San Francisco Chronicle
By Zachary Coile, Bob Egelko,Matthew Yi

The Bush administration blocked efforts by California and 16 other states Wednesday to limit greenhouse gas emissions from cars and trucks, setting up a political and legal fight over whether states can take a lead role in combatting global warming.

Environmental Protection Agency Administrator Stephen Johnson rejected California's request for a waiver from the federal government to impose its tough tailpipe emissions standards. The other states were poised to adopt similar rules if California's request was granted.

The states represent nearly half the U.S. population, and their laws would effectively require automakers to cut greenhouse gas emissions nationwide, despite President Bush's rejection of mandatory national standards.

Johnson said Congress' passage of an energy bill this week that raises fuel economy standards for all cars and trucks to 35 miles per gallon by 2020 made the state laws unnecessary. Bush signed the law Wednesday morning.

"It's important to put this in perspective - (the new law) applies to all 50 states," Johnson said. "Not 12 states, not 17 states, all 50 states. That is great from an environmental perspective."

California's 2002 statute would require automakers to cut emissions to 23 percent below current new-car levels by 2012 and 30 percent below by 2016, through a combination of better gas mileage, alternative fuels, reducing leaks from air conditioners and other new technologies.

California officials said they believed Johnson had long ago decided to oppose the state's waiver, and said he was using the newly passed energy bill as an excuse. Nothing in the new law prevents states from taking stronger action, they said.

"It's a phony argument and ridiculous on its face," said Sen. Barbara Boxer, D-Calif.

"I find this disgraceful," said Sen. Dianne Feinstein, D-Calif., who helped write the fuel-economy law. "The passage of the energy bill does not give the EPA a green light to shirk its responsibility to protect the health and safety of the American people from air pollution."

It was the first time the EPA has flat-out denied a waiver request by California under the Clean Air Act. The law gives California special authority to set stronger standards because the state has a long history of smog and other air-quality problems.

But Johnson insisted the state's request had not met the "extraordinary and compelling conditions" required under the act to grant a waiver.

California officials already had laid the groundwork to sue EPA, assuming weeks ago the agency would deny the request. State officials said they plan to file suit as soon as the ruling is published in the Federal Register in the next few weeks.

California Air Resources Board Chairwoman Mary Nichols called Johnson's justification "flimsy." State Attorney General Jerry Brown said he believes the courts will agree with the state's rationale for taking action, given the potential impacts on the state from global warming.

"It is completely absurd to assert that California does not have a compelling need to fight global warming by curbing greenhouse gas emissions from cars," Brown said.

The decision thrilled automakers, who have been fighting California's new rules in court and lobbying the administration to oppose the waiver. Automakers insist it will be too difficult to comply with 50 different state standards.

"We commend EPA for protecting a national, 50-state program," said Dave McCurdy, president of the Alliance of Automobile Manufacturers.

The EPA announced its decision at an unusual news conference held at 6:30 p.m. EST, long after most news networks had finished work on their broadcasts. Johnson called Gov. Arnold Schwarzenegger just moments before the announcement, a call aides described as "terse."

Schwarzenegger complained that while the new federal law is a good step, it is not as far-reaching as California's efforts to dramatically cut emissions from all sources by 2050.

"It is disappointing that the federal government is standing in our way and ignoring the will of tens of millions of people across the nation," he said in a statement.

Environmentalists said California's law is stronger than the new federal standards because it requires a 30 percent reduction in emissions four years before the federal law requires those cuts.

David Doniger, director of the Climate Policy Center for the Natural Resources Defense Council, said the EPA's ruling is flawed because the new energy law specifically allows states to set stronger standards.

"The energy law only sets a fuel-economy floor," he said. "It requires the administration to set standards of 'at least 35 miles per gallon,' expressly giving the administration the power to go farther. And the law expressly preserves California's authority under the Clean Air Act to set independent, stronger standards."

But the ruling will probably set back California's efforts to implement its rules, even if the state ultimately prevails in court. The law starts with 2009 model-year vehicles, which arrive in showrooms at the end of next year. Nichols said the state still has enough time to implement the rules if the courts act quickly.

Sierra Club attorney David Bookbinder said even if there is a yearslong delay, "in the end, either the court will rule for us or Congress will step in or the next administration will change it," he said.

He said the Sierra Club and other groups, which have joined California in the waiver application, would sue to overturn Johnson's decision in the U.S. Court of Appeals in Washington, D.C., which has jurisdiction over the EPA's decision.

Although that court ruled in the EPA's favor in an earlier case over regulation of greenhouse gases, a ruling that the Supreme Court overturned in April, Bookbinder said he was confident of a favorable appellate decision.

Johnson is "dead wrong on the law," Bookbinder said.

Johnson also is likely to get an unfriendly reception on Capitol Hill. Boxer said Wednesday she plans to call the EPA administrator to explain his decision at a hearing in January.

California officials complained that EPA's decision-making process for the waiver was tainted months ago when documents revealed that Transportation Secretary Mary Peters led a lobbying campaign to urge lawmakers to call the EPA and oppose the waiver request.

Automakers have been meeting regularly at the White House to discuss the new fuel-economy standards. The Detroit News reported that Vice President Dick Cheney met with the CEOs of Chrysler and Ford this fall to try to influence the policy.

Johnson dodged a reporter's question Wednesday about the meetings between Cheney and the auto executives. But he added: "My decision was an independent decision."
Emissions limits

Background: California asked the EPA to grant a waiver to implement its rules to cut greenhouse gas emissions from cars and trucks; 16 other states are pursuing similar rules.

What happened: EPA Administrator Stephen Johnson rejected the request, saying California's rules are no longer needed now that Congress has passed new fuel-economy legislation.

What's next: California plans to sue EPA in federal court to overturn the decision, arguing that the state has authority under the Clean Air Act to set stronger standards.