Electric School Buses Aren’t Cutting It In Michigan’s Cold Winter

Between the federal government, states and municipalities, billions of taxpayer dollars have been spent adding electric buses to transit fleets across the United States to supposedly reduce carbon dioxide emissions. However, these electric buses are sitting unused as they are broken-down and either cannot be fixed, are too expensive to fix, or have been scrapped altogether.

Officials in Asheville, North Carolina, recently expressed frustration that three of the five e-buses the city purchased for millions in 2018 are now sitting idle due to a combination of software issues, mechanical problems and an inability to obtain replacement parts. The Denver Gazette reported that two of the four e-buses the Mountain Metropolitan Transit in Colorado Springs acquired in 2021 are not running. They cost $1.2 million each, mostly paid for by government grants. A major part of the problem is the manufacturer of the buses, the Biden Administration- backed Proterra, filed for Chapter 11 bankruptcy in August. Founded in 2004, the company became the largest e-bus company in the United States, representing nearly 40 percent of the market prior to filing for bankruptcy. Since the bankruptcy filing, it has been impossible to get parts. Department of Energy Secretary Granholm was one of their celebrity shareholders, while Vice President Harris was an outspoken advocate for EV school buses.

However, cities had problems with the company’s buses long before then. In 2020, The Philadelphia Tribune reported SEPTA’s entire $24 million fleet of 25 buses manufactured by Proterra had been pulled out of commission–the third-largest fleet of all-electric buses in the United States at the time. In September 2021, the Daily Bulletin out of California reported that “As of August, Foothill Transit, based in West Covina and serving the San Gabriel Valley, parts of Los Angeles and Pomona Valley, had 13 idled battery-electric buses out of 32 in its fleet. At one point, the agency indicated up to 67% of its electric buses were not operating during 2019 and 2020.”

Other cities were also struggling with idled electric bus fleets. In November 2022, the entire fleet of Proterra electric buses in Louisville had not operated in two years for which the city had paid $9 million.  In Austin, Texas, the city’s Capital Metro entered into a $46 million deal with Proterra in 2020 for the company to build 40 e-buses. Capital Metro has six of them in operation while they await another 17 that have been built but are sitting in Proterra’s South Carolina factory because chargers for them are not yet available. Broward County, Florida, purchased 42 e-buses from Proterra for $54 million, and the first batch operated for an average of 600 miles before breaking down, while the second batch averaged 1,800. For comparison, the county’s much less expensive diesel buses average 4,500 miles between failures.

The Fiasco Goes On

The U.S. Environmental Protection Agency (EPA)’s Clean School Bus Program is spending $5 billion over five years, 2022 to 2026, underwriting electric buses for schools that could not afford them otherwise. The funding requires low income and rural school districts, school districts in areas most affected by air pollution, and other environmental justice factors to be prioritized in allotting the funds. Priority districts are eligible for funding up to the full cost of 25 buses and the necessary chargers. So far, the EPA has spent $1.84 billion from the fund, on 5,103 electric buses. That averages out to more than $360,000 per bus—3 to 6 times more than diesel buses that cost between $65,000 and $100,000 each.

Michigan Governor Gretchen Whitmer wants Michigan to build the infrastructure for 2 million electric vehicles by 2030. Her plans to overhaul the state’s 8,800-vehicle fleet, however, will not be complete until 2040—a decade later. Portions of Michigan’s 17,000 school buses will transition to electric ahead of the state government fleet. Michigan is getting $125 million from EPA to help school districts buy electric school buses. That means Michigan’s $125 million will buy less than 350 electric buses. To replace all 17,000 school buses in the state, it would take more than $6 billion, leaving school districts with expensive and frequent repairs.

Ann Arbor Public Schools was an early adopter of the electric school bus. Officials have admitted  that the onboarding of just four electric school buses has been a struggle due to cost, downtime and performance issues. The e-buses cost five times what a regular bus would cost, while the charging infrastructure was four times more expensive than estimated. Besides the cost of the e-bus, there is another $1,200 to $12,000 or more for a basic EV charger and infrastructure-related costs.

The EPA identified 297 “priority districts” out of Michigan’s over 800 traditional and charter districts for the grant program, primarily in rural and low-income areas. Non-priority districts are also able to apply for funding, but would only receive $250,000 per bus and $13,000 per charger, which would make the school district’s cost of a new electric bus comparable to the price of a diesel bus.

