[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]



 
 RUNNING ON EMPTY: HOW THE OBAMA ADMINISTRATION'S GREEN ENERGY GAMBLE 
                WILL IMPACT SMALL BUSINESS AND CONSUMERS

=======================================================================


                                HEARING

                               before the

                  SUBCOMMITTEE ON REGULATORY AFFAIRS,

               STIMULUS OVERSIGHT AND GOVERNMENT SPENDING

                                 of the

                         COMMITTEE ON OVERSIGHT

                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 12, 2011

                               __________

                           Serial No. 112-87

                               __________

Printed for the use of the Committee on Oversight and Government Reform


         Available via the World Wide Web: http://www.fdsys.gov
                      http://www.house.gov/reform





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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                 DARRELL E. ISSA, California, Chairman
DAN BURTON, Indiana                  ELIJAH E. CUMMINGS, Maryland, 
JOHN L. MICA, Florida                    Ranking Minority Member
TODD RUSSELL PLATTS, Pennsylvania    EDOLPHUS TOWNS, New York
MICHAEL R. TURNER, Ohio              CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of 
JIM JORDAN, Ohio                         Columbia
JASON CHAFFETZ, Utah                 DENNIS J. KUCINICH, Ohio
CONNIE MACK, Florida                 JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
ANN MARIE BUERKLE, New York          GERALD E. CONNOLLY, Virginia
PAUL A. GOSAR, Arizona               MIKE QUIGLEY, Illinois
RAUL R. LABRADOR, Idaho              DANNY K. DAVIS, Illinois
PATRICK MEEHAN, Pennsylvania         BRUCE L. BRALEY, Iowa
SCOTT DesJARLAIS, Tennessee          PETER WELCH, Vermont
JOE WALSH, Illinois                  JOHN A. YARMUTH, Kentucky
TREY GOWDY, South Carolina           CHRISTOPHER S. MURPHY, Connecticut
DENNIS A. ROSS, Florida              JACKIE SPEIER, California
FRANK C. GUINTA, New Hampshire
BLAKE FARENTHOLD, Texas
MIKE KELLY, Pennsylvania

                   Lawrence J. Brady, Staff Director
                John D. Cuaderes, Deputy Staff Director
                     Robert Borden, General Counsel
                       Linda A. Good, Chief Clerk
                 David Rapallo, Minority Staff Director

 Subcommittee on Regulatory Affairs, Stimulus Oversight and Government 
                                Spending

                       JIM JORDAN, Ohio, Chairman
ANN MARIE BUERKLE, New York, Vice    DENNIS J. KUCINICH, Ohio, Ranking 
    Chairwoman                           Minority Member
CONNIE MACK, Florida                 JIM COOPER, Tennessee
RAUL R. LABRADOR, Idaho              JACKIE SPEIER, California
SCOTT DesJARLAIS, Tennessee          BRUCE L. BRALEY, Iowa
FRANK C. GUINTA, New Hampshire
MIKE KELLY, Pennsylvania


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on October 12, 2011.................................     1
Statement of:
    Anwyl, Jeremy, CEO, Edmunds.com; Marlo Lewis, Ph.D., senior 
      fellow, Competitive Enterprise Institute; Roland Hwang, 
      Transportation Program Director, Natural Resources Defense 
      Council; and Scott Grenerth, independent trucker, owner-
      operator, Independent Driver's Association.................     7
        Anwyl, Jeremy............................................     7
        Grenerth, Scott..........................................    61
        Hwang, Roland............................................    37
        Lewis, Marlo, Ph.D.......................................    16
    Strickland, David, Administrator, National Highway Traffic 
      Safety Administration; Gina McCarthy, Assistant 
      Administrator for the Office of Air and Radiation, 
      Environmental Protection Agency, accompanied by Margo Oge, 
      Director of the Office of Transportation and Air Quality, 
      Environmental Protection Agency............................   101
        McCarthy, Gina...........................................   108
        Strickland, David........................................   101
Letters, statements, etc., submitted for the record by:
    Anwyl, Jeremy, CEO, Edmunds.com:
        Information concerning academic research.................    98
        Prepared statement of....................................    10
    Buerkle, Hon. Ann Marie, a Representative in Congress from 
      the State of New York, letter dated May 16, 2011...........   122
    Cummings, Hon. Elijah E., a Representative in Congress from 
      the State of Maryland, prepared statement of...............     5
    Grenerth, Scott, independent trucker, owner-operator, 
      Independent Driver's Association, prepared statement of....    63
    Hwang, Roland, Transportation Program Director, Natural 
      Resources Defense Council, prepared statement of...........    39
    Kucinich, Hon. Dennis J., a Representative in Congress from 
      the State of Ohio, prepared statement of...................    90
    Lewis, Marlo, Ph.D., senior fellow, Competitive Enterprise 
      Institute, prepared statement of...........................    18
    McCarthy, Gina, Assistant Administrator for the Office of Air 
      and Radiation, Environmental Protection Agency, prepared 
      statement of...............................................   110
    Strickland, David, Administrator, National Highway Traffic 
      Safety Administration, prepared statement of...............   104


 RUNNING ON EMPTY: HOW THE OBAMA ADMINISTRATION'S GREEN ENERGY GAMBLE 
                WILL IMPACT SMALL BUSINESS AND CONSUMERS

                              ----------                              


                      WEDNESDAY, OCTOBER 12, 2011

                  House of Representatives,
      Subcommittee on Regulatory Affairs, Stimulus 
                 Oversight and Government Spending,
              Committee on Oversight and Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10 a.m., in 
room 2247, Rayburn House Office Building, Hon. Jim Jordan 
(chairman of the subcommittee) presiding.
    Present: Representatives Jordan, Buerkle, Labrador, Guinta, 
Kelly, Issa (ex officio), Kucinich, Speier, and Cummings (ex 
officio).
    Staff present: Michael R. Bebeau, assistant clerk; Molly 
Boyl, parliamentarian; David Brewer, counsel; Tyler Grimm, 
professional staff member; Christopher Hixon, deputy chief 
counsel; Kristina Moore, senior counsel; Sharon Meredith Utz, 
research analyst; Krista Boyd, Claire Coleman, minority 
counsels; Ashley Etienne, minority director of communications; 
Devon Hill, minority assistant; Jennifer Hoffman, minority 
press secretary; and Suzanne Sachsman Grooms, minority chief 
counsel.
    Mr. Jordan. All right, the subcommittee will come to order, 
do opening statements. I want to welcome our witnesses or 
panelists and guests.
    The subcommittee convenes this morning to continue with the 
investigation into the process by which the Obama 
administration set fuel economy standards for cars and trucks, 
and the impact these standards will have on small businesses 
and consumers.
    On July 29, 2011, President Obama announced his 
administration had come to an agreement with the State of 
California, labor unions, and several major auto manufacturers 
on increased corporate average fuel economy standards for 2017 
through 2025. Previously, the administration enacted fuel 
economy standards for light-duty cars and trucks from the 2012 
to 2016 time line and for heavy-duty trucks from 2014 to 2018.
    In announcing the latest version of these standards, the 
President boasted that the agreement had been reached ``without 
Congress.'' Based on this statement and other evidence, it 
appears that the President has forgotten that there are in fact 
three separate, but equal, branches of Government, and it is 
Congress that writes the law. In addition to forgetting about 
Congress, the President also forgot about his pledge to be the 
most transparent president in history. It appears that each of 
these standards were set based on closed-door negotiations with 
select stakeholders who sometimes were awarded with billions in 
Federal grants or loans or, in the case of a few, a generous 
taxpayer bailout.
    Despite the President's expressed desire to craft 
regulations in a way that is sensitive to their impact on job 
creation, the President's staff never bothered to consult with 
consumers or the small businesses that will be impacted by 
these very regulations. While the administration has argued 
that a future notice and comment rulemaking will cure this 
defect, there is reason to believe that such a process will be 
merely a pro forma exercise and that the voice of the consumers 
and small businesses will never be heard because the critical 
elements of the regulation are already set in stone.
    What is more, these new regulations do not come cheap. The 
2012 to 2016 standards are expected to cost manufacturers $50 
billion in compliance costs. The 2017 to 2025 standards may 
well cost three times that amount, $150 billion. Truckers can 
also expect to pay a minimum of $6,000 more per truck starting 
in just 2 years, and many argue that the estimate is at the low 
end.
    Because of these concerns, Chairman Issa has sent detailed 
letters to the White House and the agencies asking the 
administration to reveal the process used to determine the 
standards and to be transparent with the public on the impact 
these higher fuel economy standards will have on future cars 
and trucks. We look forward to reviewing the administration's 
response.
    In addition to these procedural concerns, today's hearing 
will focus on the impact these fuel economy standards are 
expected to have on consumer choice and the safety of the 
vehicles. The committee wants to know how much these 
regulations will cost and how many consumers will be priced out 
of the new car market. If consumers can't afford to purchase 
new vehicles, what will be the impact on the many automobile 
dealerships that depend on new car sales for their very 
survival.
    It appears that the administration is simply substituting 
its bureaucratic judgment for the independent judgment of the 
marketplace. When Government substitutes its judgment for the 
private market, the result is never good. Most likely, these 
standards will force the auto industry to limit consumer choice 
and manufacture products that Americans may not want or simply 
cannot afford.
    In the case of the trucking industry, we want to know if 
the heavy-duty fuel economy standards are necessary and, if so, 
how they will impact the livelihood of independent truckers. It 
appears as though the administration's heavy-duty truck 
standards will have dire consequences for independent truckers, 
who are the backbone of American commerce. Independent truckers 
did not have a seat at the table during the administration's 
negotiations, but these negotiations now threaten to force them 
off the road.
    We also want to know if NHTSA has a handle on how many 
people may lose their life or suffer severe injury as a result 
of these standards. In the case of light-duty vehicles, these 
standards will force Americans to drive lighter weight 
vehicles. This has significant implications for driver safety. 
Moreover, if the heavy-duty trucking regulation forces 
independent owner-operators to retire, it is possible that less 
experienced drivers will take their place. This turnover could 
have severe implications for highway safety as well.
    Regrettably, we may never know the full truth about how the 
2009 standards were set, because they were the result of closed 
door negotiations where, according to the California Air 
Resources Board Chairman Mary Nichols, participants took a 
``vow of silence'' and took great pains to ``put nothing in 
writing ever.''
    The committee wanted to ask Ms. Nichols what exactly she 
meant by that statement but, regrettably, she has refused to 
appear before this panel. The committee also wanted to ask Ms. 
Nichols why her State is in the business of setting fuel 
economy standards at all, in light of the explicit 
congressional preemption of State action on matters relating to 
fuel economy standards. In my opinion, her absence today 
crystalizes why the State of California should not be part of 
this rulemaking process. Quite simply, CARB is unaccountable 
and unresponsive to the needs of the Nation and should not be 
in the business of establishing Federal law.
    With these considerations in mind, we look forward to 
hearing from today's witnesses.
    With that, I will yield to the ranking member of the full 
committee, the gentleman from Maryland, is now recognized for 5 
minutes.
    Mr. Cummings. Thank you, Mr. Chairman.
    I would like to welcome Administrator Strickland, Assistant 
Administrator McCarthy, and Director Oge for joining us today 
to discuss the recently announced corporate average fuel 
economy and greenhouse gas emission standards for automobiles 
for models year 2017 to 2025.
    I am pleased that the Obama administration is moving 
forward on fuel economy standards that will decrease our 
dependence on foreign oil, improve vehicle value for consumers, 
our constituents, and improve air quality across our Nation.
    Despite what some may claim, the standards proposed by the 
Obama administration are not grabs from thin air. In 2007, 
President Bush signed into law the Energy Independence and 
Security Act, which set a national standard of 35 miles per 
gallon by 2020. President Bush praised this legislation, 
calling it, ``a major step toward reducing our dependence on 
oil; confronting global climate change, expanding the 
production of renewable fuels; and giving future generations of 
our country a Nation that is stronger, cleaner, and more 
secure.''
    Now, just 4 years later the majority has arrived at the 
puzzling conclusion that improving energy efficiency is not in 
our national interest. Today's hearing is entitled Running on 
Empty, which is a misguided criticism of fuel efficiency 
standards supported by the industry, consumers, and the 
administration. Frankly, I have a hard time understanding what 
the majority's problem is with the fuel efficiency standards, 
or whose interests they are representing in opposing them.
    I also understand that the majority is concerned that the 
administration has been inappropriately colluding with 
stakeholders. This is also a strange claim considering the 
frequent complaints from the other side about the 
administration seeking too little input from industry when 
developing regulations.
    While the administration has worked out a proposal that 
automakers support, as you will hear today, it fully intends to 
go through the formal rulemaking process and comply with the 
requirements of the Administrative Procedures Act.
    The new standards are critical to ensuring that consumers 
are getting the most for their money. According to the Union of 
Concerned Scientists, the new standards are expected to save 
average drivers, our constituents, $3,500 over the lifetime of 
their vehicles, after factoring in the cost of new fuel 
technology. In recent months, several of the top automakers 
have reported that their customers are increasingly choosing 
fuel-efficient vehicles over the less efficient products. We 
can certainly understand that in these recessionary times.
    The new standards also will help create new jobs. Serus 
estimates that the standards could create as many as 8,400 new 
jobs in Maryland, my State, and 500,000 jobs nationwide by 
2030.
    While there undoubtedly will be some challenges to meeting 
these standards, the substantial buy-in from industry indicates 
that they are achievable and ultimately will benefit consumers 
and the U.S. auto industry as a whole.
    With that, Mr. Chairman, I yield back.
    [The prepared statement of Hon. Elijah E. Cummings 
follows:]
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    Mr. Jordan. I thank the gentleman for his statement.
    We will now introduce our first panel. We first have Mr. 
Jeremy Anwyl, who is CEO of Edmunds.com. We also have Dr. Marlo 
Lewis, senior fellow at the Competitive Enterprise Institute; 
Mr. Roland Hwang is the transportation program director at the 
Natural Resources Defense Council; and finally, Mr. Scott 
Grenerth is an independent trucker from the Fourth District of 
Ohio. So we appreciate all of you being here today.
    Pursuant to the rules, all witnesses are to be sworn in 
before they testify, so if you will please stand up and raise 
your right hands.
    [Witnesses sworn.]
    Mr. Jordan. Let the record reflect that all witnesses 
answered in the affirmative. Thank you.
    We will go now to our first witness, Mr. Anwyl.

