Oil & Gas elephant spooked by EV mouse — for good reason

Photo of EV charging station
Electric Vehicle charging station. Image: City of Hoboken NJ

The oil and gas industry is losing market share to clean energy technologies such as wind and solar. But it’s the electric vehicle (EV) that poses the most pressing threat to the industry. Here’s why:

The car-owning public reacts negatively to high gas prices. Politicians of all strips are sensitive to that fact. Even politicians who recognize the environmental need to reduce fossil fuel production are reluctant to take actions that could drive up prices at the pump. Taxing the carbon in fossil fuel emissions rather than taxing the carbon content of fossil fuels as they are produced is an example of this reluctance — it distances the politician from the effect. And even that feeble political action is further weakened by the failure to set the carbon price high enough to cause meaningful reduction in fossil fuel use. A switch from gasoline to electric powered cars will remove the political fear of pump prices and leave the oil and gas industry vulnerable to direct carbon pricing.

Many of the country’s newer natural gas powered electricity generating plants might last for another thirty years or more. This means that the complete replacement of fossil fuel power with cheaper renewables could take decades. The situation with electric vehicles is different. The average life expectancy of a car is 10 years or less. As EV prices drop and public acceptance increases, a shift to EVs could result in a complete replacement of the existing fleet of vehicles within a period of 10 to 15 years. Motor gasoline accounts for about 24% of total fossil fuel energy currently used in the U.S., a big chunk of the fossil fuel industry’s market. The shift would, at the same time, create new opportunities for wind and solar powered electricity generation.

Oil and gas industry executives are well aware of the threat posed by EVs. It explains the industry’s hatred of the EV incentive program. The program, introduced in 2015 under the Obama administration, offers a tax credit of $2,500 to $7,500 per new EV purchased for use in the U.S. Initial funding for the program was capped at about $2-billion. The oil and gas industry, concerned that Congress may decide to extend funding for the program, has ramped up its propaganda machine to try and prevent that from happening. As usual, when it comes to spreading disinformation about climate science and clean technologies, the industry calls on its mercenary propaganda troops to do the lying for them (see Apr.21 post — How the Oil and Gas Industry gets others to fight for its life). The propaganda effort described below shows the lengths the industry will go to fight what is a relatively small program.

A coalition of 34 fossil-fuel-funded, free market advocacy groups (see image below) delivered a letter May 9 to Congress (addressed to Senators Grassley and Wyden, and Representative Brady and Neal) urging members to protect “all American families by opposing an expansion of the electric vehicle tax credit.” The coalition is led by the American Energy Alliance (AEA), a not-for-profit organization that, according to its website, “engages in grassroots public policy advocacy and debate concerning energy and environmental policies.” The AEA, according to Desmogblog, is run by a former lobbyist for Koch Industries. The letter claims that the EV subsidy is unpopular, overwhelmingly benefits the rich, and amounts to a wealth transfer to California at the expense of all other states. It also claims that electric cars are not cleaner than cars powered by internal combustion engines.

Image of 34 fossil fuel funded, free market advocacy groups logos
Coalition of fossil fuel funded, free market advocacy groups organized to oppose expansion of the federal EV subsidy program. Image: eenews

As mentioned above, the U.S. EV subsidy is relatively small. Since its start in 2015, the program has handed out a total of about $20-billion in the form of income tax credits. By comparison, the U.S. fossil fuel industry receives about $27-billion annually in direct federal subsidies. The industry letter to Congress says nothing about that. The following bar chart shows the amount of annual subsidies each of the G7 nations currently hand out to support their fossil fuel addictions. It’s time they sought treatment.

Bar chart showing how G7 countries subsidize fossil fuel industry
Image: Natural Resources Defense Council (NRDC)

Note that the bar chart above shows only the direct subsidies to the fossil fuel industry. The industry also receives a massive indirect subsidy due to the fact that it does not pay the cost of damages — global warming, climate destabilization, etc. — caused by the burning of its products.

