Briefing by Conference Call on the President's Announcement on CAFE and Alternative Fuel Standards

Secretary Of Transportation Mary Peters
Secretary Of Agriculture Michael Johanns
Epa Administrator Stephen Johnson
Deputy Secretary Of Energy Clay Sell
Deputy Press Secretary Scott Stanzel

2:07 P.M. EDT

MR. STANZEL: Thank you all for joining us today. As you know, the President made an announcement just a short time ago about his directing the administration to take action to implement his 20-in-10 plan, to reduce our nation's addiction to oil. And as you know, in his State of the Union address, the President proposed this 20-in-10 plan, and this action today follows on that.

We are joined today by EPA Administrator Stephen Johnson, Secretary of Transportation Mary Peters, Secretary of Agriculture Mike Johanns, and Deputy Secretary of Energy Clay Sell. I'm going to turn it over momentarily to Administrator Johnson, who will talk a little bit about today's announcement. And then we'll have some brief comments from Secretary Peters, Secretary Johanns, and Deputy Secretary Sell about their involvement in this very important issue.

So with that, I'll turn it over to Administrator Johnson.

ADMINISTRATOR JOHNSON: Thanks very much. This is Steve Johnson, Administrator of the U.S. Environmental Protection Agency. And I also want to add my thanks to all of you for joining us on the call.

As was noted, earlier today President Bush signed an executive order directing EPA, the Department of Transportation, the Department of Energy and the Department of Agriculture to coordinate on the development of possible regulatory actions to address the emissions from mobile sources that contribute to global climate change. Following this direction, and put simply, the Bush administration is taking the first regulatory step to address greenhouse gas emissions from cars.

On April 2, 2007, the U.S. Supreme Court decided in Massachusetts versus EPA that the Clean Air Act provided EPA the statutory authority to regulate greenhouse gas emissions from new vehicles if I determine in my judgment whether such emissions endanger public health and welfare under the Clean Air Act. Today the President has responded to the Supreme Court's landmark decision by calling on EPA and our federal partners to move forward and take the first regulatory step to craft a proposal to control greenhouse gas emissions from new motor vehicles.

This rule-making will be complex and will require a sustained commitment from the administration to complete it in a timely fashion. While the President's 20-in-10 plan, which would increase the supply of renewable and alternative fuel and reform the CAFE standards, will serve as a guide, we have not reached any conclusions about what the final regulation will look like. In most instances, by federal law, the Environmental Protection Agency must follow a specific process and take several steps before issuing a final regulation. This is a complex issue and EPA will ensure that any possible rule-making impacting emissions from all new mobile sources through the entire United States will adhere to the federal law.

We will solicit comments on a proposed rule from a broad array of stakeholders and other interested members of the public. Our ultimate decision must reflect a thorough consideration of public comments and an evaluation of how it fits within the scope of the Clean Air Act. Only after EPA has issued a proposal and considered public comments can it finalize a regulation. Today's announcement reflects our commitment to move forward expeditiously and responsibly.

While this is the first regulatory step, it builds on the Bush administration's unparalleled financial, international and domestic commitments to reducing global greenhouse gas emissions. Since 2001, EPA and the entire administration have invested more than $37 billion to study climate change science, promote energy-efficient and carbon-dioxide-reducing technologies, and fund tax incentive programs. As you all know, that's more money than any other country in the world has spent to address this global challenge.

Under the President's leadership, our nation is making significant progress in tackling greenhouse gas emissions. According to EPA data reported to the United Nations Framework Convention on Climate Change, U.S. greenhouse gas intensity declined by 1.9 percent in 2003, declined by 2.4 percent in 2004, and 2.4 percent again in 2005. Put another way, from 2004 to 2005, the U.S. economy has increased by 3.2 percent, while greenhouse gas emissions increased by 0.8 percent.

In another study, the International Energy Agency reported that from 2000 to 2004, U.S. emissions of carbon dioxide from fuel combustion grew by 1.7 percent, while our economy expanded by nearly 10 percent. Yet, during this time of growth, the United States actually reduced its carbon dioxide intensity by 7.2 percent.

