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The original documents are located in Box 3, folder "Auto Emissions (1)" of the James M.
Cannon Files at the Gerald R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
[March 1975]
File
DRAFT STATEMENT FOR RON NESSON
One subject which came up at the Cabinet
Meeting yesterday which I did not mention because it
is highly technical and I wanted to be fully briefed
on it, was the catalytic converter
Russell Train, Chairman of the Environmental
Protection Agency, reported to the Cabinet on the
standards
legislative background which set the which
prompted some automobile companies to use catalytic
converters to meet auto emission standards. Train
provided the Cabinet Members with background on his
decision, because he has the responsibility to be
independent on this decision to maintain existing
standards.
FORD LIBRARY if GERALD
The President pointed out this is an important
lesson for all in government and that it shows what
can happen when the ultimate full cost of an important
decision is not known, and the American consumer pays
a very high price for such decisions which are made by
Congress and the Executive Branch.
The President has asked for a full review of
the facts and implications involved. He has asked
the Energy Resourc Council, Economic Policy Board
and the Domestic Council to undertake a review
immediately and report back to him within 10 days.
Digitized from Box 3 of the James M. Cannon Files at the Gerald R. Ford Presidential Library
GERALD FORD LIBRARY
One subject which came up at the Cabinet
Meeting yesterday which I did not mention because it
is highly technical and I wanted to be fully briefed
on it, was the catalytic converter.
Russell Train, Chairman of the Environmental
Protection Agency, reported to the Cabinet that the
catalytic muffler was selected by the majority of the
automobile industry as the most reasonable technical
way to meet the legislated air quality standards.
After an enormous investment in the catalytic system
and installation on most 1975 models, EPA and other
Federal agencies have documented a serious health
hazard which I am sure all of you are familiar with.
The catalytic muffler produces a sulfuric acid midst
which may have very adverse health implications.
As a result, Train announced his decisions
on the catalytic converter last week which may result
in legislative and EPA action ultimately banning
the type of catalytic converter in use today.
The President pointed out this is an important
lesson for all in government and that it shows what
can happen when the ultimate full cost of an important
decision is not know and the American consumer pays
a very high price for such regulatory decisions which
are made by Congress and the Executive Branch.
2
The President has asked for a full review of
the facts and implications of the EPA announcement
on the OUR public health, economic ince on consumer,
THE
PROGRAM.
and on energy progress: He has asked the Energy
Resource Council, Economic Policy Board, and the
Domestic Council to undertake a review immediately
and report back to him within 10 days.
THE WHITE HOUSE
Fab
WASHINGTON
March 4, 1975
MEMORANDUM FOR THE VICE PRESIDENT
FROM :
Catalytic Sun Converters
JIM CANNON
SUBJECT :
FORD i LIBRARY GERALD
Here is a copy of the background paper for
the President before his meeting with
Russ Train.
Attachment
Form lear 1008
min Blown Import
THE WHITE HOUSE
WASHINGTON
March 3, 1975
MEETING WITH RUSSELL TRAIN
Monday, March 3, 1975
3:30 p.m. (30 minutes)
Oval Office
Through: Jim Cannon
From: Mike Duval
I. PURPOSE
At Russ Train's request, provide him an opportunity to
tell you of the announcement that he plans to make on
Wednesday concerning:
his decision to extend or not extend 1975-76 auto
emission standards to 1977 model cars. This is a
regulatory decision authorized under 1974 amend-
ments to the Clean Air Act.
his recommendations for legislative changes with
respect to emission standards for 1978-81 model cars.
This is a policy decision.
II. BACKGROUND, PARTICIPANTS AND PRESS PLAN
A. Background: A copy of the decision paper and
memorandum from Jim Lynn which were sent to you on
Saturday are enclosed at Tab A.
Russ Train has been unwilling to discuss his decisions
with anyone on your staff. Briefly, he contends that
the regulatory decision is his alone to make and that
the policy decision on standards beyond 1977 is based
on the same facts and thus is inextricably tied with
the regulatory decision. Our best guess at this point,
based largely on press reports, is that he will
(a) extend 1975-76 standards to 1977, (b) announce a
major effort to study the sulfate issue, and (c) rec-
ommend standards for 1978-81 at some level near the
California standards.
- 2 -
Resolving the sulfate issue may require a change in
your energy related decision to recommend the modified
California standards.
B. Participants:
Russ Train
Jim Lynn
Jim Cannon
Alan Greenspan
Frank Zarb
Staff: Mike Duval
C. Press Plan: No press coverage. Meeting will be announced.
III. TALKING POINTS
We strongly recommend that you simply hear Train out
concerning his one year extension decision (which is
regulatory) and that you do not endorse at this time
his legislative recommendations on the 1978-81 standards.
(We believe this approach is essential because members
of the press and others already know his conclusions.
You may want to get additional information on the
health dangers which arise from the sulphiric acid
mist which is produced from the catalytic muffler.)
Concerning the 1978-81 standards and sulfate issue, we
recommend that you ask Cannon, Lynn and Zarb to review
the EPA position in coordination with other interested
agencies. They should report to you by Tuesday of
next week SO that you can decide on an Administration
position prior to Congressional Hearings which may
start around the middle of March.
If Train asks you how he should answer a question at
his Wednesday press conference concerning your views
on his decision, we recommend:
1. You state that the one year extension is a regulatory
decision and he has obviously made up his mind on his
own.
