By Jueseppi B.
Remarks by the President on Fuel Efficiency Standards of Medium and Heavy-Duty Vehicles
Safeway Distribution Center
Upper Marlboro, Maryland
11:30 A.M. EST
THE PRESIDENT: Well, good morning, everybody. (Applause.) It is good to be here. And I want to thank Jack Jacobs and all the folks at Safeway for having us here today, at this busy distribution center where delivery trucks get everything from Doritos to diapers where they need to go. And by the way, I have a little soft spot for Safeway in my heart because some of you know I went to high school in Hawaii and I was living with my grandparents, and our main grocery store was Safeway. It was right down the way. (Applause.) And so my grandmother would send me out to go shopping at Safeway, and everybody there always treated me very well. So I very much appreciate the good work you guys do.
And I want to thank all the workers and businesspeople and labor leaders and environmental leaders who are here today as we take another big step to grow our economy and reduce America’s dependence on foreign oil.
In my State of the Union address, I said that this would be a year of action, and I meant it. So over the past three weeks, I’ve acted to require federal contractors to pay their employees a fair wage of at least $10.10 an hour, because we believe in a higher minimum wage. (Applause.) I’ve ordered an across-the-board reform of job training programs so we can train workers with the skills that employers actually need and match them to the good jobs that are out there right now needing to be filled. I directed the Treasury Secretary to create something we’re calling “myRA” — it’s a new way to help working Americans start saving for retirement. And we’ve brought together business leaders who’ve committed to helping more unemployed Americans find work, no matter how long they’ve been looking.
So the point is I’m eager to work with Congress wherever I can — but whenever I can act on my own to expand opportunity for more Americans and help build our middle class, I’m going to do that.
And all of you I think understand that although the economy has been doing better, we’ve spent the past five years fighting our way back from the worst recession of our lifetimes. Now, the economy is growing. Our businesses have created over 8.5 million new jobs over the past four years. The unemployment rate is actually the lowest it’s been in over five years. But the trends, the long-term trends that have hurt middle-class families for decades have continued — folks at the top doing better than ever before; average wages and incomes have barely budged. Too many Americans are working harder than ever just to keep up.
So our job is to not only get the economy growing but also to reverse these trends and make sure that everybody can succeed. We’ve got to build an economy that works for everybody, not just the fortunate few. Opportunity for all — that’s the essence of America. No matter who you are, no matter where you come from, no matter how you start out, if you’re willing to work hard and take responsibility, you can succeed.
So I’ve laid out an opportunity agenda to help us do that. Part one is create more new jobs that pay good wages — jobs in manufacturing, energy, exports, innovation. Part two, we’ve got to train folks with the skills they need to fill those jobs. Part three, we’ve got to guarantee every child access to a world-class education. Part four is making sure that the economy rewards hard work with equal pay for equal work and wages you can live on, savings you can retire on, health insurance you can count on that’s there when you need it.
Now, there are very few factors that are helping grow our economy more, bringing more good jobs back to America than our commitment to American manufacturing and American energy. And that’s why we’re here today.
Five years ago, we set out to break our dependence on foreign oil. And today, America is closer to energy independence than we’ve been in decades. For the first time in nearly 20 years, America produces more oil here at home than we buy from other countries. Our levels of dangerous carbon pollution that contributes to climate change has actually gone down even as our production has gone up. And one of the reasons why is because we dedicated ourselves to manufacturing new cars and new trucks that go farther on a gallon of gas — and that saves families money, it cuts down harmful pollution, and it creates new advances in American technology.
So for decades, the fuel efficiency standards of our cars and trucks was stuck in neutral even as other kinds of technology leapt forward. And that left families and businesses and our economy vulnerable to fluctuations in oil prices. Every time oil prices shot up the economy got hurt. Our automakers were in danger of being left in the dust by foreign automakers. Carbon pollution was going unchecked, which was having severe impacts on our weather.
And that’s why, after taking office, my administration worked with automakers, autoworkers, environmental advocates, and states across the country, and we set in motion the first-ever national policy aimed at both increasing gas mileage and decreasing greenhouse gas pollution for all new cars and trucks sold in the United States. And as our automakers retooled and prepared to start making the world’s best cars again, we aimed to raise fuel economy standards to 35.5 miles per gallon for a new vehicle by 2016.
AUDIENCE MEMBER: Wow!
THE PRESIDENT: Yeah, wow. (Laughter and applause.)
That was an increase of more than eight miles per gallon over what cars had averaged at the time. And what we were clear about was if you set a rule, if you set a clear goal, we would give our companies the certainty that they needed to innovate and out-build the rest of the world. They could figure it out if they had a goal that they were trying to reach. And thanks to their ingenuity and hard work, we’re going to meet that goal.