Our aggressive and practical strategy is working. America is on track to meet the President's goal to reduce greenhouse gas intensity by 18 percent by 2012. By taking this first regulatory step to address greenhouse gas emissions from cars, we are maintaining America's unparalleled leadership in addressing global climate change while strengthening our energy security.

Thanks very much.

SECRETARY PETERS: Scott, thank you, and thanks to everyone who is on the call with us today. The President understands that each of our agencies bring significant knowledge, expertise and skill to bear when it comes to meeting his ambitious goal of 20-in-10. We have wide-ranging experience and significant technical knowledge at the Department of Transportation when it comes to setting fuel economic standards that require automakers to install fuel savings technology on every type of pickup truck, SUV, and minivan, regardless of their size or weight.

As a result, our repeated increases in the fuel economy standards for the light truck category of vehicles have set tough new mileage targets while encouraging consumer choice, maintaining vehicle safety, and of course, protecting jobs and the American economy.

We intend to share this experience as we work closely with EPA and the other agencies to meet the President's direction to evaluate regulatory solutions based on 20-in-10 and the framework that the President has provided. This will reduce greenhouse gas emissions and strengthen energy security.

Scott, thank you so much.

MR. STANZEL: Thank you, Secretary Peters.

Secretary Johanns.

SECRETARY JOHANNS: Scott, thank you. And to everyone on the call, we appreciate the opportunity to offer a few words on this presidential initiative.

The President has provided a very important blueprint to address energy security with his 20-in-10 proposal. And now, through a coordinated effort, the agencies are putting the building blocks in place.

For the United States Department of Agriculture, renewable energy is a top priority. The President's goal to achieve 20-in-10 has ignited what I would describe as a transformational period, nothing short of that, in American agriculture. He's articulated a definite vision and he has followed up on that in our case, in Agriculture's case, with a very aggressive Farm Bill proposal that will fit perfectly with what he talked about this afternoon.

We've already put forth a Farm Bill proposal that would increase funding for renewable energy by $1.6 billion. Without question, the President's proposals represent the most significant commitment to renewable energy that's ever been proposed in farm legislation. It's focused on cellulosic ethanol, which is where we believe the next step is in terms of ethanol development. And it's also one of the building blocks that will help us achieve 20-in-10.

The Farm Bill proposals would expand research into cellulosic ethanol, to improve biotechnology, and create a better crop for conversion to renewable energy and to improve that conversion process, making it more efficient and, therefore, more commercially viable.

These proposals also fit well with the President's announcement because they provide funding to support more than a billion dollars in guaranteed loans, to encourage the construction of the commercial-scale cellulosic plants.

I do want to mention finally that the United States Department of Agriculture has worked hand-in-hand with the Department of Energy to ensure our efforts are complementary, and to send a very strong signal to the marketplace that this administration supports renewable energy production, just as the President has indicated yet again today. There is no question that American agriculture has an important role to play in the renewable energy field and in achieving the 20-in-10 goal. The President has recognized that and embraced it through the Farm Bill proposals that we have put out.

MR. STANZEL. Thank you, Secretary Johanns. Now I'll turn it over to Deputy Secretary of Energy Clay Sell.

DEPUTY SECRETARY SELL: Good afternoon. Secretary Bodman is meeting in Paris today at the biannual meeting of the International Energy Agency, so I'm pleased to be here on his behalf.

Matters of energy security cannot be separated from our priorities for environmental stewardship. And it is our view at the Department of Energy, and I think it is the view held inside the administration, that technology and the development of technology is the key to addressing these two issues together. And as part of developing the technology, we also must focus on the policies that will help pull these technologies into the marketplace on a time frame that is relevant to address the problems at hand.

And so we have looked forward to working with the Congress on the President's legislative proposals in 20-in-10, and we now look forward to working with our colleagues inside the administration to pursuing this regulatory path, as well. Thanks.

Q This is a work that's just starting in progress. Can any of you assure us that there will be a CAFE element in the package when you complete it?