2. Your mind is open on the sulfate and 1978-81 standards
issues. You will decide on an Administration position
after you receive the report from Cannon, Lynn and
Zarb.
DECISION
THE WHITE HOUSE
WASHINGTON
March 1, 1975
MEMORANDUM FOR:
THE PRESIDENT
THROUGH:
JIM CAVANAUGH
FROM:
MIKE DUVAL
SUBJECT:
TRAIN'S AUTO EMISSION ANNOUNCEMENT
Next Wednesday Russ Train will announce his regulatory
decision on the one year extension of emission standards
and EPA's recommendation to Congress for the standards
from 1977 through 1981. See attached memorandum from
Jim Lynn covering the substance of this issue (TAB A).
While Train has refused to discuss his position on these
issues with White House or OMB staff, EPA officials have
fully briefed (not for attribution) selected members of
the press. This is reflected in the attached Los Angeles
Times article which appeared Friday (TAB B) and I under-
stand other reporters have been given even more detailed
briefings for their use early next week.
Train has apparently decided to delay for one year imposi-
tion the strict 1977 statutory standards. He will also
present Congress with specific recommendations to back
off the statutory standards through 1981 and he will peg
this decision on the sulfate problem. The catalytic
muffler emits sulfuric acid. He will announce a major
study to determine how to improve the catalytic system or
develop alternative technologies to prevent the creation
of sulfuric acid.
If our understanding of the Train decision is accurate, he
may be making a proper decision considering the options
available to him. Imposing the California standards which
you proposed as a part of your energy plan would require
use of catalytic mufflers that emit twice as much sulfuric
2
acid as the catalyst that is used to meet the 1975-76
standards applicable outside California which Train
can (and apparently will) extend to 1977. Furthermore,
the emergence of the sulfate issue as well as the
continued disagreement over both facts and judgments
as to the best balance among fuel economy, automobile
cost, air quality and public health objectives justifies
reconsideration of your position.
It is my understanding that Train has asked to meet with
you on Tuesday to inform you of the announcement that he
will make on Wednesday.
I do not believe you or your staff should change the sub-
stance of Train's announcement even though it apparently
will go beyond the 1977 regulatory decision that he must
make. First, some of the press has already been informed
fully of the EPA decision and any change will be attributed
to the White House. Second, we would at this late date be
forced to rely on the EPA data concerning sulfates and your
options for considering data from outside EPA should be
left open. Third, Train has tied the regulatory decision
for 1977 and the longer range policy issue so closely
together that a review of his position on the longer
range issue could be perceived as an attempt to influence
his regulatory decision.
Alternatives, Recommendation, and Decision
1. Meet with Train per his request. This
may result in press speculation (with
help from the EPA staff) that you have
endorsed Train's recommendations.
Pleant
2. Have Train meet jointly with you and your
staff (Zarb, Lynn, Domestic Council, etc.)
3. Have Train meet with your staff.
4. Avoid any meeting with Train prior to his
Wednesday announcement. Direct your staff
to prepare immediately a decision paper
for you on the entire auto emissions stand-
ards issue.
I recommend alternative 4.
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
INFORMATION
WASHINGTON, D.C. 20503
MAR 1 1975
MEMORANDUM FOR THE PRESIDENT
FROM:
JAMES T. LYNN
SUBJECT:
Pending EPA Announcement on Auto Emission Standards
(An Energy Independence Act Item)
ISSUE: Russ Train will announce the emission standards for 1977
model year cars by Wednesday, March 5. This is a regulatory
decision. On March 5, Russ also plans to announce his recommenda-
tions for auto emission limitations for the five model years 1977
thru 1981. This is a policy recommendation he was asked to make
by the Energy Resources Council.
Russ has indicated that he plans to discuss his decisions with
you before making his announcement but neither he nor his staff
nave indicated what decisions are likely. He should not engage
in off the record discussion with anyone on his planned regulatory
decision before it is made. However, Russ also states that he
should not discuss his recommendation in respect to five-year
auto emissions levels with other agencies prior to making a
public announcement. He argues that the two issues cannot be
separated since both decisions are in part affected by the same
considerations.
This memorandum:
Summarizes recent information which shows that cars
FORD is 9ERALD LIBRARY
equipped with catalytic converters could pose a
serious threat to public health.
Concludes that your objective of improving automobile
fuel economy by 40% is at least jeopardized, if not
impossible, if catalytic coverters are not used on
automobiles, and the California Standards dre maintained.
2
BACKGROUND: In return for automobile manufacturers' commitment to
increase fuel economy 40 percent by 1980, you proposed in your Energy
Independence Act nationwide adoption of the current "California"
emission standards by hydrocarbons and carbon monoxide in 1977.
Auto emission standards by model year are displayed in the last page
of the attachment.
EPA held public hearings on the 1977 regulatory decision and
alternative emission levels for 1977-81 model years. Information
gathered during the hearings highlighted a major potential health
problem -- that automobiles equipped with catalytic converters emit
sulfuric acid mist. Since catalysts improve fuel economy by allowing
the removal of pollution control equipment from engines, their
discontinuance will result in a near term drop in auto fuel economy
and the 40 percent improvement in fuel economy by 1980 will be
jeopardized.
