ANALYSIS: Fuel economy rulemaking declares destination with no roadmap

By Jami Jones, senior editor | Wednesday, August 10, 2011

The fanfare surrounding the “first ever” fuel economy standards for heavy-duty trucks clouded some very significant shortcomings in the final rule – details of the individual mandates, cheaper solutions and the real cost.

The Obama administration met on Tuesday, Aug. 9, with truck original equipment manufacturers, fleets, and environmental groups to unveil a mandated 23 percent reduction in fuel consumption by heavy-duty trucks.

The “publication preamble and final rule” were released to the public shortly after the meeting concluded.

The regulation paints heavy-duty trucks as the pigpens of the highways and establishes the most stringent standard on heavy-duty trucks, giving pickups and vocational trucks much lower fuel consumption thresholds to meet at 15 percent and 9 percent respectively.

The Owner-Operator Independent Drivers Association leadership says the administration’s announcement today for greenhouse gas emissions standards for heavy-duty trucks is a flawed, one-size-fits-all rule. The new rule ignores input from small-business trucking, overlooks less expensive options to achieve EPA goals of reduced emissions, and will ultimately increase new truck costs.

“By totally ignoring the impact on small-business trucking, the EPA has demonstrated yet another example of our wretchedly broken regulatory process,” said Joe Rajkovacz, Director of Regulatory Affairs for OOIDA. “Congress should take action when they return in September to rein in the bureaucracy and push forward regulatory reform legislation that has already been introduced.”

In a backgrounder call with the press held on Monday afternoon, the added cost for complying with the regulation was estimated to be approximately $6,620 per truck. However, it should be noted that with the three-tiered emission regulations announced in 2001, the cost of compliance was estimated at $1,200 to $1,900 per truck. Yet, comparable 2011 models cost $30,000 to $40,000 more than the 2001 trucks.

Rather than burdening the industry with another round of regulations that increase the cost to small-business truckers, OOIDA’s leadership pointed to the simplest and cheapest way to reduce fuel consumption.

“They totally overlooked the most effective fuel-savings method of all,” said Rajkovacz. “Driver training, which is responsible for 35 percent of fuel economy and which costs far less than any new technology, should have been the priority.”

Despite scientific support for the idea of a driver’s role in fuel economy, EPA ignored the findings of the National Academy of Sciences and instead developed a rule that will cause many small businesses to keep and rebuild older equipment. In 2010, the academy found evidence that driver training offers potential fuel savings for the trucking sector that rivals the savings available from technology add-ons and mandates. The Academy called for consideration of this alternative before any regulation was developed.

“But EPA ignored this recommendation,” said Rajkovacz. “The new rule is just another example of big moneyed interests working with government to protect their own bottom line. Instead of standing up for all motor carriers, regardless of size, the American Trucking Associations was out in front in their support of this regulation.”

Rajkovacz added, “This rulemaking basically takes EPA’s SmartWay program and mandates participation – regardless of whether certain technologies are appropriate for a particular operation.”

The Association believes that large motor carriers use SmartWay participation in order to get compensation from shippers for appearing “green.” As a result, this rulemaking does not represent any cost increase to them.

All new trucks sold to large fleets were likely already either fully SmartWay-certified or had incorporated most of the certified technologies used under this rule. OOIDA believes that EPA is taking credit to over-sell this rulemaking based on a business activity that is already occurring within large fleets. 

Conversely, OOIDA would like congressional appropriators to seriously consider defunding EPA’s SmartWay program because the adoption of this rulemaking makes the program obsolete and a waste of taxpayer money.

In fact, when the final rule is looked at closely, it is long (958 pages) on rhetoric, but short on details of how the mandate should be accomplished.

Repeated references state that both the National Highway Traffic Safety Administration and the Environmental Protection Agency are both “finalizing” standards that the rule claims will help achieve the lofty goal of a 23 percent reduction in fuel consumption.

With that glaring lack of any sort of real detail, this final rule could easily be considered to be little more than feel-good regulation that plays to rainbows, bunnies and unicorns leaving a trail of glitter. It’s regulating a destination with no roadmap of how to get there and no regard for the unintended consequences.

“This amounts to pomp and circumstance that could cripple the American trucker if it continues to be executed in this piecemeal, disconnected fashion, that does nothing but drive up the costs of operations when simpler, cheaper means could achieve the same outcome,” Rajkovacz said.

Copyright © OOIDA

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