  STATEMENTS OF JEREMY ANWYL, CEO, EDMUNDS.COM; MARLO LEWIS, 
PH.D., SENIOR FELLOW, COMPETITIVE ENTERPRISE INSTITUTE; ROLAND 
   HWANG, TRANSPORTATION PROGRAM DIRECTOR, NATURAL RESOURCES 
   DEFENSE COUNCIL; AND SCOTT GRENERTH, INDEPENDENT TRUCKER, 
        OWNER-OPERATOR INDEPENDENT DRIVER'S ASSOCIATION

                   STATEMENT OF JEREMY ANWYL

    Mr. Anwyl. Thank you, Chairman Jordan and Ranking Member 
Cummings and members of the committee. Thank you for the 
opportunity to speak today on this most important issue.
    I have been tracking the progress of the soon to be 
proposed CAFE standards with a growing level of concern. This 
concern relates to several areas, but my comments this morning 
will focus on one in particular. This is one we at Edmunds 
think about every day, and that is the automotive consumer.
    I have three points to make this morning. The first is that 
up until now consumers have been either ignored or 
misrepresented; the second is that consumers matter; and the 
third is that consumers are most definitely not on board.
    The evidence that consumers have been ignored is 
everywhere, but one of the clearest is this interim technical 
assessment prepared by EPA that listed the CAFE stakeholders. 
These included environmental groups, auto firms, labor unions, 
and others, even EV charging firms were seen as needing a seat 
at the table, but apparently not consumers.
    Consumers matter because responding to their needs is what 
drives innovation, and innovation is what should drive our 
economy. They matter because, at the end of the day, they are 
the ones who will be asked to buy and to drive the vehicles our 
Government is potentially demanding car companies build.
    Most importantly, let me emphasize the consumer is not on 
board with the proposed standards. Now, I know there has been a 
blizzard of polls showing consumers want higher mileage 
standards. My contention is these polls are worse than 
meaningless; they are in fact grossly misleading.
    Instead of polls, we should, first and foremost, be guided 
by what consumers are actually doing, by actual purchases. In 
the U.S. market, consumers have demonstrated the marked 
preference for larger vehicles, illustrated by sales as 
recently as just last month. And a particular caution exists 
around the new high-tech higher mileage vehicles that have been 
introduced. These are the very vehicles that the administration 
seems determined to mandate through the proposed CAFE 
standards. In these instances, it is not the car company that 
is not getting it; they are delivering the goods. It is the 
consumer that is not interested. And in several cases these 
cars are selling slowly, even after large tax credits have been 
offered.
    Any study of actual sales makes clear that for the vast 
majority of consumers fuel economy is simply not their primary 
motivating factor when purchasing a vehicle. This doesn't mean 
they don't care about fuel economy, just that other things are 
more important.
    Consumers decide which vehicle to buy based on a weighing 
of vehicle features and a judgment on which set of features 
best meet their needs. In other words, they make tradeoffs. 
Price and fuel economy for most consumers represent costs. 
Passenger capacity, cargo space, towing ability, and other 
things represent features. Consumers are always happy to pay 
less or save fuel, but not if it means giving up features they 
deem important. This is key.
    Edmunds can actually add a special clarity around this 
issue of consumer preferences and demand because among our many 
datasets we have a market simulation model that was developed 
working with leading academics. This simulator can be used to 
show how consumers weight various vehicle attributes in terms 
of importance. And I have actually run an analysis for this 
committee and the following are the results.
    Note that vehicle mileage accounts for only about 6 percent 
of why consumers purchased a particular vehicle. As you would 
expect, the weighting does vary amongst vehicle categories, but 
it is important to note that even in the heavily cost-sensitive 
segment of subcompacts, mileage only accounts for about 15 
percent of the purchase decision.
    There is an obvious factor that can influence these 
weightings, and that is the price of fuel. We have seen that 
when fuel prices jump there is an increase in the number of 
consumers who consider smaller vehicles and, in some cases, buy 
them. But these effects are not as dramatic as I have seen 
claimed. Further, they have been short-lived as consumers have 
shifted back to larger vehicles quickly, either because they 
grew accustomed to the higher price, fuel prices dropped, or 
maybe a little bit of both.
    Looking at the data, there is an argument that could be 
made that if fuel prices increase sufficiently, market demand 
could align with future CAFE standards, and this is an 
interesting point. But the increase, about a doubling of 
today's price, would need to be far higher than even the most 
extreme forecast deemed likely. And we should also consider the 
chance that fuel prices in the mid-term could actually be lower 
than prices seen today.
    I do have some good news. If we look back, the auto 
industry seems to have delivered the impossible: they have 
added features, increased safety, elevated performance, and 
delivered increased fuel economy, much of this even during a 
period when CAFE standards were stable. I credit mostly the 
advance of technology and expect this progress to continue. But 
if mandates trigger an escalation of prices, a reduction in 
consumer utility, or the adoption of technologies before they 
have been proven, consumers will react. This reaction could 
destabilize an industry that is a vital engine of our 
collective prosperity.
    Thank you again for the opportunity to speak and I look 
forward to your questions.
    [The prepared statement of Mr. Anwyl follows:]
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    Mr. Jordan. Thank you, Mr. Anwyl.
    Dr. Lewis.

                STATEMENT OF MARLO LEWIS, PH.D.

    Mr. Lewis. Mr. Chairman and Ranking Member Cummings, thank 
you for inviting me to testify today.
    I know of no oversight proceeding more important than 
committee Chairman Issa's investigation of the administration's 
actions to regulate greenhouse gases and fuel economy. Only 
last year Congress declined to give EPA explicit authority to 
regulate greenhouse gases when Senate leaders abandoned cap-
and-trade legislation. Recall that a key selling point for the 
Waxman-Markey cap-and-trade bill was its broad preemption of 
EPA regulation of greenhouse gases through the Clean Air Act.
    A bill introduced in 2009 authorizing EPA to do exactly 
what it is doing now, regulate greenhouse gases through the 
Clean Air Act, as it sees fit, would have been dead on arrival. 
Therefore, the notion that Congress gave EPA such expansive 
authority in 1970, almost two decades before global warming 
became a public concern and 5 years before Congress enacted its 
first fuel economy statute, defies common sense.
    In his September 30th letter to Administrator Jackson, 
Chairman Issa says that he finds EPA's actions troubling and 
inconsistent with the system of government articulated in the 
U.S. Constitution. I think he means the following. The 
Constitution seeks to ensure a system of democratic 
accountability through the separation of powers. The 
Constitution is vitiated when agencies legislate, when they 
exercise powers not delegated by Congress, when they flout 
procedural safeguards Congress has put in place.
    To obtain industry buy-in for its new career as fuel 
economy regulator, EPA pursued what might be called a 
regulatory extortion strategy. By reconsidering California's 
request for a waiver to establish its own greenhouse gas, motor 
vehicle emissions program, EPA threatened to allow State 
governments to balkanize the U.S. auto market. This flouted the 
Energy Policy Conservation Act's express prohibition against 
State laws or regulations related to fuel economy.
    Then, in negotiations culminating in the May 2009 historic 
agreement, EPA offered to remove the threat of a regulatory 
patchwork if automakers promised not to oppose EPA and 
California's new non-congressionally authorized roles as 
national fuel economy regulators.
    The negotiations, as you mentioned, Mr. Chairman, were 
conducted under a vow of silence and no notes were taken, an 
apparent violation of the Presidential Records Act. Similarly, 
the negotiations culminating in this year's historic agreement 
to raise fuel economy standards appear to violate Federal 
Advisory Committee Act standards of transparency and 
accountability.
    As Chairman Issa also notes, the fuel economy targets in 
this year's historic agreement are ``outside the scope of 
law.'' NHTSA and California plan to set fuel economy standards 
for model years 2017 to 2025, a 9-year period, but EPCA limits 
setting fuel economy standards to ``not more than five model 
years.'' The 9-year plan also conflicts with the EPCA 
requirement that NHTSA consider economic practicability when 
setting fuel economy standards. As Chairman Issa has explained, 
at the present time it is impossible for NHTSA to adequately 
consider economic practicability for fuel economy standards in 
model years 2022 to 2025 because car manufacturers themselves 
do not have product plans for those years.
    The agencies claim that EPA and California's greenhouse gas 
emission standards are harmonized and consistent with NHTSA's 
fuel economy standards, but EPA's standards do not allow 
automakers to pay fines in lieu of compliance or earn credits 
for producing flexible fuel vehicles during model years 2016 to 
2019. This means automakers face more stringent requirements 
than they would if fuel economy were administered under the 
statutory scheme Congress created.
    Fuel economy advocates may see no problem in the transfer 
of power from NHTSA to EPA and California because it produces 
policy outcomes they want. They forget an elementary civics 
lessons: the legislative process is more valuable than any 
result an administrative agency can obtain by doing an end-run 
around it. And I think Members of Congress should understand 
this better than anyone else.
    Thank you very much. I will be happy to take questions.
    [The prepared statement of Mr. Lewis follows:]
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    Mr. Jordan. Thank you, Dr. Lewis.
    Mr. Hwang.

                   STATEMENT OF ROLAND HWANG

    Mr. Hwang. Thank you, Chairman Jordan and Ranking Member 
Cummings, for the opportunity to testify today.
    My name is Ronald Hwang. I am the Transportation Program 
Director for the Natural Resources Defense Council. NRDC is a 
nonprofit organization of scientists, lawyers, and 
environmental specialists dedicated to protecting public health 
and the environment. Founded in 1970, NRDC has more than 1.3 
million members and online activists nationwide.
    President Obama's July 30th announcement of the latest 
clean car agreement builds on two other previous highly 
successful and broadly supported agreements for stronger 
pollution and fuel efficiency standards for passenger vehicles 
and commercial trucks. These three agreements exemplify how 
leadership, partnership, and compromise can solve the enormous 
environmental, economic, and energy challenges facing this 
country.
    Far from running on empty, these clean car and fuel 
efficiency standards will save Americans from emptying their 
wallets at the pump, slow the emptying of our national wealth 
for foreign oil, and cut the dangerous carbon pollution that is 
emptying our children's future.
    Over the lifetime of model year 2012 and 2025 vehicles 
covered by the first and second round of clean car standards, 
drivers will save $1.7 trillion in fuel savings, oil dependence 
will be reduced by 12 billion barrels of oil, and heat trapping 
pollution that drives global warming will be cut by 
approximately 6 billion metric tons.
    By cutting our oil dependency, the national program will 
act as a powerful economic stimulus by allowing us to keep $100 
billion annually by 2030 in the U.S. economy, money that 
otherwise would be sent overseas to Saudi Arabia, Iran, 
Venezuela, and other oil exporting countries. Drivers will have 
more money in their pockets. By 2030, net fuel savings from 
these combined standards will be equivalent to a $330 tax 
rebate for every American household. This higher level 
investment in the U.S. economy and reduced fuel bills is 
estimated to create 500,000 more jobs by 2030.
    With such overwhelming benefits, it is not surprising the 
most recent clean car agreement has strong support from a broad 
array of stakeholders; from automakers to environmentalists, 
Republicans to Democrats, consumer advocates to energy security 
advocates, business leaders to labor unions. Even an 
overwhelming 80 percent of small business owners support a 60 
mpg standard by 2025.
    One of the great success stories is the role the national 
program has played in laying the foundations for the auto 
industry's remarkable recovery. In a world of volatile but 
steadily rising oil prices, it is regulation that has played a 
crucial role in providing businesses the certainty they need to 
invest in fuel-efficient technologies needed to be competitive 
in the future.
    Compared to 2009, when the auto industry hit rock bottom, 
car sales, profits, and fuel efficiency are all on the rise. 
And one of the key reasons for why stronger standards and the 
auto industry recovery are going hand-in-hand is that with 
$3.50 gallon gasoline prices, consumers are demanding, make no 
mistake about it, fuel-efficient cars. In fact, thanks to the 
new products now on the market in anticipation of stronger 
standards, automakers like General Motors and Ford find 
themselves stepping up production and hiring new workers to 
keep up with the demand for fuel-efficient cars like the Chevy 
Cruze and Ford Focus.
    The market trend toward fuel efficiency is clear. Americans 
have fallen out of love with gas-guzzling vehicles and engines. 
Where once truck-based SUVs and V8s ruled the road, now one out 
of every two vehicles sold is a small car, small crossover, or 
a mid-sized car. And thrifty 4-cylinder vehicles are now 
America's most popular engine choice. Even picky drivers are 
choosing fuel efficiency. Six out of 10 Ford F-150 buyers are 
now choosing the more powerful and more fuel-efficient EcoBoost 
engine options, even though it costs extra.
    But perhaps the most remarkable result of the newest clean 
car agreement is what it shows about getting beyond political 
gridlock in today's America. The President, the auto companies, 
States, labor, and environmentalists have once again shown what 
it means to govern effectively and what can be accomplished by 
constructive compromise.
    Chairman Jordan, Ranking Member Cummings, and members of 
the subcommittee, the Clean Car and Clean Truck National 
Program are examples of Government at its best. The results 
speak for themselves. Upsetting this important program would 
only raise drivers' fuel bills, increase dangerous pollution, 
and make us more dependent on foreign oil.
    In view of its overwhelming benefits and overwhelming 
support, if anything, Congress should be urging the agencies to 
implement this important program sooner rather than later.
    Thank you for your attention, and I welcome your questions.
    [The prepared statement of Mr. Hwang follows:]
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    Mr. Jordan. Thank you, Mr. Hwang.
    Mr. Grenerth, you are recognized for 5 minutes.