Train's policy conclusion on five-year emission levels may not agree
with the legislative position you have taken on auto emission
standards for 1977 thru 1981.
INTERAGENCY REVIEW: In response to this emerging problem, OMB
conducted an interagency review of this problem based on EPA's public
hearing record and other published data. The results of this review
are summarized in the following. Additional information is provided
in the attachment.
Areas of Agreement:
There is unanimous scientific agreement that emissions of
sulfuric acid mist are detrimental to public health, resulting
in increased deaths, aggravation of asthma, heart disease, lung
disease, eye irritations and discomforts.
There is also agreement that the adoption of the California
standards nationwide will force the manufacturers to employ the
type of catalyst currently used in California, and that these
emit nearly twice as much sulfuric acid as the ones used to
meet the 1975 Federal interim standards under current law.
Areas of Disagreement: The areas of disagreement lie in the
concentration levels needed to pose a health problem and the
number of years before concentrations reach that level.
The data summarized in the attachment shows that under worst
conditions and using "California" catalysts, serious health
problems could occur in 1977. With current catalysts, serious
health problems could occur between 1979 and 1981 depending on
weather. However, there is strong disagreement on the
probability that problems will actually occur on those dates
because of scarcity of data and because of other assumptions
used to derive them.
3
Dr. Ted Cooper, Acting Assistant Secretary for Health in HEW, has
written to Train and stated, "I am obligated to observe that these
catalytic systems pose a significant public health hazard and that
the hazard substantially outweighs the potential health benefits
based on the projected control of hydrocarbons, nitrogen oxides
and carbon monoxide by the catalytic system."
FEA and Commerce staff believe that it is necessary to study the
issue further (about two more model years) before significant action
can be taken.
DOT staff believe from continued reductions in CO through the use
of the catalyst will continue to outweigh risks associated with
emissions of sulfuric acid.
EPA staff monitored the interagency review but reserved their advice
for the Administrator's decision process. - Therefore EPA staff
views, as well as the conclusion of the Administrator, are unknown
at this time.
Options: In the short run (pre-1980), there are several options
available to significantly reduce emissions of sulfuric acid, but
all have serious drawbacks (see attachment). Primarily the options
are:
to re-blond gasoline to achieve low sulfur content
to force refiners to remove the sulfur from gasoline at the
GERALD FORD
refinery stage
to retain the 1975 interim standards
to ban the use of catalysts
The re-blending of gasoline will impose a large allocation problem
on refiners, and desulfurization will impose heavy capital requirements
at the expense of expanding domestic refining capacity. The retention
of the 1975 standards will postpone the problem, but only for a
couple of years and require a change in proposed legislation. A
ban on catalysts would increase fuel consumption by 10% over the
next few years and undermine several billions of dollars invested
by the auto industry.
In the long run (1980-1985), the development of engines which do not
require a catalytic converter is probable, if incentives are given
to the manufacturers to drop the catalyst as a control technology.
ATTACHMENT
Background
Gasoline contains sulfur which, after combustion, is released as sulfur
dioxide. In the process of removing other pollutants, the catalytic
converter changes some of the sulfur dioxide into sulfuric acid mist.
The system generally used to meet the 1975 interim national standards
produces less sulfuric acid than the system generally used to meet the
more stringent 1975 California emission standards, since the system
used to meet the California standards utilizes more oxygen. There are
several non-catalyst technologies which meet either set of emission
standards but produce no sulfuric acid. However, there is limited
production potential for using these non-catalytic systems by the
1977 model year, and the companies are very reluctant to commit them-
selves to such technologies until uncertainties about the NOx standard
are resolved.
Scope of Problem
The data presented in the table below répresent the best estimates that
can be made based upon available information. There is no agreement on
the probability that problems will actually occur in a specific year
because of uncertainties in the data.
Model Year in which Sulfuric Acid
could pose a serious health problem
Average Meteorological Adverse Meteorological
Standard
Conditions
Conditions 2/
1975 Interim Standards
1981
1979
1975 California Standards
In 49 States
1979
1977
In California 3/
1978
1977
GERALD FORD LIBRARY
1/ The data also assume that there are no emissions of sulfates from
stationary sources, and that 70 percent and 90 percent of the fleet
in 1975 and 1976 respectively will utilize catalysts.
2/ Adverse meteorological conditions would occur in large metropolitan
areas on an average of 6-7 days a year.
3/ The dates for reaching a critical problem are earlier in California
than the remaining 49 States because California utilizes higher
sulfur gasoline.
Options
The following short-term actions are available to minimize the sulfate
problem:
1. Gasoline Blending -- Catalyst equipped vehicles could be
provided with lead-free and low-sulfur fuel, which would
reduce emissions of sulfuric acid. However, both EPA
and the refiners have indicated that this could not be
done in sufficient quantities to meet the needs of all
catalyst equipped vehicles beyond 1977 or 1978. EPA is
exploring this option with FEA.
2. Desulfurization of Oil -- Though technically possible at this
time, this process would require a capital investment of
$2 to $4 billion at a time when refiners are attempting to
expand domestic capacity. It would also create an increase
in the price of gasoline by 1 to 2 cents per gallon and
impose an increase in crude oil consumption due to
additional refining by .5 percent.
