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Biden Looks To Japan For Green Energy Bailout

April 5, 2023 by Leave a Comment

The United States and Japan reached a trade agreement for critical minerals used in batteries–a deal aimed at allowing Japan to meet sourcing requirements for new electric-vehicle subsidies in the United States and beginning to shift energy supply chains away from China. Under the deal, the United States and Japan agreed not to levy export duties on critical minerals they trade and coordinate labor standards in producing minerals, among other steps. The Biden administration has started pursuing trade deals with close allies on critical minerals as it tries to address the restrictions it has placed on new subsidies for electric vehicles and China’s current dominance of the supply of minerals such as lithium and graphite that are necessary for making electric vehicles. President Biden is pursuing this tact rather than developing critical mineral mines in the United States where he is revoking leases, delaying permits, and adding to the list of endangered plants to stall its development.

Under the Inflation Reduction Act, the requirement for the tax credit for electric vehicles to qualify for the full $7,500 is that much of the minerals in the vehicle’s battery must come from the United States or a country with a free-trade agreement with the United States. Half of the tax credit is reserved for North American-assembled vehicles and batteries, and the other half of the credit is contingent on at least 40 percent of the value of critical minerals in the battery having been extracted or processed in the United States or a country with a U.S. free trade agreement or recycled in North America.

Many close U.S. allies, including Japan, the European Union and the U.K., do not have traditional free-trade agreements with the United States. The pact with Japan builds on a limited trade accord the two countries reached in 2019, which the United States and Japan will review every two years to see if they should end it or change it. The agreement to not impose export duties on trade in lithium, cobalt, manganese, nickel and graphite —all strategically important minerals — is a boon for Japanese automakers and companies like Panasonic, one of the biggest battery makers. A majority of global lithium production comes from China, Australia, Argentina and Chile; Russia dominates the global nickel market; and the Democratic Republic of Congo is the world’s largest cobalt producer.

The Biden administration worked the deal with Japan in such a way that minerals from there will now meet the sourcing requirement for the new tax credit—while not having to launch negotiations over broader trading issues that could prove lengthy and difficult to finalize. Biden administration officials believe Japan, which already processes and refines critical minerals, could become a major part of an overhauled supply chain for the goods. The United States is also negotiating a similar trade agreement with the EU, with plans to also try and strike a deal with the U.K.

Since the Biden administration is using executive authority to reach an agreement with Japan, it will not submit it to Congress for approval. The Biden administration, however, claims to have consulted closely with lawmakers on the agreement. According to a senior Biden administration official, the United States and Japan currently impose no export duties for trading critical minerals between their countries. The two countries also agreed to share information about reviewing foreign investments in the minerals sector.

Lawmakers in both parties, however, have criticized the administration’s push to make the agreement without receiving approval from Congress, calling it a violation of their constitutional authority, although many of these same lawmakers have supported Biden’s climate authorities under the Paris Accord, which has also never been submitted to Congress. According to the Biden administration, meeting climate goals will require a massive cooperative effort among U.S. allies to produce the vast amounts of minerals needed to electrify the global auto market, and the deal includes commitments on environmental standards and worker rights.

Biden administration officials see critical minerals agreements with members of the Group of Seven advanced democracies as the first piece of a broader strategy to reorient global supply chains away from China. Western officials have discussed forming a buyers club for critical minerals, in which G-7 nations would offer financing and other development support to countries such as Zambia that are rich in the resources—an effort to convince these nations to sell their minerals to the West instead of China. Of course, the United States could develop its own critical mineral resources, but that seems to be off the table as President Biden is catering to environmentalists, who do not want mining to take place in the United States, but push relentlessly for “green” policies requiring the use of significantly more critical minerals.

The Treasury Department is expected to release details about tax credits and adjustments to the law soon. According to the Biden administration, the Treasury Department is expected to define sourcing requirements for the EV tax subsidies by the end of March in guidance awaited by automakers, miners and battery producers. Billions, and perhaps hundreds of billions of dollars in tax credits are at stake in this decision.

