By ADMIN
A Senate Letter on Huge Gains From Increased Efficiency Vehicles
This was shared during the ‘cash for clunkers’ debate last summer. It is posted here unedited, for reference, and because the analysis is increasingly relevant today.
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Here is the analysis that I referenced. Although it makes the case against both bills, you can also use almost any part of it to make the case against moving forward with the House version, or for positively altering it. It is also reasonably brief, as, obviously, respect for your time is paramount. Therefore much was left out in terms of further example, support, analysis, and proscriptive remedies. But please also do not hesitate to follow up, or have someone from your office, follow up, with respect to any and all questions and concerns.
Also please note that a big part of getting bills accomplished, as you obviously are probably having to deal with every day, is getting everybody on the same page, and putting forth the most pertinent points, in a broad based, and appealing way. This point is also lightly touched on below, but it is worth noting here that I have shared this analysis with a broad spectrum of experts on the matter. Not one mainstream environmentalist has disagreed with it, and not one conservative analyst has taken great issue either, simply because of the large national security, oil reliance ramifications. The economics has been backed up and supported, as well. And everyone, in terms of actual voters, that I have shared the basic ideas with, have been in agreement as well.
In ‘06, the U.S. was responsible for 6.17 billion metric tons of net greenhouse gas emissions. Using this figure as the baseline, S. 1200 would, according to the press release, save an amount equal to .00745% — 75/1,000,000 — of our net greenhouse gas emissions over the House (and Stabenow) version, and .031% — 31/100,000 — of our net greenhouse gas emissions in total. It would also save less than .035% or 35/100,000 of our total passenger vehicle oil use (using 8 million barrels a day as the base figure), over the House version, and .14% — 14/10,000 — in total.
But even these figures may be overly optimistic. They don’t appear to take into account that some of the subsidized transactions would occur anyway (and that there are energy costs involved in the production of each replacement vehicle, although that consideration can be exceedingly misleading). [Editorial update: In hindsight, the bills had a slightly better effect, because a lot of people did choose to use them for higher efficiency cars than the bills required for subsidy, most notably the now highly reputed Ford Fusion.]
More importantly, they also don’t consider that the subsidized vehicles, unlike those being targeted for replacement, can not otherwise, for all practical purposes, be scrapped a year or two down the road and replaced by far more efficient vehicles as these become available — but will instead perpetuate the status quo for years. These vehicles may also ultimately decrease our future fleet average, if we otherwise come close to achieving our new vehicle sales fleet mpg average target (35.5 mpg for cars and light trucks combined by 2016, with smaller, incremental increases in earlier years.)
Here are the basics: The ultimate goal of any pro-Detroit assistance is to create job opportunity and growth. Other vehicle stimulus packages will have this same macro economic effect. If there is a concern, nevertheless, to help Detroit specifically, there is a way to do this and have this very same bill, with a little tweaking — have not just far more broad based appeal over the House version — but be far more effective.
It is also critical to keep in mind that properly framed — and I have already gotten feedback from people in both political parties outside of the beltway — almost everybody is on board with reducing gasoline usage for one or both of the following reasons: Decreasing CO2 emissions and moving us toward the necessary greater international credibility on the issue (particularly with respect to nations such as India, and China), and improving our national security by mitigating our needless reliance upon foreign oil — here emphasized for framing purposes.
I will skip the lengthier analysis of vehicles on the market and the necessary restructuring of this legislation in order to meet the same expressed, and desired, ends, and yet at the same time meet them in a way that is more broadly appealing as well. That needs to be done via separate inquiry and/or in person. But the follow-up proscription suggested below will also give some critical insight into how practical and effective such a measure can potentially be — even with respect to our Detroit based companies.
It may also be far more cost effective than many other subsidy, or technology study programs, to extend a properly constructed reward program with progressively, and aggressively, higher efficiency targets. (And at the same time, be more politically palatable than significantly raising oil based fuel taxes. Note also that at least some of this idea is not dissimilar from S. 247 introduced back on Jan. 14. But the similarities and differences, and how some of that can be reintroduced while having even more appeal and at the same time more vigorously serve to prompt the market itself to develop, produce, and purchase far more and higher mpg and alternative fuel vehicles — the necessary requirement for us to effect these dual problems of oil and emissions — are subsequent points to make.)
This would not only prompt such vehicle replacements, but shift the development, production, and demand aspects of the market in this direction as well. This, in turn, would also have the critical, and underestimated effect, of altering market parameters in the proper direction and thus rendering further significant market movement and design improvement far more likely and easier to build upon. This sounds somewhat conceptual, but it is a key requisite element for solving these challenges.