3. Retention of the 1975 National Interim Standards -- A
retention of the 1975 Interim Standards would allow the
continued use of the catalytic system employed on 1975
cars and would produce 50 percent less sulfuric acid than
cars meeting the California standards. However, as an
increasingly larger number of cars become equipped with
catalysts, even remaining at the 1975 Interim Standards
will eventually create a threat to public health unless
other corrective actions are taken.
4. Prohibit the Catalyst -- EPA could prohibit the catalyst
based upon health concerns. This could increase fuel
consumption for the next 2 to 4 years by 10 percent if the
1975 Interim Standards are to be met with a non-catalytic
technology.
5. Take No Action -- This would leave the decision to the Congress.
They are committed to addressing the relationship between auto
emissions and fuel economy in the current session. If they
choose to adopt your proposed emission standards, or continue
the implementation of the standards currently set forth in the
Clean Air Act, then they may be counting on the use of new
technologies after 1980 to solve the sulfuric acid problem,
particularly if the statutory NOx limit is relaxed.
In the long run, the most promising methods for eliminating sulfuric
acid emission from automobiles are the use of engines which meet
emission standards without the use of a catalyst (e.g., the lean-burn
or stratified charge engines) or fuel desulfurization. The broad
utilization of non-catalytic systems for mass production could be
achieved between 1980 and 1985, if incentives (such as relaxing the
NOx standard or setting a sulfate emission limit for 1980) are given
to the manufacturers to drop the catalyst as a control technology.
Auto Emission Standards
Clean Air Act amendments signed in June 1974, set auto emission
standards for 1976 model year cars and authorized the EPA Administrator
to extend those levels for one additional model year (1977) or to
set some level between those authorized for 1976 and the statutory
levels for 1977.
In December, the Energy Resources Council recommended and you approved
an Administration position calling for standards of .9 (hydrocarbons),
9.0 (carbon monoxide), and 3.1 (nitrogen oxides) for model years
1977-81 -- as part of an agreement with major auto makers that they
achieve a 40 percent increase in average fuel economy by the model
year.
Auto Emission Standards
(Grams per mile)
HC
CO
NO
1975 (Interim) & 1976
1.5
15.0
3.1
1977 statutory
.41
3.4
2.0
1975 California
.9
9.0
2.0
1977-81 Administration
Recommendation (Energy
Independence Act)
.9
9.0
3.1
Some items in this folder were not digitized because it contains copyrighted
materials. Please contact the Gerald R. Ford Presidential Library for access to
these materials.
3.FORD
&
&
\
GERALD
1817
LIBRARY
&
/
/
/
,
LOS ANGELES TIMES
Friday Morning, February 28, 1975
Auto Makers to Be Given
Year's Delay on Emissions
BY DAN FISHER
FORD is LIBRARY GERALD
Times Auto Writer
Russell Train, administrator of the
Ultimately, it is Congress which
urging that he endorse regulations
U.S. Environmental Protection Agen-
must act on any longer-range (1978
even less stringent than the current
cy, will announce Monday- that he
and beyond) changes in auto emission
California requirements.
will grant auto makers an additional
standards. But Train's recommenda-
"It's a tough decision with enormous
year to meet antismog standards now
tions are expected to carry considera-
implications," one high ranking agen-
scheduled to go into effect on 1977
ble weight with liberal congressmen
cy official said.
model cars, it was learned Thursday.
who might not be SO moved by Mr.
A major question involves the cata-
He will also, either then or at con-
Ford's proposals
lytic. converters which the auto in-
gressional hearings within the next
dustry uses on most 1975 model cars
Train's decisions could also put Gov.
three weeks, endorse legislation to
sold nationally and on all cars sold in
Brown's Administration in the posi-
slow down the existing schedule for
California. The catalysts cause those
tion of either contradicting EPA's as-
even more stringent auto emission
sessment of, the health situation or
cars to emit more sulfates than they
standards during the following sever-
otherwise would.
ordering the first rollback of Califor-
------ d to cournos close to
Some EPA researchers contend
70
EPA
RUSS TRAIN'S ANNOUNCEMENTS ON AUTO EMISSION
ST ANDARDS ( 2PM, Wednesday, March 5)
Question
FORD i LIBRARY GERALD
15 expected to
Russ Train has announced his decisions and recommendations to
Congress on auto emission standards which amount to significant
delays in current requirements. We understand that he met with the
President on this subject on Monday. Do these delays in effect reflect
what the President told Mr. Train to do?
Answer
EPA
his
Mr. Train asked for a meeting with the President on Monday for the
purpose of informing the President of announcement on auto emission
standards that Mr. Train planned to make on Wednesday. The request
was
granted. During the meeting, Mr. Train informed the President
today
of the decisions that he had made and would will announce concerning
Auto emission standards for 1977 model cars which he is authorized
to set under 1974 amendments to the Clean Air Act. This is a
regulatory decision.
Auto emission standards that he recommends for 1978-81 model
year cars. This is a policy recommendation and, to become
effective, would require Congressional action to amend the
clean Air Act.
Mr. Train merely informed the President of his decisions did not
ask for approval of his decisions and, certainly, no attempt was made to
influence either his regulatory decision or his legislative recommendations.
Follow-up Question
Mr. Train's decisions on emission standards for 1977 and 1978-81 are
different from those recommended by the President to the Congress in his
proposed Energy Independence Act. Do they replace the President's
recommendations to Congress?