Conclusion

According to the United States Geological Survey, the United States is endowed with critical minerals needed in electric vehicles and their batteries, as well as defense equipment, wind turbines and solar panels. Yet, the Biden Administration is revoking leases, delaying permits, and listing plants as endangered species to hinder critical mineral mine development to please its environmental friends, who do not want mining to occur in the United States while calling for the use of technologies requiring multiples of additional minerals consumption.

To show that the administration is not in China’s clutches for critical minerals, despite that country’s dominance, the Biden administration is undertaking agreements with its allies to allow them to qualify for tax benefits under the Inflation Reduction Act, despite the fact that these are trade agreements that should be approved by Congress. President Biden is wielding his Presidential authority as if he is ruling an authoritarian country and hurting the U.S. economy in doing so.

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

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Joe Manchin Is The Senate’s April Fool

April 1, 2023 by Leave a Comment

Senator Joe Manchin, Chairman of the Senate Energy and Natural Resources Committee, is not happy about how his wording in the Inflation Reduction Act is being interpreted by President Biden’s Department of the Treasury.  Treasury’s proposal allows a much wider claim on the electric vehicle tax credit than he says he intended. The Treasury Department is offering U.S. automakers leniency in being able to use more foreign-sourced minerals and battery parts without losing the tax break and allowing European and Japanese companies to get a piece of the incentives. The proposal takes effect on April 18, giving automakers and consumers two more weeks before the new restrictions from the Inflation Reduction Act take place. After that date, fewer electric vehicles will qualify for the full tax credit than the number of models eligible under the old law, but more than was the intent of the Inflation Reduction Act.  Its stated intent was to build the industry in the United States and not rely on China, which dominates the EV battery supply chain currently. Senator Joe Manchin called Treasury’s guidance a horrific giveaway to foreign suppliers.

According to the Inflation Reduction Act, to qualify for $3,750 of the credit, an increasing share of a vehicle’s battery minerals such as lithium and nickel has be extracted or processed in the United States or in a country with which the United States has a free-trade agreement. The other half of the credit is supposed to be available only for vehicles in which a majority of its battery components are made in North America, starting at 50 percent this year and up to 100 percent by 2029. Few EVs currently on the market are expected to qualify for even half of the credit. Automakers including Germany’s Volkswagen have announced plans to expand in North America, seeking certainty their models will qualify for the incentives. Most minerals are mined and processed in countries that do not have free trade agreements with the United States, such as China, Indonesia and the Democratic Republic of Congo. Key battery components—namely, active anode and cathode materials—are mostly produced in China, Japan and South Korea.

According to the Treasury Department’s proposed rules for the tax credit, electric vehicles leased to consumers will be able to qualify for a separate commercial vehicle tax credit, which does not entail sourcing, income or price restrictions. This is a huge loophole, because the law imposed an income limit to qualify for tax subsidies of $150,000 for individual EV buyers, and a price cap for vans, SUVs and pickups ($80,000), and sedans ($55,000). In the Treasury’s determination, dealers or auto finance companies could receive the tax credits or pass them on to customers. EV buyers have typically been high-income individuals, and this leasing loophole will allow them to reap tax subsidies through a backdoor approach.

Treasury is also redefining “free trade agreements” to include one-off deals with countries that commit not to impose trade barriers on critical minerals. The White House has already struck such a deal with Japan and is negotiating deals with Europe. This is a departure from congressionally approved trade agreements in much the same way the Biden Administration has declared the United States subject to the Paris Climate Accord without a treaty vote. Anode and cathode materials in batteries would also be treated as critical minerals rather than components. These changes will allow more vehicles to qualify for both parts of the credit, removing Senator Manchin’s sourcing conditions.

The revision to the rules means that the real cost of the climate and energy subsidies in the Inflation Reduction Act will be far more than the $391 billion that Democrats claimed when they passed the bill. Goldman Sachs estimated recently that the cost of the Inflation Reduction Act could be more than triple the original estimate–$1.2 trillion over 10 years because of the EV tax credits and other provisions of the bill. The Treasury Department is allowing comments on the proposed EV tax credit rule for 60 days.

The full list of qualifying cars will not be published for a couple of weeks and will be updated monthly. Tesla indicated that the least expensive version of its Model 3 sedan, one of the most popular electric cars, would no longer be eligible for the full credit because the car uses a battery made in China. General Motors, on the other hand, indicated that three electric vehicles it plans to sell this year — the Cadillac Lyriq and electric versions of the Chevrolet Equinox and Blazer sport utility vehicles — would qualify for the full credit.