The Michigan school districts have concerns about battery capacity, charging infrastructure, the state’s brutal winters and ease of maintenance. Different models of electric school buses have a range of 70 to 200 miles on a full battery, while diesel buses can go over 500 miles on a full tank. Unlike diesel-powered vehicles, the range for electric buses drops in the winter. Batteries reduce their range in winter because some of their energy is used to heat up the cabin, a necessity where harsh winters are the norm. The range drops quite a bit when it is very cold so in a rural area one needs to be cautious when traveling long distances characteristic of rural areas. Charging several times a day can help deal with range matters but if the buses need to go to events where there are no charges, the situation becomes difficult and additional costs are required for reliable backup.

Conclusion

The Biden administration is pushing electric buses on cities and schools to further its climate agenda. However, there are problems with the program including initial cost of the e-buses, ability to get parts, and bankruptcy from one of the major manufacturers and suppliers, resulting in many e-buses sitting idle. The school bus program also has issues including cost of the e-bus, which can be 3 to 6 times more than a diesel bus; range, which is just 15 to 40 percent of a diesel bus’s range; availability of charging stations; and weather degrading battery capacity, thereby reducing range. Nevertheless, Biden’s EPA is handing out money and eligible school districts are accepting the funds and purchasing e-buses.


*This article was adapted from content originally published by the Institute for Energy Research.

European Carbon Prices Elicit Revolts Across The Continent

Farmers in the Netherlands blocked roads with their tractors to revolt against Europe’s increasingly stringent climate policies, and farmers in Germany and France have risen to the fight against rising diesel prices to protect their livelihoods and culture and ensure that Europeans have food on their tables. Demonstrations first broke out in the Netherlands in 2019 over government demands that livestock production be halved in order to reduce nitrogen oxide emissions. In the wake of farmers’ protests, the Farmer-citizen movement (BBB) was set up in 2019. The party stunned Dutch politics last year by winning big in the upper house of parliament after provincial elections. The BBB aims to fight government plans to slash nitrogen emissions by dramatically reducing livestock numbers and buying out thousands of farms. Now, the fight turns to other agricultural countries in Europe.

The German Situation

Farmers clogged Berlin streets with 4000 tractors, honking their horns in protest to a plan to cut tax breaks on diesel, for a demonstration at the landmark Brandenburg Gate. Convoys of tractors and trucks gathered on roads in sub-zero temperatures in nearly all 16 federal states. Farmers blocked highway entrances and slowed traffic across Germany with their protests, intent on pushing Chancellor Olaf Scholz’s government to abandon the planned cuts entirely as they have no alternative to diesel to fuel their tractors. But they are not satisfied with concessions the government announced on January 4, when it watered down its original plan, stating that a car tax exemption for farming vehicles would be retained and the cuts in the diesel tax breaks would be staggered over three years — a 40 percent cut this year, with another 30 percent cut in each of the next two years.

The cuts were part of a package agreed to by leaders of Chancellor Olaf Scholz’s three-party coalition to fill a 17 billion-euro ($18.6 billion) hole in the 2024 budget. The budget was revamped after Germany’s highest court in November annulled an earlier decision to repurpose 60 billion euros (almost $66 billion) originally meant to cushion the fallout from the COVID-19 pandemic for measures to help combat climate change and modernize the country. The measure failed due to Germany’s strict self-imposed limits on running up debt, and occurs when Germany is the worst performing major world economy, in part because of its climate and energy policies.

The farmers say that the two tax breaks currently saves them about 900 million euros ($980 million) per year, and cutting the tax breaks will unfairly burdens them and will drive them out of business. But the farmers want more than just changes to the current plans. They claim that in recent years and decades, they have been beaten endlessly with more and more requirements, tighter rules and restrictions. Further, while they have more and more requirements imposed upon them, more food is coming from abroad that is produced below German standards.

Germany’s budget deal also included an abrupt end to subsidies for buying new electric cars, which originally were due to stay in place until the end of this year. The Economy Ministry announced an end to new EV subsidy applications with less than two days’ notice. Germany also raised its levy on carbon dioxide emissions from fossil fuel by more than previously planned at the start of the year, which is expected to impact prices for gasoline, diesel, natural gas and heating oil. The carbon dioxide price increased to 45 euros (about $49) per metric ton of emissions from the previous 30 euros. The government had planned a smaller increase to 40 euros a metric ton before the budget change.  For comparison, the Biden Administration has proposed a $190 per ton “social cost of carbon” for its decision-making on climate-related programs.

