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NEWS FROM THE US NEWS FROM THE UNITED STATES BY KRISTEN WRIGHT MANAGING EDITOR, PEI President Donald Trump calls for a re-evaluation of Obama’s fuel economy standards and slashes the Environmental Protection Agency budget by 31 percent. The U.S Department of State grants a Presidential Permit to construct the Keystone XL pipeline. And the future of health care remains unknown for U.S. businesses. These are petroleum industry headlines from the U.S. Trump: Re-evaluate United States Fuel Economy Standards U.S. President Donald Trump on March 17 said the Corporate Average Fuel Economy (CAFE) standards set forth by the Obama administration will be re-evaluated. Automakers celebrated the president’s announcement for which they had lobbied. Auto executives had voiced concerns that the CAFE standards would increase vehicle prices as much as $1,800 by 2025, according to a study, and kill between 150,000 and 1 million U.S. jobs. The Environmental Protection Agency (EPA) locked in the 2025 CAFE standards during President Barack Obama’s last week in office — and one year before the deadline. In 2016, regulators relaxed the 2025 mandate for automakers to average between 50.8 mpg and 52.6 mpg instead of 54.5 mpg. Experts expect Trump’s review of the standards could take a year. Trump Slashes Budget; Hits Environmental Agency Hardest Trump made good on his campaign promise to cut federal spending, and the biggest cut in his $1.1 trillion 2018 federal budget proposal hits the EPA squarely in its climate change programs. The president on March 16 proposed a 31 percent cut to the EPA’s budget, a 28 percent reduction to the State Department and a 13.2 percent cut to the Department of Housing and Urban Development. In addition to eliminating climate change programs, the proposed cuts would reduce air and water quality protection initiatives, slash funding for regulation enforcement and eliminate 19 percent of the EPA workforce. The administration will release its full budget proposal in May. The president’s budget must be approved by the Republican-controlled Congress. Historically, Congress implements significant changes to federal budgets before it approves them. California Aims for Emissions Regs Tougher Than Trump’s The California Air Resources Board (CARB) voted unanimously in March to adopt higher auto emissions standards than Trump’s federal standards. Through the 1970 Clean Air Act, California has had a waiver that allows the state to set stricter auto emissions standards than the federal government. In addition, the waiver allows CARB to require unique gasoline mixes in California and lets CARB mandate that automakers sell a certain number of zero emission vehicles (ZEVs) if they want to do business in the state. CARB voted to maintain California’s cleancar standards through 2025 and launched a formal effort to write stricter ZEV rules for the five years after that, according to a Bloomberg report. CARB currently requires about 3 percent of auto sales to be powered by battery, fuel cell or plug-in powertrains. The stricter ZEV rules could be set for as much as 40 percent of auto sales in California, according to Bloomberg. Health Care Replacement Fails The first step in repealing and replacing the Affordable Care Act, otherwise known as “Obamacare,” failed. The House Republican bill, officially called the American Health Care Act (AHCA), was pulled from the House floor March 24 before a vote and likely defeat could occur. As a candidate, Trump campaigned on repealing and replacing Obamacare with something more affordable and accessible until his November 2016 election in which Republicans also won both chambers of Congress. Republicans have been vocal about wanting to repeal the Affordable Care Act since its 2010 enactment. Some moderate and very conservative Republicans said they would not vote in favor of the American Health Care Act to replace it. Keystone XL Pipeline Gets Go-Ahead The U.S. Department of State signed and issued on March 24 a Presidential Permit to construct the Keystone XL pipeline, TransCanada Corp. announced. “This is a significant milestone for the Keystone XL project,” said Russ Girling, president and CEO of TransCanada, in a statement. “We greatly appreciate President Trump’s administration for reviewing and approving this important initiative and we look forward to working with them as we continue to invest in and strengthen North America’s energy infrastructure.” The Keystone XL project is a proposed 36 inch-diameter crude oil pipeline beginning in Hardisty, Alberta, and extending to Steele City, Nebraska, according to TransCanada. TransCanada will continue to engage stakeholders and neighbors in Nebraska, Montana and South Dakota to obtain the required permits and approvals to advance the Keystone XL pipeline to construction. TransCanada also has discontinued its claim under Chapter 11 of the North American Free Trade Agreement (NAFTA) and will end its U.S. Constitutional challenge. Kristen Wright is managing editor of the PEI Journal. Reach her at kwright@pei.com. The Petroleum Equipment Institute is a trade association whose more than 1,600 member companies in 80-plus countries manufacture, distribute and service petroleum marketing and liquid handling equipment. 22 erpecnews is published by McLean Events, Conferences and Media Ltd.


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