Treasury’s guidance was originally due in December, but the department postponed the proposal’s release until the end of March. In the meantime, it allowed the credit to go into effect without any restrictions on where a vehicle was produced. Since January, electric vehicle buyers have been able to receive the credit as long as they did not exceed an income threshold and the car was below a certain price. The new proposed Treasury rules apply to vehicles picked up by their owners on or after April 17, even though they would not become final until at least June.

In 2024 and 2025, the criteria for the tax credit will become more stringent as provisions go into effect prohibiting the sourcing of any battery parts and critical minerals from “foreign entities of concern” — which should include China. That could be a major hurdle since many top mining companies are partially Chinese-owned or process their minerals in China. Guidance on the “foreign entities of concern” provision from the Treasury will not be released until later this year.

Conclusion

Senator Manchin said his comment “is simple: stop this now—just follow the law.” But the Biden Administration has been bucking the law in every way it can, including avoiding the congressionally enacted Offshore Leasing program, to further its climate agenda.

President Biden has a goal that 50 percent of new car sales in 2030 will be electric and is doing all he can to meet that target, including assuming powers beyond those traditionally exercised solely by the Executive Branch.  In pursuit of his plans for new ways to electrify the United States, President Biden is assuming new powers which previously were held in check and balanced with other branches of the government. According to Manchin, “It is horrific that the Administration continues to ignore the purpose of the law which is to bring manufacturing back to America and ensure we have reliable and secure supply chains.”

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

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New York State Opens New Front In War On Gas Appliances

March 31, 2023 by Leave a Comment

New York will become the first state to pass a law banning natural-gas and other fossil-fuel hookups in new buildings on its way to meeting President Biden’s net zero carbon goals and the state’s own targets for greenhouse-gas reduction. The New York State Climate Leadership and Community Protection Act, passed in 2019, calls for a reduction in economy-wide greenhouse-gas emissions of 40 percent by 2030 and 85 percent by 2050 from 1990 levels.

The ban is to be added to the state’s coming budget, due to be completed this week. Democratic Governor Kathy Hochul outlined an all-electric building mandate in her spending plan, and both chambers of the Democratic-controlled State Legislature included similar proposals in their respective budget outlines. One outcome of the proposals and the forthcoming legislation would be an end to natural gas stoves in new homes, along with other gas-powered appliances such as water heaters, furnaces and clothes dryers. Clearly, this will take away energy options from N.Y. residents as well as affordability and reliability as the nation delves into almost complete electrification from intermittent renewable energy (mostly wind and solar power).

In all proposals, the ban will be phased in with the earliest date being January 1, 2025, to as late as December 31, 2028. The Senate and Assembly proposals exempt uses such as commercial kitchens, hospitals, crematoriums, laboratories and laundromats and the governor’s office indicates a possible range of exemptions. Under New York’s proposals for banning fossil-fuel hookups, people who already have gas stoves could keep them. That would also be true under a separate proposal from Governor Hochul to prohibit the sale of any new fossil-fuel heating equipment and related systems for existing homes and buildings starting in 2030. Most greenhouse emissions in U.S. buildings come from heating: 68 percent of emissions stem from space heating, 19 percent comes from water heating, 13 percent from cooking.

This new mandate is unpopular with N.Y. residents. A recent Siena College poll found that 53 percent of all New York respondents said they opposed it. Reliability and affordability are endangered with additional electrification as exemplified by the December blizzard in Buffalo that caused widespread power outages. Diversity of energy supply choices, which could help to avoid blackouts, would not be allowed under Governor Hochul’s proposal.