Two years later, we’ve already seen enormous progress, and we’re building on that progress by setting an even more ambitious target: We’re going to double the distance our cars and light trucks can go on a gallon of gas by 2025. We’re going to double it. And that means — (applause) — that’s big news. Because what it means is you’ve got to fill up every two weeks instead of every week, and that saves the typical family more than $8,000 at the pump over time. I’m assuming you can use $8,000 — (laughter and applause) — that you’re not paying at the gas station. And, in the process, it cuts American oil consumption by 12 billion barrels.
So we let the automakers decide how they were going to do it. We set the goal and we said, go figure it out. And they invested in innovative and cost-effective technologies. And some are already making cars that beat the target of nearly 55 miles per gallon. They’ve got plug-in hybrids. They’ve got electric vehicles. They’re taking advantage of the investments that the Recovery Act made in American advances in battery technology. So cars are getting better and they’re getting more fuel-efficient all the time.
And for anybody who said this couldn’t be done or that it would hurt the American auto industry, the American auto industry sold more cars last year than any time since 2007. (Applause.) And since we stepped in to help the automakers retool, the American auto industry has created almost 425,000 new jobs.
So we raised fuel efficiency, helped consumers, helped improve air quality, and we’re making better cars than ever and the automakers are hiring more folks again for good jobs all across the country. (Applause.) More plants are running at full capacity — some are even running three shifts, 24 hours a day — churning out some of the most high-tech, fuel-efficient, high-performance cars in the world.
And that’s a story of American ingenuity, American grit, and everybody has a right to be proud of it. But today we’re taking the next step.
Heavy-duty trucks account for just 4 percent of all the vehicles on the highway. I know when you’re driving sometimes it feels like it’s more — (laughter) — but they’re only 4 percent of all the vehicles. But they’re responsible for about 20 percent of carbon pollution in the transportation sector. So trucks like these are responsible for about 20 percent of our on-road fuel consumption. And because they haul about 70 percent of all domestic freight — 70 percent of the stuff we use, everything from flat-screen TVs to diapers to produce to you name it — every mile that we gain in fuel efficiency is worth thousands of dollars of savings every year. \
So that’s why we’re investing in research to get more fuel economy gains. And thanks to a partnership between industry and my administration, the truck behind me was able to achieve a 75 percent improvement in fuel economy over the last year — 75 percent. That’s why we call this “SuperTruck.” (Laughter.) It’s impressive, this one right here, as well. I mean, these are — first of all, they’re really big. (Laughter.) But you can see how they’ve redesigned the truck in order for us to save fuel economy.
And improving gas mileage for these trucks are going to drive down our oil imports even further. That reduces carbon pollution even more, cuts down on businesses’ fuel costs, which should pay off in lower prices for consumers. So it’s not just a win-win, it’s a win-win-win. You’ve got three wins.
THE PRESIDENT: In 2011, we set new standards for medium- and heavy-duty trucks that take effect this year and last until 2018. Three weeks ago, in my State of the Union address, I said we’d build on that success. Today, I’m directing the Secretary of Transportation, Anthony Foxx, who is right here — former mayor of Charlotte — (applause) — and Gina McCarthy, the Administrator of EPA — (applause) — two outstanding public servants — their charge, their goal is to develop fuel economy standards for heavy-duty trucks that will take us well into the next decade, just like our cars. And they’re going to partner with manufacturers and autoworkers and states and other stakeholders, truckers, to come up with a proposal by March of next year, and they’ll complete the rule a year after that.
And businesses that buy these types of trucks have sent a clear message to the nearly 30,000 workers who build them: We want trucks that use less oil, save more money, cut pollution. So far, 23 companies have joined our National Clean Fleets Partnership to reduce their oil consumption or replace their old fleets of trucks with more fuel-efficient models. And, collectively, they operate about 1 million commercial vehicles nationwide.
So this is a lot of companies, and some of them are competitors. And if rivals like PepsiCo and Coca-Cola, or UPS and FedEx, or AT&T and Verizon — if they can join together on this, then maybe Democrats and Republicans can do the same. (Applause.) Maybe Democrats and Republicans can get together. (Applause.)
So when you see these companies’ new electric or natural gas-powered delivery or garbage trucks, it’s due to this partnership. And the reason we’re here is because Safeway was an early leader on this issue. By improving the aerodynamics of its trucks, investing in larger trailers, more efficient tires, Safeway has improved its own fuel efficiency. And the results are so solid that Safeway now encourages all the companies it hires to ship its products to do the same.
