Big oil cheers as Trump eases fuel economy standards

The Trump WASHINGTON administration’s plan to relax fuel-economy and vehicle-pollution standards could be a boon to U.S. oil producers who’ve quietly lobbied for the measure.

The proposal, released Thursday, would translate into an additional 500,000 barrels of U.S. oil demand per day by the early 2030s, about two to three per cent of projected consumption.

“It’s a meaningful increase in U.S. oil consumption” and one of the biggest steps the Trump administration could take to boost crude demand, said Trevor Houser, a partner with the Rhodium Group, a research firm that’s analyzed the proposal.

The Environmental Protection Agency and National Highway Traffic Safety Administration proposed locking in U.S. fuel-economy and tailpipe greenhouse gas emissions requirements at 2020 levels of 37 miles per gallon (6.36 l/100 km.) The existing standards the Trump administration wants to replace call for a steady increase to roughly 47 mpg (5 l/100 km) by 2025.

Oil industry leaders have been supporting the move behind the scenes, and a handful of companies disclosed lobbying on the issue this year.

The industry ’s chief argument is that the Obama-era standards are a relic of a different time, when the U.S. was deeply reliant on foreign oil and gasoline to fuel its vehicles.

It’s now less important to conserve energy and to curb oil demand given the dramatic rise in U.S. crude production, the Trump administration said.

Senator Ed Markey, a Democrat from Massachusetts, said the Trump plan is “a Big Oil-masterminded effort.”