                  STATEMENT OF SCOTT GRENERTH

    Mr. Grenerth. Thank you. Good morning, Chairman Jordan, 
Ranking Member Cummings, and members of the subcommittee. Thank 
you for inviting me here to testify.
    My name is Scott Grenerth. I have been a professional truck 
driver for more than 10 years and proud to hail from Chairman 
Jordan's home district. I am here on behalf of the Owner-
Operator Independent Drivers Association.
    OOIDA's approximately 150,000 members are small business 
professional truckers in all 50 States. I am here to talk about 
how the EPA and NHTSA heavy truck duty greenhouse gas and fuel 
efficiency rule will impact small trucking operations such as 
mine, particularly during a time when most small business 
truckers are fighting to stay afloat.
    While trucking is my career, environmental stewardship is 
my life's passion. Before trucking, I worked for many years in 
environmental education. My wife and I were married on Earth 
Day in 1995 and we both took the name Grenerth to mark our 
commitment to the planet. So you might assume that I support 
the heavy-duty truck rule. However, I am strongly opposed to 
this one-size-fits-all regulation and the mandates it places on 
trucking.
    Compared to large trucking companies, small business 
truckers and owner-operators have a very different reality when 
it comes to fuel efficiency. Simply put, with diesel at close 
to $4 a gallon, if I do not drive in a fuel-efficient manner, I 
will be driving myself out of business.
    Considering that small businesses are the vast majority of 
trucking companies, it is hard to understand why the agencies 
chose not to tap into the collective knowledge of truckers like 
me on how to improve fuel efficiency. They did not speak to a 
single truck driver, apparently taking the attitude that truck 
drivers will never improve fuel economy without regulation. 
This view was eagerly supported by large motor carriers, who 
all too often do turn to the Government to diminish competition 
from smaller carriers.
    The resulting rule mandates add-ons and truck 
specifications that work for large motor carrier operations, 
even though trucking has hundreds of thousands of different 
operating models. Despite EPA's claims, this will add new costs 
to small business truckers, negatively impacting operations, 
and could lead to reduced efficiency for some.
    For example, a colleague hauls fresh produce in a 
refrigerator box trailer for most of the year, but for a few 
months he pulls a flatbed trailer. His tractor has a roof 
fairing that improves fuel efficiency while he is hauling 
produce. When he is not using his box trailer, he removes the 
fairing because it actually decreases fuel efficiency with his 
flatbed operation. Under this new rule, removing the fairing 
and improving fuel efficiency this way will be a violation of 
Federal law.
    Truckers inspect their trucks from bumper to bumper, making 
sure that everything meets the needs of their business. 
However, truck manufacturers have stated that this rule will 
reduce operations to truckers. This puts us in a tough 
position: buy the wrong truck for my operation or buy the right 
truck and pay a $37,000 EPA penalty.
    Truckers are also forced to purchase equipment they don't 
need or want under this rule. Take heavy haul operations that 
move loads like Army tanks and massive construction equipment. 
There is no way the aerodynamics of their truck will improve 
efficiency, but they will be forced to pay for mandated add-ons 
anyway. Low rolling resistance tires which reduce traction are 
also a significant part of this rule. Am I expected to only 
drive on dry and clear roads? EPA estimates all this will add 
another $6,000 to the price of a truck; this on top of the 
$20,000 to $30,000 their previous engine emissions rules added.
    And that is the crazy thing about this new rule. EPA sees 
truckers as the reason fuel economy is down. But, in reality, 
they should look at themselves. The technology required under 
the former rules has significantly reduced fuel economy, 
forcing truckers to buy around 800 gallons more fuel every 
year. Think about how much more oil has to be refined directly 
because of EPA emission standards mandates.
    These past rules cost truckers in other ways. New trucks 
break down more often, costing drivers more money. Further, 
OOIDA has learned that truck manufacturers are charging big 
dollars for once low-cost warranties and instituting EPA 
surcharges that add another $20,000 to the price of a truck. 
Instead of a costly one-size-fits-all rule, EPA and NHTSA could 
have offered a compliance alternative focused on improved 
driver training to operate any truck one driver drives as 
efficiently as possible. Yet, they ignored that significant 
recommendation from the National Academy of Sciences in lieu of 
a rule that unquestionably will fail to achieve purported 
goals.
    Chairman Jordan and members of the subcommittee, OOIDA 
supports improved efficiency and lower emissions, but there 
must be recognition of the costs they entail and the fact that 
trucking is a diverse industry. Small business truckers are 
inherently focused on maximizing fuel efficiency because our 
business success depends upon it. Pure economics tells you that 
trucking is going to take advantage of every opportunity to 
improve fuel efficiency based on their operating needs and 
without Government mandates.
    Thank you for the opportunity to testify and I welcome your 
questions.
    [The prepared statement of Mr. Grenerth follows:]
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    Mr. Jordan. Thank you, Mr. Grenerth. We appreciate all the 
witnesses' testimony.
    We are going to start with the gentleman who understands 
this issue or has to deal with this issue on a regular basis, 
and that is the gentleman from Pennsylvania, who is a small 
business owner in the car business. Mr. Kelly is recognized for 
5 minutes.
    Mr. Kelly. Thank you, Mr. Chairman.
    Mr. Anwyl, thanks for being here today. As the chairman 
said, I think one of the other costs that we are not looking at 
is what it costs a dealer to stock these vehicles. I am a 
Chevrolet dealer, and have been when my dad started in 1953. We 
have a Chevy Volt on the lot right now; it has been there now 
for 4 weeks. We have had one person come in to look at it, just 
to see what it actually looked like.
    Now, my question, and I guess what I am trying to 
understand is, here is a car that costs $45,763. I can stock 
that car for probably a year and then have to sell it at some 
ridiculous price. Now, by the way, I just got some information 
from Chevrolet. In addition to the $7,500 tax credit, 
Pennsylvania is going to throw another $3,500 to anybody 
foolish enough to buy one of these cars, somehow giving $11,000 
of taxpayer money to buy this Volt.
    Now, when you look at this, it makes absolutely no sense. I 
can stock a Chevy Cruze, which is about a $17,500 car and turns 
every 30 to 40 days out of inventory, or I can have a Volt, 
which never turns and creates nothing for me on the lot except 
interest cost. And I am trying to understand how in the world 
we come up with these ideas that somehow, somehow, if we just 
go electric we are going to save all this money and all this 
fuel, and we are going to relieve the world of all this 
emission that is out there. It is absolutely insane that we 
continue down this path.
    A Chevy Cruze can get 36 miles per gallon on the highway. 
Now, they say on a Volt you can get 94 miles per gallon. That 
is if you go on an electric charge, right? Which I think the 
range on that, I think you can go 35 miles if you just go 
electric, okay? Which doesn't make sense for people who live in 
northwest Pennsylvania. Sometimes that is the one way just to 
your work.
    So a lot of these things that we are seeing and that are 
going on have a tremendous economic impact on the people who 
are being asked to stock them and sell them. There is no market 
for this car. I have some friends who have sold them and they 
are mostly to people who have an academic interest in it or 
municipalities that they are asking to buy these cars.
    So just from your standpoint, because you talk to a lot of 
dealers, people like me, is there any upside to any of this? We 
can get cars that I can turn every 35 to 40 days that get 
almost the same amount of miles per gallon, their emissions are 
clean. Please tell me what is the marketing strategy on this?
    And I saw where Mr. Ackerson said we need to build 200,000 
of these. I tell you what. If he builds 200,000, he is going to 
have to find somebody that can buy those cars and put them on 
their lot. If General Motors wants to ship them to me and I 
will put them on my floor plan, I will gladly store them in the 
back lot for them as long as I don't have any economic interest 
in it.
    But if you can tell me where do you see this going. I mean, 
is anybody out there, other than somebody that is good with a 
laptop but lousy with an econotop, cold tell me where in the 
heck are we going with this policy and where does this lead 
down the road? If we continue this policy, it makes no sense. 
And I can tell you as far as job creation, the guy who ordered 
that Volt in my store is no longer in that job. So it actually 
worked against him.
    And I am trying to understand. And I was told that the 
reason that that car is on our lot is that General Motors told 
him had to stock it. I said, wait, let me understand. I told 
you under no circumstances were you to order a Volt. And he 
said, yeah. And I said, so why did you order it? He said, well, 
General Motors told me. I said, is this the same General Motors 
that tried to take my Cadillac franchise from me? These are the 
people you listen to? The guy that signs your check doesn't 
have as much influence as the guy who tried to take the 
franchise?
    So if you could, tell me where is this market going? Do you 
see any market for this car at all?
    Mr. Anwyl. There is a little bit of good news. You 
mentioned it did create some traffic for you, albeit one 
person. That is something that the car companies tout, is that 
these vehicles do attract some interest, some traffic; not 
necessarily buyers.
    I think there are a couple things in what you are 
mentioning. And let me also mention the Volt is actually a very 
nice vehicle. We bought one ourselves. It is in a long-term 
fleet. We have an extended charger. People actually enjoy it. 
But the problem I think you have outlined is really twofold. 
One of them is that there are all sorts of inducements for 
people to be buying these vehicles. In California it varies; I 
think it is $2,500 plus the $7,500.
    And yet, when you look at who is buying these vehicles, and 
there are people buying them, they are at the very high end of 
the demographic scale. And there is a group in society, a group 
in the marketplace who are very passionate about alternatively 
powered vehicles, Leafs, Volts. We have an environmental editor 
who bought a Leaf with his own money and he is putting solar 
panels on his roof so that he can actually charge the vehicle 
from the sun. So this is a little extreme, but there are people 
that are very passionate about that. And for these people I 
think the Volt is a perfectly fine choice, and so is the Leaf a 
perfectly fine choice.
    The question is, though, how many people are there like 
that? And right now we are seeing people who would have bought 
that vehicle anyway, even without the tax credits, getting the 
tax credit obviously at the expense of other taxpayers, and you 
have to wonder about the wisdom of that.
    Mr. Kelly. Well, people who actually have to work within a 
budget that they are very limited to, and part of it is not 
only their housing cost and their food cost, but also their 
transportation cost and the cost for fuel, it makes absolutely 
no sense to those people. I am talking about hard-working, 
taxpaying American public that actually needs transportation to 
get back and forth to work. These are the people that cannot 
afford to buy these cars, and it makes no sense to it. It is 
not a vehicle that I would want on my car lot in northwest 
Pennsylvania.
    Thanks for weighing in on it.
    Mr. Anwyl. Sure.
    Mr. Kelly. Thank you, Mr. Chairman.
    Mr. Jordan. Thank you.
    Next, the gentlelady from California is recognized for 5 
minutes.
    Ms. Speier. Thank you, Mr. Chairman.
    First of all, to Mr. Kelly, send that Volt to California. 
It doesn't have to stay on your lot, because there is a waiting 
list in my district at my Chevrolet dealership of 6 months to 
get a Chevy Volt.
    Mr. Kelly. Would the gentlelady yield? Give me the name of 
the dealer. I will get it out there as quick as I can.
    Ms. Speier. Putnam Chevrolet. Send it to him today and I 
can guarantee you----
    Mr. Kelly. If you will pick up the transportation costs, I 
would love to do that.
    Ms. Speier. All right.
    Mr. Jordan. Bipartisan operation.
    Mr. Kelly. Thank you. Appreciate your help. We do work 
together. Thank you. [Laughter.]
    I will be right back; I am going to call the store.
    Ms. Speier. Mr. Chairman, I respect your authority as 
chairman of this committee. I realize that you can set the 
agenda, but this subcommittee has the responsibility to look at 
a number of things, probably the most important is Government 
spending. And if we spent our entire legislative agenda in this 
subcommittee on getting rid of wasteful Government spending and 
look exclusively at the $30 billion to $60 billion of 
contracting that goes on that is fraudulent, we would be doing 
a service to the public. But this hearing, with all due 
respect, is a bad fairy tale because it doesn't reflect 
reality.
    And to you, Mr. Anwyl, you said, under oath, that the 
consumer is not on board with higher mileage vehicles. I don't 
now what consumer in this country wouldn't be interested in 
getting a vehicle that gets better mileage, because they save 
money at the gas pump if they get a vehicle that gets better 
mileage.
    Now, I want to address to you the press release put out by 
Ford Motor Co. in June 2011, just a couple of months ago, 
entitled Miles Per Gallon Matters. ``Forty-two percent say fuel 
economy is key in new vehicle purchase decisions. Influence 
likely to grow.''
    The release cited the new vehicle customer study done by 
Moritz Research that has been going on since the 1970's, and 
according to this study 42 percent of those surveyed say fuel 
economy is ``extremely,'' not a little, extremely important in 
their decision to purchase a new 2011 model, and it has been a 
13 percent increase versus 10 years ago.
    So for you to say that the consumer is not on board is a 
false statement, and I want you to address the Ford Motor Co. 
press release that says 42 percent say it is extremely 
important in their new car decision.
    Mr. Anwyl. Thank you. So let me explain. And I did say that 
under oath and I do stand by that statement. The issue that we 
are dealing with is that what you are citing are surveys, and 
there are a lot of surveys out there that show that consumers, 
and the numbers are going to vary, but basically they are 
making the case that to consumers fuel economy is very 
important.
    The issue that you run into, though, either through the 
survey design or pretty much on any surveys, that surveys are 
going to create some strange results. The big one is that 
consumers tend to respond to surveys in ways that they think 
are societally acceptable. And a great example of this would be 
when you ask someone why did you pick the job that you have? 
They are going to talk about job satisfaction or making a 
difference. And yet, when you actually do a mathematical 
scientific study, you are going to find that they took the job 
because of the money, and yet nobody says that on a survey. And 
we are seeing the same thing in terms of the cars that people 
are buying.
    So when I say that they are not on board, it is not that 
they don't say nice things in surveys. What matters are the 
vehicles that they are buying, and their preference is 
overwhelmingly not for the types of vehicles that are being 
mandated by this proposed set of regulations.
    Ms. Speier. So you are basically saying that people don't 
say what they mean.
    Mr. Anwyl. Absolutely.
    Ms. Speier. So then why do we listen to any polls?
    Mr. Anwyl. That is a very good question. [Laughter.]
    I would echo that.
    Ms. Speier. But, Mr. Anwyl, you cited your own poll. So it 
sounds like you are being selective.
    Mr. Anwyl. No, no, I did not cite a poll. No, the study 
that we have done is actually a market-based study, where we 
look at the vehicles that people are buying and we blend into 
that consumer analysis, but it is fundamentally driven by the 
vehicles that they are choosing in the marketplace, not what 
they are saying when somebody calls them at dinnertime.
    Ms. Speier. All right, Mr. Hwang, how would you respond to 
that?
    Mr. Hwang. First of all, I think this discussion about the 
Chevy Volt is a good discussion to have, and I think we would 
like more Chevy Volts in California; however, the fact of the 
matter is the 54.5 mpg standard will not require vehicles like 
the Chevy Volt. General Motors is free to build such vehicles, 
but reaching 54 mpg can be done with rather conventional 
technologies.
    Furthermore, Mr. Anwyl does point out a very important 
issue, which is that we should listen to the market. So let's 
look at the marketplace. In September what we have seen is an 
increase in so-called crossover utility vehicles. Okay, these 
are not SUVs. I believe in his testimony he labeled these as 
SUVs. A true truck-based SUV market no longer exists, 
practically no longer exists; it has been cut in half since 
2005. These are the Chevy Tahoes and what you traditionally 
might think of as a Ford Explorer.
    In fact, in September a very popular vehicle, very popular 
Chevy vehicle that drove General Motors' sale growth is a 
crossover utility vehicle, a car-based, very tall station wagon 
type vehicle called the Chevy Equinox. The Chevy Equinox, the 
most fuel-efficient version you can buy, which many customers 
are choosing, achieves 25.9 miles per gallon for a crossover 
utility vehicle that replaces the Chevy Trailblazer. And the 
Chevy Trailblazer used to achieve--General Motors no longer 
builds it--17.2 miles per gallon combined cycle.
    So, therefore, customers are speaking. They are buying 
fuel-efficient vehicles, whether they are crossover utility 
vehicles, whether they are compact cars, or whether they are 
other types of vehicles.
    A recent article by Edmunds, October 6th, on Edmunds site 
talked about pickup trucks. Pickup truck sales did increase in 
September, but the title of the article was ``Incentives Bulge 
to Keep Big Pickups Moving.'' So it is not like the American 
public are flocking back to big gas guzzling vehicles. One, 
they are crossover utility vehicles, not SUVs; and, two, 
incentives, according to Edmunds, averaged for pickup trucks, 
the current incentive level is $4,281, up in April of $3,261. A 
quote from Edmunds, ``Appears market share perhaps profitable, 
perhaps not, was bought largely with increased incentives.'' 
Again, this is the pickup market.
    Mr. Jordan. Thank you.
    Before recognizing the gentlelady from New York, let me 
just be clear. Mr. Anwyl, so you are saying your poll is based 
on actual purchases versus what people may say, is that 
correct?
    Mr. Anwyl. Yes, Mr. Chairman. It is actually not a poll, 
this is a scientific study.
    Mr. Jordan. The facts are the facts. Let me ask one quick 
question. Let's assume Ms. Speier is right, that in fact 
Americans want higher miles per gallon. Then I go to the 
fundamental question: Why do we need Government to impose it? 
If that is what they want, won't the market get us there?
    Mr. Anwyl. Well, I think the three pillars under which I 
have heard supporters talk about the new CAFE standards, one of 
them is that the technology is readily available; the second is 
that it is cheap; and the third is that the consumers want it. 
And I think, to your point, in a pre-market economy you 
wouldn't need regulations to drive sales; under those 
circumstances the market would be pulling sales through for 
you.
    Mr. Jordan. Correct. Thank you.
    Now let's recognize the gentlelady from New York, Ms. 
Buerkle.
    Ms. Buerkle. Thank you, Mr. Chairman, and thank you to our 
panelists for being here today.
    Unfortunately, the gentlelady from California left. I just 
have a couple of issues with what she said. First of all, she 
mentioned we should be dealing with wasteful Government 
spending, and I think when we see $7,500 tax credits to a car 
that is questionable in the market, and trying to put the 
Government in the middle of how the market works, I think that 
is a waste of taxpayer money.
    I also want to mention about Ford and the press. I was 
going to ask her to repeat the press release that she read 
regarding Ford. Ford has a vested interest in this, and 
speaking of wasteful Government spending, the amount of money 
they received from this administration, both in grant and in 
loans, is several billions of dollars. So I think when they 
issue a press release such as that, they have a vested interest 
in this whole initiative going forward, and that is precisely 
what we are doing here this morning. We are trying to 
understand why a regulatory agency is circumventing the 
legislative process. So we all are concerned with wasteful 
Government spending, but I think we need to be clear about 
that.
    I wanted to talk to Mr. Anwyl. I have a couple questions 
for you. NRDC cites a survey, and Mr. Hwang mentioned it, the 
Small Business Majority, that says the majority of small 
businesses support fuel economy standards. The whole project, 
frankly, seems fundamentally, ideological, and clearly liberal. 
That is what was stated within the Democratic party. The Small 
Business Majority has all the hallmarks of a shadowy interest 
group, starting with a name.
    Are you familiar with this survey, the Small Business 
Majority?
    Mr. Anwyl. Yes, I have seen an overview of the study, yes.
    Ms. Buerkle. And how does that reconcile with what your 
studies have shown?
    Mr. Anwyl. Well, I think this echoes what I was talking 
about earlier. This is actually a poll, so it is not a 
scientific study. I think, as I was saying, the poll 
respondents tend to say what they think is societally 
acceptable. You will find that with every poll. The third 
thing, on this particular study, is it seems, when you look at 