Answer
- EPA's public hearings and were
Not necessarily. The decisions and legislative recommendations announced
by Mr. Train were.not reviewed or discussed with other agencies that have
an interest in inatter prior to Mr. Train's decisions and announcement. The
President has indicated that he would like to have the views of other agencies
before he decides how he might modify his legislative proposal.
ALL OTHER QUESTIONS ON MEANING OR IMPLICATION OF TRAIN'S
DECISION SHOULD BE REFERRED TO EPA.
DRAFT
M. Duval (3/11/75)
TALKING POINTS - CABINET MEETING DISCUSSION ON THE CATALYTIC CONVERTER
I think that the most important lesson for all of us, from
the experience we have had with the catalytic converter, is
that we should exercise far greater care when we propose
legislation and take regulatory and Executive action. It is
obvious that the American public will pay a very high price
for the decisions made by the Congress and by the Executive
FORD LIBRARY H 0 There
Branch concerning these automobile polution regulations. I
think it is fair to say that if we had known the full cost
which ultimately will flow from these actions prior to making
the regulatory decisions which locked us onto this course,
the specific legislation and regulatory action might have been
very different.
I have a very basic philosophy concerning my approach to these
kinds of regulatory actions and to legislation which sets them
in motion. It can be summed up by the phrase: "Truth in Govern-
ment." By this, I mean that we should level with the American
people and tell them the true price of government actions and
who's going to pay for it. This is the principle that I
followed with my Fiscal 1976 Budget and in my State of the
Union Address and subsequent legislation. I believe in laying
out the true costs of my actions. For example, the price tag
of my energy proposals is right out there for everyone to see.
It's $30 billion a year and this will result in a one-time
2% increase in the CPI. Contrast this clearly-defined price
tag with the Democrats' so-called Pastore-Wright plan. Although
my energy and economic advisers think that the total price tag
of their plan will equal or exceed mine, this will show up in
hidden costs which will ultimately result from quotas and
allocation and further government intrusion into the market-
place. In short, while their proposal is politically attractive
because it doesn't appear that anyone will have to pay the bill,
I don't think government decisions should be made this way. I
think the people should know the true cost of the programs
proposed here in Washington and, importantly, who's going to
pay the bill and when.
I have taken some steps myself to implement this "Truth in
Government" philosophy. In addition to the State of the Union
and Budget Messages, I have signed an Executive Order requiring
that an Inflation Impact Statement be prepared for every govern-
ment action under my control. If an honest Inflation Impact
Statement had been done when the initial decisions were made
concerning the catalytic converter, I suspect we would not be
faced with the problem confronting us today. Of course, it's
not just the environmental regulations which raise this issue.
There are literally thousands of examples, but I recall speci-
fically the problem we had with the truck brake regulation
issued by the Department of Transportation before you, Bill
(Coleman), came on board. I had to make a decision on
New Year's Eve out in Vail to let that regulation go forward
because we were so far down the road that, to hold it up
would have imposed economic hardship on the industries which
had geared up to implement the Federal rule. As a result,
we are increasing the cost of trucks and trailers 5-7% and,
I now understand, this regulation may force many little
companies out of business. I have no doubt that many of
the energy regulations create the same kind of dislocations.
The point here is that each one of you must control the
actions of your departments and agencies to insure that the
full cost of every proposal and regulatory action you take
is laid out clearly. I think it is also important that this
be done in time so that a real choice can be made between
going forward or not. Too often, the economic consequences
of the regulation only come to light so late in the process
that there really isn't any opportunity to pull back. The
pressures to go forward come from the legislation itself,
from law suits which have been brought by proponents on one
side or the other, from industry who will be benefitted or
hurt by the proposed rule and, often from within the agency
itself when the Federal officials in charge of implementation
become advocates for one course of action or another.
As each of you makes the day-to-day regulatory and policy
decisions, I want you to think through very carefully the
impact of those decisions a year from now, five years from
now, ten years from now. Think through what will happen if
those policies and programs are to be implemented by some
future administration which might not be as conscious as we
are of preserving the freedom of individual choice and the
market mechanism. One discipline that should assist you is
to ask three questions each time you face an important govern-
mental decision:
1. What is the problem -- specifically -- that I am being
asked to solve?
2. Does the proposed solution in fact solve the problem?
3. What additional problems will this government "solution"
create? It is this last step that we so very often fail
to take.
Of course, concerning the catalytic converter, we need to
make a decision concerning my proposed legislation which is
now pending before Congress recommending that we adopt a
modified California standard. I submitted this legislation
because it was part of the compromise worked out whereby the
automobile manufacturers could achieve a 40% increase in auto
efficiency by 1979, without a large increase in the cost of
cars and with reasonable environmental standards still intact.
FORD LIERARY
It is clear from the decisions and conclusions reached by
Russ Train, that we must reconsider my legislative proposal.
We can't dillydally around on this one because I want the
Congress to move quickly on my entire energy plan, but now
one part of it may no longer be valid. Accordingly, I want
to be able to review my decision on the long-range automobile
polution standards and submit new legislation, if necessary,
prior to the Easter recess. I understand that Frank Zarb
and Russ Train already have studies underway and that they
are coordinating this with the Department of Transportation.
I'd like the Domestic Council to follow up on this so that
I can have the views of all the interested agencies and
departments and final recommendations very quickly.
