[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]





    UPDATE ON THE CORPORATE AVERAGE FUEL ECONOMY PROGRAM (CAFE) AND 
         GREENHOUSE GAS EMISSIONS STANDARDS FOR MOTOR VEHICLES

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

                             JOINT HEARING

                               BEFORE THE

                      SUBCOMMITTEE ON ENVIRONMENT

                                AND THE

        SUBCOMMITTEE ON DIGITAL COMMERCE AND CONSUMER PROTECTION

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

                           DECEMBER 12, 2017

                               __________

                           Serial No. 115-86



[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


      Printed for the use of the Committee on Energy and Commerce
                        energycommerce.house.gov
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                    COMMITTEE ON ENERGY AND COMMERCE

                          GREG WALDEN, Oregon
                                 Chairman

JOE BARTON, Texas                    FRANK PALLONE, Jr., New Jersey
  Vice Chairman                        Ranking Member
FRED UPTON, Michigan                 BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois               ANNA G. ESHOO, California
MICHAEL C. BURGESS, Texas            ELIOT L. ENGEL, New York
MARSHA BLACKBURN, Tennessee          GENE GREEN, Texas
STEVE SCALISE, Louisiana             DIANA DeGETTE, Colorado
ROBERT E. LATTA, Ohio                MICHAEL F. DOYLE, Pennsylvania
CATHY McMORRIS RODGERS, Washington   JANICE D. SCHAKOWSKY, Illinois
GREGG HARPER, Mississippi            G.K. BUTTERFIELD, North Carolina
LEONARD LANCE, New Jersey            DORIS O. MATSUI, California
BRETT GUTHRIE, Kentucky              KATHY CASTOR, Florida
PETE OLSON, Texas                    JOHN P. SARBANES, Maryland
DAVID B. McKINLEY, West Virginia     JERRY McNERNEY, California
ADAM KINZINGER, Illinois             PETER WELCH, Vermont
H. MORGAN GRIFFITH, Virginia         BEN RAY LUJAN, New Mexico
GUS M. BILIRAKIS, Florida            PAUL TONKO, New York
BILL JOHNSON, Ohio                   YVETTE D. CLARKE, New York
BILLY LONG, Missouri                 DAVID LOEBSACK, Iowa
LARRY BUCSHON, Indiana               KURT SCHRADER, Oregon
BILL FLORES, Texas                   JOSEPH P. KENNEDY, III, 
SUSAN W. BROOKS, Indiana             Massachusetts
MARKWAYNE MULLIN, Oklahoma           TONY CARDENAS, California
RICHARD HUDSON, North Carolina       RAUL RUIZ, California
CHRIS COLLINS, New York              SCOTT H. PETERS, California
KEVIN CRAMER, North Dakota           DEBBIE DINGELL, Michigan
TIM WALBERG, Michigan
MIMI WALTERS, California
RYAN A. COSTELLO, Pennsylvania
EARL L. ``BUDDY'' CARTER, Georgia
JEFF DUNCAN, South Carolina

                                  (ii)
                                  
                      Subcommittee on Environment

                         JOHN SHIMKUS, Illinois
                                 Chairman
DAVID B. McKINLEY, West Virginia     PAUL TONKO, New York
  Vice Chairman                        Ranking Member
JOE BARTON, Texas                    RAUL RUIZ, California
MARSHA BLACKBURN, Tennessee          SCOTT H. PETERS, California
GREGG HARPER, Mississippi            GENE GREEN, Texas
PETE OLSON, Texas                    DIANA DeGETTE, Colorado
BILL JOHNSON, Ohio                   JERRY McNERNEY, California
BILL FLORES, Texas                   TONY CARDENAS, California
RICHARD HUDSON, North Carolina       DEBBIE DINGELL, Michigan
KEVIN CRAMER, North Dakota           DORIS O. MATSUI, California
TIM WALBERG, Michigan                FRANK PALLONE, Jr., New Jersey (ex 
EARL L. ``BUDDY'' CARTER, Georgia        officio)
JEFF DUNCAN, South Carolina
GREG WALDEN, Oregon (ex officio)
                                 ------                                

        Subcommittee on Digital Commerce and Consumer Protection

                         ROBERT E. LATTA, Ohio
                                 Chairman
ADAM KINZINGER, Illinois             JANICE D. SCHAKOWSKY, Illinois
  Vice Chairman                        Ranking Member
FRED UPTON, Michigan                 BEN RAY LUJAN, New Mexico
MICHAEL C. BURGESS, Texas            YVETTE D. CLARKE, New York
LEONARD LANCE, New Jersey            TONY CARDENAS, California
BRETT GUTHRIE, Kentucky              DEBBIE DINGELL, Michigan
DAVID B. McKINLEY, West Virgina      DORIS O. MATSUI, California
ADAM KINZINGER, Illinois             PETER WELCH, Vermont
GUS M. BILIRAKIS, Florida            JOSEPH P. KENNEDY, III, 
LARRY BUCSHON, Indiana                   Massachusetts
MARKWAYNE MULLIN, Oklahoma           GENE GREEN, Texas
MIMI WALTERS, California             FRANK PALLONE, Jr., New Jersey (ex 
RYAN A. COSTELLO, Pennsylvania           officio)
JEFF DUNCAN, South Carolina
GREG WALDEN, Oregon (ex officio)





































                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Robert E. Latta, a Representative in Congress from the State 
  of Ohio, opening statement.....................................     2
    Prepared statement...........................................     3
Hon. Janice D. Schakowsky, a Representative in Congress from the 
  State of Illinois, opening statement...........................     4
Hon. John Shimkus, a Representative in Congress from the State of 
  Illinois, opening statement....................................     6
    Prepared statement...........................................     7
Hon. Paul Tonko, a Representative in Congress from the State of 
  New York, opening statement....................................     8
Hon. Greg Walden, a Representative in Congress from the State of 
  Oregon, opening statement......................................    10
    Prepared statement...........................................    11
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................    12
    Prepared statement...........................................    13

                               Witnesses

Mitch Bainwol, President and Chief Executive Officer, Alliance of 
  Automobile Manufacturers.......................................    15
    Prepared statement...........................................    17
    Answers to submitted questions...............................    99
Forrest McConnell III, President, McConnell Honda & Acura, on 
  Behalf of the National Automobile Dealers Association..........    38
    Prepared statement...........................................    40
    Answers to submitted questions...............................   104
Dave Cooke, Ph.D., Senior Vehicles Analyst, Union of Concerned 
  Scientists.....................................................    45
    Prepared statement...........................................    47
    Answers to submitted questions...............................   107
John Bozzella, President and Chief Executive Officer, Association 
  of Global Automakers, Inc......................................    55
    Prepared statement...........................................    57

                           Submitted Material

Proposed Rule, Department of Transportation, National Highway 
  Traffic Safety Administration, 49 CFR Parts 531, 533, and 536, 
  Federal Register, December 28, 2016, submitted by Mr. Olson....    93
Letter of December 11, 2017, from Ann Wilson, Senior Vice 
  President, Government Affairs, Motor & Equipment Manufacturers 
  Association, to Mr. Shimkus and Mr. Latta, submitted by Mr. 
  Shimkus........................................................    95

 
    UPDATE ON THE CORPORATE AVERAGE FUEL ECONOMY PROGRAM (CAFE) AND 
         GREENHOUSE GAS EMISSIONS STANDARDS FOR MOTOR VEHICLES

                              ----------                              


                       TUESDAY, DECEMBER 12, 2017

                  House of Representatives,
                        Subcommittee on Environment
                             joint with the
     Subcommittee on Digital Commerce and Consumer 
                                        Protection,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:04 a.m., in 
room 2123, Rayburn House Office Building, Hon. Robert Latta 
(chairman of the Subcommittee on Digital Commerce and Consumer 
Protection) presiding.
    Members present: Latta, Shimkus, McKinley, Kinzinger, 
Barton, Upton, Blackburn, Harper, Lance, Olson, Bilirakis, 
Johnson, Bucshon, Flores, Mullin, Hudson, Cramer, Walberg, 
Walters, Costello, Carter, Duncan, Walden (ex officio), 
Schakowsky, Tonko, Green, Matsui, McNerney, Welch, Clarke, 
Cardenas, Ruiz, Peters, Dingell, and Pallone (ex officio).
    Staff present: Ray Baum, Staff Director; Samantha Bopp, 
Staff Assistant; Allie Bury, Legislative Clerk, Energy/
Environment; Kelly Collins, Staff Assistant; Wyatt Ellertson, 
Professional Staff Member; Melissa Froelich, Chief Counsel, 
Digital Commerce and Consumer Protection; Adam Fromm, Director 
of Outreach and Coalitions; Jordan Haverly, Policy Coordinator, 
Environment; Paul Jackson, Professional Staff Member, Digital 
Commerce and Consumer Protection; A.T. Johnston, Senior Policy 
Advisor, Energy; Bijan Koohmaraie, Counsel, Digital Commerce 
and Consumer Protection; Ben Lieberman, Senior Counsel, Energy; 
Mary Martin, Chief Counsel, Energy/Environment; Katie McKeogh, 
Press Assistant; Mark Ratner, Policy Coordinator; Madeline Vey, 
Policy Coordinator, Digital Commerce and Consumer Protection; 
Everett Winnick, Director of Information Technology; Andy Zach, 
Senior Professional Staff Member, Environment; Greg Zerzan, 
Counsel, Digital Commerce and Consumer Protection; Michelle 
Ash, Minority Chief Counsel, Digital Commerce and Consumer 
Protection; Jeff Carroll, Minority Staff Director; Jean Fruci, 
Minority Policy Advisor, Energy and Environment; Lisa Goldman, 
Minority Counsel; Caitlin Haberman, Minority Professional Staff 
Member; Rick Kessler, Minority Senior Advisor and Staff 
Director, Energy and Environment; Caroline Paris-Behr, Minority 
Policy Analyst; Alexander Ratner, Minority Policy Analyst; and 
C.J. Young, Minority Press Secretary.
    Mr.  Latta. Well, good morning. The joint subcommittee will 
now come to order. The Chair now recognizes himself for 5 
minutes for an opening statement.

OPENING STATEMENT OF HON. ROBERT E. LATTA, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF OHIO

    Good morning. I would like to thank our witnesses for being 
with us this morning. Today we are here to discuss with 
stakeholders the Corporate Average Fuel Economy Program, or 
CAFE, at the National Highway Transportation Safety 
Administration, NHTSA, and the greenhouse gas emissions 
standards at the U.S. EPA agency that govern fuel economy 
standards.
    NHTSA's CAFE program was established by Congress in 1975. 
The goals of the program are to improve vehicle fuel economy, 
reduce oil consumption, and secure the Nation's energy 
independence.
    The CAFE program has undergone major changes and 
modifications in the past four decades, both because of 
political and economic forces.
    Less than 10 years ago, and on top of the CAFE program, the 
EPA standards were created to incentivize the production of 
more efficient vehicles that will use less fuel and emit less 
carbon dioxide.
    In addition, various States have enacted their own 
standards with respect to automobile emissions. The 
combinations of these requirements has created an incredibly 
complicated regulatory scheme.
    Improving fuel efficiency and achieving energy independence 
are important goals. That said, real-world facts and data must 
drive regulatory decisions that impact such an important and 
far-reaching part of the American economy and consumers' daily 
lives.
    The previous administration announced an attempt to create 
a national standard which included a plan for NHTSA and EPA to 
work together to avoid conflicting regulations.
    Whatever progress had been made on that front was undone, 
however, when earlier this year EPA issued its final 
determination that the standards for model year 2022 and 2025 
are appropriate.
    EPA took this action without coordinating with NHTSA, 
clearly undermining their earlier pledge. The result is that 
automobile makers potentially found themselves in a position 
where they are in compliance with one Federal program but out 
of compliance and subject to penalty with another.
    This type of fragmented regulation harms our economy, our 
workers, and our consumers. The automobile industry is a huge 
source of American jobs, including nearly 100,000 Ohioans.
    A hallmark of the American automobile industry has been the 
ability to innovate and build cars that American drivers want 
to buy. But outdated, conflicting, or impossible-to-meet 
Government regulations get in the way of this type of 
innovation.
    It is a rare event, to say the least, for policymakers in 
Washington to have better ideas about how to meet consumer 
demand than consumers themselves.
    All too often, Washington stands in the way, particularly 
when it creates unnecessary confusion with conflicting rules.
    My constituents know what type of vehicles work best for 
their family and their budget. That may change over time, and 
each American family should be able to make their own choice 
without the Federal Government putting an extra strain on their 
finances.
    Also, there is a real risk that the costs associated with 
duplicative Federal and State fuel economy standards could 
force families to choose older cars without the benefits of new 
safety technologies.
    NHTSA's safety mission and statutory obligations must 
remain its guiding principle. When we are just starting to turn 
the corner after many challenging years, it is disheartening, 
but not surprising, to see the EPA rush out a final 
determination in the waning hours of the last administration.
    I am interested in hearing from our witnesses about 
industry's experience attempting to navigate this tricky 
regulatory terrain and what can be done to help support choice 
for American consumers and jobs across the country.
    Again, I want to thank our witnesses for being here, and I 
yield at this time to the gentlelady from Tennessee.
    [The prepared statement of Mr. Latta follows:]

               Prepared statement of Hon. Robert E. Latta

    Good morning, I would like to thank our witnesses for being 
here this morning. Today we are here to discuss with 
stakeholders the Corporate Average Fuel Economy Program, or 
CAFE, at the National Highway Transportation Safety 
Administration (NHTSA), and the Greenhouse Gas Emissions 
Standards at the U.S. Environmental Protection Agency (EPA) 
that govern fuel economy standards.
    NHTSA's CAFE program was established by Congress in 1975. 
The goals of the program are to improve vehicle fuel economy, 
reduce oil consumption, and secure the Nation's energy 
independence. The CAFE program has undergone major changes and 
modifications in the past four decades--both because of 
political and economic forces.
    Less than 10 years ago, and on top of the CAFE program, the 
EPA standards were created to incentivize the production of 
more efficient vehicles that will use less fuel and emit less 
carbon dioxide. In addition, various States have enacted their 
own standards with respect to automobile emissions.
    The combination of these requirements has created an 
incredibly complicated regulatory scheme. Improving fuel 
efficiency and achieving energy independence are important 
goals. That said, real world facts and data must drive 
regulatory decisions that impact such an important and far-
reaching part of the American economy and consumers' daily 
lives.
    The previous administration announced an attempt to create 
a national standard which included a plan for NHTSA and EPA to 
work together to avoid conflicting regulations. Whatever 
progress had been made on that front was undone, however, when 
earlier this year the EPA issued its Final Determination that 
the standards for model year 2022-2025 are appropriate. EPA 
took this action without coordinating with NHTSA, clearly 
undermining the earlier pledge.
    The result is that automakers potentially find themselves 
in a position where they are in compliance with one Federal 
program, but out of compliance and subject to penalties with 
another's.
    This type of fragmented regulation harms our economy, our 
workers and consumers. The automotive industry is a huge source 
of American jobs including nearly 100,000 Ohioans.1
    A hallmark of the American automotive industry has been the 
ability to innovate and build cars that American drivers want 
to buy.
    But outdated, conflicting or impossible-to-meet Government 
regulations get in the way of this type of innovation. It is a 
rare event, to say the least, for policymakers in Washington to 
have better ideas about how to meet consumer demand than 
consumer themselves. All too often Washington stands in the 
way, particularly when it creates unnecessary confusion with 
conflicting rules.
    My constituents know what type of vehicle works best for 
their family and their budget. That may change over time and 
each American family should be able to make their own choice 
without the Federal Government putting extra strain on their 
finances. Also, there is a real risk that the costs associated 
with duplicative Federal and State fuel economy standards could 
force families to choose older cars without the benefits of new 
safety technologies. NHTSA's safety mission and statutory 
obligations must remain its guiding principle.
    When we are just starting to turn the corner after many 
challenging years, it is disheartening, but not surprising, to 
see the EPA rush out a Final Determination in the waning hours 
of the last administration.
    I am interested in hearing from the witnesses about 
industry's experience attempting to navigate this tricky 
regulatory terrain, and what can be done to help support choice 
for American consumers and jobs across the country.
    Thank you for being here today and I look forward to 
hearing your testimony.