How to survive global warming — Nail the culprits before they nail us

Atmospheric carbon dioxide (CO2) continues its rapid rise. Last month (May 2019) CO2 in the atmosphere set a new record with the average peaking at 414.7 parts per million at NOAA’s Mauna Loa Atmospheric Baseline Observatory (see graph below). 

NOAA graph showing atmospheric CO2 2014 to present
The red line represents the monthly mean values. The black line represents the same as a moving average of 7 adjacent seasonal cycles, after correction for the average seasonal cycle. Image: NOAA

The highest level of CO2 in the atmosphere during the 800,000 years preceding the industrial revolution was 300 ppm. That occurred about 330,000 years ago, long before modern humans arrived on the scene (see graph at bottom of post).

What is being done about the present accumulation of greenhouse gas in the atmosphere? Here’s what the World Bank (April 2018) says: Some 40 countries and more than 20 cities, states and provinces already use carbon pricing mechanisms, with more planning to implement them in the future.  Together the carbon pricing schemes now in place cover about half their emissions, which translates to about 13 percent of annual global greenhouse gas emissions.”

As the above graph shows, these carbon pricing efforts, while well meaning, have had no noticeable effect on the rise in atmospheric CO2. Is it possible that if the carbon pricing efforts become more widespread, their effect will become noticeable? That is unlikely. Why? Because the carbon pricing schemes currently in use target the emissions from fossil fuels rather than the fossil fuels themselves.

In a shooting war, the bullets are not the enemy, the people loading the guns and pulling the triggers are the enemy. To win the war, you duck the bullets and focus your attack on the gunmen. In our climate war, we need to look past the CO2 emissions and set our sights on the gunmen, the people who extract fossil fuels from the ground, the oil and gas industry. 

The best way to fight the industry is to replace fossil fuel based technologies with clean technologies. That’s already happening simply because the cost of clean technologies has dropped sharply. Clean technologies are now cheaper and more efficient than fossil fuel based technologies and they are starting to be used in large areas of the economy (see May 27 post — NY Governor Cuomo goes for clean power technology in a big way). The fossil fuel industry will eventually collapse because of its inferior economics. But not fast enough.

Applying a carbon tax is a way to speed things up. However, to be effective the tax must be targeted, not against the CO2 emission from fossil fuels, but against the carbon content of the fossil fuels before they are burned. The most effective time and place to apply the carbon tax is when and wherever the fuels are extracted from the ground or imported into the country. The correlation between the amount of tax charged and the resulting reduction in oil and gas produced will be close, unambiguous, and directly measurable; a huge advantage for the administrators.

Is it right to single out a particular industry and tax it so as to throttle its production? Of course it is. Our survival depends on it. Being fair to the enemy is not a winning strategy. In any case, fossil fuel companies do not deserve equitable treatment. They knew for years that the use of their products would cause global warming. Did they inform the public? No. They kept the knowledge to themselves, continued pumping fossil fuels, and lied about the dangers.

Keep this in mind:
The oil and gas industry is in favour of taxing CO2 emissions. Why? Because it provides a smoke screen in which to hide. When CO2 emissions are taxed, everyone pays. It allows the oil and gas industry to masquerade as just another industry paying its fair share. It is not just another industry, it is the culprit. As I write this post, the culprit is busy promoting a scheme to 
tax CO2 emissions, a scheme much to its advantage (see May 12 post — Oil Industry promoters want to pay Americans not to complain about global warming).

Subsidize clean technologies. Sue oil and gas  corporations in court. Ban fossil fuel industry tax breaks. Dump investments in oil and gas. Dump politicians who support the oil and gas industry. Those are all great ways to hit the fossil fuel industry and its promoters. Here’s some pertinent advice:

“hit them fast, hit them hard, hit them a lot” — Jack Reacher (Lee Childs’ fictional character)

Graph showing Atmospheric carbon dioxide concentrations in parts per million (ppm) for the past 800,000 years, based on European Project for Ice Coring in the Antarctic (EPICA) data. Image: NOAA National Centers for Environmental Information (NCEI).
Atmospheric carbon dioxide concentrations in parts per million (ppm) for the past 800,000 years, based on European Project for Ice Coring in the Antarctic (EPICA) data. Image: NOAA National Centers for Environmental Information (NCEI).