how the questions were phrased, that the results were somewhat 
inevitable. I mean, I can read you the one question. This is on 
the pro-regulation side.
    Ms. Buerkle. Yes, if you would clarify that, that would be 
great.
    Mr. Anwyl. Sure. So listen to the question. It says, Should 
automakers be required to meet higher fuel efficiency standards 
because of our growing dependence on Middle East oil is a 
serious threat to our security and American car companies lost 
market share in this country because they built fuel 
inefficient vehicles?
    From a polling perspective, that is what I would call a 
highly leading question. There is almost no way to respond to 
that other than in the affirmative. So, as you would expect, 
that is what the poll did, it showed that small businesses 
favored higher standards.
    Ms. Buerkle. Now, in your testimony you mentioned that the 
consumers were left out, they weren't consulted. Can you just 
expand on that?
    Mr. Anwyl. Well, I think we have heard this morning that 
the new standards were arrived at through a process where 
secrecy was a requirement, and from the consumer perspective we 
were looking at this all along and were very troubled by that 
process. My personal belief is that government should be 
transparent, that things should be simple and should be easy to 
understand. When we contacted the EPA about the consumer point 
of view, their response was that consumers would have the 
ability to contribute during the hearing process. After the 
rules have been published, there is a process where consumers 
can comment. I wonder how much consumer comments will be 
actually taken into consideration when a deal has already been 
announced.
    Ms. Buerkle. So your position or your thought is that this 
period of time for comment isn't going to cure the defect in 
this whole process.
    Mr. Anwyl. I would find that unlikely.
    Ms. Buerkle. Dr. Lewis, would you like to expand on that?
    Mr. Lewis. Well, yes. There is a basic difference between 
the opinions that people express just in response to a question 
and the revealed preferences that they have when they are 
actually putting their money where their mouth is. So I think 
that is what my colleague's here study actually tries to 
measure, is revealed preference.
    Another point to be consider would be--and I completely 
acknowledge that a lot of people really do want to buy more 
fuel-efficient cars, and I trust the data that Mr. Hwang was 
mentioning about how many people are now buying V6s rather than 
V8s and so on, but if that is what people really want, why do 
we need a law forcing automakers to produce those cars? If the 
automakers don't provide customer satisfaction, and if the 
dealers, Mr. Kelly, don't have cars on the lot that people want 
to buy, they will be penalized in the marketplace more 
ruthlessly than any government regulator could possibly 
administer.
    So it seems to me that the only purpose that a fuel economy 
standard would serve would be to actually limit what customers 
are able to buy and what automakers are able to sell and 
produce. I mean, that is the only point of them, really, 
because if we just had a totally free market, then automakers 
would be able to cater to consumer preferences rather than 
government agency directives.
    Mr. Buerkle. Thank you, Dr. Lewis.
    My time is up, but I just want one further comment, if I 
may, Mr. Chairman. In all of this, everyone wants to drive a 
fuel-efficient car, but I had six children, my son has seven 
children, so some of these options--it isn't that I don't want 
to drive a fuel-efficient car, it is that the reality is that I 
have to fit these kids in a car and I want my kids to be safe. 
I yield back. Thank you, Mr. Chairman.
    Mr. Jordan. I thank the gentlelady.
    Real quickly. Mr. Grenerth, as a small business owner who 
has the standards already imposed on your trucking company, did 
you feel your concerns were addressed during the comment time 
that you had? We are talking about the comment period that 
exists for people to weigh in, consumers and business owners. 
How was it for you?
    Mr. Grenerth. I know the staff from OOIDA is more than 
happy to get hold of me any time. They know I will show up in 
D.C. any time there is a worthwhile opportunity for input. They 
tried to get the EPA to provide an opportunity for actual truck 
drivers to have input. Nothing. They did not get back to them. 
That is one of the things that drives me nuts.
    Mr. Jordan. So you would agree with the statement that Mr. 
Lewis and Mr. Anwyl made, that it seems to be the deal is 
already done.
    Mr. Grenerth. Yes, that generally seems to sum it up there, 
definitely. It is very disheartening, to put it mildly.
    Mr. Jordan. I thank the gentleman.
    I now recognize the ranking member of the full committee, 
the gentleman from Maryland.
    Mr. Cummings. Thank you very much. As I listen to all of 
this, I am wondering what, Mr. Hwang, let's assume for a moment 
that all that Mr. Anwyl is saying is true, and Dr. Lewis. I am 
trying to figure out what is the down side of trying to save 
fuel. Maybe I am missing something. You talked about how we are 
sending dollars overseas and how it would be good to, for our 
consumers, our constituents, to spend less money on gasoline. 
But you have listened to Mr. Anwyl and he has talked about what 
consumers are doing, but what is the down side of trying to do 
this? Maybe I am missing something.
    Mr. Hwang. Frankly, Mr. Cummings, I strongly concur with 
you. I struggle to see down sides in this new proposal. The 
benefits to the consumer, the benefits to our balance of trade 
and reducing imported oil, the benefits to the environment are 
overwhelming. Why is there a law or requirement for automakers 
to raise fuel economy and lower CO2? Well, the fact of the 
matter is that there is a national interest here at stake: our 
energy dependency and the future of our health and our 
environment. So there is a national interest here at stake, so 
I think it is quite appropriate that there are long-term 
standards.
    Furthermore, of course, what we have seen over the past 
history of the U.S. auto industry and what we see in the 
combativeness associated with the last two decades of trying to 
lower carbon pollution and raise fuel economy for motor 
vehicles has not actually done a great service, actually has 
done a disservice to the U.S. auto industry, who was caught 
multiple times, when oils prices were raised and lost market 
share, jobs were lost, companies lost market share, especially 
the domestic automakers.
    So no one really wants to return to the bad old days of 
fighting about new standards because everybody recognizes that 
it is in our long-term interest, both from a business 
perspective from the U.S. auto industry and from a national 
interest perspective to reduce our dependency on oil and 
enhance U.S. economic competitiveness by having the U.S. auto 
industry build the cars of the future.
    And Ms. Buerkle, I am the father of two children. Safety is 
of absolutely critical importance to myself personally, and I 
would say that to your question about needing to haul around 
your family, needing a larger vehicle, when it comes to safety, 
design matters. Vehicles which are lighter can be safe, are 
safer than heavier vehicles. This is data that I am happy to 
submit; some of it is in my testimony.
    Furthermore, I also mentioned that there is a vehicle 
called the Chevy Equinox. The Chevy Equinox is a crossover 
utility vehicle that holds probably at least, I will have to 
check on that, but it is a mid-sided crossover utility vehicle. 
That vehicle achieves 25.9 miles per gallon, 50 percent higher 
than the 17.2 miles per gallon vehicle that Chevy replaced 
called the Chevy Trailblazer.
    Mr. Cummings. Let me just interrupt, because I want to ask 
you one more question. You talk about your kids. I teach my 
kids to never mistake a comma for a period, and I think we 
could go the route we have been going and be the same place we 
are 20 years from now. At some point I think we have to aim in 
the direction that we are aiming in.
    And let's assume what Mr. Anwyl says is true, that maybe 
people are not buying these vehicles as fast. I am just 
assuming for the moment. Maybe there are some people that need 
to catch up with that. I mean, at some point I can tell you 
people in my area, they need that extra savings because a lot 
of them have lost their jobs, lost their houses. So if there is 
any way that they can save fuel, they want to do that.
    When we talk about innovation, sometimes we need to be 
aiming at a higher standard. We are better than this. When I go 
to other countries, it seems like I see these cars everywhere. 
How do we compare to other countries with regard to this kind 
of issue?
    Mr. Hwang. Well, the fact of the matter, when it comes to 
international competitiveness, we have slipped behind, and we 
are behind Europe and even China when it comes to current fuel 
economy levels. Both Europe and China are moving forward very 
aggressively with advanced vehicles also, including electric 
vehicles. So the world is moving at a more fuel-efficient, the 
world is moving toward hybrid electric vehicles, battery 
electric vehicles, plug-in electric vehicles, and that is 
really the future and that is really where we need to invest 
our money, in our U.S. manufacturing innovation and 
competitiveness, if we still want to be able to compete in the 
21st century.
    Mr. Cummings. Thank you, Mr. Chairman.
    Mr. Jordan. I would argue part of that in Europe is the 
price of gasoline is about $8 a gallon, so there is a little 
different climate there.
    Let me just, real quickly, ask Mr. Lewis. You know, Mr. 
Hwang, if it was up to him, why don't we make it 70 miles per 
gallon, 100 miles, if it is going to be all this wonderful 
world and just raise it as high as we possibly can? Can we meet 
the standard now, the 49 miles per gallon, that NHTSA has, the 
54 that EPA? Can that standard be met today? I know that is the 
target in the future, but can it be met?
    Mr. Lewis. There are very few cars that could meet that 
standard today.
    Mr. Jordan. And certainly not in a practical sense, for 
folks who live like in northwest Pennsylvania, like Mr. Kelly 
talked about, right?
    Mr. Lewis. Yes. Yes. And if we are going to offer $7,500 in 
tax rebates to put a million of these vehicles on the road, 
that is $7.5 billion in loss of revenue at a time of a fiscal 
crisis. So you wonder how affordable it is from a national 
perspective as well.
    I wish I had the reference here, I will provide it to the 
committee, but I saw an article only a few weeks ago that said 
that in China SUV sales are booming, that in 2010 there were 
850,000 SUVs sold and only one hybrid sold. One Prius in all of 
China, and it may have been purchased from an engineer who was 
trying to take it apart to see how it worked.
    So here is the down side that I see.
    Mr. Jordan. Quickly, because I want to recognize the 
gentleman from Idaho.
    Mr. Lewis. Okay. The premise of setting fuel economy 
standards really is that consumers don't understand their best 
interest, that they let the short-term pain of a higher priced 
vehicle overwhelm their good judgment in achieving longer-term 
fuel savings. But this kind of reduces the consumer to a two-
dimensional character.
    The only thing that the consumer considers from this 
mentality is up-front costs versus fuel expenditures. Whereas, 
in fact, we know that consumers are much more complicated than 
that. Sometimes you don't want to spend a couple extra thousand 
dollars this year on a car because you want to send your kid to 
college or because you need it for the kid's music lessons.
    So if you read the EPA NHTSA literature, they say the 
consumers undervalue fuel economy. Well, that is like saying 
consumers undervalue music lessons.
    Mr. Jordan. Thank you.
    Mr. Lewis. And where it gets really crazy.
    Mr. Jordan. Hang on a second. I am going to stop you right 
there.
    Mr. Lewis. Okay.
    Mr. Jordan. I want to get to Mr. Labrador, and maybe you 
can jump right back in there.
    The gentleman from Idaho is recognized. Thank you.
    Mr. Labrador. Thank you, Mr. Chairman.
    Mr. Grenerth, I just have a question. I don't know if you 
heard what Mr. Hwang just said, but he said that there is 
really no down side to this new CAFE standards, and I think I 
heard your testimony say something different. Do you agree with 
his statement?
    Mr. Grenerth. Oh, I definitely would say there is a down 
side to it, because the fact that if you just look at, for 
example, the last time the EPA did this with the 2004 and 2007 
standards, fuel economy dropped with the exhaust gas 
recirculation being introduced in trucks, it dropped by one 
mile per gallon. One mile per gallon on a vehicle that gets, on 
a good average, 6 miles per gallon. That is a huge down side. 
That is very detrimental. That puts more greenhouse gas out in 
the air.
    The other thing that came along with that is reduced 
reliability, and I mean in a big way. Those valves fail 
frequently. As a matter of fact, I called a shop back in 
Congressman Jordan's district, where I get my truck worked on, 
and this is a pretty small truck repair shop, too. In that week 
they replaced four EGR valves on trucks. That is $400 apiece 
plus basically missing an entire day's work and maybe, even 
worse than that, losing a customer because you are viewed as 
not a reliable individual anymore in your business.
    So that unproven technology is a very, very serious 
concern. It has been proven, unfortunately, from these previous 
mandates, that this does happen, talking about trying to push 
technology that is really not there. And that is why I 
personally can tell you that when I went to buy my truck, 
almost exactly 3 years ago, when I became an owner-operator, I 
intentionally purchased a truck that did not have that exhaust 
gas recirculation on it because I believe that I can make the 
choice the way I drive the vehicle between here and my right 
foot, that I know how to drive it appropriately and get the 
best fuel economy. I haul very heavy loads all the time. I get 
7.2 miles per gallon.
    Mr. Labrador. So what you are saying is that central 
government planning doesn't necessarily work.
    Mr. Grenerth. Absolutely. It doesn't necessarily mean you 
are going to end up with proven technology. There are a lot of 
risks in this. I don't gamble. I am willing to take a risk 
being a small business owner, but I do not gamble, definitely 
not.
    Mr. Labrador. Mr. Anwyl, what is the number one selling 
vehicle in America right now?
    Mr. Anwyl. Generally, it is the F-150 pickup truck from 
Ford.
    Mr. Labrador. And that is just like a Prius, right, it gets 
the same gas mileage?
    Mr. Anwyl. It is a little bit bigger than a Prius.
    Mr. Labrador. Okay. And can you explain to us why, if 
America wants fuel efficiency, why the F-150 is the number one 
selling vehicle in America?
    Mr. Anwyl. Well, I think it actually is supported by my 
earlier testimony, and that is that consumers are looking for 
fundamental utility when they buy a vehicle. They buy a vehicle 
to do something, to take their family around, to haul 
something, to tow something. And I think it is important to 
note that the car companies have been delivering utility and 
better performance, better safety, and improved fuel economy 
over the past few years, and I do expect that to continue. So 
when we talk about the future, what we need to be recognizing 
is that the future in terms of fuel economy is going to improve 
even without additional regulation. The trend line there is 
pretty clear.
    The F-150 is interesting because they have introduced a V6 
EcoBoost engine, and I think that is probably the best evidence 
of what I have described, because what Ford has done with the 
EcoBoost is actually improved the utility of the truck; it has 
more torque, more towing capacity, happens to get only 1 mpg 
better, so it is not like it is solving all the problems, but 
it is a step in the right direction.
    Mr. Labrador. Excellent.
    Dr. Lewis, I am having a hard time here understanding why, 
if America wants these cars, we have to give them $7,500 to buy 
them. I really like Big Macs, and the Government doesn't have 
to make me, force me to buy those Big Macs. So how does this 
work?
    Mr. Lewis. Well, you have just provided the reductio ad 
absurdum, and you are absolutely correct. And what is even, I 
think, stranger, and this is what I was going to get to 
earlier, is that the EPA and NHTSA seem to think that even 
truck drivers, people who haul freight for a living, people 
whose single biggest operating expense is fuel, people who live 
on razor thin profit margins don't understand their true 
interest are shortsighted buyers and need to be forced to buy 
trucks that meet Government-imposed fuel economy regulations, 
and, you know, it is like saying we need a Big Mac mandate.
    Mr. Labrador. So we are too stupid to know that we want 
these cars. Is that what is being said here?
    Mr. Lewis. I think there is a nanny status aspect to this 
in which ordinary people are viewed as just big children.
    Mr. Labrador. Mr. Chairman, I respect your job very much 
and I think that if we are going to look at Government 
spending, the fact that we are spending $7,500 for each one of 
these cars, and in some States we are adding another $2,000 to 
$2,500, I think that is wasteful Government spending, 
especially if it is something that the people want.
    Mr. Jordan. Well said. I thank the gentleman.
    Now yield to the ranking member of the committee, my good 
friend from Cleveland, Mr. Kucinich.
    Mr. Kucinich. Thank you very much, Mr. Chairman, members of 
the committee. I just want to say I think Mr. Anwyl is one of 
the most remarkable witnesses that this committee has ever had 
because he came to a town that is totally reliant on polls. 
[Laughter.]
    The White House, the Presidential race, Republican Party, 
the Democratic Party, just about every Member of Congress is 
reliant on polls, and we have a witness come before this 
committee who tells us definitively, authoritatively, no doubt, 
that polls are not scientific. I want everyone to mark this 
moment and check with your campaign treasurers. [Laughter.]
    And I think that we ought to take Mr. Anwyl's other comment 
about consumers don't care much about fuel economy with the 
same humor.
    Now, I just want to say the trucking industry is a critical 
part of Ohio's economy; provides Ohio with over 290,000 jobs. 
But in order to survive and remain competitive, truck drivers 
need trucks that get better gas mileage and cost less to 
operate. That is exactly why the new fuel efficiency standards 
for medium- and heavy-duty trucks that are finalized this 
summer are so important to Ohio and the trucking industry; and 
it is also why there is a long list of trucking industry groups 
that support the new rule, including the American Trucking 
Association and its Ohio affiliate, the Ohio Trucking 
Association.
    Now, Mr. Hwang, I am puzzled by Mr. Grenerth's testimony 
that members of the Owner-Operator Independent Drivers 
Association will be harmed by the new standards. Can you 
discuss the impact of the proposed fuel economy standards on 
the trucking industry, including trucking companies that are 
small, locally owned businesses? What do they stand to gain or 
lose? Thank you.
    Mr. Hwang. Thank you, Mr. Kucinich. According to EPA 
analysis, standards of this new fuel economy and CO2 program 
for medium- and heavy-duty trucks will save truck owners quite 
a bit of money. Semi-truck owners will save an average of 
$73,000 over the life of the truck. Purchasers of new trucks, 
fuel savings in the first year will outweigh incremental costs 
of $6,200, so fuel savings are estimated to be about, for most 
truck drivers, $10,000.
    For drivers that finance their purchase, savings will 
accrue immediately in the form of lower monthly payments both 
for the vehicles and fuel costs. So in the first month most 
truck owners will actually see savings; in the first year they 
will see the incremental costs paid.
    Mr. Kucinich. Thank you, sir. I just want to say whatever 
views one holds about environmental protections against 
greenhouse gas emissions, it would be difficult to dispute the 
fact that unemployment and a weak labor market are continuing 
to devastate the future of this country. The bottom line is 
that job creation benefits from the manufacturing of fuel-
efficient vehicles and components will help reduce the massive 
unemployment rate in this country.
    Ohio is at the heart of the auto industry, ranking second 
only to Michigan in terms of employment in the motor vehicle 
industry. In Ohio, it is estimated that the higher fuel 
standards will create at least 23,000 new jobs. I know that in 
Ohio we have many more skilled workers who would jump at good 
jobs in a clean auto manufacturing industry.
    Now, we have a chart here. Now, this chart shows every 
Member's district in this room stands to gain jobs resulting 
from new technologies. Mr. Hwang, again, can you talk in detail 
about the array of job opportunities, both inside and outside 
the auto industry, that will be created as a result of higher 
fuel efficiency and auto pollution standards?
    Mr. Hwang. Yes, I would be glad to. In terms of job 
opportunities for fuel efficiency, we have seen what has 
happened to the U.S. auto industry from lack of attention to 
fuel efficiency; jobs have been lost, market share has been 
lost. Conversely, we see the benefit already of the U.S. auto 
industry, U.S. auto supply industry already in a joint study by 
United Auto Workers, NRDC, and the National Wildlife Federation 
have identified already 300 facilities in 43 States plus the 
District of Columbia that are currently responsible for 
employment of 150,000 workers today that are building 
components for fuel-efficient and clean advanced and 
conventional I would add vehicle technologies.
    According to a recent forecast, in 2030 the job creation 
potential will be close to 500,000 for a 54.5 mpg by 2030. That 
is accruing both from new manufacturing jobs and the fact that 
there will be more money back in the pockets of consumers 
equivalent to a $330 tax rebate that they can spend back into 
the economy.
    Mr. Kucinich. I want to thank the gentleman.
    My time has expired. Thank you, Mr. Chairman. And I want to 
thank each of the witnesses for testifying. Thank you.
    [The prepared statement of Hon. Dennis J. Kucinich 
follows:]
[GRAPHIC] [TIFF OMITTED] 71980.083