    Mrs.  Blackburn. Thank you, Mr. Chairman, and I appreciate 
so much that you and Chairman Shimkus have called this hearing.
    Studies have shown that the higher purchase price of cars 
under a stricter CAFE under these 2025 standards would 
eliminate a lot of consumers from buying new cars.
    There is between 3.1 and 14.9 million American consumers 
that would fall out of the new-car marketplace. Now, this is 
where there is a tension and a friction that we need to talk 
about: When is something counterproductive?
    And, of course, in Tennessee we have a lot of auto 
manufacturers. This is what they tell me: Whether they are with 
Nissan or Toyota or Volkswagen or GM, it does not matter. They 
want realistic standards. They want something that will--they 
will be able to meet the expectation of American consumers and 
deliver a product that is, first of all, safe and that 
consumers are going to be safe in these automobiles.
    So I thank the chairman for the hearing. I think this is 
time for us to talk about what is realistic, what is 
achievable, and what will deliver a safe product for the 
American consumer, and I yield back.
    Mr.  Latta. Thank you very much. The gentlelady yields 
back.
    The Chair now recognizes the subcommittee ranking member, 
the gentlelady from Illinois, for 5 minutes for an opening 
statement.

       OPENING STATEMENT OF HON. JANICE D. SCHAKOWSKY, A 
     REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS

    Ms.  Schakowsky. Thank you, Mr. Chairman.
    CAFE and greenhouse gas emission standards have been 
critical tools to improve fuel economy and reduce carbon 
pollution.
    The CAFE program was born out of the energy crisis in the 
1970s. Now those standards are helping us address the even 
greater threat of a changing climate.
    Strong standards have a more immediate consequence for 
American consumers: big savings at the pump. In the midterm 
evaluation finalized in January, the Environmental Protection 
Agency estimated that the model year 2022 to 2025 greenhouse 
gas emission standards will save consumers $92 billion over the 
lifetime of their vehicle--obviously, not each one, together 
$92 billion. Industry has criticized the standards for 2022 to 
2025 as too costly. That criticism is not supported by the 
facts.
    The EPA found that meeting the standards is not only 
technologically feasible but also cheaper than expected. In 
fact, the cost estimate per vehicle has gone down over $200 
since 2012.
    Ambitious standards have driven innovation, which has, in 
turn, lowered costs. The last time we held this hearing in 
September of 2016, John German of the International Council on 
Clean Transportation testified, quote, ``During the course of 
my 40-year career, initial cost estimates for complying with 
emissions and efficiency requirements have consistently been 
overstated, not some of the time or even most of the time, but 
all of the time.``
    Nevertheless, the standards face resistance. I often hear 
companies call for greater regulatory certainty and more time 
to comply with the rules. But this time, the EPA actually 
finished its work ahead of schedule.''
    So what did the automakers do? Petition for a redo, and the 
Trump administration was all too happy to comply. No matter how 
EPA Administrator Scott Pruitt or others want to explain the 
decision to reopen the midterm evaluation, the end result is 
clear: dirtier, less efficient vehicles.
    Calls for harmonization between CAFE and greenhouse gas 
standards are just further efforts to weaken the standards.
    I am especially confused why the auto industry would be so 
opposed to strong standards when the automakers are promising 
fleets of energy-efficient autonomous vehicles.
    If AVs are actually going to be electric vehicles, I would 
think compliance should be easy. As we discuss the future of 
these standards, family budgets and public health hangs in the 
balance. This is not the time to ignore facts under the 
industry pressure.
    We need to continue the progress toward greater fuel 
efficiency and lower greenhouse gas emissions.
    And I now yield to Congresswoman Matsui.
    Ms.  Matsui. Thank you very much, Ranking Member 
Schakowsky.
    NHTSA's CAFE standards and the EPA's greenhouse gas 
emission standards for light-duty vehicles are win-win. They 
are good for consumers who save billions of dollars at the pump 
over the lifetime of their vehicles.
    They are good for the environment. The standards 
significantly reduce emissions for the transportation sector, 
the only sector in which energy efficiency has grown worse over 
the past 15 years in this country.
    And they are good for the American workers. They spark the 
development of innovative technologies that create profits and 
support jobs.
    Many companies understand this and support the NHTSA and 
EPA standards. Even those companies critical of the standards 
are shifting to efficient engines and electric vehicles in 
response to consumer demand for cleaner cars.
    In light of the widespread support for improving fuel 
economy, I am disappointed with the Trump administration's 
decision to revisit the standards for model years 2022 to 2025.
    It is clear the administration is simply intent on 
weakening the progress we have made so far. That is why I will 
be introducing a bill to codify the NHTSA and EPA standards. 
These standards are written in 2012 with the support of the 
auto industry, environmental groups, and States.
    My legislation maintains the Federal Government and auto 
manufacturers' promise to American people, a promise for 
cleaner and efficient cars that cost less at the pump and that 
are better for the environment, health, and the future of our 
children and grandchildren.
    I look forward to continuing to engage with the committee 
on this issue. Thank you, and I yield back.
    Mr.  Latta. Thank you. The gentlelady yields back, and the 
Chair now recognizes the chairman of the Environment 
Subcommittee, the gentleman from Illinois, for 5 minutes for an 
opening statement.
    Mr.  Shimkus. Mr. Chairman, before I do my opening 
statement, I get 15 seconds for a point of personal privilege?
    Thank you. Two pictures I want to identify for folks--you 
will all appreciate this. This is a tweet I got from my 
colleague from Texas, who is not paying attention, talking 
about the next streak, and then the next photo will--if you put 
that up--that's actually what--Mr. Olson, are you paying 
attention?
    Mr.  Olson. Yes.
    Mr.  Shimkus. So I thank you for correcting the record and 
starting a new streak.
    Mr.  Olson. For the second time in 16 years.
    Mr.  Shimkus. I would just--we saw your tweet earlier, so--
I know my colleagues because of Mr. Olson and how he acts, and 
we appreciate that. So thank you very much.
    Mr.  Latta. The gentleman is recognized.

  OPENING STATEMENT OF HON. JOHN SHIMKUS, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ILLINOIS

    Mr.  Shimkus. One of the costs of this energy and 
environmental regulation from the Obama administration is the 
one we will address today that targets fuel efficiency and 
greenhouse gas emissions for cars and light trucks.
    EPA estimated total cost in excess of $200 billion by 2025, 
much of which will show up in the form of higher sticker prices 
for new vehicles.
    And although the agency claims offsetting consumer savings 
from lower fuel costs, we now know that this was based upon 
inaccurate projections of rising gas prices as well as other 
assumptions that are proving to be off the mark.
    It is time to review these rules to see if they are a good 
deal for consumers or whether they can be improved upon. 
Fortunately, regulations contain just such a review, the so-
called midterm evaluation.
    The regulations were finalized in 2012 and included 
progressively stricter standards all the way out to 2025, more 
than a decade into the future.
    For this reason, it was decided to revisit the standards 
midway through the process to see if standards for model years 
2022 to 2025 need to be adjusted in light of changed 
circumstances.
    In 2016, EPA commenced its midterm evaluation and was 
poised to make a final determination by April 2018. But after 
the elections, EPA accelerated its time line and rushed the 
final determination out the door last January.
    This determination concluded that standards are fine as 
they are and don't need to be changed. The good news is that 
Administrator Pruitt found this process to be completely 
unacceptable and has reopened the midterm evaluation with the 
original deadline of April 2018, after which the agency may 
proceed to a rulemaking to change the targets for 2022 through 
2025.
    Part of this hearing is to get input from those who make 
cars and trucks as well as those who sell them about their 
contributions to the midterm evaluation and what they would 
like to see come out of the process.
    The stakes are high for automakers and auto dealers. But 
they are higher still for consumers. The average price of a new 
vehicle has risen to $35,000 in 2017. These regulations are a 
contributor to the increase.
    EPA estimated cumulative price increases of nearly $3,000 
per vehicle by 2025, and the real number may prove to be 
higher.
    Worst of all, the biggest sticker shock may be on the 
vehicles that matter most to middle America. Granted, a Toyota 
Prius or a Smart car may be fine for some people, but many of 
my constituents need family-size vehicles or pickup trucks for 
work, and it is these larger vehicles that may take the biggest 
hit.
    We need to make sure that the future targets under this 
program maintain vehicle choice and affordability.
    In addition to the midterm evaluation, we also need to 
evaluate whether we have a uniform set of rules for the Nation.
    Recall that since the 1970s the National Highway Traffic 
Safety Administration, or NHTSA, had exclusive authority to set 
vehicle fuel economy standards.
    But the Obama administration decided that the EPA and the 
California Air Resources Board should do so as well. So now we 
have three agencies all regulating the same thing, and, not 
surprisingly, there are discrepancies emerging.
    Looking ahead, we need to ask whether we still want three 
agencies involved in the fuel economy and why we gave 
California so much more power than any other State in the 
Union.
    It all comes down to what is best for the consumer. Vehicle 
purchases are second only to home purchases in terms of their 
consumer impact, and I hope this hearing helps us strengthen 
our understanding of what we need to do to make these 
regulations as consumer friendly as possible.
    Thank you, Mr. Chairman, and I yield back the balance of my 
time.
    [The prepared statement of Mr. Shimkus follows:]

                Prepared statement of Hon. John Shimkus

    One of the costliest energy and environmental regulations 
from the Obama administration is the one we will address today 
that targets fuel efficiency and greenhouse gas emissions from 
cars and light trucks. EPA estimated total costs in excess of 
$200 billion by 2025, much of which will show up in the form of 
higher sticker prices for new vehicles. And although the agency 
claims offsetting consumer savings from lower fuel costs, we 
now know that this was based on inaccurate projections of 
rising gas prices as well as other assumptions that are proving 
to be off the mark. It is time to review these rules to see if 
they are a good deal for consumers and whether they can be 
improved upon.
    Fortunately, the regulations contained just such a review--
the so-called midterm evaluation. The regulations were 
finalized in 2012 and included progressively stricter standards 
all the way out to 2025--more than a decade into the future. 
For this reason, it was decided to revisit the standards midway 
through the process to see if the standards for model years 
2022-2025 need to be adjusted in light of changed 
circumstances. In 2016 EPA commenced its midterm evaluation and 
was poised to make a final determination by April of 2018.
    But after the elections, EPA accelerated its timeline and 
rushed the final determination out the door last January. This 
determination concluded that the standards are fine as they are 
and don't need to be changed.
    The good news is that Administrator Pruitt found this 
process to be completely unacceptable and has reopened the 
midterm evaluation with the original deadline of April of 2018, 
after which the agency may proceed to a rulemaking to change 
the targets for 2022-2025.
    Part of this hearing is to get input from those who make 
cars and trucks as well as those who sell them about their 
contributions to the midterm evaluation and what they would 
like to see come out of this process.
    The stakes are high for auto makers and auto dealers, but 
they are higher still for consumers. The average price of a new 
vehicle has risen to $35,000 in 2017, and these regulations are 
a contributor to the increase. EPA estimated cumulative price 
increases of nearly $3,000 per vehicle by 2025, and the real 
number may prove to be higher.
    Worst of all, the biggest sticker shock may be on the 
vehicles that matter most to Middle America. Granted, a Toyota 
Prius or a Smart car may be fine for some people, but many of 
my constituents need family-sized vehicles or pickup trucks for 
work, and its these larger vehicles that may take the biggest 
hit. We need to make sure that the future targets under this 
program maintain vehicle choice and affordability.
    In addition to the midterm evaluation, we also need to 
evaluate whether we have a uniform set of rules for the Nation. 
Recall that since the 1970s the National Highway Traffic Safety 
Administration (NHTSA) had exclusive authority to set vehicle 
fuel economy standards, but the Obama administration decided 
that EPA and the California Air Resources Board should do so as 
well. So now we havethree agencies all regulating the same 
thing and not surprisingly there are discrepancies emerging. 
Looking ahead, we need to ask whether we still want three 
agencies involved in fuel economy and why we gave California so 
much more power than any other State.
    In conclusion, it all comes down to what is best for the 
consumer. Vehicle purchases are second only to home purchases 
in terms of their consumer impact, and I hope this hearing 
helps us strengthen our understanding of what we need to do to 
make these regulations as consumer-friendly as possible. Thank 
you.

    Mr.  Latta. Thank you. The gentleman yields back the 
balance of his time.
    The Chair now recognizes the Environment Subcommittee 
ranking member, the gentleman from New York, for 5 minutes for 
an opening statement.

   OPENING STATEMENT OF HON. PAUL TONKO, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF NEW YORK

    Mr.  Tonko. Thank you, and thank you to our witnesses. 
Thank you, Chair Latta, Chair Shimkus for holding today's 
hearing.
    NHTSA's Corporate Average Fuel Economy, or CAFE, standards 
and EPA's greenhouse gas emissions standards have played a 
critical role in saving consumers money at the pump while 
reducing carbon pollution.
    CAFE standards were established in 1975 by the Energy 
Policy and Conservation Act to reduce our Nation's reliance on 
foreign oil, and since 2009, EPA's greenhouse gas emissions 
standards have become increasingly important in our Nation's 
efforts to address climate change.
    Last year, transportation surpassed the electricity sector 
as the largest source of greenhouse gas emissions in our 
country. According to the EPA's Inventory of U.S. Greenhouse 
Gas Emissions and Sinks, light-duty vehicles accounted for 
nearly 60 percent of the United States transportation emissions 
and approximately 16.5 percent of total domestic emissions in 
2015.
    No serious effort to reduce emissions can ignore emissions 
from light-duty vehicles. The current standards are estimated 
to lead to the reduction of carbon emissions by 6 billion 
metric tons for vehicles within model years 2012 through 2025.
    In addition to the pollution reduction, CAFE standards are 
estimated to save consumers some $1.7 trillion at the pump from 
vehicles produced between 2011 and 2025.
    Improving vehicle efficiency has truly been a win-win 
outcome. We have come a long way since the 1930s. Over the past 
four decades, the Federal fuel economy program has evolved 
considerably to give automakers significantly greater 
flexibility.
    Today, manufacturers are not forced into a single 
compliance path. Each manufacturer has its own fleetwide 
standard that reflects the vehicles it produces to meet its 
customers' demands.
    But in the 15 months since our last hearing on this 
subject, we have seen major changes at EPA. As part of the 2012 
agreement between President Obama and the auto industry, EPA 
agreed to conduct a midterm evaluation to determine whether 
assumptions made about technology development and costs in 2012 
were still accurate and still reasonable.
    Last summer, EPA began its midterm review. The agency 
examined a wide range of factors and built an extensive public 
record on the appropriateness of greenhouse gas standards for 
model years 2022 through 2025 vehicles.
    Along with the NHTSA and the California Air Resources 
Board, EPA issued the July 2016 draft technical assessment 
report and sought public comment.
    EPA also sought public comment on the proposed 
determination that the greenhouse gas standards for model years 
2022 through 2025 vehicles remain appropriate.
    The technical assessment and ensuing comments provide a 
robust and conclusive record. EPA standards are feasible and 
can be met at lower costs than originally estimated.
    EPA's current estimate is an average per-vehicle cost of 
$875 to meet these standards. This estimate is lower than the 
initial estimate of $1,100 per vehicle, which EPA found 
reasonable in its 2012 rule and much lower than consumers can 
expect to save at the pump over the life of the vehicle.
    In January, former EPA Administrator Gina McCarthy issued a 
final determination that the targets should remain in place up 
to 2025.
    I believe that was the correct decision. But despite the 
extensive record established by EPA, in March Administrator 
Pruitt announced his decision to reopen the midterm review. 
Weakening these standards would be bad for consumers, the 
environment, and, certainly, American competitiveness.
    I have tremendous faith in America's manufacturers. There 
is no doubt they will continue to be able to meet these 
achievable goals.
    In fact, the evidence is clear that technology adoption 
rates have occurred more quickly than EPA's initial 
expectation.
    Last year, former EPA Acting Assistant Administrator Janet 
McCabe testified before this committee that there are more than 
100 individual model year 2016 vehicle versions already meeting 
model year 2020 standards or later.
    As automakers continue to innovate, it is clear that 
multiple technology pathways, including existing off-the-shelf 
technologies, will allow them to achieve existing model years 
2022 through 2025 standards, particularly given the flexibility 
of the program.
    So thank you again to the chairs for today's joint hearing 
and thank you to our witnesses for being here. These are 
incredibly important programs for the sake of our constituents' 
wallets and our Nation's efforts to reduce pollution.
    With that, I yield back.
    Mr.  Latta. Thank you. The gentleman yields back.
    The Chair now recognizes the chairman of the full 
committee, the gentleman from Oregon, for 5 minutes for an 
opening statement.

  OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF OREGON

    Mr.  Walden. I thank the chairman.
    Good morning, everyone. Today's hearing touches on a 
prominent point of frustration for many Americans, and that's 
the duplicative Government programs that increase costs and 
decrease choices for consumers.
    Specifically, we are talking about the differing fuel 
economy standards under programs administered by the National 
Highway Traffic Safety Administration and the Environmental 
Protection Agency.
    While NHTSA has been charged with implementing fuel economy 
standards for motor vehicles since 1978, I believe, the Obama-
era EPA developed its own standard under the Clean Air Act in 
2009.
    So, in order to coordinate these different requirements, 
the Obama administration created the national program. 
Unfortunately, the national program has failed in its attempt 
to develop a single national standard, which causes uncertainty 
around the multiple policies and creates barriers to innovation 
and growth.
    Under the current scheme, it is possible that automakers 
will find themselves in full compliance with one Federal 
regulatory standard but running afoul of another.
    This is true even though the previous administration 
explicitly told this committee during a hearing last Congress 
that they would work together to avoid this very result.
    Since then, we have seen activity that completely 
undermines the national program and works against the Obama 
administration's promise of coordinated regulatory efforts.
    Under the midterm evaluation schedule, NHTSA and EPA were 
to jointly issue their respective determinations on the model 
years 2022 through 2025 standards.
    This was supposed to happen in April of 2018. However, the 
EPA then abandoned this commitment and rushed through its final 
determination without coordination with the National Highway 
Traffic Safety Administration just 7 days before President 
Trump was sworn into office.
    I look forward to receiving an update from our witnesses 
today on how they are dealing with different requirements. We 
want to know how these different regulatory schemes impact 
consumers and learn more about better ways to ensure the 
Federal fuel economy standards are met without creating 
unnecessary paperwork or administrative burdens that serve only 
to drive up costs for American families.
    As currently constructed, it's been estimated these 
programs will raise the average price of a new vehicle by 
almost $3,000. That's no small amount and one that will 
undoubtedly price many Americans out of the new car market.
    Although the goals of these varying programs are important, 
we must never forget that we do in Washington have a real 
impact on consumers across the country.
    Government works best when it identifies clear problems and 
offers clear instructions for how to solve those problems. 
Federal programs that overlap or conflict do nothing to help 
protect the American people.
    It's our job to ensure that our laws and the implementation 
of them advance public policy goals, and, if they need 
correction or clarification, it's what we are here to do.
    So I want to thank our witnesses again for participating in 
our discussions today, and the American people deserve a 
Government that removes barriers to innovation and growth and 
avoids unnecessarily driving up costs for consumers.
    I look forward to your testimony, and unless any other 
Member wants the balance of my time, I will return the balance 
of my time.
    I yield back.
    [The prepared statement of Mr. Walden follows:]

                 Prepared statement of Hon. Greg Walden

    Good morning. Today's hearing touches on a prominent point 
of frustration for many Americans: duplicative Government 
programs that increase costs and decrease choices for 
consumers. Specifically, we're talking about the differing fuel 
economy standards under programs administered by the National 
Highway Traffic Safety Administration and the Environmental 
Protection Agency.
    While NHTSA has been charged with implementing fuel economy 
standards for motor vehicles since 1978, the Obama-era EPA 
developed its own standards under the Clean Air Act in 2009.
    In order to coordinate these different requirements, the 
Obama administration created the National Program. 
Unfortunately, the program has failed in its attempt to develop 
a single national standard, causing uncertainty around the 
multiple policies and creating barriers to innovation and 
growth.
    Under the current scheme it is possible that auto makers 
will find themselves in full compliance with one Federal 
regulatory standard, but running afoul of another. This is true 
even though the previous administration explicitly told this 
committee during a hearing last Congress that they would work 
together to avoid this very result.
    Since then, we've seen activity that completely undermines 
the National Program and works against the Obama 
administration's promise of coordinated regulatory efforts. 
Under the Midterm Evaluation schedule, NHTSA and EPA were to 
jointly issue their respective determinations on the model year 
2022-2025 standards. This was supposed to happen in April of 
2018.
    However, EPA abandoned this commitment and rushed through 
its final determination--without coordinating with NHTSA--just 
7 days before President Trump was sworn into office.
    I look forward to receiving an update from our witnesses 
today on how they are dealing with the different requirements. 
We want to know how these different regulatory schemes impact 
consumers, and learn more about better ways to ensure the 
Federal fuel economy standards are met, without creating 
unnecessary paperwork or administrative burdens that serve only 
to drive up costs for American families.
    As currently constructed, it has been estimated that these 
programs will raise the average price of a new vehicle by 
almost $3,000--that is no small amount and one that will 
undoubtedly price many Americans out of the new car market. 
Although the goals of these varying programs are important, we 
must never forget that we do in Washington has a real impact on 
consumers across the country.
    Government works best when it identifies clear problems and 
offers clear instructions for how to solve them. Federal 
programs that overlap or conflict do nothing to help protect 
the American people. It is our job to ensure that our laws and 
the implementation of them advance public policy goals, and if 
they need correction or clarification, we do so.
    I thank our witnesses for appearing before us today to 
address this important topic. The American people deserve a 
Government that removes barriers to innovation and growth, and 
avoids unnecessarily driving up costs for consumers.
    I look forward to our witnesses' testimony and I yield back 
the balance of my time.

    Mr.  Latta. The gentleman yields back the balance of his 
time, and the Chair now recognizes the ranking member of the 
full committee, the gentleman from New Jersey, for 5 minutes.

OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE 
            IN CONGRESS FROM THE STATE OF NEW JERSEY

    Mr.  Pallone. Thank you, Mr. Chairman.
    A little over a year ago, the committee held a hearing on 
the technical assessments report produced by the National 
Highway Transportation and Safety Administration, the EPA, and 
the California Air Resources Board, and that report formed the 
basis for all three agencies' decision in January to move 
forward with the proposed light-duty vehicle standard for 
models produced from 2022 to 2025.
    Unfortunately, as with many other decisions and regulations 
needed to improve public health, the environment, and consumer 
benefits, the Trump administration is moving to weaken these 
important standards.
    The administration complied with a request from the auto 
industry to reopen the midterm review and reconsider the 
current greenhouse gas emission target for light-duty vehicles 
equivalent to 51.4 miles per gallon by model year 2025, and 
this review could potentially lead to a weakening of the 
standard.
    I believe that if the U.S. oil industry is to remain 
competitive in the global market, we must reject efforts to 
move backwards. These targets are critical to reducing 
greenhouse gas emissions that contribute greatly to the ongoing 
threat of climate change, and we must meet these goals to 
reduce harmful emissions that endanger public health.
    Air pollution and carbon emissions from the transportation 
sector are significant in many of the world's urban areas.
    The fastest-growing markets for auto are in Asia, 
especially in India and China. These are the same countries 
whose large cities experience chronic poor air quality that 
creates significant public health problems.
    Understandably, several countries, including Britain, 
France, India, and China this year, announced ambitious goals 
to restrict or eliminate sales of new gas and diesel cars 
within the next few decades.
    And the auto industry claims that it can't meet stricter 
fuel efficiency and emission reduction goals by 2025. But their 
efforts to seek harmonization through credits and so-called 
credit banking will only serve to undermine and erode the 
laudable goals previously set by the Obama administration.
    Meanwhile, the auto industry has already received a 
sizeable advantage from the Trump administration: an indefinite 
delay of the civil penalty increases for CAFE violations that 
were finalized at the end of last year.
    Industry must find ways to continue their investment in 
vehicles that are more fuel efficient, particularly those that 
don't rely on fossil fuel for power.
    The joint standards developed by NHTSA and EPA in 
conjunction with the State of California are ambitious but, 
clearly, achievable.
    They will deliver tremendous benefits to consumers and make 
our Nation more energy secure. It will also play a critical 
role in our effort to slow the pace and severity of climate 
change, and lowering emissions will improve air quality and 
public health.
    We know that technologies to produce more efficient and 
less polluting vehicles are available and affordable today. 
Those vehicles must be produced, and they must be marketed with 
at least the same level of resources used to market the large, 
inefficient sport utility vehicles currently being pushed by 
industry, and there is simply no justification for easing up on 
this important effort that will benefit the public health, the 
environment, and American manufacturers who will reap the 
benefits of our Nation being out front instead of being dragged 
behind.
    I don't know if anybody else wants my time. If not, I'll 
yield back, Mr. Chairman.
    [The prepared statement of Mr. Pallone follows:]

             Prepared statement of Hon. Frank Pallone, Jr.

    Good morning. A little over a year ago, the committee held 
a hearing on the Technical Assessment Report (TAR) produced by 
the National Highway Transportation and Safety Administration 
(NHTSA), the Environmental Protection Agency (EPA), and the 
California Air Resources Board (CARB). The report formed the 
basis for all three agencies' decision in January to move 
forward with their proposed light duty vehicle standards for 
models produced between 2022 and 2025.
    Unfortunately, as with many other decisions and regulations 
needed to improve public health, the environment, and consumer 
benefits, the Trump administration is moving to weaken these 
important standards. The administration complied with a request 
from the auto industry to re-open the midterm review and 
reconsider the current greenhouse gas emission target for light 
duty vehicles equivalent to 51.4 miles per gallon by model year 
2025. This review could potentially lead to a weakening of the 
standard.
    I believe that if the U.S. auto industry is to remain 
competitive in the global market we must reject efforts to move 
backwards. These targets are critical to reducing greenhouse 
gas emissions that contribute greatly to the ongoing threat of 
climate change. And, we must meet these goals to reduce harmful 
emissions that endanger public health.
    Air pollution and carbon emissions from the transportation 
sector are significant in many of the world's urban areas. The 
fastest growing markets for automobiles are in Asia, especially 
in India and China. These are the same countries whose large 
cities experience chronic poor air quality that create 
significant public health problems. Understandably, several 
countries, including Britain, France, India, and China, this 
year announced ambitious goals to restrict or eliminate sales 
of new gas and diesel cars within the next few decades.
    The auto industry claims that it cannot meet stricter fuel 
efficiency and emission reduction goals by 2025. But their 
efforts to seek harmonization through credits and so-called 
credit banking will only serve to undermine and erode the 
laudable goals previously set by the Obama administration.
    Meanwhile, the auto industry has already received a sizable 
advantage from the Trump administration--an indefinite delay of 
the civil penalty increases for CAFE violations that were 
finalized at the end of last year.
    Industry must find ways to continue their investment in 
vehicles that are more fuel efficient, particularly those that 
don't rely on fossil fuel for power. The joint standards 
developed by NHTSA and EPA in conjunction with the State of 
California are ambitious, but clearly achievable. They will 
deliver tremendous benefits to consumers and make our Nation 
more energy secure. They will also play a critical role in our 
effort to slow the pace and severity of climate change. And, 
lowering emissions will improve air quality and public health.
    We know that technologies to produce more efficient and 
less polluting vehicles are available and affordable today. 
Those vehicles must be produced, and they must be marketed with 
at least the same level of resources used to market the large, 
inefficient sport utility vehicles currently being pushed by 
industry. There is simply no justification for easing up on 
this important effort that will benefit public health, the 
environment, and American manufacturers, who will reap the 
benefits of our Nation being out in front, instead of being 
dragged behind.
    Thank you, I yield back.

    Mr.  Latta. Thank you. The gentleman yields back, and this 
now concludes our Member opening statements.
    The Chair would like to remind Members that, pursuant to 
committee rules, all Members' opening statements will be made 
part of the record.
    Again, we want to thank all of our witnesses for being with 
us today and taking time to testify before our subcommittees. 
Today's witnesses will have the opportunity to give 5-minute 
opening statements followed by a round of questions from 
Members.
    Our witness panel for today's hearing will include Mr. 
Mitch Bainwol, president and CEO, Alliance of Automobile 
Manufacturers; Mr. Forrest McConnell III, president, McConnell 
Honda and Acura, Montgomery, Alabama, on behalf of the National 
Automobile Dealers Association; Dr. Dave Cooke, senior vehicle 
analyst, Union of Concerned Scientists; and Mr. John Bozzella, 
the president and CEO of Global Automakers.
    We thank you again for all being here, and, Mr. Bainwol, 
you are recognized for your 5-minute opening statement.
    Thanks again for being here.

   STATEMENTS OF MITCH BAINWOL, PRESIDENT AND CHIEF EXECUTIVE 
    OFFICER, ALLIANCE OF AUTOMOBILE MANUFACTURERS; FORREST 
MCCONNELL III, PRESIDENT, MCCONNELL HONDA & ACURA, ON BEHALF OF 
THE NATIONAL AUTOMOBILE DEALERS ASSOCIATION; DAVE COOKE, PH.D., 
  SENIOR VEHICLES ANALYST, UNION OF CONCERNED SCIENTISTS; AND 
     JOHN BOZZELLA, PRESIDENT AND CHIEF EXECUTIVE OFFICER, 
             ASSOCIATION OF GLOBAL AUTOMAKERS, INC.