The French Situation

Farmers spent weeks protesting across France with irate farmers recently blocking a major highway out of Paris. French Prime Minister Gabriel Attal announced a series of measures to ease financial and administrative pressure on farmers. The French government dropped plans to gradually reduce state subsidies and tax reductions on agricultural diesel to quell the unrest that had farmers spray manure over a public building and supermarket, dump hay bales in highways and empty the contents of trucks carrying fresh produce from neighboring countries. But angry farmers surrounding Paris still threatened to converge on the capital in their tractors because the new prime minister had not responded to all of their issues.

According to the prime minister, a plan to phase out state support on diesel would be scrapped, a planned trajectory of increasing tax on non-road diesel fuel would be stopped, red tape would be simplified and an appeal would be lodged with the European Union for a waiver on bloc-wide rules to force farmers to leave some of their land fallow. France would remain opposed to signing the Mercosur free-trade deal, which farmers say will flood the country with cheaper Latin American meat and produce. France is the European Union’s biggest agricultural producer.

EU Policies Drive the Discontent

The European Union has set measures to revamp its €55 billion Common Agricultural Policy (CAP) and make it more “ sustainable.” More than 70 percent of that money is spent on direct payments to farmers as a safety net. The revamp includes an obligation to devote at least 4 percent of arable land to non-productive features, as well as a requirement to carry out crop rotations and reduce fertilizer use by at least 20 percent. Farmers argue that these measures will make the European agricultural sector less competitive against imports. They are also worried that inflation has dramatically reduced the value of their direct payments, forcing farmers to do much more with less support.

Ukraine’s War has Made Matters Worse

Russia’s invasion of Ukraine in February 2022 all but blocked off trade routes in the Black Sea through which Ukrainian agricultural products were shipped. The EU temporarily lifted restrictions on imports from Ukraine – allowing its agricultural produce to flood European markets. Ukraine’s agricultural sector is huge: an average Ukrainian farm is about 1,000 hectares (2,471 acres); its European equivalents measure on average only 41 hectares (about 100 acres). Prices in neighboring countries such as Hungary, Poland and Romania suddenly dropped, and local farmers were left unable to sell their crops. By spring 2023, tractors were blocking the Polish roads that had been lined with volunteers welcoming Ukrainians refugees a year before.

The EU imposed trade restrictions on Ukraine’s exports to its neighbors, but only for a limited period. When the ban expired, the governments in Budapest, Warsaw and Bratislava announced their own restrictions. Ukraine filed a lawsuit, relations soured and compassion for Ukraine took a backseat. Now, Eastern European countries are demanding the EU definitively revises its trade liberalization measures with Ukraine. In Poland, farmers kicked off a nationwide protest on January 24 against Ukrainian agricultural imports saying Ukrainian grain should go to the Asian or African markets, not to Europe. Similar sentiments are being echoed in Slovakia and Hungary. Poland’s Prime Minister Donald Tusk has promised to meet Ukrainian representatives in early March to come to a deal to regulate the transit and export of products.

Conclusion

The EU and countries in Europe are making concessions after their farmers protested against EU climate policies and issues relating to agricultural products from Ukraine. But for farmers across Europe who feel forgotten, betrayed or unable to feed their families, it is unlikely to be enough. Opposition parties are gaining in European elections this year as residents feel they have had enough of policies that hurt their livelihood and well-being.


*This article was adapted from content originally published by the Institute for Energy Research.

The Unregulated Podcast #167: The Full Yang 

On this episode of The Unregulated Podcast Tom Pyle and Mike McKenna fact check some of the recent statements from the White House and discuss the American public’s appetite for electric vehicles and the world’s appetite for American oil and gas.

Links:

Democrat Lawmaker Threatens Jail For Owners Of Gas Powered Lawnmowers

A Washington state legislator has introduced a House bill to prohibit new gas-powered outdoor equipment beginning in 2026. New gas-fueled lawnmowers, chainsaws, rototillers, weed whackers, log splitters, leaf blowers, pressure washers, stump grinders, wood chippers, snow blowers and other equipment with 25-horsepower or less would be banned. The legislation, House Bill 1868, also would exempt electric-powered equipment from sales taxes and provide $5 million a year to local governments to replace gas equipment. The ban would add to Washington’s existing ban on new gas- and diesel-powered cars and pickups beginning with 2035 models and plans to ban new gas and diesel heavy-duty trucks beginning with 2036 models. Washington’s proposed bill would allow federal, state and local governments to use gas-powered equipment to fight fires, clean up oil spills and respond to other emergencies. But others caught violating the ban would be subject to a $10,000 fine and one year in jail.