Some U.S. municipalities, including many Democratic-led cities in California, have all-electric building mandates, while lawmakers in some Republican-led states have passed laws blocking cities from imposing such requirements. In Florida, Republican Gov. Ron DeSantis urged lawmakers to approve a tax exemption for gas stoves and declared federal officials are not “taking our gas stoves away from us,” after a federal official said the Consumer Product Safety Commission should consider a ban. Since then, the Department of Energy has attempted another approach to the same end, proposing regulations that would make 50 percent of gas stoves in the United States illegal under “efficiency standards.” And, the reality may be worse because one estimate suggests that 95 percent of the market would not meet the proposed efficiency levels. In late 2021, New York City instituted a ban on fossil fuel combustion equipment including stoves, with exemptions for restaurants and other specific uses, in most new buildings under seven stories starting next year and in 2027 for taller buildings.

New York would be the first state to take this action through legislation; California and Washington state have done so through building codes. Last year, the Washington State Building Code Council required heat pumps as the main heating source in buildings. The changes, which take effect in July, allow gas heat pumps and the use of gas supplemental heating.

Gas Stove Usage

As of 2020, about 38 percent of the country’s households used natural gas for cooking. However, there is a wide degree of regional variation in its use. In four states — New Jersey, California, Illinois and New York — approximately 60 to 70 percent of homes cook with natural gas. The percentage is below 20 percent in nine other states, mostly located in the South. Nationally, electricity is the largest source of energy for cooking. Of the 123 million U.S. households surveyed, more than half — 65 million — said that electricity was the most-used source of power for their oven and stove. Electricity is also twice as likely to be the most-used range fuel for households making between approximately $5,000 or less annually to as much as $99,000. Gas is more prevalent when residents are earning $150,000 or more; 5.8 million households at that income level used gas compared with 5.6 million for electric.

A provision in the Inflation Reduction Act, the High-Efficiency Electric Home Rebate Program, offers low-income homeowners up to $840 in rebates for new electric ranges. For moderate-income homeowners, the program also offers rebates of up to 50 percent of the total cost of an electric range. A Consumer Reports survey of about 2,100 people nation-wide showed the following: three percent had an induction stove, 57 percent reported having other types of electric models, and thirty-seven percent had gas stoves. An induction stove—the most efficient electric range—costs about $1,000, and also requires the use of induction-capable cookware which may mean additional expenses for purchasers.

Conclusion

New York wants to be the first state to legislate a ban on gas stoves in new buildings with the hope that other states will follow in order to reach Biden’s goal of net zero carbon, despite the fact that most New Yorkers are not in favor of the action. Sixty to 70 percent of N.Y. homes cook with natural gas. While New York Governor Hochul has not proposed a measure to ban the sale of gas stoves for existing buildings, New York’s climate plan backs such a step in the future. That would be very costly for N.Y. families, and limit the diversity of energy supply at the very time when New York’s energy transition is beginning to show serious shortcomings. The state of Virginia found that a total gas appliance ban in the state would cost families as much as $26,000 for retrofits. States that are looking toward a total natural gas ban should realize that the costs are prohibitive and that eliminating choices for residents is a policy mandate most often found in authoritarian governments.

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

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The Unregulated Podcast #126: Opening Day

March 31, 2023 by Leave a Comment

On this episode of The Unregulated Podcast Tom Pyle and Mike McKenna discuss the highlights from a busy week in Washington and their thoughts on the new season of Major League Baseball.

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Key Vote YES on H.R. 1

March 30, 2023 by Leave a Comment

The American Energy Alliance urges all members to vote yes on final passage of H.R. 1 the Lower Energy Costs Act.

This legislation includes common sense reforms and policy changes which will lower energy costs for Americans and encourage domestic investment in resource development as well as reducing red tape for a broad spectrum of energy and energy-related projects. With persistently high inflation, these types of actions to lower costs are all the more needed. The incremental steps included in H.R. 1 move this country in a more prosperous and secure direction and are worthy of support.

The AEA urges all members to support free markets and affordable energy by voting YES on H.R. 1. AEA will include this vote in its American Energy Scorecard.

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AEA to House: A Job Well Done on Passing H.R. 1.

March 30, 2023 by Leave a Comment

WASHINGTON DC (03/31/2023) – Today, the House of Representatives passed H.R. 1, the Lower Energy Costs Act.

AEA President Thomas Pyle issued the following statement:

“Today, the House of Representatives took an important step in pushing back against President Biden’s war on domestic energy production. H.R. 1 addresses many of the policy priorities that the American Energy Alliance has championed in recent years. The Lower Energy Costs Act will cut red tape and increase domestic energy production to lower energy costs for American families and reduce our dependence on China for important minerals and mineral processing.