                   STATEMENT OF MITCH BAINWOL

    Mr.  Bainwol. Thank you, Chairman Latta, and members of the 
distinguished committee.
    I have an extensive deck to go through, and so I ask for 
your patience because I am going to zip through it fairly 
quickly.
    I am here today on behalf of the Alliance of Automobile 
Manufacturers. We are 12 manufacturers from the U.S., from 
Europe, and from Japan. We represent about 80 percent of the 
cars on the road in the U.S.
    So let me jump in. I've got eight points to make. First 
point--next slide--is that sales have peaked. We went through 7 
years of growth. We are a cyclical industry. We have now 
peaked.
    If you look at the bottom right, you will see that, year 
over year, we are now down about a point from the first 9 
months of '16. You also see a very significant shift in the 
fleet mix. Cars, over the 5 years, are down 19 percent. Trucks, 
over the 5 years, are up 38 percent.
    Point 2: There has been very broad and strong support for 
harmonization from environmental voices. Chris Grundler is a 
senior career guy at EPA who opens up his presentations around 
the country with a picture of the planet and talks about the 
importance of saving the planet.
    So his bona fides in this area are strong. He says, ``I am 
all in on harmonization. It should not be acceptable for an 
automaker to pay penalties under CAFE.'' The ICCT testified 
here before and said, ``Based on the well-designed EPA 
flexibilities, a harmonized One National Program would best be 
addressed with NHTSA's program matching EPA's.''
    The Obama DOT talked about building a single fleet of U.S. 
vehicles, helping to reduce costs and regulatory complexity. 
Carol Browner:``A clear and uniform national policy is not only 
good news for consumers, but also good news for the auto 
industry, which would no longer be subject to a costly 
patchwork.'' We still are.
    And, of course, the President of the United States, 
President Obama, when he was in office: ``clear certainty that 
will allow these companies to plan for a future, in which they 
are building cars of the 21st century.''
    So there is strong support from, really, both sides of the 
aisle.
    Point 3: The determination, as has been suggested in some 
of the opening statements, was rushed. On November 29th, that 
was a screen shot of the EPA website, which talked about the 
determination coming out in April of 2018 simultaneously with 
NHTSA.
    November 30th, the screen shot disappeared. It was like 
those old Soviet photos where the picture of the guy leaves 
and, bingo, they are gone. So the process changed. The 
determination was rushed.
    The industry is completely united on the idea of rebooting 
the MTR. Eighteen CEOs from all the major companies that 
operate in the U.S.--some of whom are based here, some of whom 
chose to invest here--all signed a letter asking that we not 
prejudge the outcome but that we reboot the MTR to the original 
schedule that was promised when the deal was done in 2011.
    Next slide. Point 4: Reality is now contradicting theory. 
When the final determination came out in January, the line was, 
``the automakers were overcomplying, everything is fine.''
    A few weeks later, NHTSA came out with new evidence on 
compliance and showed that, for '16 and '17, we are now 
undercomplying. So the reality on the ground is undercompliance 
in '16-'17.
    Point 5: The math here is really, really important. If you 
go from 10 to 20 mpg over a thousand miles, you save 50 
gallons. If you go from 40 to 50 over a thousand miles, you 
save 5 gallons. There's a 10-to-1 multiplier focusing on the 
front end of the curve rather than the back end of the curve. 
That suggests that the most important thing you guys can do is 
to make sure that fleet turnover happens as rapidly as 
possible.
    This next slide shows that the bulk of the savings through 
2025 has already been realized. NHTSA has proposed through 
2025, in terms of gallons saved, 179 million gallons.
    If you take 2021 and you plus it up 1, 2, or 3 percent, you 
get somewhere between 97 and 99 percent of the savings. So we 
can talk about this big gap in terms of the politics of the 
issue. But in terms of the substance, through 2025 we're 97 
percent to 99 percent there. That's pretty impressive.
    I am really running out of time. Gas prices were profoundly 
wrong--point 6. That's changed the fleet mix in a dramatic way. 
What you see here in this next slide is a--four lines. The 54 
line is the original deal. The 51.4 line is the same deal 
recalculated with the change in the fleet mix.
    And the third line is if you recalculate based on the 
subsequent fleet mix changes where the deal now is. That's not 
a stringency adjustment. That is where the number now is, 
roughly, 50.
    The final point here is that consumers have a very 
important role in this. This is a program that gets measured by 
what consumers buy, not by what we produce. They are saying 
they'd like fuel economy, but they are not willing to pay for 
it.
    I will go through, if I can, just two slides. One in three 
said they would pay nothing for additional fuel economy. One in 
10 would be willing to pay more than 2,500 bucks. And then, 
finally, because they say they like fuel economy, it's 
important to understand contextually where it fits.
    Affordability and reliability are top priorities. Fuel 
economy and safety follow. So when a consumer goes into the 
showroom, they're looking for lots and lots of factors and lots 
of features.
    Fuel economy is one of those, but it's not the sole 
determinant of their choice.
    Thank you very much.
    [The prepared statement of Mr. Bainwol follows:]
    
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

   
   
   
    
    Mr.  Latta. Thank you very much.
    Mr. McConnell, you're recognized for 5 minutes.

               STATEMENT OF FORREST MCCONNELL III

    Mr.  McConnell. Mr. Chairman, ranking members of this joint 
subcommittee, thank you for allowing me to testify on the topic 
of fuel economy.
    My name is Forrest McConnell. I am a third-generation Honda 
dealer from Montgomery, Alabama. I am also former chairman of 
the National Automobile Dealers Association, which represents 
over 16,000 dealers who employ 1.1 million people.
    I've been in the car business for about 40 years selling 
fuel-efficient Hondas through good times and bad. But one thing 
never changes. People buy new vehicles based on two factors: 
one, does it fit their needs, and two, can they afford it?
    So how fuel economy is regulated is very important to my 
customers. Mr. Chairman, Rube Goldberg would be proud of the 
convoluted way our Nation regulates fuel economy.
    As Members know, there are not one but three fuel economy 
programs that automakers must follow. These different fuel 
economy programs are administered by three different agencies--
NHTSA, EPA, and the California Air Resources Board--under three 
different sets of rules pursuant to three different laws, 
potentially resulting in three different standards, all of 
which must be separately followed.
    These sometimes contrary regulations were labeled by the 
Obama administration as One National Program, but they're 
actually three separate programs.
    When Congress established CAFE, they gave NHTSA the sole 
authority for setting fuel economy standards. To avoid a 
patchwork of State standards, Congress also correctly preempted 
States from regulating fuel economy.
    Since 2009, we've had something very different. Multiple 
regimes under the One National Program flow from judicial and 
executive branch actions. This program put EPA in charge of 
setting fuel economy policy and allowed California for the 
first time to set its own standard.
    These actions have undermined the CAFE program that 
Congress created. Congress should return to one actual fuel 
economy program. There are benefits to having regulatory 
clarity.
    For example, the CAFE program was written to regulate fuel 
economy. When setting standards, NHTSA must balance job loss, 
consumer choice, safety, and market demands.
    In contrast, the Clean Air Act was not designed to regulate 
fuel economy. The EPA is not required to balance factors such 
as consumer choice, safety, or job loss when setting a 
standard.
    California's regulation only considers economic factors in 
that State, which is why it makes poor national policy. 
California and every State is expressly--expressly--preempted 
from regulating fuel economy. Yet, this has been ignored since 
2009.
    All this unnecessary regulation costs money. Multiple fuel 
economy regimes harm customers because auto manufacturers must 
charge more for the cars that customers want to subsidize the 
cars the regulators demand.
    These regulatory costs help make the One National Program 
the most expensive set of rules ever, at a cost of $209 
billion. Now, I've never seen a billion dollars, but I 
understand it's a lot of money.
    This will raise the average price of a vehicle nearly 
$3,000 and will price over 6 million people entirely out of the 
new car market.
    America will benefit from returning to one real national 
fuel economy program established by Congress. This is not a new 
idea.
    In 2011, the House passed a bipartisan bill sponsored by 
Congressman Upton that would have re-established CAFE as the 
sole fuel economy program.
    Mr. Chairman, we can do better than this Rube Goldberg way 
of setting fuel economy policy. Let's bring accountability back 
by returning to one national policy. This approach will create 
continuous fuel economy improvements that customers want and 
that they can afford. The power rests with you.
    Thank you.
    [The prepared statement of Mr. McConnell follows:]
    
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
     
    Mr.  Latta. Thank you very much, and at this time, Dr. 
Cooke, you're recognized for 5 minutes. Thanks for your 
testimony.

                    STATEMENT OF DAVE COOKE

    Dr.  Cooke. Thanks. Good morning, Mr. Chairman and ranking 
members.
    My name is Dr. Dave Cooke, and I am a senior vehicles 
analyst with the Union of Concerned Scientists, a nonprofit 
advocacy organization whose primary mission is to ensure that 
policy is crafted on the best available science without 
political interference.
    I appreciate the opportunity to comment this morning on the 
current fuel economy and emission standards. Transportation is 
now the leading source of carbon dioxide emissions in the 
United States, and the 2012 to 2025 light-duty vehicle 
standards represent the largest single step towards reducing 
greenhouse gas emissions and oil use in the U.S.
    One National Program recognizes the independent authorities 
of the National Highway Traffic Safety Administration, 
Environmental Protection Agency, and California, as well as the 
States that follow California's lead on tailpipe pollution 
regulations.
    At the same time, it helps provide a coordinated approach 
to achieving reductions in oil use and emissions that allows 
manufacturers to be able to design a single fleet capable of 
complying with all fuel economy and greenhouse gas regulations, 
should they choose to.
    Separately, California and other States have adopted a Zero 
Emissions Vehicle program in order to address air quality 
issues. These States currently face $37 billion in annual 
health impacts related to passenger vehicle pollution.
    By 2030, the ZEV program will cut that by 35 percent. While 
increasing the sales of electric vehicles will ultimately help 
manufacturers comply with greenhouse gas regulations, that is 
not the program's primary purpose, and it appropriately is not 
part of One National Program.
    Of course, the implications of One National Program extend 
beyond national security and under EPCA or greenhouse gas 
emissions under the Clean Air Act.
    These cost-effective standards help put money back into the 
hands of consumers by saving them money at the gas pump. 
Improving the efficiency of new vehicles is especially critical 
for lower- and middle-class families who spend a greater share 
of their income on fuel, and these standards disproportionately 
benefit those individuals by making the new and used car market 
more fuel efficient.
    The efficiency of cars and trucks continues to improve as a 
result of these standards, with SUVs showing some of the 
greatest levels of improvement year over year precisely because 
these size-based standards encourage manufacturers to offer 
more fuel-efficient options in all vehicle classes.
    And even as the fleet is becoming more efficient, 
automakers are setting sales records. At the same time, the 
success of these standards cannot be taken for granted. 
Suppliers have invested nearly $50 billion building and 
expanding factories around the U.S. as a result of the 
certainty these standards provide, growing manufacturing jobs 
by more than 20 percent.
    Anything done to weaken the standards and undermine those 
investments could have drastic consequences for a supplier base 
with a broad national footprint and, in turn, the U.S. economy.
    This technology investment is part of why we are confident 
that manufacturers can achieve the 2025 standards. Automakers 
have barely begun deploying many off-the-shelf technologies 
that can improve the efficiency of conventional gasoline-
powered vehicles, and new unanticipated developments continue 
to emerge that can reduce fuel use even further.
    As a result of this progress, NHTSA and EPA were able to 
jointly show in the technical assessment report that cost to 
comply with fuel economy and greenhouse gas emission standards 
had declined.
    As required under the midterm evaluation process agreed to 
by all parties to the One National Program, EPA reviewed the 
comments on the TAR and moved forward with the determination on 
whether its standards for 2022 to 2025 remained appropriate.
    Based on the best available economic and technical data, 
including data provided by manufacturers, EPA concluded that 
the 2025 standards remained appropriate. In fact, EPA agreed 
with our assessment that the data shows that manufacturers 
could meet even stronger standards by 2025.
    But the agency chose instead to leave the standards as is 
to provide the certainty needed for continued investment and 
efficiency.
    By seeking to renegotiate the terms of the One National 
Program, automakers are injecting uncertainty into the 
progress, stymieing progress and forestalling investment.
    This directly harms consumers and risks long-term impacts 
for the industry. Ceding leadership as the rest of the world 
moves forward signals a repeat of the failings that required 
American taxpayers to bail out the industry in 2008, and 
suppliers could exit to China or Europe in response.
    Rather than wriggling out of their commitment to seek 
relief, as the alliance puts it, ``any way we can get it,'' 
manufacturers should be doubling down on improving efficiency 
to protect American investment and American jobs.
    One National Program is working now to provide fuel savings 
for Americans, improve national security, and reduce emissions. 
But this progress is in jeopardy as a direct result of 
automakers' recent actions to undermine these standards.
    It is critical to continue to hold automakers accountable 
for the promises they have made to the American people.
    [The prepared statement of Mr. Cooke follows:]
    
    
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    Mr.  Latta. Thank you very much for your testimony.
    Mr. Bozzella, you are recognized for 5 minutes.

                   STATEMENT OF JOHN BOZZELLA

    Mr.  Bozzella. Thank you, Chairman Latta, Chairman Shimkus, 
Ranking Member Schakowsky, Ranking Member Tonko.
    On behalf of the Association of Global Automakers, thank 
you for the opportunity to testify today.
    Global Automakers represents the U.S. operations of 
international automobile manufacturers that design, build, and 
sell cars and light trucks in the United States.
    Our member companies have invested $59 billion in U.S.-
based facilities and directly employ over 100,000 Americans. 
Our members are building cars and trucks that are more fuel 
efficient and cleaner than ever, and making tremendous strides 
in vehicle electrification.
    Our future progress in reducing emissions and fuel 
consumption depends on a number of factors, some of which are 
not fully within the control of manufacturers.
    The most important factor is the customer. As we have seen, 
when gas prices are low, fuel economy is less important to 
customers when they purchase a new car or truck.
    Government regulations are also important. Manufacturers 
are required to produce vehicles to meet regulatory 
requirements that may have been set in different times and 
under very different circumstances.
    To that end, as we talk about the fuel efficiency of 
vehicles, we should also talk about the efficiency of public 
policy. The auto industry, Federal Government, and State of 
California established One National Program, ONP, to address 
the fact that multiple agencies across 15 jurisdictions were 
using different tools to regulate similar aspects of the 
vehicle.
    The resulting program aims to harmonize CAFE and GHG 
standards for light-duty vehicles. The ONP provides substantial 
year-over-year reductions in petroleum consumption across the 
Nation for all light-duty vehicles while reducing unnecessary 
regulatory duplication.
    Recognizing the nationwide benefits produced by the Federal 
program, California accepts compliance with Federal standards 
as compliance with its GHG program.
    But despite ONP's efforts to better align, notable 
differences among the programs remain. That makes no sense.
    The current scheme creates friction and drag in the system 
that slows innovation and imposes unnecessary compliance costs 
ultimately borne by consumers, with no added environmental or 
energy benefits.
    In fact, under the current standards, as you have heard, a 
manufacturer could comply with one standard but not the other.
    This is a prescription for wasted time, talent, and 
resources which would be more productively directed toward 
engineering and other challenges associated with actually 
reducing vehicle emissions. Some of these problems can be 
solved in a straightforward manner.
    In mid-2016, Global Automakers and the auto alliance 
jointly submitted a petition to EPA and NHTSA requesting 
regulatory changes permissible within the statutory constructs 
of each relating primarily to the banking accruing and 
applications of credits and process improvements that will 
promote additional innovative technologies with real fuel 
savings benefits. The agencies should respond to this petition 
without delay.
    These regulatory changes, however, cannot fully address the 
differences in Federal statutes, which means that legislation 
is necessary.
    Global Automakers supports congressional action to provide 
greater certainty and consistency between the Federal programs.
    These problems all have solutions. We simply haven't put 
them to action, and that creates a dilemma. The auto industry 
is in the middle of fundamental transformations to 
electrification and automation.
    The cars we sell today need to be able to generate the 
resources to fund these transitions, and we need to be 
thoughtful about public policy to support these efforts.
    Finally, it's critically important that all of the parties 
remain at the table to work through these issues. It is far 
preferable that we resolve these issues without litigation or a 
retreat from One National Program.
    Those paths would only create uncertainty, which would 
discourage investments in innovation and freeze further 
progress in emissions reductions.
    Global Automakers remains committed to a harmonized 
national approach, and we look forward to working with you 
toward that goal.
    Thank you, and I will be happy to answer any questions.
    [The prepared statement of Mr. Bozzella follows:]
    