Consider two American candidates for significant cash for clunker type targeting, and compare them in stark contrast to the vehicles that we would nevertheless be subsidizing the purchase, and thus perpetuation (and even increase) of, under the current proposals: The Chevy Volt, and Ford’s Fiesta ECOnetic diesel. (Note that diesels are not currently popular here merely because there has not yet been a reason for them to be, which as a basic truism of market capitalism, will change when the reasons change. Emissions aside, they can now also easily be made as clean, or cleaner, than gasoline internal combustion engines. In fact, Volkswagen’s recently introduced Jetta TDi (diesel) has been extremely well received in the U.S. thus far.)
The Volt gets 100+ mpg equivalent its first forty miles after charge — enough to cover most routine commutes and trips — and 48-50 mpg when running via gasoline generator thereafter. The Ford Fiesta ECOnetic gets 65 mpg. (There is also a Fiesta Van ECOnetic version due out in a few months, that gets in the 70s. In fact, Fiesta’s full size transit van ECOnetic, which is not available in the U.S., but which requires the correct policies in order to be, gets 32.6 — an enormous improvement over what is on the road in terms of work vans today.)
Replace a vehicle that gets 18 mpg, with one that gets 65, and this would prompt the market to develop even better and more efficient versions of such vehicles; and we would save 482 gallons of gas, and 9352 lbs. of CO2, over a typical 12,000 mile driving year, for that one vehicle alone. This is the energy and exhaust equivalent of driving a vehicle that gets 35.5 mpg — the new CAFE requirement average for the year 2016 — for 17,110 miles, using air as its fuel, and emitting nothing but air.
What if the vehicle to be replaced was one of the 24 mpg vehicles, say, one year from now; only it can’t, because it is almost brand new. What would the savings have been otherwise, by switching over to the 65 mpg vehicle? 315.4 gallons of gasoline, and 6118.67 lbs. of CO2, over 12,000 miles of driving distance. Enough, again, in a net emissions and oil usage sense, to fuel that soon to be standard 35.5 mpg vehicle for 11,196 miles, on pure air.
Yet Ford is not currently planning to bring the ECOnetic to America. According to Mark Fields, Ford America President;
We just don’t think [Americans] would buy that many diesel cars.
Of course we wouldn’t, when we are considering the subsidization of replacement vehicles that get 24 mpg, instead.
It’s emissions savings — while much harder to precisely calculate because of measurements in mpg equivalents and variability in how much the car is driven above the 40 mile between charge cutoff (not to mention electricity generation fuel source variability, and nighttime charging potential when power plants tend to otherwise overproduce, etc.) — would still likely be significantly greater even than for the ECOnetic. But let’s take the example of oil, which is easier to calculate, and which would represent an even greater net savings than in the emissions case.
The average commute in the U.S. is around 35-36 miles round trip (give or take), and the Volt would thus cover average commutes without the need for supplemental charging, and even some longer commutes if there was outlet availability at work. Most routine trips would be covered, as well. Let’s take an average driver who amasses 12,000 miles in a year, and estimate, conservatively, that for 25 percent of those miles the car is being powered by its gasoline generator. (In reality, for a lot of people, the figure is apt to be lower, particularly in the future as work and shop charging stations become more prevalent). For simplicity, let’s use the 50 mpg figure while running on gasoline. The car will thus use 60 gallons of gasoline for the entire year, while running off its generator.
What about the 9000 miles when the car is running solely off its electrical charge? Currently, about 1 .5 % of our electrical power generation comes from oil. This figure, for a variety of reasons, including regulation, is unlikely to increase, so for all practical purposes, the electrical energy fuel source for the vehicle will likely be coal, or an alternative fuel such as solar, hydro, wind, or nuclear, for example. It will thus, essentially, not consume any oil for this proportion of its travel, and its total gasoline usage for the year should be around 60 gallons of gas, or less than one-eighth of the amount of a passenger car that would be subsidized under the current cash for clunkers initiative (i.e., 500 gallons for a 24 mpg vehicle). That is, eight Volts would likely use less oil in total than one 24 mpg car to be subsidized under the proposed program. (And ten Volts would likely use less oil than one 20 mpg pick up truck or SUV to be subsidized under the program.)