[GRAPHIC] [TIFF OMITTED] 71980.084

    Mr. Jordan. I thank the gentleman.
    We now yield to the chairman of the full committee, 
gentleman from California, Mr. Issa.
    Mr. Issa. Thank you, Mr. Chairman. Following up on Mr. 
Kucinich, there is a lot of humor here and I know that Dennis, 
my friend, you intend to find humor whenever you can. But what 
I find humor is that only a couple weeks ago this committee had 
a hearing in which we had Secretary Hilda Solis and we asked 
her about green jobs, and she was able to show that this 
administration, for $250 million, had managed to create 1,000 
new green jobs, those being jobs that last a year or more. They 
created 8,000 if you don't mind the fact they only lasted as 
long as we paid for the training.
    So what I find interesting in Mr. Hwang's testimony is he 
is talking about green jobs. Well, the problem is the 
definition of green jobs includes a bus driver, we found out 
last week. Not the hybrid bus driver, not electric bus, just 
any form of public transportation. So as I see this 
administration have a war on the private automobile and the 
private light truck, I kind of get it that, yes, you will get 
green jobs, and those green jobs will be forcing people off the 
road and out of the vehicles they want.
    Dr. Lewis, when I compare the mission of the NRDC, which is 
to save the earth and to hell with the American people--no, I 
am serious. Sometimes you just get a witness and you look and 
say I know the organization; I am sure he is knowledgeable and 
so on. But I have been through this. Clearly, they could care 
less about whether we still have automobiles. As a matter of 
fact, we are mandating electric vehicles. Fine. GE bought a 
bunch of them as long as they got the tax break. But we are 
doing it when we still don't have a nuclear or other 
alternative to the 51 percent of our fuel that is created by 
coal when it comes to electric fuel.
    So I want to ask a couple of quick questions. When you look 
at the total package of subsidies and unfunded mandates that 
are in the current CAFE increase--and when I say unfunded, the 
cost to industry that they are going to have in addition to the 
subsidies and so on--if you were to take that amount of money 
and set it in a pot and say we will invest in better mileage 
technology at a given weight, a given performance level, what 
fraction of that $100 billion a year do you think it would take 
if the Government started looking and saying we want to be part 
of the solution, not simply shift cost to people so they can 
feel good?
    I happen to own a Prius. It is a wonderful vehicle. At the 
end of 50,000 miles, it hasn't paid for itself, and everyone 
knows it.
    Where will we be if we took that other tact, instead of 
constantly shifting huge amounts of unfunded mandates to auto 
companies, some of them effectively owned or controlled by the 
American administration currently in the White House?
    Mr. Lewis. Well, I do think that we would be more 
prosperous in that the auto industry would be--one of the 
figures that was cited earlier is that just to comply with the 
current model year 2012 to 2016 standards requires an 
investment of $50 billion. Now, what if that money had been 
invested by the auto industry to meet revealed consumer 
preferences? I would imagine that some of that would have gone 
into fuel economy improvements. But some of it might have gone 
into other amenities, features, capacities, maybe things we 
can't even imagine.
    So it seems to me, though, that a very good suspicion is 
that it would have, in the long-term, produced more jobs, more 
happy customers than the Government trying to determine what it 
is people should want to buy.
    Mr. Issa. Mr. Grenerth, I am going to follow up with you. 
As an environmentalist, as somebody who does care about how we 
get more for less strain on our environment, you mentioned you 
carry heavy loads. By definition, to get to 55 miles per 
gallon, isn't a big part of that going to be simply limiting 
the capacity of vehicles, dumbing down categories so that your 
category may not be where the real savings is; the category of 
the vehicle you need to carry heavy loads simply may be the one 
that they try to find a way not to sell? Isn't that really what 
you have seen in the past in CAFE standards?
    Mr. Grenerth. Well, there is definitely with Kenworth, for 
example, streamlined option choices when we are talking about 
large trucks. They are talking about, to meet these standards, 
having to eliminate some of the choices that are available, and 
those are things like, when you get into heavy-haul, people 
that do--when I say heavy, I am talking 80,000 pounds, 
typically.
    Mr. Issa. Okay. And I assuming that you already go to alloy 
wheels, alloy tanks, aerodynamic improvements.
    Mr. Grenerth. I have a few things----
    Mr. Issa. All the things that reduce drag and to reduce 
weight. But ultimately, if you are carrying a 65,000 pound 
cargo, that part, there is no way to make it lighter, is there?
    Mr. Grenerth. Absolutely. Or if it is a very large object 
with a lot of wind resistance. You can't do that.
    Mr. Issa. So when we look at the standard--and we have been 
talking about cars and light trucks today. When we look at the 
standards, don't we really have to look at the fuel economy 
achievements, carrying a specific load, whether that is the 
vehicle or, in this case, the cargo; look at the low-road 
industry and the improvements that they continue to make 
because it is all about carrying more for less, and the heavy 
truck industry, and haven't we found that basically that is 
mostly an engine design improvement to optimize efficiency, 
something that is not in the CAFE standards? The CAFE standards 
rewards you for simply taking weight out, making light, tiny 
vehicles, not necessarily producing true efficiency increases. 
Isn't that what you found in the trucking industry?
    Mr. Grenerth. I found you definitely have to spec your 
vehicle out for specifically what you are doing. Owner-
operators take great care to make sure that the wheels, the 
transmission, the final gear ratio----
    Mr. Issa. Tire pressure.
    Mr. Grenerth [continuing]. Everything, tires, exactly, and 
maintain it impeccably as well, too. So, absolutely, you have 
to do that or you are not going to succeed. It is that simple.
    Mr. Issa. Thank you.
    Mr. Chairman, I might comment for the record, because it 
always seems like the press says you have a vested interest in 
this. I had two RVs. My old RV, which used the Mercedes diesel, 
was a Sprinter, Dodge Sprinter, before they required that 
actual fuel economy reduction design. So I have experienced my 
old one versus my new one; and I like the new one and I like a 
lot of the features. But going to a newer RV with a ``next 
generation engine'' and getting less mileage was pretty 
repugnant to me, and I think to all of us who----
    Mr. Kucinich. Would the gentleman yield?
    Mr. Issa. Of course.
    Mr. Kucinich. I would just like to say while the chairman 
and I may have some fundamental disagreements about where we go 
with these policies, I think there are probably very few 
Members of Congress who have the kind of expertise that you do 
have in this area. We have to appreciate that.
    Mr. Issa. Thank you. And I thank you for pointing out the 
wrong way in diesel technology because it is something that I 
think this committee didn't watch closely enough, and hopefully 
we will continue to monitor it.
    Thank you, Mr. Chairman.
    Mr. Jordan. Thank you.
    Mr. Hwang, earlier you referenced material on safety and 
the idea that lighter cars are in fact, you cited, I think, 
some study that shows their safety. We would like for you to 
provide that to the committee at the end of the hearing, if you 
would be able to do that.
    I want to next recognize Mr. Guinta for his 5 minutes.
    Mr. Guinta. Thank you very much, Mr. Chairman.
    Mr. Hwang, I read your testimony on page 3. You said by 
2030, the 2012 to 2025 national program standards will reduce 
oil consumption by 3.1 million barrels per day. Can you tell me 
what expectation you have for vehicle sales annually during 
that period of time?
    Mr. Hwang. Yes, absolutely. The issue of vehicle sales, as 
currently, the estimate for this year, the sale for calendar 
year 2011 is 13.6 million units. I believe in 2008, when the 
auto industry hit rock bottom, the units were about 10 million, 
10 point something million units. So this points to the fact 
that vehicle sales can increase, profits can increase, as well 
as fuel efficiency.
    If you take the agency estimates, as well as our estimates 
of what the cost of the new technology will be and what the 
payback time will be in 2025 for the 54.5 mpg, my full 
expectation is that vehicle sales will continue to increase 
from the 13.6 million units that we are expecting this year, 
and my full expectation is that these vehicles will actually be 
highly desirable for consumers, and because of the payback time 
attractiveness, that there will be no impact, and if there is 
any impact, in my opinion, it will be a positive impact, an 
increase in sales.
    Today, the vehicles on the used car market, the most 
valuable cars on the used car market, according to data from 
KBB, from Edmunds, and other places, and also NADA, the 
National Automobile Dealers Association, the most valuable 
vehicles on the used car market today are fuel-efficient 
vehicles; the least valuable vehicles on the used car market 
today are fuel-inefficient vehicles.
    The F-150 is a great example. In the new car market, 6 out 
of 10 buyers are buying the F-150 EcoBoost more fuel-efficient 
V6 option. So consumers are willing to pay more for fuel 
efficiency because of the benefits that it accrues. So my 
expectation is that sales in 2025 will continue to increase 
from today's and it will, if anything, vehicle sales will be 
higher than otherwise.
    Mr. Guinta. Okay, in New Hampshire, where I represent, we 
roughly have 600 businesses that are related to the motor 
vehicle industry and we have about 13,000 employees. There was 
a chart that was put up earlier that showed, with these 
standards, we would increase jobs in New Hampshire by 
approximately 2,600. I would love to see an increase in this 
industry for New Hampshire by 2,600.
    What you are saying is, in part, the increase in sales will 
continue to grow as the economy comes back, but you also said 
something else. You said this is based also on payback. I want 
to take just Manchester, the city that I am from. The average 
family income is somewhere between $55,000 and $60,000. If you 
are looking at payback and looking at Chevrolet as the example, 
the Cruze is a $20,000 vehicle, the Volt is $45,760. That is a 
difference of $25,763. Here is the math that I don't quite 
understand. The Cruze, $1,682 is what you would spend annually 
for fuel, and the Volt is $1,000 according to the sticker. So 
that is a difference, a fuel savings of $682 per year.
    My math says that you would have to have that car for 37 
years in order to achieve payback. So if I purchase that today, 
I just had a birthday last month, I am 41, I would be 78 years 
old by the time I had payback on that vehicle.
    I am struggling to see how the marketplace, the consumer, 
when they walk into a showroom and decide that they want a 
vehicle with greater fuel efficiency, and I agree with the 
statement made earlier that fuel does matter, but purchase 
price matters even more. So if you can find a purchase price 
that dictates these savings, I think the theory would be that 
more people would buy these vehicles.
    But you are talking right now about almost a $26,000 
differential and a 37-year payback. So I struggle to appreciate 
or understand how that math would work and how the country, 
over this period of time, would see that 37-year payback as 
something effective for their family and efficient for their 
family in cost dollar savings.
    Mr. Hwang. Well, very quickly, in 2025--today's technology 
is not 2025 technology, for one. Second, the calculations that 
we have done based upon the agency and our own cost estimates, 
is that in the first month drivers who financed the purchase of 
their vehicles will see monthly savings in their vehicle 
payments and fuel costs. Their costs will go down.
    Mr. Guinta. But how is that possible if the vehicle is 
$45,000 today for the Volt, $45,760. So if I, as an average 
shopper--what does an average individual spend on a car, 
$25,000?
    Unidentified Speaker. Thirty-three.
    Mr. Guinta. Thirty-three. Okay, so just take the 33 number. 
You are adding, you are going up to $45,000, almost $46,000. I 
fail to see how the financing would actually monthly payment 
would come down. I mean, unless you are financing it over a 
longer period of time, of course it would come down in that 
perspective.
    Mr. Hwang. I believe, sir, the difference in our 
calculations are that, and my calculations and my estimates 
based upon the agency's and other publically available research 
data, we believe that Chevy Volts and other kind of electric 
vehicles will actually not be required to--no one will have to 
be required to build those kinds of vehicles to meet the 2025 
standards.
    In fact, the 2025 standards can be met through relatively 
conventional gasoline vehicle technology, much less expensive. 
The example I gave earlier is 50 percent improvement between a 
Chevy Equinox and a Chevy Trailblazer, and both of those are 
considered to many people as a sport utility vehicle, when in 
fact the Equinox is a lighter, more fuel-efficient so-called 
crossover utility vehicle, 50 percent better improvement in the 
combined EPA estimated fuel economy.
    Mr. Guinta. Thank you, Mr. Chairman.
    Mr. Jordan. I thank the gentleman from New Hampshire.
    Mr. Kelly, you are recognized.
    Mr. Kelly. Thanks, Mr. Chairman. I would like to ask we put 
in the record I have the actual window stickers that would 
probably help testimony that shows actually the list prices and 
the fuel savings based on the calculations that is on the label 
of every vehicle produced. So I would like to submit that 
because that really adds some authenticity to what we are 
talking about.
    Mr. Jordan. I thank the gentleman.
    Mr. Anwyl, just one question for you. Why, if it is not in 
the consumers' best interest, if it doesn't seem to be in the 
best interest of the market, why are the auto manufacturers 
going along with the whole process, the whole scheme?
    Mr. Anwyl. Well, I think that is a good question and it is 
one I put to them directly. I meet with the car companies on a 
regular basis. The expression that I hear repeatedly is they 
felt they had a gun to their head, and by that I think they are 
referring to the threat of a California opt-out, the California 
waiver. We have talked about the balkanization of the 
marketplace, but the cost associated with meeting individual 
standards across the 50 States would be overwhelming. So the 
threat of the California waiver is very real and very scary.
    Mr. Jordan. And you have individuals represent the auto 
manufacturers tell you this personally?
    Mr. Anwyl. Yes, absolutely.
    Mr. Jordan. Okay. I thank the gentleman.
    I want to thank our panel for a great hearing. Mr. Anwyl.
    Mr. Anwyl. I don't know if this is out of order or not, but 
I do----
    Mr. Jordan. It is, but go ahead.
    Mr. Anwyl. Okay. Well, I wanted to characterize, again, my 
testimony as not saying that consumers don't care about fuel 
economy, because that is not what I am saying. What I am saying 
is they care about other things more.
    Mr. Jordan. Exactly.
    Mr. Anwyl. And the second thing I would like to offer for 
the written record would be copies of peer vetted academic 
research that actually do show that what consumers say in polls 
and what they do in the real world are not the same thing. And 
I feel that that might be a public benefit as an outsider from 
Washington.
    Mr. Jordan. Without objection.
    [The information referred to follows:]
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    Mr. Jordan. Since we are going down the list, go ahead, Mr. 
Lewis.
    Mr. Lewis. Okay. Well, thank you very much. There is a 
cartoon that I would like to send the committee which shows a 
man who looks very depressed, and his friend says what is 
wrong? And he says, everybody I talk to lies to me. Why? Are 
you a defense attorney? No, I am a pollster.
    Mr. Jordan. Here we go.
    Mr. Lewis. But a point that I would like to make in regard 
to Chairman Issa's question about an unfunded mandate, you see, 
if I remember the figure from Mr. Hwang's testimony, EPA and 
NHTSA are saying that the truck driver will save something like 
$68,000 over the lifetime of the truck, netting out all the 
costs with the savings.
    Mr. Jordan. Mr. Grenerth disagrees.
    Mr. Lewis. Right. Okay. Now, the problem, though, is what 
if EPA and NHTSA are wrong? What if the reliability problems 
that Mr. Grenerth talked about are just horrendous and he 
actually ends up with the short end of the stick, paying more 
for a truck that costs him more to operate? And then what about 
the manufacturer who then finds that there is no market for 
these vehicles?
    If EPA and NHTSA were actually providing a guarantee, we 
guarantee that you will save $68,000 over the life of the truck 
and, if not, we will refund your purchase to that amount, it 
would be a whole different story. But my point is that the 
agencies don't assume any of the risk. And we know that when 
people make decisions, including regulatory decisions, and 
other people bear all the risks, well, then factors like 
ideology get to play a bigger part than prudence.
    Mr. Jordan. Well said.
    In the spirit of bipartisanship, I will give you 30 
seconds, Mr. Hwang and Mr. Grenerth. One last quick statement 
because we do want to get to our next panel quickly because I 
have to leave shortly.
    Mr. Hwang. Yes, much appreciated, Chairman Jordan. I will 
just say, in terms of your request for the safety data, that is 
all in my testimony, and I am glad to provide the committee 
with even more data, and I am also glad to provide the press 
release from a safety expert named Clarence Ditlow that 
reinforces the position.
    Mr. Jordan. Great.
    Mr. Grenerth.
    Mr. Grenerth. Yes, absolutely. Appreciate it. I would just 
say earlier Mr. Kucinich was asking about the cost in Ohio and 
all that. We are talking about basically $50,000 being added to 
the cost of a vehicle. That is a huge problem for a small 
business owner.
    And regarding EPA's attitude about this and not including 
truck drivers, to me it is as if you are a doctor and we give 
you a drug without consulting you. They are trying to force us 
to take this medicine, if you will, that we have no idea what 
is going to happen. It is unproven technology we are going to 
rely on and that could be fatal to my business.
    Mr. Jordan. Thank you very much for taking the time to come 
today, Mr. Grenerth, and all of you as well. We appreciate your 
great witness panel.
    We will quickly get ready for the next panel because we 
have to move very fast.
    The committee will come back in order. I want to thank our 
witnesses for being here and for your patience. We thought the 
first panel was great and we had, as you can see, a full 
committee. But we now want to welcome you.
    Our first witness is the Honorable David Strickland. He is 
the Administrator of the National Highway Traffic Safety 
Administration. We also have with us the Honorable Gina 
McCarthy, who is the Assistant Administrator for the Office of 
Air and Radiation at the Environmental Protection Agency; and 
also Mrs. Margo Oge, who is the Director of the Office of 
Transportation and Air Quality at the EPA.
    So let's quickly swear you in. If you would please stand 
and raise your right hands.
    [Witnesses sworn.]
    Mr. Jordan. All right, let the record show that all 
witnesses answered in the affirmative.
    Mr. Strickland, you know the routine here. You have 5 
minutes. Fire away with that high-tech gadget there in front of 
you.