    
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    Mr.  Latta. Thank you very much and we appreciate your 
testimony, and we will now move into our question-and-answer 
portion of the hearing.
    I will begin the questioning and recognize myself for 5 
minutes.
    Mr. McConnell, as a dealer, how can you tell the 
subcommittees about consumer trends, especially with respect to 
the types of vehicles they are purchasing today?
    Mr.  McConnell. Thank you very much for your question.
    You know, the customer makes their own decision of what car 
to buy. You can build cars. That doesn't mean that the 
customers--the demand is there.
    So the two things that I've found is customers buy their 
needs for a car. For example, we had a customer the other day. 
She was pregnant, with her second child. Big soccer mom.
    You know, they had moved from a smaller car up to Odyssey 
minivan that suits her needs. But the demand for cars right now 
is, 63 percent of the people are trucks versus about 34 percent 
cars. So it's changed tremendously in the last couple of years, 
and that's because the price of gas went down from $4 a gallon 
basically into the $2s.
    Mr.  Latta. Thank you.
    Mr. Bainwol, with the current rules and regulations in 
place, do we in fact have one national standard for CAFE and 
greenhouse gas emission standards?
    Mr.  Bainwol. We do not, effectively.
    Mr.  Latta. And how did the EPA's less than 7-week process 
from public hearing to final determination impact the midterm 
review?
    Mr.  Bainwol. Well, it disconnected first from NHTSA. So, 
if you go back to 2011, there was essentially a trade, and the 
agreement was the industry would agree to very ambitious, 
aggressive targets over a very long period of time through 
2025. In exchange, the industry would get a commonsense 
analytic lookback to make sure that the projections were 
accurate, and we would get one national program.
    What we've gotten is neither. We are pledged to try to get 
there, but we do not have one national program, and the midterm 
review was premature.
    When the TAR came out, we asked for an extension. We were 
told, ``Don't worry, there's going to be plenty of time.'' The 
extension request was denied.
    When the original proposed determination came out, we asked 
for an extension, and it was denied. And over the course--we 
had about 20 days over the course of the Christmas holidays. 
And so everything was very compressed, and there was a very 
strong disagreement about the substance of the report, which we 
never really got to work our way through.
    Mr.  Latta. Let me ask you this, because I believe that you 
made some comments, and were any of the flawed assumptions that 
you raised addressed by the agency?
    Mr.  Bainwol. Not really, and I think it's worth pointing 
out there has been an attitude on the part of some that the TAR 
and the subsequent work was the Holy Grail--that it was without 
dispute. And I would just simply like to point out that the EPA 
made many assumptions, and if you go through and just look at 
the points, they've been proven false.
    There was a massive failure on projecting gas. The fleet 
mix question was completely butchered. There was a view that we 
were overcomplying, and we were under complying. So we can talk 
about the substantive value of that report under which the 
midterm was set and was finalized. But they made mistakes that 
were really quite profound.
    Mr.  Latta. Let me ask you, because you're pointing out all 
these mistakes. And your pointing these mistakes out--what did 
they say?
    Mr.  Bainwol. Well, originally, they said there would be 
time to talk about it later on, and we kind of lost that time.
    There are substantive disagreements. We believe--I think 
the most important mistake, in our view, is just the amount of 
electrification necessary to comply.
    They believe we can comply over the schedule with minimal 
electrification. We believe much more is required, and if you 
look at the purchase pattern in the marketplace, that's the 
real problem.
    Mr.  Latta. OK.
    Mr. Bozzella, if I could, in my last minute here--by having 
different standards from multiple agencies leads to automakers 
building cars consumers are not buying, what effect will that 
have on jobs and growth in the United States auto industry?
    Mr.  Bozzella. I think it certainly could have a fairly 
significant impact on jobs and on the growth of the industry.
    You know, what's happening here is we are having to waste 
time and resources on compliance when we ought to devote that 
time and resources to innovation that improves fuel economy.
    So with one standard, what you can do is focus that 
investment, and it's massive investment, and all of you know 
and many of you on both sides of the aisle have praised that 
investment. Many of you represent States and communities where 
you see that investment firsthand.
    What we want to make sure is every dollar of those 
investments is focused on improving fuel economy as opposed to 
efforts to comply for the sake of compliance with no benefit.
    Mr.  Latta. Thank you very much. My time has expired, and 
at this time the Chair recognizes the ranking member of the 
subcommittee, the gentlelady from Illinois, for 5 minutes.
    Ms.  Schakowsky. I would just like to point out this is the 
2-year anniversary of the Paris Accords and, unfortunately, in 
my view, the United States is no longer part of that. And it 
seems to me that what's being considered today might actually 
increase the pollution caused by weakening fuel economy 
standards.
    So the plea for harmonization between EPA's and NHTSA's 
program isn't about aligning different regulations. It's about 
weakening fuel economy standards.
    All the credits that the automakers want to be added to 
NHTSA's program are going to cause stagnation of fuel economy's 
goals and not harmonizations.
    Dr. Cooke, let me first ask you, are these programs 
working, and are U.S. cars more efficient and less polluting 
than they used to be?
    Dr.  Cooke. Absolutely. Vehicles have gotten significantly 
more efficient over the past 5 years.
    Ms.  Schakowsky. Are the yearly goals for the two programs 
stifling innovation, or actually helping to drive it?
    Dr.  Cooke. I think the fact that fuel economy is improving 
and that you see continued new research--every, you know, 
announcement from automakers shows that they're investing and 
that this is driving innovation.
    Ms.  Schakowsky. And as I understand, the car makers want 
to reinstate expired credits from earlier years when standards 
were much more lax, and they want to extend the life of those 
credits from 5 to 11 years, and they want to add a whole new 
category of credits to the mix, and they want to relax the caps 
on their ability to transfer the credits they earn on their 
cars to their pickup trucks.
    Dr. Cooke, have I left anything out in that list of what 
they want?
    Dr.  Cooke. No, I think that sounds about right.
    Ms.  Schakowsky. Do automakers, Dr. Cooke, really need such 
a substantial expansion of credits to meet the fuel economy 
standards?
    Dr.  Cooke. No, I think the TAR and the work since the vast 
body of evidence shows that there are plenty of technologies 
that they could be applying to their vehicles in order to meet 
the standard, and if they met the CAFE standard, which they're 
trying to weaken through these credits, they would be in 
compliance with the EPA standard as well. So----
    Ms.  Schakowsky. If automakers were to get all the 
retroactive credits they're asking for, what would this mean 
for real improvements in fuel economy, going forward?
    Dr.  Cooke. The vast volume of credits could really offset 
and forestall continued investment in inefficiency, and so you 
could see manufacturers using their credits to stall progress 
on the fuel economy of the pickup trucks that many drivers are 
looking to purchase, and that affects our ability in the long 
term as--through the midterm process, that would set up a 
trajectory where we have weaker vehicles going into the 2022 
model year and the standards are then further weakened through 
this lack of progress, and we could see 8-to-10-mile-per-gallon 
reduction in the 2025 targets as a result.
    Ms.  Schakowsky. Well, while we are on the topic of 
credits, car makers have complained about the fact that the EPA 
has allowed them to get extra credits for using certain 
technologies like stop-start ignitions systems, but NHTSA has 
not given them credits.
    I am referring to off-cycle credits. We are told that NHTSA 
needs to harmonize with the EPA and allow these credits to 
count retroactively toward both emissions goals and fuel 
economy standards.
    So Dr. Cooke, aren't these off-cycle technologies already 
factored into NHTSA's fuel economy goals?
    Dr.  Cooke. Yes, that's right. NHTSA explicitly excluded 
them from the 2012 to 2016 regulations when they set the 
standards.
    Ms.  Schakowsky. And, in fact, didn't NHTSA intentionally 
set its fuel economy goals lower than EPA's emission goals 
precisely because its program didn't include these credits?
    Dr.  Cooke. That's right. Its standard was about 1 mile per 
gallon lower as a result.
    Ms.  Schakowsky. And if NHTSA were to allow off-cycle 
credits to apply retroactively to its already discounted fuel 
economy standards, shouldn't it also reset those standards to 
make them more stringent?
    Dr.  Cooke. That's correct.
    Ms.  Schakowsky. So do you buy the estimate that this would 
raise the cost of a car $3,000? Does that take into account 
what the lower gas price would be?
    Dr.  Cooke. I have no idea where that $3,000 number is 
coming from. It is outdated.
    Ms.  Schakowsky. Thank you. I yield back.
    Mr.  Latta. Thank you very much. The gentlelady yields 
back.
    The Chair now recognizes the chairman of the Subcommittee 
on Environment, the gentleman from Illinois, for 5 minutes.
    Mr.  Shimkus. Thank you, Mr. Chairman.
    I guess, first, following a couple of the lines of 
questions, to the automakers, first of all, it's just a--it's 
just a thank you, and to the auto dealer.
    You represent America, in which you raise capital, assume a 
risk, try to prove it's a good, and try to sell a good. You pay 
living wages. Many times you pay health benefits. You're paying 
taxes to the country. You're paying local taxes that fund our 
schools, our towns, and our communities. You probably are 
supporting local sports leagues and sport teams and stuff like 
that.
    So I always get frustrated when we bring people before us 
who are doing everything we ask, and they seem like they're on 
trial and that they're under attack. It just--it is 
unfortunate.
    So, first of all, thank you. Now, to the point--part of 
this debate is that Obama administration moved the goalpost in 
this midterm review. Is that correct? Mr. Bainwol and then Mr. 
Bozzella.
    Mr.  Bainwol. Yes, it is correct.
    Mr.  Bozzella. Correct.
    Mr.  Shimkus. And your request is what?
    Mr.  Bainwol. Our request is simply to go back to the 
original Obama time line.
    Mr.  Bozzella. And have a fact-based, evidence-driven 
process.
    Mr.  Shimkus. Because--and you want that because?
    Mr.  Bozzella. Because we need to get it right. It is 
critically important to the customer, it is important to 
investors who are investing in this country, and it is 
important for all of us who care about reducing greenhouse gas 
emissions and improving fuel economy. That is why.
    Mr.  Shimkus. And isn't it safe to say that when you do a 
formula, over time variables in the formula could change?
    Mr.  Bainwol. That's correct, and they have changed.
    Mr.  Shimkus. And then give me some examples of those 
changes in those areas.
    Mr.  Bainwol. Well, we talked about the gas price reality, 
and there's nothing that drives behavior in the marketplace 
more than the price of gas. So that's the biggest factor, and 
that has changed the fleet mix, and that has changed ultimately 
the compliance reality. So we are now undercomplying.
    And I think it's important to point out there are two 
different programs. EPA was estimated to save something like 
65.6 billion gallons. The NHTSA program was going to save 
something like 65.3 billion--essentially, the same thing.
    And we are complying with the more numerically stringent 
EPA program. So, in the discussion of harmonization, that 
doesn't change. We are not touching the EPA at all.
    Mr.  Shimkus. Let me go to the--Mr. McConnell, just from 
your observations of the consumers in this process and based 
upon this discussion, the consumers have changed in their 
choices of what they want to pull off the lot, right? And can 
you give me that observation?
    Mr.  McConnell. Yes. The one thing I wanted to mention, the 
$3,000 additional cost to my customers is from the three 
rules--the total cost. It's in the Federal Registry.
    The TAR is in a rule. Customers, as you in life, they make 
decisions, times change, you have different stages, you have 
different desires. But, you know, Congress got it right the 
first time by not having a patchwork.
    You want to consider affordability to customers and their 
consumer choice, and they get the car that fits their needs, 
and the one thing I want to point out is, this is the 
customer's money.
    A regulator can demand a certain car gets built. But a 
customer has the right to spend his money. Maybe it's a Prius 
because that works for you. Maybe you have to have a truck 
because you have a business, and that's how you earn your 
livelihood.
    Mr.  Shimkus. Yes. Let me reclaim my time because I am 
running short. But I am from rural America. We like big 
vehicles. We like big trucks. So I know what's being sold in, 
as we say, my neck of the woods.
    Let me finish with the auto manufacturers, and this may not 
be a surprise to some of my friends. There is a Government 
initiative, Co-Optima, which is underway to define and 
understand the costs and benefits of high-compression engines 
and high-octane, low-carbon fuels.
    If your industry were to go in that direction, what do you 
think it would mean in terms of emission reductions or consumer 
affordability for vehicles in the model year 2021 and beyond?
    Mr.  Bainwol. Well, high-octane absolutely has value in 
terms of fuel efficiency, and I've seen it estimated something 
in the order of 4 or 5 percent as a plateau shift.
    So there's real value on high-octane, and then there's a 
question of how you get it, and on that question we're a little 
bit agnostic, but we'd be happy to work with you.
    Mr.  Shimkus. But certainty is part of that process too, 
right?
    Mr.  Bainwol. Yes.
    Mr.  Shimkus. Mr. Bozzella?
    Mr.  Bozzella. Yes. I think you have to look at the vehicle 
and the fuel are one system. And so that's what's driving that 
type of work, right. So, if you have more efficient engines and 
cleaner engines you want to have a fuel that matches one 
system.
    Mr.  Shimkus. Excellent. I yield back my time.
    I thank the chairman.
    Mr.  Latta. Thank you. The gentleman yields back.
    The Chair now recognizes the ranking member of the 
Environment Subcommittee, the gentleman from New York, 5 
minutes.
    Mr.  Tonko. Thank you.
    Dr. Cooke, as I mentioned in my opening statement, this 
committee received testimony that automakers are already ahead 
of schedule to meet standards for upcoming model years.
    Did the TAR find that the targets for later model years can 
be met by mostly efficiency improvements to gas-powered 
engines?
    Dr.  Cooke. Yes, that's correct. There's not a significant 
deployment needed of electrification.
    Mr.  Tonko. Thank you.
    And numerous comments to the TAR and proposed determination 
outlined a number of technologies that reduce greenhouse gas 
emissions that are commercially available.
    Your testimony mentions a number of proven technologies 
have not been widely deployed. Some of these have existed for 
years but still are only found in 10 or 20 percent of new 
vehicles.
    Dr. Cooke, can you discuss how off-the-shelf technologies 
could be more widely adopted?
    Dr.  Cooke. Sure. I think you look at what Ford has done 
with its turbocharged downsized engines, where you can provide 
equivalent amount of power from a smaller engine. Even they 
haven't sort of moved that technology across the board, and 
they're certainly a leader, and other vehicle manufacturers can 
either move in that same direction with something that's proven 
or define a new pathway, and we are seeing those developments 
routinely come out in new announcements every few months.
    Mr.  Tonko. Why haven't these commercially available 
technologies been adapted more quickly?
    Dr.  Cooke. I think one of the challenges is that product 
cycles are long. They're about 5 years, and so it does take 
time to redesign a vehicle.
    But, at the same time, we've seen instances where, for 
example, Toyota's large trucks haven't seen a power train 
upgrade in a decade.
    So I think there's inconsistency in the industry in how 
quickly they're moving these technologies through.
    Mr.  Tonko. Thank you.
    And would additional vehicle models meet higher fuel 
efficiency standards if more of these commercially available 
technologies were more broadly utilized?
    Dr.  Cooke. Absolutely. There is plenty of room for them to 
meet the standards.
    Mr.  Tonko. Thank you.
    It's also my understanding that there are also several 
other well-known technologies that are under development and 
will very likely provide alternative cost-effective pathways 
toward meeting these standards.
    Dr. Cooke, is that accurate?
    Dr.  Cooke. Yes. I think one of the things that the 
modeling shows and the fact that the TAR was done both by NHTSA 
and EPA using slightly different assumptions and different 
modeling results resulted in a number of different pathways 
that manufacturers could choose to meet the standards.
    So it's a robust analysis that proves that there are 
multiple pathways of getting there.
    Mr.  Tonko. And despite the likelihood of these 
technologies become available in the near future, is it 
accurate that EPA did not consider them when determining the 
appropriateness of the model years 2022 to 2025 standards?