SECRETARY PETERS: I'll take that question from the Department of Transportation, and then defer it to Steve Johnson at EPA.

As you mentioned, we're just starting the process right now. So our first step will be to evaluate the impacts of the ruling and where we want to go with the 20-in-10, and then determine whether or not we move forward with a CAFE regulation. But it is our intent to implement the President's 20-in-10.

ADMINISTRATOR JOHNSON: As a very practical matter that there are two ways of controlling greenhouse gas emissions from new cars. One is the fuel, and our comments on the alternative fuel and renewable fuel; and the second is through efficiency of the automobile, or hence, CAFE.

So what is particularly noteworthy is the President's legislative plan of CAFE reform and alternative fuel supply is very consistent with where -- a good starting point for us to be from a regulatory standpoint because it addresses the two areas where there's an opportunity to not only deal with greenhouse gas emissions, but also energy security.

Q Just wanted to ask about the time frame here. You mentioned that you're not going to rule out any action or lack thereof. The President today set a goal to wrap up work by the end of 2008. Just kind of clarify what exactly he's calling for and how the Clean Air Act might enter into here. The Clean Air Act was mentioned in the executive order, as well.

ADMINISTRATOR JOHNSON: The first step that we're taking to initiate a regulatory process is through the Clean Air Act, and that what the President has asked that we do as Cabinet members is to proceed so that we can have a final regulation in place by the end of 2008. The process that we go through for any rule-making, we develop the proposal; we issue it for notice and comment; then based upon those comments, then we make a final decision, which is then incorporated into the final rule.

So today's announcement is the first step in that regulatory process, and that is we are now going to be turning our attention to developing a proposal which will then go through notice and comment rule-making.

MR. STANZEL: And, Chris, I should note -- and I should note for everyone else on the call -- we did release the executive order. That's available at WhiteHouse.gov, as is a fact sheet about today's announcement.

Next question.

Q I also wanted to ask about the time element. You talk about operating in an expeditiously and a timely fashion, yet it's 17 months before you expect to get anything done. Congressman Markey has put out a release; it calls this yet another stall tactic by the President. How do you explain why it takes so long? What do you say to his comments that it's a stall tactic?

ADMINISTRATOR JOHNSON: Having been at the EPA for 26 years now, I can tell you that a rule-making process -- typically, a rule-making process at the agency takes between 18 and 24 months. And so you can do the calculation, but this is expediting a rule-making. This is very important that we expedite, but it's also very important that we have a close collaboration among particularly the Department of Transportation, Energy, Agriculture and ourselves, and do it right.

SECRETARY PETERS: If I could just add briefly, what the President's proposal does is weigh the balance of policy issues, which includes safety, sound science, technology, public input, cost and benefits, economic impact, and American jobs. And it's very important we consider all these factors as we go forward.

Q You've already got legislative proposals, I believe, out to do what you're saying you now want to accomplish through a rule-making. But you also still say that you're seeking legislation. So is this a two-track thing, you're trying to accomplish these things legislatively, and if you don't succeed legislatively, then you're saying you're going to implement them in a rule-making? And if you can implement them in a rule-making, why not just go ahead and do that and not seek the legislation anymore?

ADMINISTRATOR JOHNSON: We are -- it is, as you correctly pointed out, it is a dual track. We would prefer that legislation be enacted over regulation. The reason is, is that legislation provides certainty; it also insulates against lengthy litigation where nothing gets done while things are being litigated in a court system. So we prefer legislation. But due to the Supreme Court decision, we are also now moving forward on a regulatory path, as well.

Q In the Supreme Court ruling, Justice Stephens wrote: "Under the clear terms of the law, EPA can avoid taking further action only if it determines that greenhouse gases do not contribute to climate change, or it provides some reasonable explanation why regulations are not needed." Does effectively your decision to start the regulatory process mean that you are choosing not to make the argument that greenhouse gases do not contribute to climate change, and effectively mean that the administration is formally accepting that greenhouse gases contribute to climate change?