According to the Washington Association of Landscape Professionals, while there are advances in electric-powered equipment, a ban would be a problem, especially for smaller businesses. Mid-size electric lawnmowers are more expensive than gas mowers. Businesses might recoup the investment in the long run, but spending the money upfront would be hard. According to the Orange County Register, commercial-grade electric-powered gear can cost anywhere from 15 percent to 300 percent more upfront, before factoring in the cost of batteries, chargers and potential electrical upgrades needed to keep them running all day. For example, an electric sit-down lawn mower could cost $30,000 versus a $12,000 gas-powered version.

There is also the issue of the practicality of plugging in field equipment or having enough battery power to work all day. It will take landscapers significantly more time to do the same amount of work due to inefficient battery-powered tools. Battery life and power cannot meet the demands of larger or more intensive landscaping projects. Landscapers also would need to upgrade electrical systems in their shops to handle the voltage needed to charge zero-emissions gear.

And while electric equipment has advanced, electric leaf blowers are still ineffective in moving wet leaves and the technology is not cost-competitive. While the proposed bill would allow the Department of Ecology to delay banning gas-powered equipment if electric options were not feasible, it might not consider the higher costs involved.

According to the Washington Contract Loggers Association, electric chainsaws will not work for the logging industry. While electric chainsaws could work for homeowners and possibly some light landscaping, they are not efficient enough or productive enough for commercial operations. Large commercial chainsaws would fall under the purview of the bill as they are generally under 25 horsepower. The association also sees less-powerful electric chainsaws as dangerous.

The ban would also have a disproportionate impact on Latino and black business owners as 22.8 percent of landscaping companies are owned by Hispanics and 14.7 percent are owned by blacks. The financial burden could disproportionately affect minority-owned businesses, potentially leading to a reduction in diversity within the industry. In California, where immigrant and non-White residents make up higher shares of lawn care workers, a state lawmaker introduced a bill that would let businesses recoup 40 percent of costs to buy electric/battery gardening equipment. California just started implementing its own law which is similar to Washington’s proposal.

According to the California proposed bill, landscape businesses could write off up to 40 percent of what they spent the prior year to buy the gear, including plug-in or cordless tools plus any batteries or chargers that power those tools. The credit also could be used to help upgrade existing equipment to make it zero-emission. Businesses could get up to $25,000 back on purchases each year, for no more than $100,000 in credits over a 10-year period. And the credit would apply to any equipment purchased on or after January 1, 2023.

Conclusion

California was the first state to mandate the forced electrification of vehicles and the banning of new gas-powered outdoor equipment. California air quality regulators voted in December 2021 to ban the sale of new gas-powered leaf blowers, lawn mowers, weed trimmers and chainsaws starting January 1, 2024. Washington state is following in those footsteps, but adding jail time and fines for violators of its proposed bill. Both the logging and landscape industries see the proposal as unworkable for their industries due to the higher cost of electric equipment, the impracticality of plugging the equipment in at work sites and/or hoping that the battery would last all day without needing duplicate equipment. Further, they claim that electric equipment is not efficient enough or productive enough for their operations. Diversity is also a factor as many landscaping companies are owned by Latinos or blacks. Legislators seem to think they know more about small businesses and their business than the owners and employees of these operations.  In reality, few of them know much about hard work, or how to employ the best tools to get that work accomplished.


*This article was adapted from content originally published by the Institute for Energy Research.

Biden’s Disastrous Anti-LNG Policy Dictated By TikTok Influencers

The Department of Energy is examining whether regulators should take climate change into account when deciding whether a proposed gas export project meets the U.S. national interest. The Energy Department is weighing whether to issue a permit for a gas export plant in Louisiana known as Calcasieu Pass 2 (CP2), one of 17 proposed LNG export terminals. The plant would ship up to 24 million metric tons of gas abroad each year from a 546-acre site in Louisiana’s Cameron Parish. The export terminal is also awaiting a determination from the Federal Energy Regulatory Commission (FERC), whose permission is needed to build interstate pipelines and LNG facilities after it assesses their environmental impact and determines whether the project is needed by the market.

The CP2 project has had several delays as FERC has requested more data for its environmental review, after anti-fossil energy groups began a campaign to stop them. Notably, the Biden administration invited a 25-year-old TikTok “influencer” involved in the campaign to the White House to share his policy “expertise” with the White House Climate Team and relevant decision makers before making a final decision.