    Dr.  Cooke. I think there are a number of technologies 
which have been developed since EPA's proposal that show that 
we can go even further, and developments that were completely 
unanticipated, not just when the agencies wrote the original 
rule but even since the final determination.
    Mr.  Tonko. And why do you believe the EPA and 
manufacturers have consistently underestimated how fast 
technologies can be developed?
    Dr.  Cooke. It's obviously in their interest to only 
provide regulators data which will result in the standards that 
are most easily achievable. So, at the same time, I don't 
understand fully why they underestimate what their engineers 
are capable of. But history has certainly shown that to be 
true.
    Mr.  Tonko. Well, thank you, Dr. Cooke.
    I think it's clear that these standards are achievable. 
They're cost effective and appropriate, and I have full faith 
in American automakers as well as the existing flexibility of 
the program to reach these standards.
    So I can't support the uncertainty created by reopening the 
midterm review determination.
    Dr. Cooke, last week Administrator Pruitt testified before 
this committee that the midterm evaluation process was flawed 
because it did not happen at the April 2018 deadline.
    I know we are used to EPA missing deadlines, but is there 
anything in the regulations that prevented EPA from evaluating 
the appropriateness of the standards before April 2018?
    Dr.  Cooke. No. Absolutely not. And given the long product 
cycles, more advanced notice is preferable.
    Mr.  Tonko. And do you think there's anything included in 
the TAR or the determination that makes it incomplete or 
inaccurate?
    Dr.  Cooke. I think there was a fairly thorough analysis. 
It was 1,200 pages and 4-plus years of careful technical and 
economic analysis, many studies, many peer-reviewed studies, 
many benchmarking tests in their own labs. There was a lot of 
data that this was based on.
    Mr.  Tonko. Thank you very much.
    With that, I yield back.
    Mr.  Latta. The gentleman yields back and the Chair now 
recognizes the gentleman from West Virginia for 5 minutes.
    Mr.  McKinley. Thank you, Mr. Chairman.
    I want to deviate a little bit from this issue over the '22 
to '25 series and more looking--there was a comment earlier in 
one of the opening statements about safety.
    I am still curious. I see there are competing reports out 
there, depending upon your perspective, of whether or not the 
efficiency--and Congressman Tonko and I work together 
frequently on legislation over efficiency.
    So, as an engineer here in Congress, I like the idea of 
efficiency but I also want to measure the, I suppose, the cost-
benefit ratio of what's it doing on safety.
    Because some cars are getting lighter. They're using more 
aluminum, less steel. But yet, you will hear some reports will 
talk about the fact that in real-world conditions there are 
more accidents, more people--last year, we had an increase in 
deaths on the highways. So others will say under a model 
situation, if all cars were the same size on the highway, there 
wouldn't be. That's not the real world.
    So I would like to hear back a little bit from you about 
the safety aspects when we continue this, because I want us to 
continue down the road of increasing efficiency of our cars. 
But I don't want to do it at the risk of our people that are 
driving the cars. So that's my first question, and I want to 
get, if we could, just some quick responses back to safety.
    Mr.  Bainwol. I'll jump in. You have hit, obviously, a very 
important point, and it's one of the reasons why EPA jumping 
ahead of NHTSA was a problem. NHTSA, under statute, has to look 
at a range of factors, including safety.
    EPA does not. So your concern about safety is valid, and it 
ought to be incorporated in the analysis, and so I think it's a 
good thing.
     Mr.  McConnell. He's 100 percent right. The good thing 
about what Congress set it up with CAFE is, you had to consider 
safety was one of the factors.
    EPA does not. California does not have to consider anything 
but economic factors only in that State, and as you know 
they've reduced the massive cars tremendously so that----
    Mr.  McKinley. Well, let me, if I could, reclaim--let me 
ask a more definite--rather than to keep it open ended. Do you 
think increasing the efficiency has caused or contributed to 
the increased accident rate or fatalities on our highways?
    Mr.  McConnell. I don't know if I have the expertise to 
answer that question. But I will say that Congress got it right 
because they required CAFE to consider safety, and EPA does not 
have to consider safety at all.
    Mr.  McKinley. OK. I am running out of time on this, but--
--
    Dr.  Cooke. There is no evidence to support the conclusion 
that these are having an adverse effect on accidents.
    Mr.  Bainwol. But what we do know is that the older the 
car, the bigger the safety risk. A new car has technology to 
avoid accidents. A new car has structural integrity and is 
better maintained.
    So, if your priority is safety on the roads, the ability to 
move fleet turnover is crucial.
    Mr.  McKinley. I am sorry I didn't call on you, Mr. 
Bozzella.
    During the testimony--Dr. Cooke's testimony, I saw your 
body language was very illuminating--that you were shaking your 
head. Do you want to express yourself in the time--I've got a 
minute and 13 seconds left--either one of you, to say where you 
disagree with Dr. Cooke?
    Mr.  Bozzella. I think--and, again, I appreciate Dr. 
Cooke's testimony--but I think there's a fundamental 
misunderstanding of the notion of credits.
    It's almost as if they're gifts that have been delivered 
from some magical place. The fact of the matter is these 
credits are the result of investments that car companies have 
made that have resulted in progress.
    So they've made more achievement, and so this credit is a 
reward for innovation. It's actually earned for the investment 
that companies are making. And so the point of this is not--we 
are almost having an abstract conversation about credits.
    It's really important to recognize that these are important 
tools in the toolbox, because what they do is they encourage 
innovation and they also help balance and smooth the ups and 
downs of product development cycles in a program where year-
over-year fuel economy increases are required.
    Mr.  McKinley. Thank you.
    Mr. Bainwol, do you have anything to add to that?
    Mr.  Bainwol. That was the right analytic answer. My body 
language was, I was just imagining Dr. Cooke running a car 
company, because he seems to have a vision that is profitable, 
but real car companies have apparently not the capacity to do 
that. So----
    Mr.  McKinley. I yield back.
    Mr.  Latta. Thank you. The gentleman yields back.
    And the Chair now recognizes the gentlelady from California 
for 5 minutes.
    Ms.  Matsui. Thank you very much, Mr. Chairman.
    The Clean Air Act gives the EPA the authority to grant the 
State of California a so-called waiver to adopt its own air 
pollution standards for vehicles.
    Approximately a dozen States have adopted California 
standards as well. Mr. Cooke, can you please tell us why 
California was given the ability to adopt its own emission 
standards?
    Dr.  Cooke. Sure. California's leadership predates the 
Clean Air Act. They were the first body to regulate tailpipe 
emissions from the vehicle industry.
    Ms.  Matsui. And also because of the huge pollution that 
they had in the State also?
    Dr.  Cooke. Exactly.
    Ms.  Matsui. When California applies for a waiver to set 
its own standards, what conditions does the EPA consider while 
deciding whether to grant that waiver?
    Dr.  Cooke. First, it's important to point out that the 
default is that the waiver is accepted unless it meets one of 
three criteria: either that the regulations were arbitrary and 
capricious, so not a well-thought-out standard--inconsistent 
with EPA's authority under the Clean Air Act, or not compelling 
or extraordinary circumstances, and I think it's very clear 
when you look at the wildfires burning why the greenhouse gas 
emission standards are compelling and, clearly, the air quality 
issues in California create extraordinary circumstances for 
ZEV.
    Ms.  Matsui. So has the EPA ever revoked one of 
California's waivers?
    Dr.  Cooke. No waiver has ever been revoked once it's been 
granted, and it's not even clear what the process would be to 
do so.
    Ms.  Matsui. OK. There are over 25 million registered cars 
and licensed drivers in the State of California. I am 
particularly interested in how CAFE standards and greenhouse 
gas emissions standards impact drivers in my State and across 
the country.
    Mr. Cooke, I think we've heard this here before, but I've 
heard the argument that the vehicle efficiency standards raise 
costs for consumers. But I understand your organization has 
found otherwise. Do you know how much money drivers are saved 
because of the standards on a per-vehicle basis?
    Dr.  Cooke. Yes. Consumers would stand to save about a 
little over $3,000 on the purchase of a new car or about nearly 
$5,000 over the lifetime of a purchase of a new truck, and 
that's at gas prices that we are at now.
    Clearly, if they increase in the meantime that would be 
significantly higher.
    Ms.  Matsui. OK. And do Americans generally support strong 
fuel efficiency standards?
    Dr.  Cooke. Absolutely. Poll after poll shows that folks 
support strong fuel economy standards. Seven in 10 Americans 
specifically support Government setting strong fuel economy 
standards, and that finding crosses aisles.
    Ms.  Matsui. OK.
    Mr. Cooke, you mentioned that both the EPA and your 
organization found manufacturers could meet stronger standards 
than are currently written for 2025.
    What data and information do you study to come to this 
conclusion?
    Dr.  Cooke. Sure.
    You know, the analysis that's been conducted has been 
extensive. But each month that passes, we see a new data point.
    The fact that both EPA's and NHTSA's models confirmed that 
the costs had come down shows robust evidence. Then vast amount 
of peer-reviewed literature the EPA has been generating.
    The Indiana University study that was funded by the 
alliance actually shows that hundreds of thousands of jobs are 
created as a result of these standards. So there are positive 
economic outcomes, new data based on suppliers that ICCT has 
put out. I mean, the list is extensive.
    Ms.  Matsui. OK. And as I mentioned earlier, the 
International Energy Agency has found that the transportation 
sector is the only sector in which energy efficiency has grown 
worse in this country over the past 15 years.
    Have you seen any factors, Mr. Cooke, here in the United 
States that explained this trend? Why do you think we've become 
less efficient in the transportation space while more efficient 
elsewhere?
    Dr.  Cooke. I think one of the things that's critical is 
the result of the mix shift. So we are seeing a swing back to 
the purchase of larger cars and trucks--SUVs and pickups. And 
so it's really critical that these standards remain strong 
because they drive improvements across those vehicles and 
ensure that cars, trucks, and SUVs get more efficient over 
time.
    And so we've seen a plateau as a result of that fleet mix, 
but these standards will continue to drive that and put us back 
on the right course.
    Ms.  Matsui. OK. Thank you, and I yield back.
    Mr.  Latta. Thank you very much. The gentlelady yields 
back, and the Chair now recognizes the gentleman from Illinois 
for 5 minutes.
    Mr.  Kinzinger. Thank you, Mr. Chairman. Thank you for 
yielding, and I want to thank all of you for being here and 
spending time with us today on this really important issue, and 
it's essential.
    We'll start with Mr. McConnell. I know it's been mentioned 
prior but in your testimony you state that the national program 
set by the last administration raised the price of each vehicle 
by nearly $3,000, and that doing so will price out over 6 
million people from the new car market.
    Can you please explain how you arrived at those numbers and 
how consumers would react, based on your experience?
    Mr.  McConnell. Well, the $3,000 is the total cost for the 
three rules. It's been noted in the Federal Register. The most 
important thing to know is fleet turnover.
    You know, everybody here is--we'd be in agreement on one 
thing. We want the fleet to turn over faster to put more people 
in more fuel-efficient cars. And so, if you make them 
unaffordable or you make them not as desirable with the 
customer, you have less people buy cars. So that's it.
    To give you an example, the structure that you had set up 
under CAFE was the right one. I don't think you want California 
setting the standard for the rest of the country, and I will 
give you one example.
    There is probably many of you in here that own a black car. 
California CARB had proposed a regulation called cool paint--
cool paint. They would eliminate black cars because they become 
hotter and you have to run your air conditioner a little bit 
longer. I don't know what Uber would do without a black car but 
it would be a----
    Mr.  Kinzinger. I have a black car, too.
    Mr.  McConnell. So it's just--it's what the customer wants.
    Mr.  Kinzinger. That's real? They actually considered 
banning black cars?
    Mr.  McConnell. Yes. It's black paint. It's called a cool 
paint. You can look it up.
    Mr.  Kinzinger. And is it fair to say that the dealers are 
concerned that these rules will force them into a position in 
which they won't be able to provide the cars and trucks to 
people that want to buy and have prices they can afford?
    Mr.  McConnell. That's right. You know, ultimately we buy 
the cars that the manufacturers make. They sit on our lots. We 
own them. But ultimately, to put them in the fleet, the 
customer has to make a decision, and any business that's 
successful has to consider what the customer wants--can they 
afford it? And 90 percent of the cars are financed in this 
country.
    There is not one bank--I've asked at least 12 banks--that 
will not loan additional money just because your car gets 
better gas mileage.
    Mr.  Kinzinger. So most of the people in this room could 
probably afford a more expensive car, but there's a vast 
majority--it seems like kind of a regressive tax, in essence.
    Mr. Bozzella, from automakers, engineers in the Department 
of Energy, and many other technical experts--and I know Mr. 
Shimkus touched on this--but I understand there's been an 
ongoing evaluation of how high-octane, low-carbon fuels such as 
midlevel ethanol blend can help reduce emissions and improve 
efficiency when used with new optimized engines.
    In its most recent request from comments on the midterm 
evaluation, EPA specifically asked for information about the 
impact of high-octane fuel, and Administrator Pruitt also 
mentioned consideration of high octane in his responses to 
questions in this committee's hearing with him last week.
    What types of work have automakers undertaken to help 
evaluate the benefits of high-octane fuels?
    Mr.  Bozzella. Thanks, Congressman.
    As you are aware, we are constantly researching and working 
on the combinations of vehicle systems, power train systems, 
and fuels. I mentioned in response to Mr. Shimkus' question 
that you have to think of it as one system--hardware software, 
engines and fuels--and so we are constantly evaluating new fuel 
and engine combinations, and we think octane certainly 
contributes to efficiency, and so there's an opportunity there, 
right. The way to think about it is, we can--you know, that 
brings additional benefits to the process while we are still 
working on gasoline-powered engines.
    Mr.  Kinzinger. So you're talking about, you know, 
obviously, that innovation and experimentation. You state in 
your testimony that the current system is stifling innovation 
and resulted in increased costs for consumers. Can you explain 
what factors are predominantly driving this increased cost for 
consumers?
    Mr.  Bozzella. Yes. It's primarily the bureaucratic drag of 
trying to comply with three different fuel economy systems as 
well as a technology-forcing mandate managed by three different 
agencies across 15 jurisdictions.
    It doesn't really make much sense. I think if we can get 
further alignment and ultimately to one national program as we 
all--that was the aspiration we all had--we will be able to 
devote that investment, those substantial resources ,to 
improving fuel economy and reducing emissions.
    Mr.  Kinzinger. So in the couple seconds I have left, will 
the existing gap between Federal and State programs, if they're 
not harmonized, do you expect to see that gap increase over the 
years?
    Mr.  Bozzella. There is no question about it.
    Mr.  Kinzinger. All right. Thank you. I yield back.
    Mr.  Latta. Thank you. The gentleman yields back and the 
Chair now recognizes the gentleman from California for 5 
minutes.
    Mr.  McNerney. I thank the chairman. I thank the gentleman 
from Illinois for giving me 5 seconds there.
    I thank the members of the panel this morning. Dr. Cooke, 
do you think the current standards have helped make the 
American auto manufacturers more competitive?
    Dr.  Cooke. I do. I think we saw what happened when they're 
allowed to sort of stagnate.
    Mr.  McNerney. Thank you. Well, how do you think--and you 
have already sort of answered this question, but how do you 
think the regulations have driven employment with U.S. 
automakers, and is this hurting the industry?
    Dr.  Cooke. I am sorry. You said employment, correct?
    Mr.  McNerney. Yes. How is it driving employment?
    Dr.  Cooke. Yes. The fact that you are moving forward with 
new research and development on new technologies, this is 
providing a catalyst for increased investment, not just at 
automakers but specifically it's drawing suppliers to invest in 
the U.S. as well, and they are a critical tool and they 
outnumber automaker manufacturing 3 to 1. So it's driving 
investment in new technologies that's supportive of increased 
job growth.