Mayor de Blasio resurrects project to bring hydro power from Quebec to NYC

Photo of Indian Pt. nuclear power plant as seen from west side of Hudson River
Indian Point nuclear power plant, Peekskill, NY, as seen from Hwy 202 on the west side of the Hudson River. Image: Google

The Indian Point nuclear power plant sits on the east bank of the Hudson River near Peekskill NY, 42 miles upstream from Lower Manhattan and the center of the NY Metropolitan Region. The plant’s proximity to the city has been viewed as a potential catastrophe and an ongoing health threat ever since it first started generating electricity in 1962. New Yorkers will breath easier when the plant shuts down for good in 2021. However, the shut down will leave a 2,000 MW hole in the state’s electricity supply which will have to be filled by a renewable source of energy. If NYC Mayor Bill de Blasio has his way, power from hydro-rich Quebec will help fill the gap.

Mayor de Blasio announced his ‘Green New Deal’ for New York City on April 22, three months after Andrew Cuomo, Governor of New York, announced his ‘Green New Deal’ for the state (see previous post). While de Blasio’s plan ‘commits’ the city to carbon neutrality + 100% clean electricity by 2050, Cuomo’s plan commits the state (including NYC) to 100% clean electricity by 2040. Two Green New Deals for New York? Well, two are better than none. The Mayor, a Democrat, has entered the race to become U.S. President and is showing his environmental credentials.

The Mayor can aspire to carbon neutrality for the city. He can work towards it. But he doesn’t have the authority to mandate it. That’s Cuomo’s job — a moot point since the Governor hasn’t promised carbon neutrality. In any case, neither Cuomo nor de Blasio have defined what carbon neutrality means. Mayor de Blasio’s justification for making the 100% clean energy commitment is a plan to bring electric power from Quebec directly to New York City. The rational is that when the electricity is added to the state grid, it will be enough to power all city-owned buildings in NYC. The more obvious effect will be simply to offset half the power that will be lost when the Indian Point nuclear plant shuts down.

First proposed in 2008, the Champlain Hudson Power Express (CHPE) is a 369 mile high voltage, direct current (HVDC) buried transmission line designed to carry 1,000 megawatts of clean power from Quebec to New York City. The buried transmission line would originate at Hydro Quebec’s Hertel substation in La Prairie, south of Montreal. On the map below, the red dot just south of Montreal is the approximate location of Hydro Quebec’s Hertel substation. The red dot immediately north of New York City is the approximate location of the Indian Point nuclear power station.

Map of North-east USA and Canadian boarder region

The CHPE transmission line will cross the international boarder at Rouses Point NY, then head south by way of Lake Champlain and the Hudson River Valley, terminating in the NYC borough of Queens. The line will follow existing rights of way as well as water ways. The promoter of the U.S. section of the project is Transmission Developers Inc of Albany NY. A 2014 news release by the company put the cost  of the “merchant transmission project” at US$2.2-billion. During his NYC Green New Deal announcement on April 22, the Mayor said he wanted to start talks with Quebec immediately on finalizing a deal to get the CHPE project moving.

The Mayor’s Green New Deal contains initiatives that he does have the authority to mandate. They include: reducing greenhouse gas emissions from large buildings; banning new inefficient glass-walled buildings; replacing the city’s fossil fuel powered fleet with electric vehicles; ending the purchase by the city of single use plastics; divesting investment of $5-billion in city pension funds from the fossil fuel industry — all good ideas that he could have promoted years ago.

Photo of NYC Mayor Bill de Blasio announcing his Green New Deal
NYC Mayor Bill De Blasio announces Green New Deal April 22, 2019. Image: from NYGov video