Press Briefing by Secretary of Transportation Ray LaHood and Environmental Protection Agency Administrator Lisa Jackson

Ray LaHood
Lisa Jackson
September 15, 2009

James S. Brady Press Briefing Room

12:09 P.M. EDT

MR. EARNEST: Good afternoon, everybody. I appreciate everybody being here on relatively short notice. We're going to have a quick briefing today to talk about an announcement that the President actually originally made in his remarks in Youngstown, Ohio, today about some national standards related to fuel efficiency and emissions for vehicles.

So obviously joining with me today is EPA Administrator Lisa Jackson and Secretary LaHood from the Department of Transportation. So they'll each make some opening remarks, and then we'll open it up for questions after that.

Administrator Jackson.

ADMINISTRATOR JACKSON: Hello, everyone. First, hello to Secretary LaHood and his team, and to my own team from the EPA.

In May of this year, we met here with President Obama, automakers, autoworkers, governors from across the country, and others to announce a historic agreement about the future of our automobile industry. That announcement was also a directive to get to work, and we're here today to announce the next step in fulfilling the promise of that historic agreement.

Today, EPA and NHTSA are proposing a new national program to reduce greenhouse gas emissions and significantly improve fuel economy from cars, SUVs and small trucks. This marks a significant advance in our work to protect health in the environment, and move our nation into the sustainable, energy-efficient economy of the future.

The groundbreaking standards require an average fuel economy of 35.5 miles per gallon in the year 2016. That standard will reduce oil consumption by an estimated 1.8 billion barrels. It will prevent greenhouse gas emissions of approximately 950 million metric tons, and at the same time save consumers more than $3,000 in fuel costs.

This proposal emerges from an unprecedented coalition, one formed of diverse groups with a range of different and often competing interests. Under President Obama's leadership, we brought together people who, in many cases, had spent the previous decade at odds with each other over this very issue. We sought, and discovered common ground, and we built a path forward that is win-win for our health, for our environment, and for our economy.

Automakers will be able to build a single national fleet that satisfies requirements under both federal programs and the standards of California and other states. That ensures that the car of the future will be built by American workers right here in the United States.

Consumers will be able to keep their money in their pockets, put less pollution in the air, and help reduce a dependence on imported oil that sends billions of dollars out of our economy every year. Overall, consumers would save more than $3,000 in fuel costs over the lifetime of a model year 2016 vehicle. The majority of you as consumers would start seeing immediate savings of roughly $130 to $160 a year from lower fuel costs. And the new standards will conserve 1.8 billion barrels of oil, significantly reducing our dependence on foreign fuel. That will help protect us from oil price spikes that shook our economy last summer.

Along with more money in their pockets, consumers will also have a stronger, more stable economy. And every American will benefit from having less pollution in the air, especially our youngest Americans who are more vulnerable to smog and other pollution in the air they breathe. And over the long term, they are the ones who will face the effects of global climate change.

Emission reductions from this program will be equivalent to taking 42 million cars off the road. I am very proud to note that this partnership of workers, American automakers, government officials, and others have come together to establish the nation's first ever national greenhouse gas standards. And I'm glad that we can all take credit for this historic step forward in confronting global climate change. And it serves as powerful evidence that we don't have to choose between our economy and our environment.

The program is designed to ensure a cleaner, more sustainable transportation sector for America. The new standards are aggressive and achievable, and ensure that consumers have a full range of vehicle choices. We're also factoring in necessary flexibilities and lead times to allow for technology improvements and cost reductions without compromising overall environmental and fuel economy objectives. That all translates into tremendous benefits for the American people.

So I'm now happy to introduce our partner in this effort, Secretary of Transportation Ray LaHood.

SECRETARY LaHOOD: Well, this is truly a green letter day for President Obama's administration. I am delighted to join Administrator Jackson in announcing our joint action to improve energy security. The program we're proposing today would bring our nation a step closer to a future where the vehicles we drive actually help us to solve our energy and environmental challenges, rather than contribute to them.

Economically and socially, we cannot continue down a path where the United States is so dependent on oil. It's time for us to break away and take control of our own destiny. That's exactly what we propose to do today -- putting millions more fuel-efficient cars, SUVs and small trucks on the road is a huge step forward. As Administrator Jackson said, consumers would reap the benefits by spending less on fuel. And we'd all enjoy cleaner air and a healthier environment, thanks to a significant reduction in pollution and greenhouse gas emissions. This move would also unleash a new era for the automobile industry.

To meet the proposed new fuel-efficiency standard, auto manufacturers are likely to introduce all sorts of innovations, such as new kinds of transmissions and tires, new stop-start technologies, and more efficient air-conditioning systems. We're confident that this program when finalized will open the door to more widespread use of advanced hybrid vehicles, clean diesel engines, and other alternatives to traditional gas-powered engines.

I'm proud that the Department of Transportation is a part of this productive and historic partnership involving the administration, the automobile industry and other stakeholders who care deeply about energy security, the environment, and the future of the country. Together we're going to make America cleaner and greener, and usher in a whole new century of automobile innovation and manufacturing.