    Mr.  McNerney. And is it hurting the automakers to have to 
hire these people or----
    Dr.  Cooke. They don't seem to be--you know, many 
automakers are seeing extremely high profits right now, and I 
defer to them on whether they feel like their industry is 
failing.
    Mr.  McNerney. OK. What about harmonization? How difficult 
do you believe that it is--the automakers can meet the 
different sets of standards that we are hearing about this 
morning?
    Dr.  Cooke. It's not very difficult at all, and 
particularly when it was pointed out explicitly in the 
rulemaking exactly the pitfalls that would face them and 
exactly the differences between the two programs, and that was 
finalized as--you know, when they signed off on One National 
Program, and nothing has changed about One National Program 
since they signed off on those rules. They were well aware of 
the differences between the two programs, and it seems that 
they are choosing instead to invest in compliance with just 
one.
    Mr.  McNerney. OK. You're answering my questions pretty 
directly here, Dr. Cooke. I appreciate that.
    You mentioned that off-the-shelf technologies already 
available would greatly increase fuel efficiency if it was 
employed. Could you expand on that a little bit?
    Dr.  Cooke. Yes. So the fact that automakers have invested 
and that there are proven technologies shows that the potential 
is there.
    But it takes time to move them across the remainder of 
their platforms, because a new car is redesigned every 5 years, 
and maybe there's a significant refresh in the middle at about 
the 3-year mark.
    But, because of that, it takes a long time for even 
technology that is ready to go to get into the fleet.
    But what we've seen established is that there are a 
plethora of these technologies that are well established, 
everyone understands, and are still in the low fractions of the 
fleet.
    And so over time, there's plenty of room for improvement 
without having to resort to the most expensive technologies.
    Mr.  McNerney. So there is a internal combustion research 
facility at Sandia Labs there in Livermore, which is near my 
district. How effective is that, do you know, in terms of 
providing technology that automakers can use to increase their 
efficiency?
    Dr.  Cooke. I am not aware of that specific lab. But the 
National Labs in general do play a significant proving ground 
for some of the more advanced types of combustion technologies, 
and they're certainly--you know, we've heard the Co-Optima 
program.
    That was in coordination with National Labs, and investment 
in that basic science, just as in any other field, certainly 
plays a strong role in development of advanced technologies.
    Mr.  McNerney. Well, you point out that fuel economy and 
greenhouse gas emission standards have benefited our economy, 
our environment, and saved consumers billions.
    Since these standards are working, why is the industry 
seeking to halt this progress and move backwards and maybe hurt 
itself?
    Dr.  Cooke. That is a very good question. I think you look 
at what the industry could be doing, and they could be moving 
forward.
    But we also look at the history of what they have done in 
the past, and I think there is a little bit of a return to that 
mindset when you look at testimony in front of House committees 
over the past 35, 40 years. This is par for the course. They 
continue--automakers routinely say, ``We can't possibly hit 
that target,'' and they are still standing. So----
    Mr.  McNerney. The chairman is going to cut me off, so I am 
going to yield back.
    Mr.  Latta. I didn't cut you off yet.
    [Laughter.]
    Mr.  Latta. The gentleman yields back. The Chair now 
recognizes the gentleman from Michigan for 5 minutes.
    Mr.  Upton. Well, thank you, Mr. Chairman. I just want to--
a lot of good questions asked on both sides. I want to bring my 
historical perspective into play here for a moment.
    I was co-chair of the Auto Caucus for a lot of years. 
Bipartisan caucus. We all want better fuel efficiency. 
Consumers want that.
    We have made some wonderful strides. Real kudos to the 
industry for where we are and, frankly, because we have gas 
prices--saw prices this weekend for $2.24 a gallon. That's a 
lot better than $3.84 8--almost 9 years ago.
    And I would dare--when we worked with the industry and with 
the administration on getting better fuel economy standards, it 
was never the intent of this Congress and, frankly, I didn't 
think it was the intent of the administration, the Obama 
administration, to have something that was different than One 
National Program, and we thought that that was going to be the 
case. I think they indicated that back in 2009 and again in 
2012.
    And I would--Mr. Bainwol, your testimony here, I think we 
were all surprised, based on their testimony earlier on and 
where they ended up, literally, as Chairman Walden said, just a 
week before the election, or a week before the end of the Obama 
presidency.
    When we worked with the industry and with the 
administration on establishing the time frame for mileage, we 
put in the provision that, in 2018--years down the road--that 
there would be a look back: Can the industry actually make 
these changes at what, hopefully, would be a reasonable price 
for consumers?
    I wouldn't say it was set in to halt the progress. It was 
to actually measure the science, the efficiencies, and the new 
vehicles as to whether they would meet those.
    Then it was 54 miles per gallon. It was revised down a 
little bit, so it's about 50. I am averaging here. But, under 
the rules, I mean, Mr. Bainwol and Mr. Bozzella, I think your 
best answer--the industry, if you didn't have that look back--
what will it take to actually meet 50 miles per gallon, 
literally, in the year, what, 2024, 2025? Mr. Bainwol.
    Mr.  Bainwol. A tough question. I think the premise that we 
are going to halt progress is false. The only question here is 
the degree of the slope, and we want the slope of progress to 
be one that's consistent with selling cars and encouraging the 
fleet turnover, and that's really what all this boils down to.
    So I understand we live in a political system and rhetoric 
gets heated. But we are talking about getting to the Obama 
numbers and beyond at some point over time, and the question is 
how do we manage this in a fashion that's consistent with 
marketplace realities?
    Mr.  Bozzella. Yes, and just to add to that: I think we are 
making outstanding progress. There is no question about that.
    Mr.  Upton. Yes.
    Mr.  Bozzella. The question really is, Are we testing the 
assumptions we made? For example, it's unclear to us really 
what types of technologies will be into the cars and trucks 
that people will need to buy in 2025.
    There is not a single gasoline-powered engine that meets 
those standards today. So I think we should be honest and 
straightforward about the types of technology pathways we are 
going to see forward--more electrification, more hybrids.
    And so really this is about not only making sure we get the 
assumptions right for innovators and investors, but also that 
the customers recognize what the marketplace will look like and 
are prepared.
    Mr.  Upton. Mr. Bainwol, as you know, my colleague and 
friend from Michigan, Mrs. Dingell, and I have introduced 
legislation called the Fuel Economy Harmonization Act of 2017 
that is designed to correct the inconsistency of having three 
different standards, in essence, and go back to one.
    What are your thoughts on that legislation?
    Mr.  Bainwol. We think it's a terrific bill. We think that 
the impact of the bill is to reduce regulatory friction, and by 
reducing regulatory friction, that allows for compliance 
strategies that make sense, and you end up reducing the cost of 
product, enhancing the ability of people to buy those cars, and 
that's crucial to employment in your States. So it really is 
very valuable.
    And in terms of dollars, I was told the other day--I am not 
sure where the data comes from, but if anywhere near the 
magnitude is right--a billion dollars in savings in terms of 
costs translates into a thousand dollars on the bonus for a guy 
who works on the line.
    So this is a multibillion-dollar savings in terms of the 
regulatory friction. That means real disposable income for the 
workers of this industry.
    Mr.  Upton. Thank you. I yield back.
    Mr.  Shimkus [presiding]. Gentleman's time has expired.
    The Chair now recognizes the gentlelady from Michigan, Mrs. 
Dingell, for 5 minutes.
    Mrs.  Dingell. Thank you, Mr. Chairman.
    I have a lot of questions. I am going to go to my last one 
first, because I want to follow up on my colleague from 
Michigan.
    When we are talking about--first of all, I am an idealist. 
Someday we are going to bring permanent peace between Michigan 
and California--that's my goal here--because I think we all 
want to have a better environment.
    But when we talk about the assumptions that were made when 
these standards were, here is one example of a technology I 
would like to pursue. Could all of you answer this question 
quickly?
    Was it not assumed that there would be a far higher 
penetration in the market of electric vehicles? And people keep 
making this comment that the companies aren't building EVs.
    But is it not a fact that the consumer is not buying EVs? 
They don't believe that there is an infrastructure in place, 
and even the 13 States that have ZEV mandates that should be 
putting them into their fleet are not buying them. Quickly.
    Mr.  Bainwol. So yes, yes, and yes.
    Mr.  McConnell. You absolutely are correct.
    Mrs.  Dingell. Dr. Cooke.
    Dr.  Cooke. There was little penetration of electrification 
assumed, and 4\1/2\ percent in California right now, electric 
vehicle penetration.
    Mr.  Bozzella. But a half a point nationwide.
    Mrs.  Dingell. And it was--that's a part of the problem. 
And I've talked to Governor Brown. And we are eliminating the 
tax credit for the EV in the tax bill, and right now we are 
losing money on those electric vehicles.
    Dr. Cooke, how do we get at that?
    Dr.  Cooke. Sorry. Say that again.
    Mrs.  Dingell. How do we get at making the consumer want to 
buy that electric vehicle?
    Dr.  Cooke. I think the fact that we are at nearly 5 
percent in California shows that, if you put the incentives in 
place, you do drive----
    Mrs.  Dingell. But the incentives are in place--the same 
incentives, quite frankly, sir. The tax credit is there. The 
infrastructure needs to be built out. So do we have to work 
together?
    All right. I am going to go to my other questions, because 
I actually think we are more together than people are thinking. 
So I would like to ask Mr. Bainwol and Mr. Bozzella, are the 
members of your trade associations committed to continued fuel 
economy improvements that are balanced, both technological 
feasibility and consumer affordability?
    Mr.  Bainwol. Yes. So life does not end in 2025. We know 
that, and we are----
    Mrs.  Dingell. Are you for post-2025 standards, which I, by 
the way, am and want to talk about it.
    Mr.  Bainwol. That conversation has to happen, yes.
    Mr.  Bozzella. Yes. I would agree to both points. We are 
committed to improving fuel economy and over the long haul.
    Mrs.  Dingell. This question is for all witnesses, and 
please answer yes or no.
    Do you believe that there is a benefit for having a single 
set of fuel economy standards across the country?
    Mr.  Bainwol. Absolutely.
    Mr.  McConnell. Yes, under NHTSA.
    Mrs.  Dingell. Dr. Cooke.
    Dr.  Cooke. Yes.
    Mrs.  Dingell. No?
    Dr.  Cooke. Yes.
    Mrs.  Dingell. Oh, yes? OK.
    Mr.  Bozzella. Yes.
    Mrs.  Dingell. And isn't what the Obama administration 
tried to do in 2010 and 2012 with the creation of one ONP--
having a unified approach between NHTSA, EPA, and CARB--isn't 
that what they tried to do?
    Mr.  Bainwol. It was the goal, but it was broken at the end 
of the administration.
    Mrs.  Dingell. Mr. McConnell.
    Mr.  McConnell. I believe that Congress had it right the 
first time not to have a patchwork, that NHTSA should be in 
charge.
    Mrs.  Dingell. Dr. Cooke.
    Dr.  Cooke. That was the goal and is still in place.
    Mr.  Bozzella. It was the aspiration, and it hasn't been 
realized.
    Mrs.  Dingell. And, in fact, EPA and NHTSA both clearly 
stated in their joint MPRM issued in 2012--I have it right 
here--the need to create a unified approach so that the 
manufacturers could design one fleet of vehicles to comply with 
both programs.
    And isn't it true that the 2012 joint final rule had two 
main phases, the first being CAFE standards from model years 
2017 to 2021 and then separate projected standards from model 
years 2022 to 2025?
    Mr.  Bainwol. Yes.
    Mrs.  Dingell. Dr. Cooke.
    Dr.  Cooke. Yes.
    Mr.  Bozzella. Yes.
    Mrs.  Dingell. OK. So it is my understanding that, when the 
2012 joint final rule was released, that the 2022 through 2025 
standards were what was called augural standards--in other 
words, estimated--which represent NHTSA's best estimate of what 
would be maximally feasible at that time. Is that correct?
    Mr.  Bainwol. Yes.
    Mr.  McConnell. I just represent the consumer who wants to 
be able to afford the vehicle.
    Mrs.  Dingell. OK. Dr Cooke.
    Dr.  Cooke. Yes.
    Mrs.  Dingell. John.
    Mr.  Bozzella. Yes.
    Mrs.  Dingell. OK. So, right now, we are going through the 
midterm review as we speak. Whether some of you like it or not, 
it's very important.
    We are in the early process, but it's important that it 
play out and encourage stakeholders to engage responsibly 
towards a negotiated solution that continues the gains we've 
seen in fuel economy since 2012, takes current conditions and 
real-world data into account, and establishes standards past 
2025.
    People aren't talking about who's at the table. We need all 
the stakeholders, including California, and quite frankly, I 
trust Governor Brown and Mary Nichols--you can quote me on that 
today--at that table, the Trump administration, automakers, and 
the environmentalists--it was California I trusted--around the 
table and working productively in order to make it happen.
    Was that not the strength of the original agreement, all 
the players at the same table giving people certainty and 
investing for the customer? A failure to reach a negotiated 
solution will result in less certainty for the industry, weaker 
standards, and less savings at the pump for consumers.
    With that being said, there are still ways that we can 
improve our fuel economy systems while the midterm review is 
playing out. This is for all the witnesses. Even though we 
all--and I am out of time. I have to quit, Mr. Chairman.
    Mr.  Shimkus. You are close to out of time. You going to--
was that a question or are you just filibustering or what are 
you----
    Mrs.  Dingell. Well, I actually had a bunch more, but I 
will put them in the record. Thank you, sir.
    Mr.  Shimkus. Without objection----
    Mrs.  Dingell. I just looked up.
    Mr.  Shimkus [continuing]. The gentlelady's time is 
expired.
    Mrs.  Dingell. Thank you.
    Mr.  Shimkus. How fortunate we have the gentleman from 
Texas, who is recognized for 5 minutes.
    Mr.  Olson. I thank my friend, who graduated from West 
Point. Congratulations one more time, the big victory 
Saturday--Army again beat Navy for the second time in now 16 
years.
    With all due respect to my friend from Michigan, I am a 
bigger optimist. I believe that maybe today we can have this 
dream: California and Texas working together as opposed to 
California and Michigan on these issues.
    Mrs.  Dingell. How about all three?
    Mr.  Olson. Pardon me?
    Mrs.  Dingell. How about all three?
    Mr.  Olson. All three works, too.
    I thank the Chair and welcome our four witnesses. A special 
welcome, Mr. Bainwol. We share a common bond, my friend: I was 
Rice University, you got an MBA from Rice University, and my 
first question is for you, Mr. Bainwol.
    In your testimony, you talked about how the 2012 final rule 
projected a very different mix of cars and trucks than we see 
on the road today.
    Any business has the same motto: The consumer comes first. 
Can you talk about how consumer preferences shapes your ability 
to make these rules workable? How do these put the consumer 
first?
    Mr.  Bainwol. So both the CAFE program and other Government 
programs that are mandates are mandates not on what we produce, 
but on what people buy.
    So, in effect, the consumer--it's not just a phrase--the 
consumer is king, because they dictate the success of these 
programs. And when consumers don't buy what policymakers want, 
it's not the consumers' fault. They're expressing their own 
market opinions about what's right for their families.
    And what we've seen over time with the plummeting in the 
price of gas is a very different mix of purchases in the 
marketplace--so pickups, trucks, SUVs, crossovers--and that has 
made life more complicated.
    Now, there is something called a footprint. So the 
footprint accommodates some of the fleet mix, but it doesn't 
accommodate other dimensions of the fleet mix, including power 
train choices.
    Mr.  Olson. Doesn't that show the need for an adaptable, 
responsive set of rules across the country?
    Mr.  Bainwol. Yes, it sure does.
    Mr.  Olson. OK. Another question for you, Mr. Bainwol, and 
you, Mr. Bozzella.
    I would like to discuss the harmonization of rules you all 
work under. To what extent does the lack of harmonization 
between the two Federal programs impact consumers and 
innovation?
    Mr.  Bainwol. It's basically what I would call a Government 
externality. The Government is imposing costs on the 
marketplace that consumers then have to absorb.
    And so it is a problem. It make fewer people able to buy 
cars, it retards the process of fleet turnover, and it has bad 
social outcomes.
    Mr.  Olson. Mr. Bozzella, sir.
    Mr.  Bozzella. And I would just add to that, why, if we are 
trying to achieve one goal, would we have different tools in 
different toolboxes? What that does is it creates compliance 
for the sake of compliance without benefits to consumers, and I 