STATEMENTS OF DAVID STRICKLAND, ADMINISTRATOR, NATIONAL HIGHWAY 
    TRAFFIC SAFETY ADMINISTRATION; GINA MCCARTHY, ASSISTANT 
      ADMINISTRATOR FOR THE OFFICE OF AIR AND RADIATION, 
  ENVIRONMENTAL PROTECTION AGENCY, ACCOMPANIED BY MARGO OGE, 
   DIRECTOR OF THE OFFICE OF TRANSPORTATION AND AIR QUALITY, 
                ENVIRONMENTAL PROTECTION AGENCY

                 STATEMENT OF DAVID STRICKLAND

    Mr. Strickland. Thank you. On the part of Secretary LaHood 
and the entire Department of Transportation and my staff at the 
National Highway Traffic Safety Administration, we appreciate 
this opportunity to testify before you today on our efforts to 
improve the corporate average fuel economy [CAFE], standards.
    Now, this joint rulemaking with the Environmental 
Protection Agency highlights the very best in the rulemaking 
process. This process created greater transparency with early 
technological engagement with stakeholders assisted these 
agencies to develop the most informed proposal possible to 
maximize economic and environmental benefits without impacting 
safety or vehicle choice.
    Now, Ms. McCarthy and Ms. Oge will speak to a lot of the 
aspects about our work and process-wise. I want to take my time 
in oral statement to talk about the safety perspective, which 
is my agency's core mission.
    We at the National Highway Traffic Safety Administration do 
not require any manufacturer to do anything that would have a 
negative impact on safety. Past safety tradeoffs occurred 
because manufacturers chose at the time to build smaller and 
lighter vehicles to help them meet the CAFE standards in years 
past.
    Staying true to our safety-first mission, the National 
Highway Traffic Safety Administration moved from a flat fuel 
economy standard that subjects each manufacturer to a single 
standard, regardless of differences in their product mix, to an 
attribute-based standard. This attribute system, which is used 
as the vehicle's footprint as the foundation for the standard, 
was then mandated by the Energy Independence and Security Act 
in 2007.
    Under this revised system, cars and light trucks have fuel 
economy targets based on a specific vehicle's footprint, which 
is roughly the area between the points at which the tires touch 
the ground. As a result, manufacturers no longer have an 
incentive to try to average out sales of larger vehicles by 
producing more small vehicles. Every additional small vehicle 
actually increases a manufacturer's overall compliance 
obligation under the new attribution system.
    In our analysis, then, we try to make sure that the 
proposed standards are safety-neutral in two ways: first, we 
set footprint-based standards that do not encourage 
manufacturers to build smaller vehicles to even out the larger 
ones; and, second, although manufacturers can choose whatever 
technologies they want to meet our standards, we demonstrate 
that in our analysis there is a feasible technology path that 
the industry could pursue to meet the standards that do not 
require unsafe levels of mass reduction. The National Highway 
Traffic Safety Administration will be continuing this safety-
neutral approach in the upcoming CAFE proposal as we undertook 
this work in model year standards for 2012 through 2016.
    Now, in addition to building on the safety efforts that we 
founded in 2012 to 2016, working in collaboration with the 
Environmental Protection Agency, we also were tasked to make 
sure that this process had the ability to pull forward the hard 
work that we achieved in model years 2012 to 2016 very 
successfully. That work was almost 14 constant months and, 
frankly, the work for model years 2017 to 2025 has actually 
been a very intensive and very transparent 2-month effort.
    After several milestones, including the Notice of Intent 
that was issued in September of last year, also the Joint 
Interim Technical Assessment Report, we, along with the 
Environmental Protection Agency, looked at the potentials of 
cost, effectiveness, and lead time requirements for over 30 
technologies that could be applied toward the new standards in 
2025. These particular assessments describe the Agency's 
initial assessment of what could be done, recognizing that we 
received comments from more than 30 organizations and more than 
100,000 individuals.
    Following this opportunity for public notice and comment 
through these processes, we published a supplemental Notice of 
Intent in December 2010 which highlighted many of the key 
comments received in response to the initial Notice of Intent 
and to the initial Technical Assessment Report. It is that 
work, us and the Environmental Protection Agency, working in 
consultation with the California Air and Resources Board, where 
we undertook an opportunity to have a forward-reaching 
opportunity to speak to key stakeholders to better inform the 
upcoming proposal for model years 2017 to 2025. This is 
something exactly that the President of the United States asked 
for us to do in his executive order and, frankly, shows the 
best aspects of how rulemaking should be made clear, 
transparent, and forward thinking.
    Thank you very much, Mr. Chairman.
    [The prepared statement of Mr. Strickland follows:]
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    Mr. Jordan. I thank the gentleman.
    Ms. McCarthy, you are welcome to go.