The Department of Energy, which is responsible for issuing the export permits, is reassessing whether it is properly accounting for the climate impacts from proposed projects, as well as the national security and the domestic economic consequences. This could include updating how the administration determines climate impacts of the projects, modernizing and updating the climate impact considerations, and considering the full upstream and downstream life cycle impacts of the projects. The Energy Department has never rejected a proposed natural gas project on these grounds. Since 2012, the Energy Department commissioned three studies on the impact of gas exports focusing on the economics of the trade. Those previous reviews had consistently found gas exports benefited the public.

The decades-old Natural Gas Act requires the Energy Department to consider whether a project is in the public interest before granting approval for an application to export natural gas to a country that does not have a free trade agreement with the United States. That export permit is needed for exporters to raise the funds to build the pipelines and compressors that bring the natural gas to the coast and chill it to minus-259 degrees Fahrenheit to turn it into liquid for transport on ships.

Gas exports increased almost four-fold during the past decade as U.S. gas production surged, turning the United States into the world’s largest natural gas exporter and helping Europe replace Russian gas shipments after Russia’s invasion of Ukraine. There are currently eight LNG export plants operating in the United States with another seven approved but still under construction.

Biden, however, faces growing pressure from environmental groups to achieve his pledge of transitioning away from fossil fuels. Without LNG exports, it may be unlikely that Biden can keep European nations united in support of Ukraine after deliveries of Russian gas to the region dropped in 2022 and someone blew up the Nord Stream 2 pipeline. Also, slowing down the approval of new projects could scare away potential customers in allied countries such as Japan and South Korea. U.S. LNG has helped foreign countries reduce the amount of coal they burn to produce electricity, resulting in lower carbon dioxide emissions. It is not a resource scarcity issue for the United States as it has enough natural gas resources in Pennsylvania, Texas and other states to support both foreign and domestic markets.

The $10 billion CP2 would be far larger than other existing U.S. LNG export terminals. It would be sited on a shipping channel that connects Lake Charles to the Gulf of Mexico and its export volume would increase U.S. gas exports by about 20 percent. The  project is part of a $21 billion investment into providing domestic natural gas to international markets, and will provide economic benefits to the region as well as good-paying construction jobs. Venture Global, the company behind CP2, had hoped to start building by 2026, and is requesting a permit to operate until 2050.  President Biden has an unrealistic goal for the United States to have zeroed out its carbon emissions by then.

U.S. LNG export capacity is expected to increase from around 84 million metric tons per year in 2023 to over 181 million metric tons per year in 2030, accounting for nearly 30 percent of global LNG production in that year. The United States has increased LNG supplies to Europe by about 30 billion cubic meters per year, about 60 percent to 70 percent of its 2030 goal.

Conclusion

The Biden administration is kowtowing to TikTok influencers and environmentalists by having his Department of Energy undertake a review of LNG export terminals and the climate considerations for their approval. The review would create uncertainty about whether U.S. allies can rely on U.S. LNG for their energy and could shock the global energy market that relies on U.S. energy dominance and supply. A delay of a decision on CP2 until after the November 5, 2024, U.S. presidential election could spare President Biden from criticism from environmentalists, but it could cause havoc to markets and the energy security of our allies who may question the reliability of the United States as a secure energy supplier.


*This article was adapted from content originally published by the Institute for Energy Research.

Team Biden Sides with Green Donors and TikTok Influencers Over the American People


The President of the United States is breaking his word with our allies and weakening NATO


WASHINGTON, DC (1/26/24) – Today, the Biden administration suspended decisions on export permits for liquefied natural gas (LNG) facilities while the Department of Energy “reassesses” whether it is properly accounting for the climate impacts from proposed projects.

This election year gimmick immediately impacts Department of Energy approval of the Calcasieu Pass 2 (CP2) gas export plant in Louisiana, which would ship up to 24 million metric tons of liquified natural gas abroad each year. The plant is also awaiting a determination from the Federal Energy Regulatory Commission (FERC), which has already been delayed by additional requests for environmental review.

In response to this decision, AEA President Thomas Pyle issued the following statement:

“With this decision, President Biden is choosing to placate his green donors over the American people and our allies abroad. Delaying these projects until after the November presidential election might spare President Biden from criticism from his environmentalist donors and TikTok influencers, but it will likely wreak havoc on markets and the energy security of our allies who may question the reliability of the United States as a secure energy supplier.”

Additional Resources:

The Unregulated Podcast #166: Forward Down the Field The Unregulated Podcast

On this episode of The Unregulated Podcast Tom Pyle and Mike McKenna discuss the left’s war on coffee and modern life, as well as the latest from the 2024 race for the White House.