Thank you.

MR. EARNEST: We'll open it up to a couple of questions.

Q: I'm a little confused, because you talk about $3,000 over the lifetime of a car, but then somebody doing -- saving $160 a year. So if you could just explain the numbers a little. Thanks.

ADMINISTRATOR JACKSON: Sure. The $3,000 is for someone who buys a model year 2016 car. So that's looking into the future, knowing what the standards will be in 2016 and saying, what will you save because of the increased gas mileage over what you have available to buy today.

The other number, the $160 is the estimate of savings on average for the American consumer, starting with model year 2012, and realizing that, of course, not everyone will go out -- as much as we would like -- and buy a new car on the first day of that model year. So this will phase in over time.

Q: How soon would automakers have to comply with this? This is -- 2012 is the first models that you would be 35 miles to the gallon, is that correct?

SECRETARY LaHood: Twenty -- 25 in 2012 and 35 in 2016.

Q: It's been quite a few months since the President laid out sort of broad strokes and made the proposal you're putting out with some more detail now. During that period two automakers have filed for bankruptcy. Has there been any consideration given -- or how much consideration has been given during that period to the fact of the cost impact this might have on those ailing automakers?

SECRETARY LaHOOD: Well, I would note since we were involved with it, in less than 30 days automobile manufacturers sold 700,000 cars in the United States. Ford has called back workers to begin building new automobiles. GM has called back workers to build new automobiles. I think the automobile industry was thrown a lifeline with the Clunkers program.

And when you sell 700,000 cars in less than 30 days that means that new cars need to be built. And we've worked long and hard with our friends at EPA to get where we're at today. And we also worked with the automobile manufacturers through the Clunkers program to make sure they could sell cars.

Q: What do you say about the fact that this regulation will grant smaller automakers a less stringent stance to meet in the first few years of the program?

ADMINISTRATOR JACKSON: You know, this regulation -- one of the reasons we're so proud and one of the reasons we worked so hard is that it melds the best of the authorities that NHTSA already has and that EPA foresees possibly having under the Clean Air Act. And in doing that, we have to recognize that, yes, smaller manufacturers are given flexibility for 25 percent of their fleet over the years, up until 2016, to be slightly less fuel-efficient than the overall standard. That was an effort to get them to do something. And that means the other 75 percent of their fleet are going to be brought up to standard; otherwise they could potentially have not made any changes at all, because NHTSA rules do allow them to simply pay a penalty, which is more economical in some ways because they don't sell as many automobiles.

So we recognize that we had to give a little bit. The good news is that by 2016 we will have caught up and all autos sold in the country are going to have to meet this.

Q: Which cars that are currently sold in the U.S. meet the 2016 standards? And this might already be out, but I don't recall -- can you break out -- there's an average 35.5 standard, but how will that apply to small cars versus SUVs and others?

SECRETARY LaHOOD: We'll be happy to provide that to you. I mean, I don't have that with me here today, but we'll happy to get it to you.

Q: Do you anticipate this would lead to fewer SUVs and light trucks proportionally that are driven by Americans? Do you think Americans --

SECRETARY LaHOOD: Well, you know, this is the standard across trucks and automobiles. So I think we'll wait and see. I mean, time will tell. I don't know that anyone knows the answer to that at this point.

Q: How do you respond to critics that say when gas prices stay low that consumers aren't going to buy these more fuel-efficient cars? And would the administration look at any incentives to get to -- such as a rebate system or a long-term gas tax increase to get consumers to buy these cars?

SECRETARY LaHOOD: Well, look, I don't know anybody who thinks that oil prices and gasoline are going to stay low -- particularly by 2016. We know that gasoline per gallon will be higher in 2016 than it is today. And we also know that fuel-efficient automobiles are wildly popular right now with people. And I think that people are -- look, in the different modes that we deal with, I mean, people are tired of paying high price for a gallon of gasoline. And it's not going to go down either by 2012 or 2016.

ADMINISTRATOR JACKSON: One of the things the President made clear is that this program as we developed our rules together to preserve Americans' ability to choose a car -- a vehicle, I should say -- that suits their needs. And certainly there are Americans whose needs are going to vary, depending on what they do, where they work, family size -- all those things.

The good news about this program is that it gives regulatory certainty, which is always something that business asks us for. But it also gives them the ability to make changes over time.

And I'm with the Secretary. I don't think we know right now how cars will change in their entirety. What we've said is, here is the standard you have to meet. Go ahead and make a product that people want to buy that meets their needs, and that's what car companies do best -- or hopefully should do best.

Q: Would the administration look at some sort of incentive on the consumer side?

SECRETARY LaHOOD: I think what we want to do is implement these standards and see how they work, and then look at what the price of a gallon of gasoline is.

Q: You said that the Cash for Clunkers program threw out a lifeline to -- a lifeline for many dealerships. What's the status of the repayment for the Cash for Clunkers program?

SECRETARY LaHOOD: We have paid out $2.5 billion as of today. We have 5,000 people processing the remaining applications. All dealers will be paid by or before the end of September; probably before. We're down to the last applications that are deficient, and we want to work with the dealers to make sure that their applications are correct, so we can pay them.

