any models of vehicles from the same year the equally priced hybrid version of the vehicle so that it outsold the nonhybrid version? >> i am not fully aware of the marketplace to that degree. there are examples where the hybrid has been priced at the same level as the conventional engine and people still choose the conventional engine. >> i can think of one particular example. the lincoln had a hybrid and a nonhybrid, the identical price. the customer has a choice. 70 percent chose the nonhybrid. 30 percent chose the hybrid. same cost.
6:21 pm
>> they have penetration in california, half a point or the rest of the country. mr. cooke, regarding the proposed legislation, we know the full effect of the legislation while the epa midterm review is still not completed. >> no. it is difficult to say. all we know is that in the short term it set up for long-term failure. >> well, think you, mr. chairman for the time. i guess i am done. thank you. >> thank you. time is expired. see no further members to ask questions i would like to thank our witnesses were being here today. before we conclude our like to include the following documents to be submitted by unanimous consent for the role. >> we have a letter from the
6:22 pm
motor and equipment manufacturers association. i think it has been viewed by the minority. and without objection it is accepted. and i remind members that they have 10 business days to submit additional questions for the record. i asked that witnesses submit the response within 10 business days on receipt of questions without objection, the subcommittee is adjourned. [inaudible conversations]
6:23 pm
[inaudible conversations] it's. [inaudible conversations] tonight on c-span2.
6:24 pm
booktv in prime time with interviews with a number of nonfiction authors. we start at 8 pm eastern with the parents of trayvon martin. on their son's life and death and their book, rest in power. then, milo yiannopoulos in his book, dangerous. after that, arizona senator, jeff flake on his views on politics today and his book, conscience of a conservative. also, harvard professor, danielle allen, examines mass incarceration in her book. and we close with former fox news host, gretchen carlson on sexual harassment and her book, the fierce. booktv in prime time tonight on c-span2 starting at 8 pm eastern. >> tonight on c-span, the
6:25 pm
communicators. looking at business trends in the technology world. >> in your book, it's about a 20/40 scenario that and you say in there that google is not going to be that big company that everybody talks about. >> there are always things that rise and fall. we have companies in the 2000 where half of the internet traffic was still through aol. it is not nearly as important as it was at its peak. and that is also the story of business owners in the past two centuries. companies rise and fall, industries rise and fall, cities rise and fall. there is a natural evolution of things. it is hard to predict but some will be new brands like a google or a facebook. just need to make sure that we level the same field. their entrepreneurs building great new companies everywhere.
6:26 pm
not just in a few places. the last year, almost 80 percent of capital into just three states. california, new york and massachusetts. 47 states, just over 20 percent of venture capital. need to figure out ways to support entrepreneurs everywhere. we saw that in the recent election. a lot of people were saying basically, i feel left out or left behind by globalization and digitization. need to make sure we have a more inclusive innovation economy and are really backing startups that are creating jobs everywhere. not just in a few places. >> when i read that statistics about 75 percent going to california, massachusetts and new york. i was surprised that washington state would not included in there. then you have another stat which is only 15 percent of venture capital went to the red states. 30 states that voted for donald trump. >> yeah. what we are essentially doing is backing entrepreneurs in
6:27 pm
places like san francisco or new york and boston. they are doing interesting, innovative and other things. some of the disruption is destroying jobs in other parts of the country. that will accelerate in the next 10 or 20 years with artificial intelligence and robotics and driverless cars and trucks and things like that. >> the communicators, on business trends in the technology world tonight on our companion network, c-span. at 8 pm eastern. >> this c-span bus tour continues is 50 capitals tour in january stopping in raleigh, columbia, atlanta and montgomery. they will speak with state officials during the live washington journal program. follow the tour and join us on january 16 at 9:30 am eastern. for our stop in raleigh, north carolina. our washington journal guest is north carolina attorney general, josh stein.


info Stream Only

Uploaded by TV Archive on