think we got to get back to benefits for consumers.
    Mr.  Olson. If this is so controversial, then why did the 
Obama administration grant your consideration of your petition 
last December? Any idea why?
    Mr.  Bainwol. Had there been a different outcome in the 
election, perhaps we'd be having a more rational conversation 
about harmonization. So I think some of this gets filtered 
through the lens of national politics.
    Mr.  Bozzella. I agree with that, Congressman. You ask a 
great question. We are very close. We are very close. We have 
the same aspirations and desires, and what we want to do is to 
create better benefits, more fuel economy, and reduced 
emissions for consumers, and let's focus on that.
    Mr.  Bainwol. And could I add also?
    Mr.  Olson. Yes, sir.
    Mr.  Bainwol. The conversation we are having today has a 
feel that somehow that there's a problem, and what we really 
need to understand is we should be celebrating success. I mean, 
I had that one slide that showed, if you take the 2021 numbers 
and you add 1, 2, or 3 percent, we are at 97 percent 
realization of fuel savings. That's pretty darn good.
    Now, we have invested $100 billion a year in safety, fuel 
economy, technologies like AVs, and we are producing dividends 
for the marketplace.
    That's a good story, and we should be thankful for the 
success of this program. And now what we are talking about 
doing is finding a way to make the economics of the program--
the regulatory piece of the program--more efficient so that 
more consumers can benefit from new cars.
    Mr.  Olson. And, well, too, I see you guys make a great 
difference. My first car was a 1977 Silverado pickup truck. 
Just one cab, nothing behind the seats. That truck, you could 
watch the gas gauge go down as you hit the gas pedal. Just 
boom, maybe 8 miles per gallon.
    I now have a 2014 Silverado crew cab--big cab, big truck. I 
drove from Houston, Texas, to watch my high school play in San 
Antonio--a basketball game--and drove back on one tank of gas.
    I would like to close, Mr. Chairman, by asking unanimous 
consent to enter into the record a Federal Register from 
Wednesday, December 20th, about the proposed rule I was talking 
about. Department of Transportation and Safety--NHTSA, 2016, 
10135.
    Mr.  Shimkus. Is there objection?
    Hearing none, so ordered.
    [The information appears at the conclusion of the hearing.]
    Mr.  Shimkus. Gentleman's time has expired. The Chair now 
recognizes the gentleman from California, Mr. Cardenas, for 5 
minutes.
    Mr.  Cardenas. Thank you very much. I am proud to represent 
California but also equally proud of the fact that California 
has led the way, sometimes with hiccups and fits and starts, 
but California has improved its emissions standards and has set 
the tone quite often.
    Let me just give you one example. There are three 
generations between me and my grandson now--myself, our four 
children, and my grandson.
    I used to tease my kids that used to not be allowed to play 
outside sometimes--I grew up in Los Angeles when I was a little 
boy--because of the smog, and then I used to tease my kids that 
they never had that problem. They never had to deal with a smog 
alert.
    But yet, we have to be careful, because the last thing I 
want is for my 18-month-old grandson, for me or his parents or 
his teachers to say, ``You can't play outside.'' We have to be 
careful and make sure that whatever we do, we preserve the 
environment for our children and we make sure that whatever it 
is that we do improves on everything that we've done in the 
past--the knowledge, the technology that we are capable of.
    So my statement is that fuel efficiency is an important 
goal across the board. It also allows low-income and middle-
class families to have access to cars that run economically. 
Less money goes to the gas pumps and more stays in their 
pockets. That's a good thing. The One National Program also 
gives low-income folks access to used cars that are fuel 
efficient. It also impacts the air we breathe.
    My district and many in southern California have dealt with 
wildfires late in the season, last week and ongoing, as we 
speak. It is no coincidence that these fires are devastating 
our communities with greater frequency and ferocity. California 
has been a leader in fuel efficiency and emission standards, 
and the Nation needs to follow suit.
    Dr. Cooke, can you please talk a little bit about the 
California emission standards?
    Dr.  Cooke. Yes. So tailpipe standards that were originally 
set formed the basis for Federal action, and the reason why we 
can breathe in Washington, DC, is largely a result of the fact 
that California set those standards way back in the '60s, and 
that trend has continued with Tier 1 standards and Tier 2 
standards that were first set in California and then 
essentially codified by the Federal agencies and that, again, 
happened with the LEV 3 standards that are part of the Advanced 
Clean Cars program.
    So we've seen this trend over and over. But, at the same 
time, California is still struggling to meet its air quality 
goals for 2030. And so that's why we have the Zero Emission 
Vehicle program.
    Mr.  Cardenas. Well, California has approximately--
approaches about 40 million people. It is still, what, the 
fifth, sixth largest economy. It bounces around there.
    So the bottom line is anytime you're that large and you're 
that impactful, especially economically with all the issues 
that are going on with the population and also with the 
business, which is to me is a good thing--I am very proud to be 
from California and the fact that we, if we were our own 
country, would be ranked fifth or sixth largest economy in the 
world.
    So, that being the case, it is complicated but it's not 
impossible for us to continue to thrive and strive to be better 
and cleaner and more efficient and to drive the markets as 
well.
    Dr. Cooke, I would also like to see if you could respond to 
the idea that the former NHTSA standards with rules designed by 
Congress were preferable to the current One National Program. 
Who does the former NHTSA standards benefit, by and large?
    Dr.  Cooke. So the single number standard, and one of the 
reasons why we moved to the size-based standard, was especially 
detrimental to the domestic manufacturers, and it advantaged 
imported vehicles, and so folks who sell more cars and less 
trucks.
    The fact that we have a size-dependent standard now helps 
drive investment and competitiveness of the Big Three as well 
as it does Honda and Toyota.
    Mr.  Cardenas. So, if I heard you correctly, the current 
One National Program benefits mostly foreign vehicle makers?
    Dr.  Cooke. No. Sorry. Prior to the One National Program 
attribute size-based standards.
    Mr.  Cardenas. OK.
    Dr.  Cooke. You know, the old CAFE program used to benefit 
primarily the imported vehicles, which is why, frankly, CAFE 
stalled for 20 years.
    Mr.  Cardenas. OK. All right.
    Well, thank you very much, and to go off what one of my 
colleagues said, again, to add a famous quote, ``You can't 
always get what you want, but you can get what you need,'' and 
I think that's the balance we are trying to strike here.
    Thank you very much. I yield back.
    Mr.  Shimkus. The gentleman yields back his time.
    The Chair recognizes the gentleman from Oklahoma, Mr. 
Mullin, for 5 minutes.
    Mr.  Mullin. Thank you, Mr. Chairman.
    You know, we are talking about achieving certain fuel 
standards, and we've kind of touched on it, kind of bounced 
around a little bit about it. But we are talking about the 
consumer benefit, too.
    There has to be a balance between the two, and we are 
trying to hit our standards that are set forth to us. When 
Congress had to look back in 2018, I think that was a look back 
of not only seeing, hey, is it feasible for the industry to hit 
it, but is it cost productive, too?
    So looking forward, what is this going to cost our 
consumers? And this is open. I am really not too worried about 
who takes it. What is this going to cost us?
    I mean, we see vehicles rising each day in cost. I drive an 
F-250 crew cab diesel--same vehicle I've driven for the last, I 
guess, 17 years. The exact same vehicle I bought in 2000 versus 
today is about $50,000 difference in price.
    Is that due to the regulations we are putting on us? Is 
that being passed on to the consumers? Mr. Cooke, do you want 
to take that? I see your finger on the button.
    Dr.  Cooke. Yes, I would. I mean, I think one of the things 
that's really important to recognize is what's causing the 
increase in retail price today.
    You know, entry-level vehicles today cost the same when 
adjusted for inflation as they did 10 years ago. So it's not 
the technology that's driving people out of the market.
    If you want to look at what's the biggest factor that's 
causing the increase in retail price, it's the fact that now we 
are selling more SUVs and pickup trucks, which do have higher 
profit margins. So----
    Mr.  Mullin. Well, no, no. My F-250 Lariat crew cab four-
wheel drive, I paid just below $30,000 for that vehicle. So in 
17 years the inflation has increased $50,000? I mean, we've 
seen that increase across with pay wages and grocery prices? 
All of them have inflated 100--what is that? Someone help me 
with the math there. Well over 100 percent?
    Dr.  Cooke. So I just want to flag that I was specifically 
talking about the entry-level vehicles. When you look at trucks 
and SUVs, what we've seen is a large increase in profit margin 
as a result of moving to higher and higher luxury trims. That's 
why the fact that you have, like, a $65,000 F-150 now at the 
King Ranch version--those SUVs have always been higher profit 
margins, but we've seen----
    Mr.  Mullin. So, but what I am saying is, is this being 
passed on to the consumer? What we are seeing by fuel savings, 
because we are talking about keeping more money in the pocket--
I think my colleague from California said that--if they can't 
afford the vehicle to begin with, then what difference does it 
make?
    Mr. Boswell--Bozzella, I am sorry.
    Mr.  Bozzella. It's OK. Bozzella. Thank you.
    Mr.  Mullin. Bozzella.
    Mr.  Bozzella. You're right. There is more technology in 
vehicles today than there ever has been. These cars are 
cleaner, safer, and more fuel efficient than they ever have 
been and, of course, there has to be some cost associated with 
that.
    The real question is not only the cost, but the cost 
combined with where the market ultimately needs to go, and I 
think, to your question, I think we have to be clear that we 
need more electric vehicles, more higher priced, more expensive 
technologies in order to really drive the shift that we are 
looking for here.
    Mr.  Mullin. Go ahead, Mr. McConnell.
    Mr.  McConnell. Yes. You make a great point. I will say 
that the cars that are $15,000 or less have been regulated out 
of existence. The cost is $3,000 a car.
    I know Dr. Cooke is an extremely smart gentleman. But he 
keeps talking about what can be built. But the question is, you 
can't save anything on fuel economy until you're able to afford 
to buy the car.
    Mr.  Mullin. Agreed.
    Mr.  McConnell. And 6.8 million people will be knocked out 
by a $3,000 price increase, and that's done because 90 percent 
of the people finance a vehicle, and that takes people's debt-
to-income-ratio out, it knocks them out of the new car market.
    We are all about fleet turnover. Until somebody buys 
something, and you can build whatever, but as you said, a smart 
business has to listen to the customer, and we are----
    Mr.  Mullin. So is it reasonable then--on what we are 
trying to do here, is it reasonable to say that a customer is 
going to be able to afford it and see the cost savings--to be 
able to pay the difference of what we are going to spend trying 
to get to fuel standards, what they're going to save on gas?
    Mr.  McConnell. The realities of the market, though, when 
the price of gas goes from $4 to close to $2, their savings are 
cut in half.
    Mr.  Mullin. Right.
    Mr.  McConnell. So people make a decision based on what's 
best for them, as they should, and the National Automobile 
Association and dealers, we want to sell whatever the customer 
wants--EV, whatever it may be. But it's the customer, and 
that's the one thing.
    We are--I live my life, and I know dealers--we want higher 
gas mileage. But you know what? You have to listen to the 
customer--what they can afford and what they want, not 
necessarily what Washington wants or California wants.
    Mr.  Mullin. Right.
    Mr. Chairman, I yield back.
    Mr.  Shimkus. Gentleman's time has expired. The Chair now 
recognizes the gentleman from Texas, Mr. Green, for 5 minutes.
    Mr.  Green. Thank you, Mr. Chairman, and you have a couple 
of guys from Texas and one from Oklahoma.
    I want to thank the chairman and ranking member for holding 
this hearing, though. But transportation is a leading source of 
carbon dioxide emissions.
    I have a very urban district in Houston, an industrial 
district with refineries. By the way, our gasoline over the 
weekend--the lowest price I found was $1.99 per gallon, and 
even with a $57 barrel of oil, there's a benefit from having a 
refinery down the road.
    But Houston is a car-dependent city. Ninety-four point four 
percent of all our households have a car, and each household 
has at least 1.8 cars. My wife and I, I think, share five cars 
in different locations.
    After Hurricane Harvey hit, nearly a million cars will be 
replaced in the Houston metro area, with analysis estimating 
that 30 to 40 percent will be new vehicles. The standards are 
more important than ever when it comes to helping our air 
quality in Houston.
    One of the things I am concerned about, the lower market 
penetration for electric vehicles anywhere except in 
California, and we have some in Houston. But, you know, you're 
not going to drive from Houston to San Antonio--that's 199 
miles--on an electric car that may not--you know, you have sit 
and let it charge up for a few hours when you get there.
    So Mr. Bainwol, how has the low price of gas affected 
purchasing habits among consumers when they come to fuel 
economy?
    Mr.  Bainwol. So, in a profound way. The average age of a 
car is about 11 years old, and when you think about the 
improvement in the conventional engine, there's two factors 
going on.
    If you turn in a Camaro for a Camaro or a Civic for a 
Civic, whatever the case may be, over 11 years you have got 
about a 25 percent increase in fuel economy, on average.
    So you have a combination of two effects. One is the 
improvement of the engine, and the second is the lower price of 
gas. The combination of the two has made electrification kind 
of a niche product, and it's just an economic reality. That may 
change over time.
    But those two factors, the starkness of the improvement and 
the lower price of gas, combined to really impact penetration.
    Electrification of the fleet nationwide in 2017 is 0.5. If 
you look at the numbers of gas, in '08 it was 97.6 percent of 
the marketplace. In '17, it's 96.9 percent. It has moved less 
than a point in a decade.
    And what's happening with--electrification is coming out of 
the hide of hybrids. So we are at a very, very slow uptick in 
terms of these alternative power trains. At some point it may 
take off, but we are not there yet.
    Mr.  Green. Well, people will typically vote with their 
pocketbook. But you're right, you're going to hear all of us 
have different cars.
    Again, I like big trucks, and so in Texas I bought a Tahoe 
in '06. I couldn't get better than 16 miles per gallon. But the 
new Tahoe I bought in 2016, we are getting 24 miles per gallon 
at certain times. And so you're right, it has increased, and 
people are going to vote with their pocketbook, and unless you 
can have a product that can do----
    And following up, were there any models of vehicles from 
the same year that an equally priced hybrid version of the 
vehicles outsold the nonhybrid version?
    Mr.  Bainwol. I'm not fully aware of the marketplace to 
that degree. But there are examples where the hybrid has been 
priced at the same levels as a conventional engine, and people 
still choose a conventional engine.
    Mr.  McConnell. I can think of one particular example. The 
Lincoln had a hybrid and a nonhybrid priced at identical price. 
Customer had a choice. Seventy percent chose the nonhybrid, and 
30 percent chose the hybrid. Same cost.
    Mr.  Green. Well, that's still better than 5 percent 
penetration of electric vehicles in California and a half a 
point for the rest of the country.
    Mr. Cooke, regarding the proposed legislation by 
Representative Upton and Representative Dingell, can we know 
the full effect that the legislation will have on GHG and CAFE 
standards while the EPA's midterm review is still not 
completed?
    Dr.  Cooke. No. It's difficult to say. All we know is that 
in the short term it sets it up for long-term failure.
    Mr.  Green. OK. Well, and thank you, Mr. Chairman, for the 
time, and I guess I batted cleanup today. Thank you.
    Mr.  Shimkus. I think you did. Thank you. Gentleman's time 
is expired.
    Seeing no further Members wishing to ask questions, I would 
like to thank all of our witnesses for being here today. Before 
we conclude, I would like to include the following documents to 
be submitted for the record by unanimous consent.
    Mr. Olson's already was taken care of. We have a letter 
from the Motor and Equipment Manufacturers Association. I think 
it's been viewed by the minority, and without objection, that 
gets accepted.
    [The information appears at the conclusion of the hearing.]
    Mr.  Shimkus. Pursuant to committee rules, I remind Members 
that they have 10 business days to submit additional questions 
for the record, and I ask that witnesses submit their response 
within 10 business days upon receipt of the questions.
    Without objection, the subcommittee is adjourned.
    [Whereupon, at 12:08 p.m., the joint subcommittee was 
adjourned.]
    [Material submitted for inclusion in the record follows:]
    
    
    
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