Q: So some dealers have been saying that they wish they never got involved in the program. Some dealers have said that they put out as much as a half a million dollars to front this program, when the money had not come in. And you're saying it's been a lifeline. How is it a lifeline when they --

SECRETARY LaHOOD: This is a wildly popular program. Nowhere in the history of any stimulus opportunity -- you look at any stimulus program that's been enacted since I've been a part of the President Obama team -- 700,000 cars sold in less than 30 days. So you go ask any salesman in the showroom if they sold a car in January, February, or March, they'll tell you absolutely not. Some showrooms had to close. You ask people who run scrap yards, they have, now, vehicles that they can sell -- used tires, used batteries, oil pumps, water pumps. You go to any credit union or bank that financed these -- there's a lot of loans that were made that would have never been made. And then ask state and local government, who collected sales tax on the sale of this -- look, this is a win-win-win-win for our economy, for the automobile industry, for the little people who work in the industry -- who sell cars, who are mechanics, who practically were out of work. And every dealer will be paid on or before the end of September -- $3 billion.

Q: Do you think the administration should do it again, considering you're saying it's a win-win-win?

SECRETARY LaHOOD: You know what, I'm going to leave that up to Congress.

Q: This is a question for Administrator Jackson. You mentioned the Clean Air Act authority, and you've been sending over some preliminary work over to OMB regarding Clean Air Act carbon regulations, including for PSD. Are you laying the groundwork for Clean Air Act's carbon regulations throughout the economy, should Congress not act on climate change legislation?

ADMINISTRATOR JACKSON: I prefer to frame it as that EPA will continue to do its job, which is to respond to the now two-plus-year-old Supreme Court ruling that EPA needed to make determinations about whether or not the Clean Air Act authorities applied to greenhouse gases. And that's based on whether or not greenhouse gases endanger public health and welfare.

I think it is fair to say that today's announcement -- which is about automobiles, and I think is path-breaking -- if you had told me a year ago that we would get to this point, I don't think anyone would have laid money on it. But not to take away from it, but that it is the beginning of regulations that we should expect EPA to continue to do its job with respect to --

Q: If Congress doesn't come through, though, on some sort of climate legislation, would you be ready to pull the trigger using the Clean Air Act with some of the work that you're doing right now?

ADMINISTRATOR JACKSON: I have said before that I actually hope that doesn't come to pass. I believe very strongly that legislation is the preferable route. It allows for a comprehensive economy-wide discussion of the issues that are going to make for a successful program. That being said, the Clean Air Act is a strong and extraordinarily successful piece of legislation. It has made huge differences in air quality in our country.

And we have an obligation under the law, based on the Supreme Court ruling, to continue to do our job. And that is what we will do. I have also said that I believe strongly that that job can be done in a way that's, step one, that's reasonable, that complies with all administrative processes.

MR. EARNEST: We have time for a couple more. Yes, sir.

Q: Following up on that last question, some of these regulations on factories and buildings and so on, need to be in place when the car rules are finalized. Are you going to propose those in concert with this, or some time in the next few days?

ADMINISTRATOR JACKSON: I'm sorry, I don't quite get the question.

Q: The PSD rules and those things -- are you going to propose those in the next couple days, or perhaps later today? (Laughter.)

ADMINISTRATOR JACKSON: I can only make the news to say that unless something drastic happens, nothing more will happen than this historic announcement today.

Q: You won't be back here at 4:00 p.m.? (Laughter.)

ADMINISTRATOR JACKSON: But I think it is not a secret that there are rules that we have worked on that we are working now with the White House through a review process on. And so I have no announcement to make with respect to any additional rules today.

Q: And one other question. This proposal doesn't address the growth in vehicle miles traveled. Does the administration have policies aimed at that?

ADMINISTRATOR JACKSON: Maybe you want to talk a little bit about the --

SECRETARY LaHOOD: I don't want to get off message.

ADMINISTRATOR JACKSON: Okay, never mind. (Laughter.)

Q: Any estimate on what happens with fatalities, highway fatalities under this rule? Do they go up?

SECRETARY LaHOOD: Well, look, we've really -- safety is the number-one priority at DOT, okay -- trains, planes, and automobiles. That's what we think about every day. When we get up every day, we think about safety.

I think between our two departments, we have really pushed the automobile industry -- by the way, every one of them was represented here by their CEO when the President made his announcement on these standards -- and we're going to push them very hard on safety. Safety has to be uppermost in the minds of people who build any kind of a vehicle that people are going to ride in, whether it's a train, plane, or automobile. And so we're going to push the industry on this. It's a priority.

Q: But as you make vehicles lighter to save fuel, sometimes that means fatalities go up, and you often estimate that in your --

SECRETARY LaHOOD: You know, it's going to be up to the automobile manufacturers to decide the weight and how they're going to meet these standards, and I guarantee you, they're going to be concerned about safety. They want to build cars that are safe because that's one of the things that people will look at when they buy an automobile. And we're going to push them on that also.

MR. EARNEST: Thanks, everybody.