By prioritizing energy reform, House Republicans are keeping their promise to fight the Biden administration’s radical approach to energy policy. The passage of H.R.1 is an important first step in pushing back against this harmful agenda, but there is much more work to be done. I look forward to continuing to work with lawmakers to help secure reliable and affordable energy for all Americans.”

The Bill is an attempt to dispel some of the Biden Administration’s anti-oil and gas policies, pipeline permitting delays, and rejections of critical mineral mines such as revoking the leases for the Twin Metals mine in Minnesota and withdrawing lands from mining, despite resources known to be in place.

H.R. 1 will increase the production and export of American energy and reduce the regulatory burdens that make it harder to build major infrastructure in the United States through comprehensive permitting reform. The bill will also expedite critical mineral mining, streamline manufacturing, and make it easier to transport and export American natural gas by repealing the natural gas tax and speeding permitting for critical projects.

It will also reform the National Environmental Policy Act (NEPA) that currently adds years of delays and millions of dollars in costs to energy and infrastructure projects. The Lower Energy Costs Act will provide a streamlined, simplified permitting process for all federally impacted projects, speeding construction for pipelines, transmission, and water infrastructure.

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Key Votes on H.R. 1 Amendments

March 29, 2023 by Leave a Comment

The American Energy Alliance urges all members to vote YES on amendments 10, 11, 12, and 13 and vote NO on amendment 26 offered to H.R. 1 the Lower Energy Costs Act.

YES: Palmer-Lesko amendment #10 would ensure that consumer choice in appliances is not arbitrarily constrained. Despite denials from the White House, various parts of the bureaucracy continue to advance proposals that would ban functionally all gas powered stoves. Congress can definitively end this threat with a simple vote.

YES: Perry amendment #11 would make clear that interstate river compacts do not have any special power to regulate hydraulic fracturing. Congress has made clear that individual states make their own regulations regarding hydraulic fracturing and this amendment would prohibit any attempts to get around that intent.

YES: Perry amendment #12 would ensure that Congress remains responsible for decisions on climate change regulations by repealing section 115 of the Clean Air Act regarding international air pollution. Sec. 115 has been repeatedly targeted by activists as an avenue to impose radical climate regulations through the backdoor, circumventing elected representatives in Congress.

YES: Roy-Self amendment #13 would direct the Federal Energy Regulatory Commission to withdraw its two highly controversial policy statements from last year regarding pipeline project approvals. While FERC has partially backed down by designating the policy statements as mere “draft” documents, FERC should abandon its misguided regulatory overreach entirely.

NO: Levin amendment #26 which would strike the section of H.R. 1 which seeks to lower the cost of developing federal energy resources. One of the most effective ways of lowering energy prices is producing more of our energy domestically, which also has added benefits in jobs and economic growth. Raising the cost of producing energy on federal lands both reduces domestic production while at the same time increasing costs to consumers, precisely the opposite of what is needed during this period of persistently high inflation.

The AEA urges all members to support free markets and affordable energy by voting YES on amendments 10, 11, 12, and 13 and NO on amendment 26. Should votes on these amendments occur, AEA will include them in its American Energy Scorecard.

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Biden’s EV Dreams A Nightmare For Working Families

March 29, 2023 by Leave a Comment

Expensive electricity rates are making home battery charging a headache and outside of the home, inconsistent and sometimes high pricing policies, frequently broken equipment, and a lack of battery chargers in key locations for all but Tesla drivers is frustrating electric vehicle owners. Inflation and intermittent renewable energy (wind and solar power) are escalating electricity rates, making EV home charging a frustrating experience for some drivers, particularly those in blue states with increasingly higher electricity rates. A J.D. Power study of EV owners who use Level 2 home-charging stations found that overall satisfaction in the home charging experiences declined 12 points since last year due mainly to the increase in electricity prices that are starting to hit home.