Links:

List Of Auto Dealers Pushing Back On Biden’s EV Agenda Nears 5,000

Almost 5,000 auto dealers nationwide wrote to President Biden, urging him to slow down his aggressive push to force automakers to produce and sell electric vehicles. His administration has proposed fuel economy and tailpipe emissions standards that would require two-thirds of the cars sold in 2032 to be electric, increasing consumer costs and unfairly burdening U.S. businesses. Earlier this year, the Environmental Protection Agency’s (EPA) proposed tailpipe emissions standards that are the most aggressive federal regulations of their kind, forcing the majority of new vehicle purchases to be electric within a decade. That rule was followed by the Department of Transportation’s proposed efficiency standards that have the same resulting sales figure for electric vehicles. According to auto dealers, electric vehicle demand today is not keeping up with the large influx of electric vehicles arriving at the dealerships due to the current regulations, and the vehicles are stacking up on their lots even with deep price cuts, manufacturer incentives, and generous government incentives. Some dealers are now backed-up, taking up to 12 months to sell electric vehicles that consumers do not want. Profits on the sale of internal combustion engine (ICE) vehicles are being used to cover some of the losses auto makers are accruing on the electric vehicles they produce.

Map of supporting dealerships. Courtesy of EV Voice of the Customers

Map of supporting dealerships. Courtesy of EV Voice of the Customers

The dealers tempered their letter by saying that Biden’s goals were admirable, but “unrealistic based on current and forecasted customer demand,” as the best indicator of demand is how electric vehicles are stacking up on dealer lots. There are many issues facing the EV industry such as lack of charging infrastructure, energy grid instability and lack of reliable mineral supplies vital for EV batteries. Biden needs to allow time to make electric vehicles more affordable, to develop the domestic mineral resources that are needed to make batteries, to build the charging infrastructure and prove its reliability, and for American consumers to get comfortable with the technology and make the choice to buy an electric vehicle. Biden’s current policy is to compel manufacturers to make increasing numbers of electric vehicles Americans do not want to buy.

Further, switching too quickly to electric vehicles could present a national security risk given China’s dominance of the global EV industry. China produces about 75 percent of lithium-ion batteries, 70 percent of production capacity for cathodes and 85 percent for anodes, two key parts of such batteries.  And, more than 50 percent of lithium, cobalt and graphite processing and refining capacity is located in China — minerals vital for EV batteries and other green energy technologies. China has also purchased stakes in African mines to ensure a firm control over mineral production. Knowingly forcing the manufacture and purchase of vehicles dependent upon China is a national security threat.

The enthusiasm of the early EV adopters has petered out, as the more wealthy Americans who can afford the higher cost of an electric vehicle already have made that purchase. Further, the current EV technology is not adequate to support the needs of the majority of consumers, who are concerned about price, and range, especially issues with range loss due to factors including temperature changes due to the effects of cold and heat on battery performance. Many customers do not have garages or access to public charging stations, making a transition to an electric vehicle difficult.

Auto makers are also struggling to electrify the bulk of their fleets as quickly as the Biden mandates demand, despite having produced a wide variety of EV options. Automakers recently have been adjusting to consumer reality. General Motors pushed back its EV targets and postponed a new EV lineup in an effort to preserve profitability; Ford postponed around $12 billion in planned EV investments; Toyota remains convinced of the value of hybrids and Tesla is in a price war to entice consumers.

EV Sales Continue to Rise

EV adoption is steadily increasing, despite overwhelming consumer sentiment regarding the state of the technology and its infrastructure.  EV sales were a record 7.9 percent of total car sales in the third quarter. S&P Global Mobility, however, recently reported a significant drop in the percentage of people open to purchasing an electric vehicle compared to 2021, due mainly to consumer finances as inflation has eaten into consumer pocketbooks and interest rates for auto loans remain high. About 50 percent of respondents in the S&P survey consider EV prices too high, despite the significant price cuts that the market has experienced in recent months. In 2019, 58 percent of respondents said they were open to purchasing an electric vehicle, with that number increasing to 86 percent of respondents in 2021. As of May 2023, however, that number fell to 67 percent, indicating a reduction in growth, but not an erasure of growth.

Biden’s Proposed EV-Related Standards and Rules

EPA’s proposed tailpipe regulations will impact car model years 2027 through 2032. Under the regulations, 67 percent of new sedan, crossover, SUV and light truck purchases, up to 50 percent of bus and garbage truck purchases, 35 percent of short-haul freight tractor purchases, and 25 percent of long-haul freight tractor purchases are expected to be electric by 2032. Biden previously set a goal of ensuring 50 percent of car purchases to be electric by 2030.