So to help our businesses and manufacturers meet this new goal, we’re offering new tax credits — both for companies that manufacture heavy-duty alternative-fuel vehicles and those that build fuel infrastructure so that trucks running on biodiesel or natural gas or hybrid electric technology, they’ll have more places to fill up.
Let me say this. The goal we’re setting is ambitious, but these are areas where ambition has worked out really well for us so far. Don’t make small plans, make big plans. And anybody who had dire predictions for the auto industry, said we couldn’t do it, manufacturers couldn’t bring jobs back to America — every time they say that they’re proven wrong. Every time somebody says you can’t grow the economy while bringing down pollution, it’s turned out they’ve been wrong. (Applause.) Anybody who says we can’t compete when it comes to clean energy technologies like solar and wind, they’ve had to eat those words. You can’t bet against American workers or American industry. You can’t bet against America. Otherwise you’re going to lose money every time, because we know how to do this when we set broad, ambitious goals for ourselves. (Applause.)
So from day one, we’ve known we had to rebuild our economy and transition to a clean-energy future, and we knew it wouldn’t be easy or quick, and we’ve got a lot of work to do on both counts. But the economy is growing. We’re creating jobs. We’re generating more clean energy. We’re cutting our dependence on foreign oil. We’re pumping out less dangerous carbon pollution. If we keep going down this road, then we’re going to have a future full of good-paying jobs.
We’ve got assembly lines that are humming with the components of a clean energy age. We got more of the best trucks and cars in the world designed and engineered and made in America.
If we keep on going, we’re going to leave a better future for our children. And I’m proud of Safeway and all its workers for helping to show us the way. If it can be done here, it can be done all across the country.
So congratulations to all of you. Thank you and God bless you. God bless America. (Applause.)
11:47 A.M. EST
FACT SHEET: Opportunity For All: Improving the Fuel Efficiency of American Trucks – Bolstering Energy Security, Cutting Carbon Pollution, Saving Money and Supporting Manufacturing Innovation
Year of Action: Making Progress Through Executive Action
In his State of the Union address, the President outlined a comprehensive agenda to make America a magnet for middle class jobs and business investment. The President highlighted the autoworker, who, implementing the Administration’s historic fuel economy standards, “fine-tuned some of the best, most fuel-efficient cars in the world, and did his part to help America wean itself off foreign oil.” And the President pledged, “in the coming months” to “build on that success by setting new standards for our trucks, so we can keep driving down oil imports and what we pay at the pump.” The President also called on Congress to do its part “by putting people to work building fueling stations that shift more cars and trucks from foreign oil to American natural gas.” Today, the President laid out additional details for his plan to improve the fuel efficiency of American trucks – bolstering energy security, cutting carbon pollution, and spurring manufacturing innovation.
- Directing the Environmental Protection Agency (EPA) and the Department of Transportation (DOT) to Set the Next Round of Fuel Efficiency Standards for Medium- and Heavy-Duty Vehicles.Today, the President is directing the EPA and the DOT’s National Highway Traffic Safety Administration (NHTSA) to develop and issue the next phase of medium- and heavy-duty vehicle fuel efficiency and greenhouse gas standards by March 2016. Under this timeline, the agencies are expected to issue a Notice of Proposed Rulemaking (NPRM) by March 2015. This second round of fuel efficiency standards will build on the first-ever standards for medium- and heavy-duty vehicles (model years 2014 through 2018), which were proposed and finalized by this Administration and will save vehicle owners and operators an estimated $50 billion in fuel costs and save a projected 530 million barrels of oil.
- Partnering with Private-Sector Leaders to Deploy Advanced Vehicles. In addition, the President highlighted the success of the National Clean Fleets Partnership that he launched to speed the deployment of clean, energy-efficient vehicles and the infrastructure to support their use. This public- private partnership helps the nation’s largest fleet operators reduce diesel and gasoline use in their fleets by incorporating alternative fuels, electric vehicles and fuel-saving measures. To date, 23 major national companies, such as ARAMARK, Coca-Cola, Staples, UPS, AT&T, Enterprise Holdings, and Waste Management have joined the National Clean Fleets Partnership. Collectively, the National Clean Fleets Partners operate more than one million commercial vehicles nationwide. The President has directed his Department of Energy to provide each company that wants to partner with specialized resources, technical expertise and support in developing a comprehensive strategy to reduce fuel use and achieve greater efficiency and cost savings.
- Expanding Fuel Choices for American Drivers. In addition to taking executive action to make America more energy independent and cut carbon pollution, the President is also renewing his call for Congress to end subsidies to oil and gas companies and create an Energy Security Trust Fund to fund research and development for advanced vehicle technologies. And he is proposing to support investment in advanced vehicles and infrastructure through a new tax credit and an extension of tax credits to support cellulosic biofuels.