Home Charging

In New England, where electricity prices surge at peak hours, home charging satisfaction saw the largest year-over-year decline. There are several programs designed to ease the cost of EV home charging, including options to schedule charging at the most affordable times of day. Only about half of EV owners in the J.D. Power study indicated that they had an understanding of their utility company programs for home charging. But, these programs may not help all EV owners as the lowest rates in California are when electricity is generated by solar power during daylight hours when the sun is shining, but when Californians are mostly at work.

Different EV brands also had different levels of satisfaction, with Tesla home charging stations having the most satisfaction. Tesla’s public charging network is also satisfying customers more as it is far larger than the others–a reflection of the fact that most EVs sold in the United States are Teslas. Tesla’s network is divided into Superchargers located on highways and destination chargers located at places like hotels and tourist spots. Tesla also plans routes for its drivers on its network, suggesting where to stop, how long to charge and how many plugs are available at that station.

Charging Outside the Home

The Biden Administration is installing electric vehicle chargers across 75,000 miles of highway – helping electrify the great American road trip. It is funding charging stations every 50 miles along the interstate highway system as a result of the infrastructure law that put $7.5 billion toward EV charging infrastructure.  However, EV owners indicate that the chargers where people refuel EVs are often broken. One study found that about a quarter of the public charging outlets in the San Francisco Bay Area, where electric cars are commonplace, were not working. EV drivers say that companies that install and maintain charging stations need to do more to make sure that chargers remain reliable. There is often no one to turn to for help when something goes wrong at charging stations. Problems include broken screens and buggy software. Some chargers stop working mid-charge, while others never start in the first place.

While stations are getting better at fixing broken chargers, many still malfunction in nearly every way possible. For example, an EV operator encountered chargers that refused to recognize the vehicle was an EV model no matter how many times it was plugged in, and at another station, the charger kept booting the EV off after just a few seconds. Electrify America stations would, quite regularly, display the “spinning wheel of death” — the spiraling icon that indicates a computer is struggling for unknown reasons. Sometimes the wheel would stop after 30 seconds or a couple of minutes, and charging would begin and at other times, it would not. Getting a station to work meant making an old-fashioned phone call to customer service to find a solution.

Even when a charger is working, the rate at which it refills the battery can vary widely. Charging rates can vary depending on the outside temperature, how full or warm the battery is, what charging level the vehicle is designed to accept and whether another car is sharing the electric current. After reaching a certain state of charge, often 80 percent, the rate of charging drops dramatically, a measure taken to preserve the battery’s longevity.

Despite the huge cash infusion for EV infrastructure in the past three years, the U.S. charging network remains spotty. Between the end of 2019 and the end of 2022, U.S. spending included $600 million by federal, state and local governments; more than $4.3 billion by private companies; and more than $1.7 billion by electric utilities. That spending has not resulted in many new chargers because the permitting and construction of chargers can take 18 months or more. Moreover, qualified electricians are getting increasingly hard to find to perform the complex wiring forced electrification is requiring. Nonetheless, the number of U.S. public EV fast-charging ports nationwide has more than doubled, from about 14,000 to almost 30,000. For example, according to station counts from the Department of Energy, Utah and Washington have more than doubled charging stalls since 2019, and Colorado has tripled them. Idaho increased its number by 35 percent and Wyoming by 45 percent. These increases, however, begin from very low numbers of chargers, meaning that the network is still very sparse.

Reliability is a major issue, with chargers going offline for weeks or months at a time. The Biden administration is seeking to address reliability problems by requiring chargers funded under the infrastructure law to function 97 percent of the time. Numerous studies, however, suggest that goal to be far away. Last year, the data analytics firm J.D. Power surveyed more than 11,500 EV drivers and found that one out of five drivers to an EV charging station came away without a charge. Almost three-quarters of those said it was because of a malfunctioning station.

The Alliance for Automotive Innovation, a trade group of U.S. auto manufacturers, pointed out that while the United States added 652,000 EVs since the start of 2022, it had added just 20,300 charging ports during the same period. That equates to 32 EVs for each public port. The alliance pointed out that California, the nation’s leading EV state, has estimated that its charging network in 2030 will require about seven charge points for every EV. Despite EV automakers claiming that 14 of their models have a range of 300 miles or more, range can be hindered by extreme temperatures, requiring more charges are needed.