The Department of Transportation’s National Highway Traffic Safety Administration’s (NHTSA) proposed Corporate Average Fuel Economy (CAFE) standards require an increase in fuel efficiency of 8 percent annually for model years 2024 to 2025 and 10 percent for model year 2026. Beginning in 2027, passenger cars and light trucks are required to improve fuel efficiency 2 percent and 4 percent annually, respectively. Under the rules, pickup trucks and work vans must increase fuel efficiency 10 percent every year starting in 2030. By 2032, average U.S. fleet fuel economy could reach 58 miles per gallon. According to the Environmental Protection Agency, the estimated average fuel economy for model year 2022 cars was 26.4 miles per gallon, meaning the proposed standards would mandate automakers more than double fuel efficiency in less than a decade or face substantial penalties.

According to NHTSA’s analysis, Ford would likely pay $1 billion in civil penalties if NHTSA’s proposal were finalized. Under NHTSA’s proposal, automakers face risks of substantial civil penalties because they hold a major portion of the market share for light-duty trucks. General Motors and Stellantis, the two other major American car companies, face much higher civil penalties than Ford. The money paid in civil penalties could be invested more wisely toward the transition to electric vehicles, toward higher wages for workers, or toward any number of other policy objectives. By comparison, in the entire history of the CAFE program, the total civil penalties paid for light-duty fleets amounts to less than $1.5 billion. NHTSA received more than 62,900 public comments related to its proposed fuel economy regulations.

According to the Alliance for Automotive Innovation, an industry group which represents many major automakers, companies will pay more than $14 billion in non-compliance penalties under the proposal, impacting one in every two light trucks in 2027 to 2032, and one in every three passenger cars in 2027 to 2029. Car prices are expected to increase by thousands of dollars. Automakers cannot afford to make the investments necessary to reach the Biden Administration’s goal of 50 percent EV sales by 2030, while also making major investments in internal combustion engine (ICE) vehicles. Costs of vehicles for Americans which are already high will rise further, pricing many consumers out of the market entirely.

Conclusion

Auto dealers are warning Biden that they cannot transition to electric vehicles as quickly as he wants as in some cases 12 months of electric vehicles are sitting on their lots. Despite a continued increase in EV sales, the initial hype and purchases of electric vehicles have fizzled out as early adopters have received their vehicles. More prudent buyers are worried about cost, interest rates on loans, range, charging infrastructure, and other issues. Auto dealers and auto makers want Biden to slow down his aggressive mandates on manufacturers to produce electric vehicles.

They claim that Biden’s proposed vehicle tailpipe and efficiency rules are impractical and work against industry, agency and administration electrification goals. The mandates will increase costs to the American consumer with absolutely no environmental or fuel savings benefits. The resulting price increase is likely to decrease sales and increase the average age of vehicles on U.S. roads. In the past, profits from existing ICE vehicles funded investments in the next generation of ICE vehicles, and are currently being used to fund the transition to electric vehicles. Auto makers cannot afford to pay billions of dollars in civil penalties for non-compliance and yet continue to improve the efficiency of gas vehicles and make improvements to electric vehicles that will make them more conducive to American buyers.


*This article was adapted from content originally published by the Institute for Energy Research.

Joe Biden Coming For Your Appliances

The Biden administration recently unveiled regulations targeting multiple home and commercial appliances, which will impact the pocketbooks and comfort of millions of Americans. Biden’s Department of Energy (DOE) finalized new energy efficiency standards for residential refrigerators and freezers and proposed standards for commercial fans and blowers. DOE’s standards for refrigerators and freezers will be implemented between 2029 and 2030, and take less efficient and less expensive models off the market, limiting consumer choice. The standards for fans and blowers are the first federal regulations targeting those appliances. According to DOE, the proposed standards “follows the lead” of efficiency standards established by California—a state whose regulations and standards the Biden administration likes to imitate.

The Biden administration tends to inflate the benefits of its analyses by using assumptions that provide the answers it wants. For example, in EPA’s power plant rule, the administration assumed that technologies such as hydrogen and carbon capture and sequestration were currently available to reach the conclusions they wanted. Refrigerator standards are much like dishwashers and clothes washer standards where there have been so many revised standards over the decades that they come at diminishing returns or negative returns. In the past, some standards have increased the upfront cost of the appliance more than the projected savings from lower energy costs.

Regardless, the Biden administration finds positive returns to support the finalization of its standards due to hidden assumptions in its models, which result in higher cost products for Americans that may not work as well. For example, new standards for dishwashers have led to cycles taking as much as twice as long to finish. The new DOE standards take choice away from American consumers, who can decide for themselves what is best for their needs. The standards substitute consumer choice for authoritarian dictates, not only for consumers, but also for manufacturers.