Further Detail on how the President will Continue to Work with Congress to Improve the Fuel Economy of American Trucks – Bolstering Energy Security, Cutting Carbon Pollution, and Spurring Manufacturing Innovation
- Directing the Environmental Protection Agency (EPA) and the Department of Transportation (DOT) to Set the Next Round of Fuel Efficiency Standards for Medium- and Heavy-Duty Vehicles.Today, the President is directing the EPA and the DOT’s National Highway Traffic Safety Administration (NHTSA) to develop and issue the next phase of medium- and heavy-duty vehicle fuel efficiency and greenhouse gas (GHG) standards by March 2016. Under this timeline, the agencies are expected to issue a Notice of Proposed Rulemaking (NPRM) by March 2015. This second round of fuel efficiency standards will build on the first-ever standards for medium- and heavy-duty vehicles (model years 2014 through 2018), and will reach well into the next decade, just like the President’s successful national car standards.
- creasing the efficiency of medium-and heavy-duty vehicles (below referred to simply as heavy-duty vehicles) is a key component of the President’s Climate Action Plan to reduce carbon emissions. Heavy-duty vehicles represent a major opportunity to cut transportation oil use and carbon pollution. In 2010, heavy-duty vehicles represented just four percent of registered vehicles on the road in the United States, but they accounted for approximately 25 percent of on-road fuel use and greenhouse gas emissions in the transportation sector. They are currently the second-largest source of greenhouse gas emissions within the transportation sector (passenger cars and light trucks are the largest source). The first round of standards for medium- and heavy-duty vehicles, finalized in September 2011, is projected to save 530 million barrels of oil and reduce GHG emissions by approximately 270 million metric tons, saving vehicle owners and operators an estimated $50 billion in fuel costs over the lifetimes of the vehicles covered. For example, an operator of a new 2018 semi truck could pay for the technology upgrades in under a year and realize a net savings of $73,000 through reduced fuel costs over the truck’s useful life.
- Partnering with Manufacturers, Labor, States, NGOs, and other Stakeholders. To develop standards that provide long-term certainty and promote innovation, EPA and NHTSA will work closely with stakeholders, both large and small, to explore further opportunities for fuel consumption and emissions reductions beyond the model year 2018 timeframe. EPA and NHTSA will also work closely with the California Air Resources Board (CARB) with the goal of ensuring that the next phase of standards allow manufacturers to continue to build a single national fleet.
- Supporting Adoption of New Fuel Efficient Technologies. The second round of fuel efficiency standards will spur manufacturing innovation and lead to the adoption of new fuel-efficient technologies on trucks and semi-trailers. In developing the standards, EPA and NHTSA will assess advanced technologies that may not currently be in production, and will consider, for example:
- Engine and powertrain efficiency improvements
- Weight reduction
- Improved tire rolling resistance
- Automatic engine shutdown
- Accessory improvements (water pumps, fans, auxiliary power units, air conditioning, etc.).
- Partnering with Private-Sector Leaders to Deploy Advanced Vehicles. In addition, the President highlighted the success of the National Clean Fleets Partnership that he launched to speed the deployment of clean, energy-efficient vehicles and the infrastructure to support their use. This public- private partnership helps the nation’s largest fleet operators reduce diesel and gasoline use in their fleets by incorporating alternative fuels, electric vehicles and fuel-saving measures. To date, 23 major national companies, such as ARAMARK, Coca-Cola, Staples, UPS, AT&T, Enterprise Holdings, and Waste Management have joined the National Clean Fleets Partnership. Collectively, the National Clean Fleets Partners operate more than one million commercial vehicles nationwide.
- The President has directed his Department of Energy, working with EPA’s complementary SmartWay Transport Partnership, to provide each company that wants to partner with specialized resources, technical expertise and support in developing a comprehensive strategy to reduce fuel use and achieve greater efficiency and cost savings. Working with the Administration, the private sector partners that have joined the National Clean Fleets Partnership and the SmartWay Transport Partnership are seeing why deploying advanced vehicles is a win-win for them; for example:
- Last year, AT&T achieved a significant milestone with the delivery of its 7,500th alternative fuel vehicle (AFV). AT&T has committed to deploying around 15,000 AFVs over a 10-year period through 2018. AT&T’s AFV fleet includes compressed natural gas, hybrid electric, all-electric, and extended-range electric vehicles. AT&T’s deployment of alternative fuel vehicles enabled the company to avoid the purchase of 7.7 million gallons of gasoline from the beginning of the program through the end of 2012. And over the 10-year deployment period these AFV’s will save 49 million gallons of gasoline and reduce carbon emissions by 211,000 metric tons.
- Enterprise kicked off a program to make plug-in electric and hybrid cars available to rental customers in major US markets. Four cities have been announced to date (Orlando, San Francisco, Seattle, and Portland). In addition, more than 80 % of their 500 airport shuttle buses now operate on biodiesel or compressed natural gas. Enterprise’s fleet is not only the world’s largest, it’s also one of the most fuel efficient. Approximately 57.3 percent of their vehicles average a highway fuel efficiency rating of at least 28 mpg, and 28 percent of their vehicles average 32 mpg or better.
- Con-Way, a 2013 SmartWay Excellence Award winner, has equipped 100% of its tractors with SmartWay-certified fuel-savings and emissions-reduction technologies, and nearly half its trailers with fuel-saving aerodynamic features. The company’s tractors also have automatic idle shutdown, and the company has equipped its tractors and trailers with low- rolling resistance tires to increase miles per gallon and lower carbon emissions.
- Partnering with Manufacturers to Support Innovation for the Next Generation of Trucks. Class 8 combination trucks – commonly known as 18-wheelers – serve as the backbone of our domestic freight transportation – hauling about 70 percent of all freight tonnage and over 70 percent of the value of all goods shipped. The Administration’s SuperTruck program, launched in 2010 and funded by the Recovery Act and subsequent annual appropriations, is focused on demonstrating that, by 2015, the freight hauling efficiency of heavy-duty Class 8 trucks can be improved by 50 percent.
Through the program, the Department of Energy has partnered with four major engine and truck manufacturers – including Cummins, Volvo, Navistar and Daimler Truck North America – to increase engine efficiency and overall fuel economy from about 6.5 miles per gallon to about 9.75 miles per gallon. Class 8 vehicles have a total weight (including freight) of 33,000-80,000 lbs. and sometimes more; so every mile per gallon gained in fuel economy is worth thousands of dollars in fuel cost savings per truck per year. Since 2010, SuperTruck partners Cummins and PACCAR’s Peterbilt Motors Company have demonstrated a 20 percent increase in engine efficiency and a 70 percent increase in freight efficiency, reaching over 10 miles per gallon under real world driving conditions on a Class 8 tractor-trailer. Cummins is now working toward developing technologies to achieve even higher engine efficiency. The other three partner teams are also on their way to achieving a 50 percent fuel economy increase—leveraging a range of aerodynamics and engine efficiency technologies, including waste heat recovery technologies. Daimler Trucks of North America has demonstrated 50% engine efficiency and halfway through their project, Volvo has already demonstrated 48% engine efficiency.
Further Detail on how the President will Continue to Work with Congress to Improve the Fuel Economy of American Trucks – Bolstering Energy Security, Cutting Carbon Pollution, and Spurring Manufacturing Innovation
- Expanding Fuel Choices for American Drivers. While the United States will continue to rely on responsibly produced oil and natural gas, President Obama is committed to a long-term policy that allows us to transition to cleaner energy sources.
- Establishing an Energy Security Trust Fund to Fund R&D for Advanced Vehicle Technologies. In addition to urging Congress to repeal the $4 billion in subsidies that taxpayers provide the oil and gas industry each year, the President has called on Congress to establish an Energy Security Trust and enact reforms to promote diligent oil and gas development on federal lands. The Energy Security Trust proposal has broad bipartisan support, including retired admirals, generals and leading CEOs, and focuses on shifting our cars and trucks off oil. This $2 billion investment in a range of cost-effective technologies – like advanced vehicles that run on electricity, homegrown biofuels, hydrogen, and domestically produced natural gas – will be drawn from revenues generated from federal oil and gas development. Establishing a dedicated source of funding will allow the Energy Department to maintain targeted and sustained investments that are catalytic and directly advance U.S. energy security.
- Supporting Investment in Advanced Vehicles and Infrastructure through a New Tax Credit and an Extension of Tax Credits to Support Cellulosic Biofuels. The President is announcing $200 million in a new tax credit to catalyze investment in the necessary infrastructure to support deployment of advanced vehicles at critical mass. This proposal would be fuel neutral, allowing the private sector to determine if biofuels, electrification, natural gas, hydrogen, or other alternative fuels would be the best fit in different communities. In addition, the President is proposing to extend the cellulosic biofuel producer credit that expired on December 31, 2013. Cellulosic biofuels have the potential to reduce petroleum consumption and carbon pollution while boosting rural economic development. Extending the existing tax credit would accelerate development of this transformative transportation fuel.