ADMINISTRATOR JOHNSON: With today's announcement, what we are announcing is the first step in the regulatory process of which we will, as part of our proposal, lay out our rationale that would include both whether it causes or contributes to climate change, as well as the issue of endangerment. That will all be laid out in our proposal.

So at this point, it's premature to speculate, but again, this is an important first step in beginning the regulatory process.

Q So if I could just follow up then. The administration, then, is not taking a position at this point on whether greenhouse gases contribute to climate change?

ADMINISTRATOR JOHNSON: Well, we as administration, have said that we know that emissions contribute to climate change and that this is a serious issue. That's why, as an administration, the President has -- and as a nation, we've invested $37 billion since 2001 to address both the science, technology, and even provided some tax incentives to help us move along.

So this is -- it's a serious issue, and it's an important issue, and that's why today is an important announcement, because we are taking the first step beginning the regulatory process.

Q Just -- you need to be clear on this point, though. Previously, the administration's position was not -- was that it was unclear whether carbon dioxide was a pollutant under the Clean Air Act. What you're saying is that although you're beginning this regulatory process, you are not accepting that contention yet that was in the Supreme Court ruling?

ADMINISTRATOR JOHNSON: No, that's not what I'm saying. The Supreme Court ruled that carbon dioxide is a pollutant. We accept the Supreme Court's decision, and we're now moving forward with the first step in the regulatory process. But it's just like any other pollutant that EPA regulates; that is to say, we have to put together what are rational -- what is our basis for regulating a pollutant, taking into consideration effects on people and the environment, in this case, including issues of safety, as well as the cost and benefits of moving forward with whatever approach that we decide to move forward with.

So, again, bottom line, this is an important first step in the regulatory in addressing greenhouse gas emissions from automobiles.

Q I think you just answered this question, but for Administrator Johnson, so will you do an endangerment finding before proposing a rule? And how soon would you like to at least propose the rule?

ADMINISTRATOR JOHNSON: Well, our target for a draft proposal will be fall of this year. And as part of that proposal, we will address the endangerment finding as part of the proposal.

Q I was wondering if you can tell me how you come up with that $37 billion number.

MR. STANZEL: Well, that goes back to all the climate research back to 2001. And I can hook you up with some experts at OMB that can walk you through all of the monies that have been spent. I don't have those figures -- the breakdown at my fingertips, but we can certainly get that to you, Steven.

Q Is that including tax incentives for alternative energy items?

MR. STANZEL: I would defer to the experts at OMB, and I can connect you with them.

Q Can I ask another question, then?

MR. STANZEL: Certainly, go ahead.

Q Wouldn't you be in violation of the Supreme Court ruling if you didn't go ahead and do this? I'm having a little trouble figuring out what the news is here, really.

ADMINISTRATOR JOHNSON: The Supreme Court -- and I like to refer to the Scalia summary of the Supreme Court decision, even though he was dissenting. He, in essence, said, if I can paraphrase, that if the Administrator determines -- if I were to determine that there is endangerment, then I would be required to regulate. That's option one.

Option two is, if I determine that there was not endangerment, then I would not be required to regulate. And then option three was, if there was some other reason and rational explanation for why it was not necessary to regulate, then that would be an option, as well.

So the Supreme Court did not direct us to regulate. It identified, as I said, three options which the Scalia summary is, I think, a handy reference for.

MR. STANZEL: Thank you, Steven. And I will contact you and we'll get you in touch with the OMB.

Next question.

Q I wanted to ask you, the President did speak today about the proposal he had sent to Congress, and he spoke about increased fuel efficiency. Yet you seem to be evading the question about whether CAFE standards will actually emerge from this work. Can you just flatly say whether you expect to see some new CAFE standards for automobiles by the end of 2008?

ADMINISTRATOR JOHNSON: Since we have to develop a proposal which goes to notice and comment rule-making, it would not be appropriate for me to say what the final rule or regulation will look like. What I did say is, there are two ways of controlling greenhouse gas emissions, at the same time improving energy efficiency. But under the Clean Air Act, our focus is on reducing greenhouse gas emissions. That's, one, through the efficiency of automobiles, and the second is the type of fuel that you put into those automobiles.