Biden’s Copious List of New Standards

According to DOE, the administration proposed or finalized a total of 30 regulations in 2023 as part of President Biden’s climate agenda and has pledged to continue moving forward with more regulations in 2024. According to experts, the Biden administration’s energy efficiency actions will ultimately harm consumers and drive prices higher since manufacturers will be forced to adopt newer technologies to achieve the standards that do not necessarily benefit consumers. For example, DOE’s efficiency standards for stovetops proposed in February compromises some of the features that gas stove users want, while saving an insignificant amount of energy. According to the agency’s analysis, those standards would effectively ban half of all available gas stoves.

After DOE released its proposed stovetop regulations, it proposed regulations for clothes washers and refrigerators in February; finalized standards for air conditioners in March; proposed regulations on dishwashers in May; issued a proposal targeting water heaters in July; and proposed standards for furnaces in September. The Biden administration is not just tweaking regulations, it is effectively banning whole categories of appliance that are sold on the market to advance the President Biden’s climate agenda. Green energy groups want to electrify homes and businesses, reducing reliance on natural gas while simultaneously demanding replacement of current fossil fuel-fired power with intermittent and unreliable wind and solar power because the commercial and residential sectors account for over 30 percent of total end-use carbon dioxide emissions in the United States–the largest share of any sector including industry, transportation and agriculture. Fossil fuels, however, allow people to work at jobs and provide Americans with a livable environment in their homes and places of business.

Industry is challenging DOE’s Furnace Standard

The natural gas industry is challenging the Biden administration over its regulations targeting traditional gas-powered residential furnaces. The American Gas Association (AGA), whose members provide natural gas to more than 74 million customers nationwide, several trade associations and one manufacturer recently filed the legal challenge against the Department of Energy (DOE) over the regulations.
The DOE’s finalized regulations, which are slated to go into effect in 2028, require furnaces to achieve an annual fuel utilization efficiency (AFUE) of 95 percent, meaning manufacturers would only be allowed to sell furnaces that convert at least 95 percent of fuel into heat within six years. The current market standard AFUE for a residential furnace is 80 percent.

Because the regulation effectively bans the sale of a large number of gas furnaces that consumers want, AGA said that DOE needs a solutions-oriented approach to energy conservation that protects consumers and ensures continued availability of low-cost, low-emission natural gas furnaces. According to AGA President and CEO Karen Harbert its 114 pages of comments have been summarily ignored by DOE. The regulations impact 55 percent of American households and would lead to higher costs for 30 percent of senior households, 27 percent of small businesses and 26 percent of low-income households.

Conclusion

The finalized and proposed standards will increase the demand for electricity and with it the cost of electricity to consumers. Residential electricity prices have increased 21 percent since Biden took office as his climate agenda is attempting to replace coal and natural gas generators with mostly intermittent and unreliable wind and solar power. While the displacement has retired a large number of coal plants and some gas plants, the share of coal and gas power to the total has only declined by a single percentage point since Biden took office as the capacity factors of wind and solar power are much lower than fossil fuel plants. But it has affected the reliability of the power grid, with little new firm capacity that can reliably meet new demand, as Senator Joe Manchin points out below.

Senator Joe Manchin, a Democrat from West Viriginia and Chairman of the Senate Energy and Natural Resources Committee has pushed back against the Biden administration’s regulations targeting home appliances. Manchin criticized DOE’s aggressive energy efficiency rulemakings, arguing the agency should allow the free market to improve product technology rather than force such changes through regulation. According to Manchin, “It absolutely shows you how disconnected the [DOE] is with the facts and reality of what’s happening to the grid system.” “We’ve had so many warnings from [the Federal Energy Regulatory Commission] and [North American Electric Reliability Corporation] and everybody else that the grid is strained to say the least.” “And we’re taking more dispatchable power off the grid. That means 24/7, mostly fossil — because of the movement of this administration. It is putting us in the danger zone, the grid,” he continued. “With all the movement and demand for more electric appliances that would take the place of gas whether it be a stove or furnace. It absolutely makes no sense and is not in check with reality. Absolutely not.”


*This article was adapted from content originally published by the Institute for Energy Research.

The Unregulated Podcast 165: Like Father, Like Daughter

On this episode of The Unregulated Podcast Tom Pyle discuss John Kerry’s departure of the Biden administration and the special, special role he, and his family, have played in developing Biden’s policies.

Links: