Friday, June 1, 2018

A Modest Proposal for Increasing EV Sales (with Apologies to Jonathon Swift)

Even with lavish government subsidies—which are disproportionately funded by the middle class and disproportionately given to the wealthy—sales of electric vehicles remain stuck in the low single digits.

According to a new report from the U.S. Energy Information Administration (USEIA), “hybrid electric, plug-in hybrid electric, and battery electric” vehicles accounted for a mere 2.5% to 4.0% of total light-duty vehicle sales from 2012 through 2017.

It’s not that policymakers haven’t tried to encourage people to buy EVs. To date, EV owners have benefitted from direct purchase subsides of up to $7,500 from the feds and up to $5,000 from a number of states; free use of electric charging stations and reduced utility rates in their homes; free access to HOV lanes; and exemptions from various taxes, registration fees and inspection requirements. The U.S. government has even lavished $2 billion dollars on car manufacturers to encourage the production and sale of EVs.

Yet despite all these subsidies, EV sales can’t get out of park.

The US EIA report cited several factors for the “limited growth” of EV sales, including low gasoline prices, the increased fuel economy of conventional vehicles, and the “relatively high” price of new EVs. They also cited the lack of charging stations, which is “the biggest hurdle in the adoption of EVs,” according to a new study from the Rocky Mountain Institute.

It is becoming increasingly clear that if we hope to persuade the most well-off among us to purchase electric vehicles, we need to build a national network of Level 3 charging stations that would rival the network of gas stations that blankets the United States today.

It won’t be cheap. At a cost of up to $100,000 per charging station, such an ambitious undertaking would cost American taxpayers untold billions of dollars. And a project of that magnitude would require a virtual army of workers to complete.

But there is an obvious solution that is both simple and elegant: make some minor adjustments to existing child labor laws to allow children as young at 12 to help build a national network of EV charging stations.

The benefits are twofold. First, an influx of roughly 12 million kids between the ages of 12 and 14 would dramatically decrease the amount of time it would take to construct the more than 100,000 charging stations needed to match the current gasoline-station grid.

Second, the additional income these kids will bring in will help offset the higher taxes and utility bills that their parents will inevitably be hit with to help fund the construction of this new nationwide EV charging network.

To be sure, not all children will be physically capable of meeting the rigorous demands of manual labor of this kind. Others may find it difficult to adjust to an eight-hour workday on a construction site far from home. But those children can also contribute to the national effort to encourage the well-off to buy electric vehicles by serving as “gophers” at existing charging stations.

These gophers would perform small tasks for EV owners, such as washing their cars or fetching cups of coffee while the EV owners waited for their cars to charge, thereby enhancing the EV-ownership experience.

Older “gophers” who were licensed to drive would shuttle the EV owners back to their homes or offices and pick them up again after their cars were fully charged, providing a kind of “Uber-rich” service to the deserving class.

Of course, these recommendations are quite ludicrous. But considering that 90 percent of existing subsidy programs go to the top 20 percent of taxpayers, “ludicrous” doesn’t seem to be a deal-breaker when considering EV public policy.

It’s time for policymakers to rethink these Robin-Hood-in-reverse policies of EV subsidies for the rich.

Monday, March 5, 2018

Is New York Trying to Stop the American Energy Revolution?

The analogy is just too rich to ignore.

A giant tanker full of Russian liquefied natural gas sits in Boston Harbor, challenging our nation’s energy independence. Two hundred and forty-five years earlier, a merchant ship carrying 114 chests of British tea sat in the same harbor, challenging our colonial self-determination. In both cases, those ships entered Boston Harbor because of a governor’s hubris and unbridled political ambitions.

The first scenario—which was the direct result of then-Massachusetts Royal Governor Thomas Hutchinson’s desire to curry favor with King George—sparked the Boston Tea Party, which escalated into the American Revolution and ultimately led to our independence from Great Britain.

The implications of the second scenario—which is the direct result of New York Gov. Andrew Cuomo’s desire to curry favor with leading environmentalists—have yet to be seen. But Gov. Cuomo would be wise to study the missteps of his historic counterpart lest he be condemned to repeat them.

Just a decade ago when we depended on OPEC and other exporters for our fuel “security,” an argument could have been made for importing Russian natural gas to generate the energy needed to heat homes, schools, hospitals and businesses during record-breaking cold winters like the one New England is experiencing this year.

But domestic natural gas production has increased so dramatically in the last ten years that the U.S. is now a net exporter of natural gas for the first time in 59 years. So why the reliance on natural gas from a Russian company that was specifically sanctioned by the Treasury Department in 2014?