EV Battery Charging Prices in Massachusetts

Some stations charge by the minute and others by the amount of electricity consumed, leading to unpredictable pricing. Charging by the minute means that less expensive EVs, which have slower charging equipment, pay more for the same amount of electricity than more expensive vehicles. For example, the maximum charging rate of the $109,000 GMC Hummer EV is about five times faster than the Chevy Bolt EV, which costs under $30,000. Charging by the amount of electricity consumed makes more sense because along with a vehicle’s maximum charging rate, temperature, equipment in the charger, and the number of other vehicles charging at the same station affect how long it takes to fill a battery. Some stations also have multiple subscription plans or charge different rates at different times of day.

Overall, there have been some significant price increases over the past few months in charging rates in Massachusetts after electric utility companies increased their rates. Electrify America, one of the largest operators of fast-charging stations in the state, raised prices by 16 to 19 percent. Smaller operator EVgo made its rate plans more complicated and added a new fee. And Tesla, which raised prices at many of its chargers last year, is opening its national network to other car brands but with higher prices for non-Tesla vehicles.

Electricity prices jumped to 39 cents per kilowatt-hour in February from 27 cents a year earlier, a 44 percent rise in the Boston metro area, according to the US Bureau of Labor Statistics. In EVGo charging sessions, prices averaged 61 cents per kilowatt-hour in March after the new rate plan took effect, compared to 42 cents in January. At Electrify America, effective rates per kilowatt-hour calculated rose from 20 cents to 26 cents (though the company charges by the minute). The company has two rates, one for slow-charging cars and one for faster-charging cars. On March 6, the price for charging slower vehicles went up to 19 cents per minute from 16 cents. Faster-charging vehicles pay 37 cents, up from 32 cents. (With a $4-per-month subscription, customers get a discount of about one-quarter off those rates.)

At ChargePoint terminals owned by MassDOT, such as along I-95 and Route 24, prices have remained steady at 35 cents per kilowatt-hour. And prices have also been steady at 70 cents at the Nouria network, owned by convenience store chain Nouria Energy, which installed a few fast chargers in the southeastern part of the state. The calculated prices include fees and taxes that operators tack on.

Conclusion

The lack of on-the-road operable charging stations and their unreliability add anxiety to EV drivers who would be carefree in a gasoline-powered automobile. There are also major issues at charging stations ranging from broken chargers to the spiraling icon at malfunctioning stations, despite Biden’s requirement for 97 percent reliability. At some stations, the charging rate would oscillate up and down, which is difficult to accept compared to the predictable output of a gasoline pump. Erratic charging performance is not what Americans want as they drive their expensive EVs when their experience at the gas pump is without drama and at a fraction of the time of a battery charge.  As more Americans acquire EVs, problems are beginning to surface.

Biden’s infrastructure bill adds many charging stations to the network, but though it may look big on paper, that number vanishes in a country as big and sprawling as the United States, which has thousands of miles of roads that can absorb hundreds of chargers without creating an atmosphere of complete coverage. Further, Biden’s net zero electricity goal is escalating the price of electricity to the point that charging stations are increasing prices dramatically, which in at least Michigan is making it cheaper to operate a gasoline car for certain models than an EV.

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

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Low Battery Warning For Biden’s EV Dreams

March 27, 2023 by Leave a Comment

Minor damage to an electric vehicle battery pack can lead to the entire car being totaled, leaving the expensive battery packs piling up in the scrapyard and causing higher insurance premiums. With no way to repair or assess slightly damaged battery packs after accidents, electric vehicles can lose up to 50 percent of their price, rendering it uneconomical to replace them, as batteries are the most expensive component of electric vehicles costing many tens of thousands of dollars.

In some cases, the battery packs are not even accessible. Tesla’s Texas-built Model Y battery pack has “zero repairability,” because the battery pack is part of the car’s structure and cannot be easily removed or replaced. Tesla’s decision to make battery packs “structural” has allowed it to cut production costs but pushes costs back to consumers and insurers. Without access to Tesla’s battery data, it is difficult for insurers to assess the extent of battery damage and take appropriate action.