GERALD R.FORD JERANY
file
THE WHITE HOUSE
WASHINGTON
March 19, 1975
TO:
JIM CANNON
JIM CAVANAUGH
DICK DUNHAM
MIKE DUVAL
FROM:
Glenn Mlsm Schleede
GERALD FORD LIBRARY
SUBJECT:
Auto Emissions - Fuel Economy - Catalyst
This is just to give you an update on activities that are underway or
being planned by others on the auto emission issue:
1.
OMB held its first interagency meeting yesterday with the objective
of developing a new Administration legislative proposal on auto
emissions. Agenda at Tab A.
-
Agencies represented included EPA, FEA, HEW, Commerce,
Treasury, DOT, CEQ and Science Adviser.
-
Papers are due by the next meeting (April 1) which look at the
problem from four viewpoints: air quality, health, fuel economy
and economic impact.
-
This effort is the best thing going at present to try to bring out the
data needed for an intelligent decision. Problems with it are:
Agency representatives are somewhat skeptical of its legitimacy.
There has been no formal communication to the heads of the
agencies. The meeting was merely called by an OMB staffer
after Jim Lynn okayed the idea.
It's a part time activity for the agency staff people involved.
The group will have to rely for balance only on two OMB
staffers and one part-timer from the Science Adviser's office.
2.
EPA Assistant Administrator Strelow, FEA's Sant and DOT Assistant
Secretary Stoney decided yesterday to call public hearings to get
additional fuel economy data from the auto companies. Further
checking indicates that: (a) no hearings have been set, (b) FEA and
DOT are proceeding with "technical meetings" with all the auto
companies today and tomorrow to get fuel economy information
(assuming alternative emissions standards and the possibility of
a 1979 sulfate standard). The plan is to have public hearings later
to get any new information on the record. This FEA-DOT effort
is now supposed to feed into the OMB effort as well as to the Zarb
effort discussed below.
- 2 -
3.
Frank Zarb supposedly is committed to having a meeting with auto
companies within ten days of the last Cabinet meeting to try to
come up with a new fuel economy agreement. This is an unrealistic
target since there can't be a fuel economy agreement independent
of a position of emission standards. Whether Zarb agrees with this
is unclear.
FORD
TALKING POINTS - MEETING WITH SECRETARY COLEMAN
The Depart LIBRAR,
DOT Regulatory and Administrative Philosophy.
ment exercises tremendous power over State and sub-State
governments, as well as the private sector.
EXAMPLE: EPA's catalytic converter
Many of DOT's regulations impose tremendous costs on con-
sumers and can have major impacts on the profitability of
businesses.
EXAMPLE: DOT's truck anti-skid brake regulations will
raise the cost of trucks and trailers 5-7%. (This is
under review in coordination with the Council on Wage
and Price Stability, but the rule was adopted on
January 1. The Domestic Council staff is monitoring
the review.)
I have attempted to do something about this problem,
government-wide, by requiring an Inflation Impact State-
ment be prepared before any Federal regulation is issued.
I am quite serious about this, and I want the analysis to
be honest and done in time so that we can make a decision
not to go forward if the economic costs outweigh the benefits.
Another area in which your Department directly affects the
lives of countless people concerns the decisions which you
are required by statute to make concerning whether to go
forward with various public works projects. This ranges
from approval of highways and bridge replacement to the
building of airports and transit systems.
I believe that we need to strike a far better balance
between various national objectives, including developing
energy facilities and other job-producing activities, versus
our desire to protect the environment. Although many of the
environmental laws which passed in the early '70s contain
goals and objectives which I strongly endorse, I think the
deck has become stacked against the forces for progress
and development. It is far easier to stop a project than
to build it.
COMMENT: We recommend that you do not specifically
refer to I-66 in your discussion of the growth/no-
growth issue.
Bankruptcies. One of the major problems that your Depart-
ment faces is the bankruptcy and pending bankruptcy of
several major transportation companies. I understand you
are reviewing the progress of the United States Railway
Association and its Preliminary System Plan to provide
2
rail service in the 17 States of the Northeast and
Midwest. The saga of the Penn Central bankruptcy is
providing an excellent example of what happens when
government neglect and over-regulation forces a major
industry out of business. There is no doubt that the
Federal taxpayer is going to pay a heavy price.
We have received, here at the White House, over 300
calls requesting financial assistance for the Rock Island
Railroad, which I understand has just filed for bankruptcy.
I support your position of declining to support direct
Federal financial help but offering to work with the
ICC and others to continue to provide rail service and
do everything else possible to aid the employees of the
company.
That same kind of sensitivity will be needed as we con-
tinue to work on the problems of Pan American and other
airlines that are in trouble. I want to be certain that
we show sympathy and compassion for the owners and employees
of these companies in financial difficulty, but at the same
time, do everything possible to limit Federal financial
exposure except in the most extreme cases.
Legislation. On Monday, I transmitted to the Congress the
aviation legislation, which is a good package. I appreciate
your memo on this subject and the compromises you were able
to work out with the Congress.
I understand that the Rail Transportation Improvement Act
will be ready for transmission, probably by Friday of this
week. This is the first piece of my overall program to
seek fundamental reform of the regulatory practices which
govern the economics of the entire transportation industry.
I hope you will move quickly on other legislative proposals
concerning motor carriers and aviation.