                   STATEMENT OF GINA MCCARTHY

    Ms. McCarthy. Chairman Jordan, members of the committee, 
first, thank you for inviting Margo Oge to testify today about 
motor vehicle regulations that are being developed jointly by 
EPA and NHTSA that will reduce greenhouse gas emissions and 
improve fuel economy for cars and light-duty trucks, as well as 
medium- and heavy-duty trucks and engines. These motor vehicle 
regulations are a great success story for this country. They 
will save consumers and small businesses money; they will lower 
the cost of transporting goods; they will reduce our dependence 
on foreign oil; and they will help protect the environment.
    Combined, the model year 2011 to 2025 light-duty vehicles 
are estimated to save Americans $1.7 trillion in fuel costs and 
reduce our need for oil by a total of 12 billion barrels. 
Ultimately, our savings will reach nearly 4 million barrels a 
day. That is almost as much as we import from all OPEC 
countries combined. The regulations are supported by a wide 
variety of stakeholders, including the industries they 
regulate, the labor unions representing workers in those 
industries, environmentalists, and States.
    The first of these regulations was last year's joint EPA-
NHTSA rulemaking for model year 2012 to 2016 vehicles. This 
national program allows manufacturers to build a single 
national fleet that satisfies EPA, NHTSA, and California 
standards. It is common sense, good government approach that 
harmonizes three different regulatory programs. EPA standards 
for model year 2016 light-duty vehicles are projected to 
achieve an average tailpipe CO2 compliance level of 250 grams 
of carbon dioxide per mile, equivalent to a fuel economy level 
of 35.5 mile per gallon if they are met only through fuel 
economy improvements.
    Over the lifetime of the vehicles, these standards are 
projected to save 1.8 billion barrels of oil and reduce 
greenhouse gas emissions by about 960 million metric tons. 
Consumers and small businesses buying model year 2016 vehicles 
are projected to average net savings of $3,000 over the life of 
the vehicle. Those fuel savings far outweigh the initial 
additional cost of the vehicle.
    We are now working on the President's request to extend 
this national program to 2017 to 2025 vehicles. This past July 
we published a preliminary framework for this program, 
including standards that could lead to a projected EPA 
fleetwide model year 2025 compliance level of 163 grams per 
mile CO2, which is equivalent to 54.5 mile per gallon, if 
reductions were achieved through fuel economy improvements. We 
project these standards set at these levels would reduce 
greenhouse gas emissions by approximately 2 million metric tons 
and save 4 billion barrels of oil over the lifetime of the 
vehicles, while still allowing consumers to have access to the 
full range of vehicle choices that they have today.
    The preliminary elements of the 2017 to 2025 program were 
informed by extensive public process over the course of the 
past year that included publication of a technical assessment 
of a range of standards, several notices published in the 
Federal Register, and extensive dialog with a wide range of 
stakeholders. The program is supported by letters from no less 
than 13 CEOs of auto companies, as well as the California Air 
Resources Board, which again intends to accept compliance with 
the Federal program as meeting California's standards. EPA and 
NHTSA will soon publish a Joint Notice of Proposed Rulemaking, 
seek an additional public comment before making any final 
decision on the 2017 to 2025 greenhouse gas and CAFE standards.
    The third set of regulations is a joint EPA and NHTSA 
rulemaking that established greenhouse gas and fuel efficiency 
standard for model year 2014 to 2018 medium- and heavy-duty 
trucks and engines. Supporters of this program include engine 
and truck manufacturers, the American Trucking Association, 
environmental groups, and California. We estimate that these 
standards will save about 530 million barrels of oil, they will 
reduce CO2 emissions by about 270 million metric tons, and help 
vehicle owners achieve $50 billion in total fuel savings over 
the lifetime of these vehicles. A semi-truck operator could pay 
for the technology upgrades in under a year and realize net 
savings of $73,000 to reduce fuel costs over the truck's useful 
life.
    Efforts like this national program represent monumental 
achievement for America and American families. History has 
shown that we can clean up pollution, preserve jobs, help grow 
our economy all at the same time.
    Again, I appreciate the opportunity to provide the Agency's 
views on this matter and I look forward to answering questions. 
Thank you very much.
    [The prepared statement of Ms. McCarthy follows:]
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    Mr. Jordan. Thank you, Administrator.
    We will go first to the gentlelady from New York, Ms. Ann 
Marie Buerkle.
    Ms. Buerkle. Thank you, Mr. Chairman, and thank you to our 
panelists for being here this morning.
    For those of you who don't know me, I have spent much of my 
professional career in health, so safety is of utmost 
importance to me. As I mentioned in the previous panel, I have 
six children and soon to be 12 grandchildren, so safety is 
always on my mind when you are putting kids in a car.
    Mr. Strickland, you talked about one of the ways to 
increase efficiency and decrease the use of fuel is decreasing 
the weight of a car, and I am concerned. Can you talk to me 
about the safety impacts resulting from making fleets smaller 
and lighter?
    Mr. Strickland. Absolutely. Well, the goal is actually to 
not encourage mass reduction, but actually to use fuel economy 
through driving technology, which is the reason why the 
National Highway Traffic Safety Administration went to an 
attribute-based standard, I believe, for our last set of truck 
rules prior to 2012 to 2016, which I think are for light-duty 
trucks, which was, I believe, in 2005. That system was actually 
not only validated, but actually mandated by the Congress in 
2007.
    When you have a flat standard, which is basically one rule 
covering the entire manufacturer's individual fleet, that 
encouraged car companies at the time to offset larger vehicles 
by making more smaller vehicles. This attribute-based system 
actually discourages that, and what you do is you don't take 
out weight. Actually, what you do is you encourage 
manufacturers to reduce weight in their largest vehicles. So 
not only do you have----
    Ms. Buerkle. Okay, I don't mean to interrupt----
    Mr. Strickland. Oh, certainly. Go ahead.
    Ms. Buerkle. Five minutes go by so quickly.
    Ms. Oge, I would like to just follow up with you. With 
regards to EPA and the concern for this fuel efficiency, what 
if the number of increase in fatalities and injuries goes up? 
At what point does the EPA say maybe this isn't such a smart 
idea, maybe this fuel efficiency approach is to the detriment 
of safety, so we are going to back off of this?
    Ms. Oge. Thank you for the question. Actually, this is a 
question that should go to Mr. Strickland. The beauty of the 
two agencies working together is that we were able to bring the 
expertise of our two technical teams. EPA has extensive 
expertise for the past 40 years to regulate the car companies 
for emissions and NHTSA has significant expertise in the area 
of safety. So, working together, we are going to put a proposal 
together that will demonstrate----
    Ms. Buerkle. So let me just----
    Ms. Oge [continuing]. Safety neutral proposal.
    Ms. Buerkle. So EPA is setting these standards without 
having the expertise with regards to safety issues?
    Ms. Oge. Under the Clean Air Act, we are required to look 
at safety, and we do that, so we have our own expertise. But 
also NHTSA has that expertise, so we rely on NHTSA when it 
comes to the fuel economy greenhouse gas program.
    Ms. Buerkle. So based on that would you just tell me what 
EPA's position is with regards to safety? We always do benefits 
and burdens analysis, so we want fuel efficiency, but we also 
want safety. So at what point do you say let's back off from 
this fuel efficiency issue because it is jeopardizing safety?
    Ms. Oge. As will become evident from the proposal, the 
proposal will be safety-neutral. That means we have taken that 
into consideration as one of the many factors that both 
agencies have to evaluate.
    Ms. Buerkle. Okay. We have evidence to the contrary.
    Mr. Strickland, I will just go back to you because you 
mentioned that these safety studies were continuing on.
    Mr. Strickland. That is correct.
    Ms. Buerkle. And I think it is important for you, if you 
are willing to do this, to commit to this committee that if in 
fact this final rule isn't going to be issued until and unless 
we know what the impact on safety is going to be. Are you 
willing to commit that to this committee today?
    Mr. Strickland. That is part of our statutory 
responsibility, Congresswoman.
    Ms. Buerkle. No, that wasn't my question. Would you be 
willing to not issue a final rule until and unless all of the 
safety studies have been completed and we understand what the 
impact of these fuel-efficiency standards are going to be on 
safety?
    Mr. Strickland. The issue is for us to be able to have the 
most complete information possible before we, as an agency, 
make a recommendation to Secretary LaHood about a final rule, 
of course, or proposal, for that matter. So the question of all 
the studies being completed, if the agency feels that we have 
enough technical information on hand to make a very educated 
decision in terms of proposal, we will go forward with that.
    Ms. Buerkle. So you are not willing to commit that we are 
not going to get all the safety studies first, before we issue 
the final rule.
    Mr. Strickland. We will have all the appropriate safety 
studies done to make a decision, Congresswoman.
    Ms. Buerkle. Mr. Chairman, I would like to introduce into 
the record a letter from Mark Pryor, Senator Pryor, a letter to 
him from Ray LaHood.
    Mr. Jordan. Without objection.
    Ms. Buerkle. Thank you.
    [The information referred to follows:]
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    Ms. Buerkle. I see my time has expired. Thank you, Mr. 
Chairman.
    Mr. Jordan. Thank you.
    Mr. Strickland, is the fuel efficiency standard for NHTSA 
in year 2025 49.6 miles per gallon? Is that going to be the 
standard?
    Mr. Strickland. Actually, it is virtually a conditional 
target. We are not allowed to set standards for more than 5-
year periods.
    Mr. Jordan. What does that number come from, then?
    Mr. Strickland. It is actually the work collectively done 
with us and the Environmental Protection Agency in terms of the 
technological reviews we are doing initially. Now, at this 
particular point----
    Mr. Jordan. But is that the number?
    Mr. Strickland. We have open notice and comment not only to 
have to go through for the initial part of the rule for 2017 to 
2021; we, under statutory obligation, under the Energy 
Independence and Security Act, we have to go through another 
open notice and comment period. We have to literally do another 
set of rulemaking. So we do not have a set endpoint standard; 
we can't, by law.
    Mr. Jordan. Anything on NHTSA letterhead or anything that 
points to that number, 49.6 miles per gallon?
    Mr. Strickland. We believe that the long-term program has 
the ability at this point to achieve that, but, once again, it 
has to be evaluated under the----
    Mr. Jordan. So that is a standard that is at least out 
there and proposed and being talked about and subject to maybe 
being the number.
    Mr. Strickland. It is a similar issue as an advanced notice 
of proposed rulemaking under the APA, which is you can 
definitely have a prospective number for thinking about 
planning purposes and also for long-term purposes planning for 
the manufacturers.
    Mr. Jordan. Ms. McCarthy, is the number that the EPA has 
54.5?
    Ms. McCarthy. That is the number that we have put out in a 
framework that is initially guiding our thought based on public 
information that has been out in the record.
    Mr. Jordan. So I guess that begs the question, then, is 
there one national standard? Is there going to be one standard 
as we are looking ahead or is there going to be two, 49.6 that 
one Federal agency is saying and 54.5 another Federal agency is 
saying? Because one of the things I hear and, look, I have been 
hearing for 2 years when I talk to business owners in our 
district and, frankly, across the State of Ohio, is the word 
that comes up more and more often, you hear it from elected 
officials, is the uncertainty in the marketplace with business 
owners today. So wouldn't it seem like maybe if there is 
supposed to be one national standard, we wouldn't want two 
numbers out there?
    Ms. McCarthy. Well, the success of the 2012 to 2016 program 
was that for the first time we did have one national program, 
which means we had three regulatory agencies that worked 
together so that one national fleet could be produced that 
would achieve all of the regulatory requirements.
    Mr. Jordan. My question is do you think that adds to 
uncertainty, the fact that there is not one standard at least 
in the proposed numbers and the target that manufacturers are 
going to have to hit?
    Ms. McCarthy. I think the manufacturers are well aware that 
for the first time they can build one fleet that achieves all 
of the regulatory requirements. That is the first time that we 
have been able to deliver it. That is why they asked us to look 
beyond 2016 and actually get together to extend that national--
--
    Mr. Jordan. Okay. Let me go to this, then. So the process--
and you were all here for the first panel. Mr. Grenerth talked 
about during the comment period for the truck industry where he 
felt like he was not heard at all and talked about the 
additional cost he now faces as a small business owner. And Mr. 
Anwyl, in his comments, talked about how he thinks the deal is 
already done now as we are moving forward with the new set of 
standards coming.
    How do you respond to that, that here are folks, consumer 
advocates, small business owners, who feel like they are not 
actually having their concerns addressed in the process and the 
deal is already done?
    Mr. Strickland. The deal is not done. We still have to 
propose, bottom line. What we did was asked stakeholders to 
provide us technical information to better inform the proposal. 
So everyone that was here that provided you testimony, we are 
looking forward to seeing their comments in our open notice and 
comment period when we issue the proposal.
    Again, also, I believe that OOIDA, which is, I think, the 
group that Mr. Grenerth, actually did have meetings not only 
with my technical team, but also with the EPA, and I can have 
Ms. McCarthy answer more specifically to that. But in terms of 