Despite our nation being awash in clean-burning natural gas—particularly from the abundant Marcellus Shale reservoir under West Virginia, Pennsylvania and New York—New England cannot access this resource without running pipelines through New York State. But New York politicians, led by Gov. Cuomo, have banned fracking and are blocking pipeline infrastructure projects at every turn, despite the fact that Cuomo himself said, “Realistically you have to move fuel, so a pipeline is the safest way if it's done right."

According to a recent Politico article, Cuomo is taking “an increasing stand against the construction of new natural gas infrastructure” to curry favor with leading environmentalists in an effort to shore up the “weakness on his left flank” as he positions himself for a possible 2020 presidential bid.
And the political pandering seems to be paying off.

“I think environmentalists have no choice but to pay some respect to Gov. Cuomo's moves—banning fracking was a big step, and he's followed it up with some other courageous decisions” on pipelines, said climate extremist and founder of, Bill McKibben.

As a result of Cuomo’s political ambitions, New England " does not have sufficient gas infrastructure to meet demand for both home heating and power generation … when it gets cold,” according to ISO New England, the Northeast region’s electric grid operator. The energy infrastructure deficit is so severe that utilities will almost certainly be forced to implement rolling blackouts in the coldest days of winters to come, ISO New England warned.

Without access to affordable, abundant domestic natural gas, New England states are turning to other, more expensive fuel sources. In fact, the pipeline constraints have caused New England to have the most expensive spot natural gas prices in the world—including this January.

In the brutal cold snap between last Christmas and January 9, Massachusetts electrical generators burned about two million barrels of more expensive oil, “which is more than double the amount burned throughout all of 2016,” according to Massachusetts Energy and Environmental Affairs Secretary Matt Beaton.

All of this could be prevented, of course, if Gov. Cuomo would allow the construction of the pipeline infrastructure needed to transport affordable and desperately needed natural gas to the birthplace of the American Revolution. Not only would that prevent the now-inevitable rolling blackouts, but it would demonstrate that Cuomo, unlike his historic predecessor, is dedicated to serving the American public and not some powerful special interest.

Saturday, January 27, 2018

Are electric vehicles the trans fats of the highways? A case could be made.

Back in the 1980’s when people—driven by the belief that “you can never be too rich or too thin”—relentlessly jazzercised to Richard Simmons video cassettes, trans fats were touted as a “heart healthy” way to lose weight.    

Encouraged by public interest groups like the Center for Science in the Public Interest, which called trans fats “a great boon to American’s arteries,” food processors replaced saturated fats with trans fats in thousands of products.

Unfortunately, researchers soon discovered that trans fats were also causing 30,000 fatal heart attacks in the U.S. each year. The promised benefits of trans fats, it seems, were more hype than reality. And the same appears to be true for electric vehicles.

Once touted as the environmentally friendly substitute for internal combustion engine vehicles (ICE), new research suggests that EVs are much more expensive and significantly more toxic than their ICE counterparts.

A big part of EVs’ toxicity to both people and the planet is the process of producing the cars’ batteries. The Washington Post recently published a scathing investigative series about the dangers associated with lithium-ion battery production including: water shortages in Argentina caused by lithium mining, air and water pollution in China caused by graphite mining, and the children who are injured and killed while mining for cobalt in the Congo.

And  because of the added emissions incurred in producing car battery cells and packs, “the emissions caused by manufacturing an electric vehicle far exceeds the emissions caused by manufacturing a conventional vehicle of similar size,” according to a new report from the American Consumer Institute (ACI).

The ACI report also cited recent research by Arthur D. Little which found that EVs are much more expensive to purchase and operate. Specifically, they found that “a compact electric vehicle costs 44% more and a mid-size electric vehicle costs 60% more than their gas-fueled counterparts” over a 20-year period of ownership.

The good news—if you’re wealthy enough to afford an EV—is that they are heavily subsidized by the government. According to ACI, car buyers can qualify for up to $7,500 in federal tax credits for buying an EV and state tax credits of up to $5,000. But because EVs are so expensive to begin with these tax incentives are being lavished on the wealthy, with as much as 60% of EV subsidies going to households earning over $200,000 per year, while only 10% of electric vehicles subsidies went to households earning less than $75,000 per year.

“These explicit and implicit subsidies,” ACI wrote, “represent welfare for the rich at the cost of all taxpayers.”

In their report, ACI warns policymakers that “incentives designed to encourage electric vehicle ownership can have adverse consequences on society that outweigh their benefits.” Let’s hope they get the message before our nation’s highway arteries are clogged with these heavily polluting vehicles.