There are several high efficiency or alternative fuel vehicles currently being produced, many more in the works, and many more which would be, with the right policies to inspire the market to do so. But let’s take one non American example. Volkswagen is taking pre orders for its stylish, 5 seat, 62 mpg BlueMotion Polo right now. Unfortunately just not in the U.S., where there is no perceived market. This again, along with the two American cars mentioned, should paint quite a stark contrast with consideration, as part of an environmental and oil reliance measure, of subsidizing cars that get 22, or 24 mpg. (And less, in the case of light trucks and SUV’s, when we should for most users be drawing far less distinctions between these vehicles otherwise.)
I also want to briefly reference the accelerated CAFE requirements under the Obama administration. There may be an intuitive hunch, now that Obama has moved up the 35 mpg new vehicle fleet average target date from 2020 to 2016 (and increased it by 1/2 mpg), that any inspired market movement in this direction is now superfluous. Little could be further from the truth.
History has shown us that even minimal emissions standards have led to little but recalcitrance and excessive lobbying expenditures by auto manufacturers (current smiling faces toward Obama’s announcement by auto exec’s, who have no choice, will more likely be replaced by scowls down the road). More practically, it is reasonably likely, particularly if the economy continues to struggle longer term or subsequently, that these standards will be relaxed, possibly by a different administration altogether. More importantly, while an improvement, they also fail to solve the problem. They might also simply not be met, fines notwithstanding.
But most importantly, it is far more practical to move the market itself to sensibly address the issue, which at the very least greatly reduces the onerous-ness of top heavy “command and control” regulation; in this instance, can significantly exceed such regulations; changes the market parameters so that future movement and improvement is far easier and more likely to be expanded upon; and, given the climate change and oil challenge here, can greatly extend the parameters by which “reasonable” regulations on top of market movement can help eradicate the underlying problem: That is, in this case, stopping the net increase to global ambient atmospheric greenhouse gas concentrations, becoming a world leader on this issue (which, again, we need to do in order to effectively solve it), and ending our needless reliance upon foreign oil.
Please reconsider these bills, and consider moving the discussion toward a more practical basis in terms of what is actually required. That is, moving the market toward the development, production, and purchase of much higher efficiency and alternative fuel vehicles.
This is a requirement if we are to effectively address these issues. Neither of the current proposals, — although again S 1200 is an improvement over HR 2751 (but again a step back from Schumer, Collins, and Feinstein’s January proposal) — accomplish this. More importantly, by further subsidizing the purchase of the target vehicles under the program, they would further entrench the same status quo that is the root cause of our oil reliance, and a major cause of our greenhouse gas emissions, dilemmas. When it comes to CO2 emissions and oil reliance, the numbers don’t lie.
Again, by changing the framing of this into a national security measure so that we don’t have to continue to import oil from the Middle East — which properly structured it is, as well as an environmental and economy boosting measure — this can be sold. And in fact, if we are to actually enact meaningful change, it needs to be. Otherwise we are going to fall far short of targets again, as we continue to compromise our security by importing oil from the Middle East, and at the same time oceans rise, ice caps disappear, island nations submerge, weather becomes increasingly violent and volatile, and major ecological changes, far too rapid on a geologic scale to be remotely positive, begin to accelerate. These bills only entrench precisely what we need to move away from, that is, ho hum status quo vehicles, in order to even begin to move in the direction of addressing these challenges.
I know that it is appealing to look at the issue, realize, correctly, that the biggest immediate potential for gains comes from getting the lowest mpg vehicles off of the road, and pass some legislation with concomitant macro stimulative, or even pro-Detroit, intent. But if we are replacing these vehicles, and in fact subsidizing this replacement, with the same general class of vehicles that are the cause of our oil reliance, and our vehicular component CO2 emissions problems, this will actually work against our interests long term, particularly by working directly against the necessary, expedited market movement that is required to address these dual, interrelated challenges.
What is most important of all is that properly framed, these points can be sold. I have gotten everybody on board with these proposals that I have spoken with, including, believe it or not, several conservatives. Once again, the key fact here is that getting off of the oil that our vehicles are so overwhelmingly responsible for using, is something that most Americans want (whether for reasons of climate change, national security, or both.)
Once again, this analysis only touches on some of the key considerations. There is a lot of additional pertinent information with respect to the types of changes electric vehicles can make, how to structure this to boost the economy and American manufacturers, and, more importantly, maximize the impact of electric vehicles (see above, a complex, but extremely important area), and how to illustrate and sell this to the rest of Congress.
Once again, it can not be emphasized enough, because of the unique interrelation between addressing climate change, and our national security/oil reliance question, this is something that ultimately almost all Americans (save gas suppliers, oil companies, and in the short term some car companies) believe strongly in.