And so it just seemed logical that we would be pursuing both of those, certainly as part of our proposal. And, in fact, that's what we have announced today, because it's very much in line with what the President's legislative proposal is.

Q I have one more question regarding legislation. So under your reading of this law, there is basically nothing that you can't do without Congress -- that you need Congress's approval for? The EPA would be free to set up a class-based CAFE system without -- for past-year cars without having congressional approval?

ADMINISTRATOR JOHNSON: In fact, the Supreme Court in language -- if I can quote to you from their opinion -- it says, "EPA no doubt has significant latitude as to the manner, timing, content, and coordination of its regulations with those of other agencies." So there is significant latitude that we have.

Q And have you and Administrator Peters worked out how much of the work load on coming up with these standards will be split between your agencies?

ADMINISTRATOR JOHNSON: Well, through -- since this regulation will be done through -- principally through the Clean Air Act, then it is my responsibility, the agency's responsibility to oversee and actually develop the regulation. But it's also equally important, and it was important to the President, to make sure that we are coordinating and collaborating with our federal partners, particularly the Department of Transportation, Department of Energy, and Department of Agriculture -- hence, the executive order.

Q Yes, Mr. Johnson, what are you -- sir, are you clear that you have the authority to do -- to increase the renewable fuel standard, or impose this alternative fuel standard without any further legislation?

ADMINISTRATOR JOHNSON: Yes.

Q -- increasing the mandate?

ADMINISTRATOR JOHNSON: Yes.

Q That's under the Clean Air Act?

ADMINISTRATOR JOHNSON: Yes. There is -- Section 211 of the Clean Air Act focuses on fuels; Section 202 is on motor vehicles.

Q Well, I've got just one follow-up. Your intent is to issue a draft by this fall, and then a final proposed rule-making by the end of 2008?

ADMINISTRATOR JOHNSON: The correct term would be a final rule-making that would then be law and go into effect that people would be required to follow by the end of 2008.

Q Would it be imposed by the end of -- or just going to -- because you have a comment period, obviously, after you issue the final ruling.

ADMINISTRATOR JOHNSON: The proposal -- the sequence, we develop a proposed rule-making; then we take public comment on that proposed rule-making, which I said we would -- our goal is to have a proposal out this fall, fall of 2007. Then there would be a notice and comment; then we then review all of those comments, and then make a final decision, which would then be issued in the final regulation, which the President has asked for us to have it completed by the end of 2008.

The actual schedule of implementation and what the nature of the rule would be would all be part of that final regulation. Whether things go into effect immediately, or are sequenced over time, those are all the considerations that will go into both the proposal as well as ultimately the final regulation.

Q Okay, but this would be in effect by the time you leave -- the President leaves office, then.

ADMINISTRATOR JOHNSON: And I leave office, too. That's correct.

Q I know you said this is a first step. Do you envision going beyond where the Senate has proposed with the CAFE standard increasing to 35 miles per gallon by 2010?

ADMINISTRATOR JOHNSON: Again, this is a first step, and we have quite a bit of work to do, not the least of which is the public notice and comment process, to consider what options that we put on the table. So stay tuned.

Q And will you also address the California lawsuit about -- in these rules, or does this just address what the Supreme Court --

ADMINISTRATOR JOHNSON: This is the first step in addressing the Supreme Court and the President's desire to improve energy efficiency and address greenhouse gas emissions for motor vehicles. On a separate track is the petition from California. We're now in a comment period. There is a public meeting scheduled for Washington -- here in Washington, D.C. on May the 22nd. And then there is a public hearing scheduled in Sacramento for May the 30th. And that's where we are in the process.

MR. STANZEL: Thank you all. Operator, that's the number of questions that we have time for. I appreciate everyone joining us today. As I indicated, the executive order and a fact sheet has been released. They're available at WhiteHouse.gov. We appreciate your participation today.

Thank you all.

END 2:37 P.M. EDT

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