hearing particular voices or the consumers' voice or things of 
that nature, that is what open notice and comment is for, and 
our doors were always open throughout this process.
    While there were numbers of technical meetings that were 
going on with lead stakeholders, there were other meetings 
going on all the time for the process. Mr. Anwyl was always 
welcome, if he had his study, to be able to provide that to the 
agency, to provide that to EPA; we would happily have taken 
that into consideration in the preliminary look in shaping the 
proposal and especially, more importantly, during open notice 
and comment, which is where we have to evaluate all this 
information.
    Mr. Jordan. Well, I appreciate that, Director, but we had 
two people under oath just testify that they thought it did 
work the way you just described. We have this statement from 
the Center for Progressive Reform which says the Center notes 
that the agreed-upon CAFE standards are ``the result of raw 
political wrangling, not the rational rulemaking process.'' So 
this is not a small business owners, this is probably a center-
left organization making that kind of statement.
    We had Mr. Anwyl, under testimony before, saying he called 
it the California balkanization, talking about manufacturing, 
and I think the statement he used was he feels like the 
manufacturers had a gun to their head and they felt they had to 
go along with the proposed standards.
    So how do you respond to that?
    Mr. Strickland. Well, I can't speak to the state of mind to 
a manufacturer, you need to ask them how they felt.
    Mr. Jordan. How about Administrator McCarthy?
    Ms. McCarthy. Well, first of all, I would say that the 
national program has garnered such widespread support because 
it is a model of how government can and should work effectively 
with a wide range of stakeholders to develop thoughtful data-
driven regulations that benefit consumers, that improve the 
environment, that improve security----
    Mr. Jordan. A lot of the questioning in the first--if I 
could just real quickly. A lot of the questioning in the first 
panel was on the cost issue. Did you guys, when you go through 
this, you did, I would assume, a pretty extensive cost-benefit 
analysis?
    Ms. McCarthy. We did, and we will provide a similar 
analysis when we put out the proposed rule----
    Mr. Jordan. And is there a chance the committee could get 
that cost-benefit analysis used thus far to arrive at the 
decisions you have arrived at?
    Ms. McCarthy. Actually, all of that information is in the 
public record already. We actually put out a Notice of Intent, 
we put out a Technical Assessment Report, we put out a 
Supplemental Notice of Intent----
    Mr. Jordan. And you will get that all to the committee? Can 
you get that to the committee?
    Ms. McCarthy. Absolutely. It is in the public record.
    Mr. Jordan. Okay. Okay.
    Ms. Jordan. The only thing I would also say is I know that 
one of the representatives you heard from this morning is 
OOIDA, and I wanted to make it very clear to you that we 
actually met with OOIDA extensively. They, early on, identified 
seven issues that were of concern to them in our proposal, and 
I can provide you direct information that indicated that their 
comments led to significant changes in the final because we 
took their comments into consideration.
    In fact, I can provide you an email from OOIDA subsequent 
to our meeting with them during the comment period in which 
they went on effusively about how good EPA was to pay such 
close attention to the interests of small business. So I don't 
know who this representative was or how extensive an 
involvement he had in the process, but clearly not working for 
OOIDA, because the staff of OOIDA met with us, appreciated it, 
and had an influence in the decision.
    Mr. Jordan. All right.
    Gentlelady from New York for a second round. We will go 
real quickly second round.
    Ms. Buerkle. Thank you, Mr. Chairman.
    Just as a followup question to the chairman's question, Ms. 
McCarthy, with regards to you sat there and you were quick to 
tick off the benefits, savings 12 billion barrels of oil with 
these new standards. Can you give us some idea of the costs?
    Ms. McCarthy. Certainly. The costs are in the rulemaking 
themselves, and let me talk to you a little bit about the 
costs.
    Ms. Buerkle. Just the amount. Just the amount.
    Ms. McCarthy. Relative to 2012 to 2016, the cost for those 
model years is $52 billion, the monetized benefits are $240 
billion. For the estimated, we haven't proposed it yet. We 
don't have any costs yet for the 2017 to 2025. But if you look 
in the record, you will see that the Notice of Intent that we 
put out actually references a wide variety of costs related to 
different ranges of stringency in those rules. For the 2014 to 
2016, heavy-duty vehicles, the cost is $8 billion, the 
monetized benefits are $50 billion.
    Ms. Buerkle. Okay, yes, if you could provide those for the 
committee, that would be great.
    Ms. McCarthy. Happy to.
    Ms. Buerkle. Thank you.
    Mr. Strickland, I want to go back a little bit because it 
sounds to me like we are going to have three different 
standards here.
    Mr. Strickland. There are three different programs, 
Congresswoman; it is one harmonized national program. There are 
different authorities under the National Highway Traffic Safety 
Administration, Clean Air Act authority under EPA, and then the 
California Air Resources Board also has the ability, because of 
the waiver and the endangerment finding, to issue their own 
rules regarding greenhouse gas emissions. The key to it was to 
harmonize those three different authorities. So while, yes, 
there are three different regulatory actions happening, they 
are jointly done and coordinated so you do have one harmonized 
national program.
    Ms. Buerkle. Can you comment, though? This California 
waiver, doesn't that create--why was California given a waiver? 
Doesn't that create confusion? This harmony, there are three 
different sets of standards. It wasn't that way before 2009, 
and I would like you to comment on that.
    Mr. Strickland. Well, I will defer to Ms. McCarthy and EPA, 
since they are the ones who have to process the waiver.
    Ms. Buerkle. But my question is directed to you, Mr. 
Strickland.
    Mr. Strickland. Oh, certainly.
    Ms. Buerkle. Then I will follow up with the other two.
    Mr. Strickland. In terms of why I think there is--well, 
clearly because California was given the waiver, they have the 
authority, because of their endangerment finding, the 
endangerment finding made by the Environmental Protection 
Agency, to be able to issue greenhouse gas standards and, 
therefore, under Mass. v. EPA, which gave the Clean Air Act 
authority the right to actually oversee transportation sources, 
we have a new regulatory environment that we have to deal with.
    The White House and the President's leadership said for us 
all that there were various statements of Presidential orders 
to be able to work together to create one national harmonized 
program, and that is what we did.
    Ms. Buerkle. But I would like you to comment on the fact 
that the EPA really, in issuing this waiver to California, 
violated the State preemption, that California should not have 
been given a waiver.
    Mr. Strickland. I am not an expert on California waiver 
issues. I would be happy to answer that for the record 
specifically, but you have two experts to my left.
    Ms. Buerkle. Well, but you are working with these groups 
and it is of concern to me whether EPA had the authority to 
grant this waiver to California, and now we end up in a 
situation where we have three sets of standards where, in 2009, 
we had one set, and that was NHTSA's standard, which appears to 
be a more reasonable and less onerous and less burdensome on 
the economy and on the folks, as you heard from this morning.
    Mr. Strickland. We were given congressional authority under 
EPCA in the mid-1970's and then modified by the Energy 
Independence Security Act in 2007 we will carry out those 
duties. Because of Mass. v. EPA and the Clean Air Act 
authority, there is independent authority as well to also 
regulate greenhouse gas emissions, and it is not our place to 
evaluate the Environmental Protection Agency's legal authority. 
Our responsibility under the Department of Transportation is to 
actually deal with our statutory authorities, and our agency's 
mission is to not only regulate fuel economy, which is one part 
of our mission, but to find the best ways to save lives and 
reduce injuries, which is what we do every single day.
    Ms. Buerkle. I would disagree with you on the fact that you 
should have knowledge and you should be concerned with the fact 
that EPA violated the State preemption by granting California 
that waiver, and that should be the place where you start. It 
was in EPCA and there was a State preemption clause in there. 
And that is why we are having this hearing. We are not saying 
we don't want a clean environment, but we want to make sure 
that this process that was followed is legal and is the right 
way to go.
    I yield back, Mr. Chairman.
    Ms. McCarthy. Madam Vice Chairman, would you like me to 
answer this question?
    Mr. Jordan. Yes. I think the question is the statute seems 
to indicate that you can't have preemption, yet the EPA said 
you can have preemption. So what gives?
    Ms. McCarthy. Actually, I believe that what you are 
referring to are fuel economy regulations. What California is 
regulating and what EPA is regulating are greenhouse gas 
emission standards. And the only thing that I wanted to make 
sure to point out is that Congress, in the Clean Air Act, in 
Section 209, actually not only gave us the authority to grant 
California waivers, but it gave us specific criteria that we 
needed to follow. We applied those criteria to the letter; we 
went through a public rulemaking process----
    Mr. Jordan. I guess maybe here is a question. I am not a 
legal scholar, but it seems, when you read the statute, it 
talks about a regulation related to fuel economy standards, and 
greenhouse gases are certainly related to fuel economy 
standards, is that right?
    Ms. McCarthy. They are closely aligned, but they are 
different, Mr. Chairman.
    Mr. Jordan. Then I think that proves the gentlelady's 
point.
    Ms. McCarthy. We actually take into consideration all 
greenhouse gas emissions related to that vehicle, most notably, 
the major differences, the air conditioning. And that makes a 
very big difference in terms of the outcome of these rules. 
EPA's regulation actually improves the amount of greenhouse 
gases you can get and achieve through this joint rulemaking, 
and it also helps improve fuel economy in the end. But we are 
not driving fuel economy; we are actually regulating greenhouse 
gases.
    Mr. Jordan. I want to go back to where I was earlier, 
because I wasn't quite clear. Is there one standard or are 
there going to be two? Are there going to be 49 miles per 
gallon and 54, are there going to be two numbers out there or 
is there going to be just one number?
    Mr. Strickland. Well, the easiest way to explain it is the 
54.5 mile per gallon standard derived from the EPA's greenhouse 
gas rules versus NHTSA's 49.6. They are actually harmonized; 
they are the same number. We have different authorities. They 
have more flexibilities----
    Mr. Jordan. Mr. Strickland, only in Washington could you 
say two numbers are the same number. I mean, I have seen all 
kinds of things in budgeting----
    Mr. Strickland. It is a harmonized----
    Mr. Jordan. We are going to cut spending, but we are not 
cutting spending; we are reducing the rate of growth. I have 
seen it all and I have only been here 5 years. But I have never 
had someone, a Federal agency say 49.6 is the same as 54.5. I 
have just never seen it.
    Mr. Strickland. There are different statutory authorities 
and different flexibilities that the agencies have. When you--
--
    Mr. Jordan. Well, will you at least admit this, that that 
probably doesn't help the uncertainty that currently exists in 
our economy where we have 9 percent unemployment? Would you at 
least admit that?
    Mr. Strickland. No, the exact reason why we needed----
    Mr. Jordan. You wouldn't think so? Wow.
    Mr. Strickland. The exact reason why we needed a harmonized 
national program is to address exactly that, so the auto 
manufacturers can actually address building one national fleet. 
It is what the manufacturers wanted. It is the best 
environmental policy and best economic policy. The reason why 
we have undertaken this joint rulemaking in the first place is 
to address that very question. Bottom line is----
    Mr. Jordan. Would you ever have had to undertake the joint 
rulemaking if California didn't have a different standard?
    Mr. Strickland. Well, clearly the issue is----
    Mr. Jordan. I mean, just be frank. You are under oath, so 
just be frank. But for that, you wouldn't have had to do this, 
would you?
    Mr. Strickland. Well, before----
    Mr. Jordan. We wouldn't have this whole convoluted 
rulemaking process, special committee----
    Mr. Strickland [continuing]. The only auto fuel regulator 
was NHTSA. So you are asking a question which sort of bespokes, 
and that isn't the current reality. The current reality is is 
that the Supreme Court made the decision that the Clean Air Act 
did cover mobile transportation sources and, frankly, not only 
because of that legal decision, it frankly was the best policy 
decision, because there are some things that the Environmental 
Protection Agency, such as air conditioning, can reach which 
actually strengthens our fuel economy policy, makes it more 
consistent, and actually makes a more rigorous standard.
    Mr. Jordan. I want to thank the witnesses. I do have to 
run. I appreciate your coming in and I apologize I can't stay, 
but I have to get to another meeting here. I will turn it over 
to the gentlelady from New York.
    Ms. Buerkle. And I just have a quick question for the three 
of you. It is a yes or no question, if you wouldn't mind. Are 
the greenhouse gas rules, either the EPA's or the California 
rules, are they related to fuel economy? Mr. Strickland?
    Mr. Strickland. They regulate----
    Ms. Buerkle. Yes or no?
    Mr. Strickland. No. They regulate greenhouse gas emissions.
    Ms. McCarthy. They regulate greenhouse gas emissions.
    Ms. Oge. They regulate greenhouse gas emissions.
    Ms. Buerkle. So they are not related to fuel economy, under 
oath?
    Mr. Strickland. No. They are greenhouse gas emission 
regulations.
    Ms. McCarthy. We do not regulate fuel economy standards.
    Ms. Buerkle. Okay. And all three of you agree with that?
    Mr. Strickland. Yes.
    Ms. Oge. Yes.
    Ms. McCarthy. Yes.
    Ms. Buerkle. Very good.
    This hearing is adjourned. Thank you all for being here.
    [Whereupon, at 12:15 p.m., the subcommittee was adjourned.]
    [Additional information submitted for the hearing record 
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