Although electric vehicles constitute only a fraction of vehicles on the road, the trend of low-mileage electric vehicles being written off with minor damage is growing. Insurers and industry experts warn that unless carmakers produce more easily repairable battery packs and provide third-party access to battery cell data, already-high insurance premiums will keep rising and more low-mileage electric vehicles will be scrapped after collisions. According to insurance companies, making batteries in smaller sections or modules that are simpler to fix, and opening diagnostics data to third parties to determine battery cell health, would help the problem.

The lack of accessibility and data are resulting in battery packs that could be reused, but instead are thrown away, which reduces the sustainability argument of electric vehicles. Further, the production of EV batteries generates more carbon dioxide than fossil-fuel vehicles, which means that electric vehicles need to be driven for thousands of miles more than their fossil fuel counterparts before they offset the extra emissions. This would be compounded if battery damaged vehicles are prematurely scrapped.

Most carmakers believe their battery packs are repairable, though few seem willing to provide access to battery data. For instance, insurers, leasing companies and car repair shops are fighting with carmakers in the European Union over access to connected-car data.

In Germany, EV battery damage makes up just a few percent of Allianz’s motor insurance claims, but 8 percent of its claims costs. Insurance companies in Germany pool data on vehicle claims and adjust premium rates annually, so if the cost for a certain model increases, it raises premiums. Allianz has seen scratched battery packs where the cells inside are likely undamaged, but without diagnostic data it must write off those vehicles.

At Synetiq, the UK’s largest salvage company, over the last 12 months, the number of electric vehicles in the isolation bay – where they must be checked to avoid fire risk – at the firm’s Doncaster yard has soared, from about a dozen every three days to up to 20 per day. The UK currently has no EV battery recycling facilities, so Synetiq removes the batteries from written-off cars and stores them in containers. It is believed that at least 95 percent of the cells in the hundreds of EV battery packs – and thousands of hybrid battery packs – Synetiq has stored at Doncaster are undamaged and could be reused.

It costs more to insure most electric vehicles than traditional internal combustion engine vehicles. The average U.S. monthly EV insurance payment in 2023 is $206, 27 percent more than for a combustion-engine model. U.S. insurers recognize that if even a minor accident results in damage to the battery pack, the cost to replace it could exceed $15,000. A replacement battery for a Tesla Model 3 can cost up to $20,000; the car having retailed at around $43,000.

Tesla offers its own insurance policies in a dozen U.S. states to Tesla owners at lower rates than other insurance providers. Recently, Elon Musk indicated that Tesla has been making design and software changes to its vehicles to lower repair costs and insurance premiums. According to insurers and industry experts, electric vehicles, because they are loaded with all the latest safety features, have had fewer accidents so far than traditional cars.

Conclusion

The transition to electric vehicles so far has resulted in battery packs at scrap yards as insurers are totaling electric vehicles that have batteries dinged or scrapped because they lack the data to know whether the cells are still in good shape. Carmakers do not want to share battery data with third parties and as a result those electric vehicles with minor dents, and even those with low mileage are written off by insurers. Further, because EV batteries generate more carbon dioxide emissions than those in fossil fuel-powered vehicles, electric vehicles need to be driven more miles than their internal combustion counterparts to be rid of the excess emissions. Insurance companies warn that as more electric vehicles get totaled, insurance premiums will increase.

President Biden wants U.S. sales of electric vehicles to reach 50 percent of the market by 2030 and has begun with a goal that all light-duty federal government vehicles to be electric by 2027. In that vein, California and other states have banned the sale of fossil fuel vehicles, taking away vehicle and refueling choice for Americans. That will only increase costs for Americans as electric vehicles cost more than their fossil fuel counterparts, insurance premiums are higher, and as electricity costs rise from Biden’s transition to wind and solar power backed up by expensive batteries, refueling electric vehicles could increase above those for internal combustion vehicles. They already have for Michigan and certain model vehicles.  Government officials whose fevered dreams of electric vehicles as the solution to climate problems may have overlooked some very important issues their zeal is creating.

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

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The Unregulated Podcast #125 Living and Dying

March 27, 2023 by Leave a Comment

On this episode of The Unregulated Podcast Tom Pyle and Mike McKenna discuss the prospects for major banking institutions in the face of government meddling, the moving goalposts of the anti-stove agenda, and where the latest trillions in government spending have all gone.

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