The Highway bill is also nearly ready for submission.
The Governors I have recently conferred with are anxious
to support our proposal of allowing the States to pick up
1¢ of the gas tax. However, the proposal to extend the
Trust Fund only for the Interstate System will be very
controversial. You will need to work closely with Bob
Jones and Bill Harsha on the House Public Works Committee
and Jennings Randolph and Howard Baker in the Senate.
Concerning mass transit, I know that there will be pressure
for new legislation, especially in light of the energy prob-
lem. I worked very hard in the closing days of the 93rd
Congress to get the Mass Transit Act passed. That Act will
FORDPROVIDE $11.8 billion over the next six years for mass
&
SERVICE
LIBRARY
3
transit, and this represents a major increase in Federal
funding. I do not believe we need more funds but, rather,
that Act must be administered vigorously, but carefully,
by your Department. We must not get into another situa-
tion like the Washington Metro system which results in
massive overruns and a commitment of more taxpayer
dollars to one city than we possibly can afford.
EXAMPLE: Metro was originally expected to cost
$2.3 billion and the current estimate is $4.5
billion to complete the entire system.
FORD LIBRARY & GERALD
THE WHITE HOUSE
WASHINGTON
April 3, 1975
MEMORANDUM FOR:
Jim Cannon
FORD i LIBRARY 078835
FROM:
Dick Dunham
Jim Cavanaugh
L
SUBJECT:
Possible Approach for Dealing with
Auto Emission-Fuel Economy Legislation
The intent of Glenn Schleede's proposal appears
to have been generated by the Senate Public Works
Committee staff. I suspect that their motives are to
delay resolution of the issue for a year or two.
It is our recommendation that, since one of the
elements of the decision relating to the catalytic
converter has been resolved and there are several
pending studies, including OMB's study and Dr. Marks'
study, we do not encourage the Senate Public Works
staff people at this stage. Therefore, we recommend
that you disapprove Glenn Schleede's recommendation.
Dich and the
I are with your
recomedation.
Please inform Auke
and Glen
Riach
Jenn
DOMESTIC COUNCIL CLEARANCE SHEET
DATE: April 2, 1975
JMC action required by: Before leaving
for Calif.
TO:
JIM CANNON
VIA:
DICK DUNHAM
FORD & LIBRARY GERALD
JIM CAVANAUGH
FROM:
Jenn Glenn Schleede
SUBJECT:
Possible Approach for dealing with auto
emission-fuel economy legislation
COMMENTS:
I discussed this with Mike Duval by phone. He supports
the idea of continuing the discussions with Barry Meyer
and specifically supports my proposals to (a) review
this with Jack Marsh's staff as soon as possible, and
(b) have me meet as soon as possible with Barry Meyer,
Bill Kendall or Pat O'Donnell and Public Works Committee
minority staffer Bailey Guard. I' dhike to set that up
for Tomorrow or Friday.
RETURN TO:
Material has been:
Signed and forwarded
Changed and signed (copy attached)
Returned per our conversation
Noted
Jim Cannon
THE WHITE HOUSE
WASHINGTON
April 2, 1975
MEMORANDUM FOR:
JIM CANNON
FROM:
CLEMN SCHLEEDE
SUBJECT:
Possible Approach for Dealing with
Auto Emission and Fuel Economy
Legislation
Last night, a good acquaintance of mine (Dick Grundy) who works
for Senate Public Works Committee Chairman Jennings Randolph
put forth informally (on behalf of Committee Counsel Barry
Meyer) the outlines of a possible plan for Administration-
Senate Public Works Committee cooperation that would lead to
legislation by early August on the auto emission-fuel economy
issue. I believe the plan approach has enough merit to warrant
further exploration -- along the lines outlined below.
This memorandum is to:
- Describe the situation on the hill as seen by Grundy.
- Outline the basic approach he and Meyer are suggesting.
- Bring you up to date on the status of executive branch
deliberations and schedule on auto emissions.
- Suggest next steps for your consideration.
If we are to pursue the approach, we would have to proceed
quickly.
The Congressional Situation
Timing for Congressional Action. Contrary to earlier
assessments, the committees responsible for the Clean Air
Act (House Commerce, Senate Public Works) are counting on
final Congressional action on auto emissions legislation by
early August. This apparently will be in time for auto
companies to make decisions on 1977 models.
House Commerce Committee. Rogers' and Dingell's subcommittees
are marking up Clean Air Act and fuel economy bills and
currently plan to report something out -- at least on Clean
Air by next Wednesday (April 9). Apparently the objective
is to have final House action on a bill before the Senate
Public Works Committee begins detailed hearings on auto
emissions.
- 2 -
Senate Commerce-Fuel Economy. A bill probably will be
reported in the next few weeks establishing some kind of
mandatory fuel economy standards. Public Works has an
agreement that any such bill will be referred to them
before going to the floor. Public Works intends to make
sure that the auto emissions and fuel economy requirements
are consistent and believes it still has the clout to do SO.
Senate Public Works. According to Grundy:
Hearings on Clean Air legislation will begin about
April 17, first covering all issues and then zeroing
in on auto emissions in early May.
All members are very conscious of the whole automobile
dilemma -- made critical by the catalytic converter
problem -- and recognized that they must act quickly,
perhaps even to avoid losing jurisdiction.
