Big Oil rattled by Electric Vehicles; Senator Barrasso tries to help

Worldwide sales of electric vehicles (EVs) have been climbing steadily since 2010. While the proportion of EVs to new car sales is still less than 3% worldwide, the oil industry is disturbed by the trend in total numbers sold (see graph below).

Graph showing sales of EVs in leading markets 2011 to 2017
Sales of EVs in leading markets. Image from Wikipedia.org

Transportation is now the country’s largest source of global warming carbon dioxide. If CO2 emissions are to be reduced, EVs will have to play a major role. For oil refiners, that’s bad news. Electric Vehicles don’t run on gasoline, which means less profit at the pump.

What do giant corporations do when confronted by threats to their market dominance? The simple answer is, they buy political influence. But they also need to be helpful (in a practical way) to the politicians they aim to influence. That is, they need to show them exactly what legislation to adopt and pass into law. That’s where ALEC comes in.

ALEC, short for American Legistative Exchange Council, is a conservative, non-profit, bill-writing organization headquartered in Arlington VA. Its motto is, ‘“Limited Government, Free Markets, Federalism”. Membership includes state legislators and private sector representatives, people who get together to discuss and agree on their political objectives and then convert those objectives into the legislative language of government bills. These ‘model’ bills are then distributed to states that want to adopt them. The bills generated by ALEC reflect the politics of its right wing, conservative, Republican membership. Bills aimed at reducing corporate taxes, cutting environmental regulations, opposing gun control, introducing tough voter ID rules, and weakening labor unions, are typical of the organization’s output.

Several nations, including the U.S., have introduced incentives designed to encourage the purchase of electric vehicles. The U.S. offers a federal tax credit of up to $7,500 to people who buy new EVs., a measure that predates the Trump era. Last November, and again in December, oil industry representatives and state legislators held ALEC meetings to discuss (in private) how to kill the tax credit. According to The Guardian of 4th Dec., the participants secretly approved resolutions “supporting stripping tax benefits from electric vehicles and endorsing Donald Trump’s pro-fossil fuel energy agenda. And they voted down a proposal to limit monopoly control of the power industry, which backers said would give consumers more choice and help grow renewable electricity faster and more cheaply.”

Entities linked to the ALEC meetings included Marathon Petrolium, the nation’s largest refiner, and the American Fuel & Petrochemical Manufacturers Association (AFPM). Marathon alone has reported spending close to a million dollars lobbying Congress about the EV tax credit and other issues. The fossil fuel industry’s man in Congress is John Barrasso, Republican Senator from Wyoming.

Photo of U.S. Senator John Barrasso
U.S. Senator John Barrasso (R-WY). Image: Facebook

Barrasso heads the Senate Environment & Public Works Committe, and sits on the Energy & Natural Resources Committe. According to OpenSecrets.org Barrasso received $520,650 in campaign financing from the fossil fuel industry over the period 2013 to 2018. Last October, the Senator introduced a bill to Congress to revoke the EV tax credit and to impose a highway use fee on electric vehicles to make up for the fact that their owners  don’t pay a gasoline tax.

On March 6 of this year, Barrasso Spoke from the Senate Floor on the subject of the Democrats “Green New Deal”. He was responding to a challenge from Senate Minority leader Chuck Schumer (D-NY), to tell the Senate what the Republicans planned to do about climate change. Here’s part of what Barrasso said (Senate Committee Press release):

It’s a plan: cut carbon through innovation, not regulation. The question is: do we believe the climate is changing? Do humans have an impact? The answer is yes to both. . . . Second, the United States and the world will continue to rely on affordable and abundant fossil fuel, including coal, to power our economies for decades to come. And we need to also rely on innovation. Not new taxes, not punishing global agreements. That’s the ultimate solution.

Interesting plan — Stick to fossil fuels and innovate. Innovate how? I’m guessing ‘green plan’ type innovations such as wind generators, photovoltaics, battery storage systems, and electric vehicles, are not what the Senator has in mind.

Four-door electric sedans currently sell In the U.S. for $30,000 and up. How will the oil industry react when prices fall? The image below shows the EV currently being built in China  by Great Wall Motors. It’s listed at around $9,000, little more than the tax credit Senator Barrasso is so keen on killing. That’s the future the oil industry will have to contend with.

Comments welcome