Senator Muskie, who has dominated all previous Senate
actions on Clean Air:
Will be amenable to an approach which avoid public
confrontation with the Administration or with
other critics of his tough stand on auto emissions.
Is concerned about the impact of this issue on his
reelection chances in 1976.
Now can command no more than 5 or 6 votes on the
Committee.
Senator Baker will be anxious to find a political way
out of the current situation.
Most members recognize that:
Auto emissions, fuel economy, auto sales, auto
industry employment, etc., are inextricably tied
together.
Neither the Committee nor the Administration will
have much public credibility on the auto emissions
issue.
There is a strong need to get alternatives and
impacts of each laid out in a way that they can be
understood.
Possible Administration-Committee Cooperation
Basic Approach. The basic approach outlined by Grundy is
quite simple though not flawless. It calls for:
Administration-Public Works Committee leadership
(Randolph, Baker, Muskie and Buckley) agreement that:
Neither side will take a public position on the
auto emissions standards at this time.
- 3 -
Hearings held by the Committee would focus on
identification of realistic alternatives and
collecting information on the implication of
each.
Turning information over to the National Academy
of Sciences for compilation of a single "white
paper" which lays out the facts that are available
but does not make recommendations. *
Once the Academy reported, all parties could take
positions on the answer they thought best and the
matter would be resolved in the normal legislative
process.
Reaching Committee-Administration Agreement on Approach.
Several steps are envisioned, including:
An early meeting with Barry Meyer to round out the
proposal.
A broader meeting involving other staff from the
Committee and key agencies (EPA, FEA, DOT).
SERAED
If it appears desirable, a meeting between Zarb and
Train with Randolph and other leaders.
A meeting of the Committee leaders with the President
and issuance of a public statement describing the
approach that will be followed. (This step would be
desired by the Committee but may prove either
unnecessary or undesirable to the Administration.)
Advantages of the Approach. If it can be worked out, I
believe this approach would have the distinct advantage
of keeping open some auto emission standards options (e.g.,
maintaining 1975-76 standards for the next five years) which
*
The justification for Academy involvement would be: (a) lack
of credibility by either the Congress or the Administration
on the issue, (b) the Academy has done several detailed
studies in this area over the past 18 months, and (c) there
is no one else to turn to. There are problems with the
Academy proposal that we would need to address since it,
too, has weaknesses and lacks credibility in some quarters
on this issue. It has little capability to deal with the
economics of the situation or prepare a paper that will be
understandable by the Congress and the public. One solution
might be to supplement the Academy's involvement with help
from other sources.
- 4 -
make great sense from a cost benefit point of view but
GERALD FORD LIBRARY
which could become lost as the Administration or the
Committee try to outdo each other in the political arena
before the facts are laid out.
Disadvantages of the Approach. On the other hand, it
sounds pretty clear that the Committee is looking for a
politically acceptably way out on the auto emissions issue
and the Committee might find it to their advantage to
abrogate any kind of agreement that was worked out.
Status of Executive Branch Activities
Interagency Review. The OMB-led interagency review is
proceeding on schedule with a draft OMB staff option
paper expected on Friday, April 4 and a final paper on
Monday, April 7. This paper should lay out the air
quality, public health, fuel economy, technological
options and economic impact of six alternative sets of
auto emissions standards. OMB expects to zero in on
the issue of:
The 1977 NOX standards -- 3.1 VS. 2.0 grams per mile.
The 1978-81 standards for HC, CO, NOX and sulfates --
the last of which could determine the future of the
catalyst.
Yesterday's meeting of the group demonstrated the lack of
both facts and agreement on the best option.
ERC Review. Current plans for the OMB-prepared option
paper to go to the Executive Committee of the ERC for
review and recommendation to the President by April 11.
Suggested Next Steps
For your consideration, I suggest that we proceed as follows:
Discuss the matter promptly with Jack Marsh's staff and
Frank Zarb.
Set up a meeting with Barry Meyer and the Senior Minority
Committee staffer and Bill Kendall or Pat O'Donnell to
(a) make sure that the proposal from Grundy is genuine,
(b) round out the basic approach, and (c) make sure that
Meyer can deliver the Committee leadership's support for
the approach if we can agree at the staff level.
Immediately thereafter bring in Russ Train and others
concerned on the discussion.
April 7, 1975
MEMORANDUM
Subject: NSF Study for the Domestic Council of Auto Emission Standards
We understand that the Domestic Council has commissioned the National
Science Foundation to perform a study of automobile emission standards.
In addition to apparently ignoring the existing, objective sources of
information and expertise within the government on this subject, such as
the Bartlesville Energy Research Center of the Energy Research and Development
Administration, any study by the National Science Foundation will undoubtedly
suffer from biases engendered by an excessively theoretical and academic
orientation; i.e. the people involved are unlikely to have any practical
experience in the problems of trying to implement from an engineering and
business point-of-view the various solutions to be considered. Since there
are good reasons for not having the study done by industry, we suggest
that an Advisory Committee to the Domestic Council be appointed with
representatives from the academic, automotive and refining areas. To
some extent such a Committee would have a parallel in the "Blue Ribbon
Panels" of the Magruder Study of Technological Opportunities.
We can suggest some possible members of such a Committee, if desired.
Henry Bellmon
FORD LIBRARY & GERALD