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THE ROAD TO 50%: Electric vehicle purchases in the United States ticked upward for the fifth straight year in 2021, but with EVs comprising just 4% of new sales, the market has a long way to go to reach President Joe Biden’s target of 50% of new vehicle sales being electric models by 2030.
Automobile manufacturers are expanding their electric vehicle footprints left and right with plans for new models and factories to build them. The fact remains, though, that the United States is behind both the Chinese and European markets in terms of new sales, according to data from Dutch multinational banking firm ING.
Between 2015 and 2020, the U.S. EV fleet (both battery electric and plug-in hybrid) grew at an annual rate of 28%, as compared to 51% in China and 41% in Europe. New sales in Europe were estimated at 14% in Europe and 9% in China last year.
ING, as well as the International Energy Agency, pointed to American consumers’ preference for SUVs as an obstacle to wider adoption of EVs.
Alex Laska, transportation policy advisor for the Climate and Energy Program at the think tank Third Way, said manufacturers are starting to make production adjustments to make up for that.
“People really like their SUVs and their pickups, and for a long time, if you were looking at the sort of electric vehicles that were offered, there were not a lot of those available,” Laska told Jeremy, pointing to Ford’s electric F150 model and Chevrolet’s electric Silverado model. “We’re going to be seeing these sort of larger passenger vehicles electrify over the next few years.”
Separately, Congress just authorized $5 billion to fund construction of EV charging station infrastructure across the country. Third Way estimates the program could yield the addition of 862,000 new chargers, which is expected to cut away at consumer hesitancy about buying an EV over concerns about charging availability.
Beyond charging availability, Democrats had sought to grow the existing EV tax credit to make up to $12,500 in credits available in the House-passed version of their Build Back Better Act, although it looks virtually dead now that Sen. Joe Manchin declined to get on board with the bill.
The mix of natural market growth and new spending on charging infrastructure puts the overall market in positive footing, but for Democrats seeking exponential growth of EV’s market at a scale such as Biden’s 50% target envisions, the market will need some help.
The role of regulation: That help may come at least in part from executive agencies. While Congress worked through the policymaking surrounding EVs through the end of last year, the Biden administration tightened vehicle fuel efficiency standards to support emissions reductions in transportation, the U.S.’s largest emitting sector.
The new standards will have an effect of their own on the nation’s electric vehicle fleet, as EPA estimates they will drive new EV sales to 17% by 2026.
Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writer Jeremy Beaman (@jeremywbeaman). Email [email protected] for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.
BLM’S PLANS FOR THE ALASKA DRILLING: The Bureau of Land Management said it seeks to return management of the National Petroleum Reserve-Alaska to a plan established during the Obama administration, leaving some 52% (or 11.8 million acres) of the reserve open to oil and gas leasing.
The move would reverse the approach BLM took under former President Donald Trump, wherein the bureau sought to make some 82% of the reserve’s 23 million total acres available for leasing.
BLM said in a statement yesterday the decision “reflects the Biden-Harris administration’s priority of reviewing existing oil and gas programs to ensure balance on America’s public lands and waters to benefit current and future generations.”
The Biden administration’s restrictive strategy toward oil and gas production on federal lands has disappointed the industry but not been enough to altogether please environmentalist groups and lawmakers who wish to see higher royalties on existing leases and access to new ones shut off.
2021 IN EXTREME WEATHER: The United States suffered 20 billion-dollar extreme weather events that killed 688 people last year, according to a report released yesterday by NOAA’s National Centers for Environmental Information.
Those events, which include California’s Dixie Fire, Hurricane Ida, and the winter storm in Texas, drove damages to $145 billion, or the third-highest cost on record. Hurricane Ida topped the list as the costliest event at $75 billion, and the Texas storm was the costliest winter storm on record.
Environmental groups and officials, including Energy Secretary Jennifer Granholm, saw in the report evidence for the need to pass Democrats’ Build Back Better Act.
“Climate change is killing our economy – and this new data shows we cannot afford to wait any longer to stem its growing costs,” said Bob Keefe, executive director of the environmental and business group E2. Keefe added that the bill “will curb the emissions fueling the costly climate disasters we experienced last year.”
Meanwhile, some scholars are urging against de facto attribution of extreme weather events to climate and to mankind’s effect on it, pointing to the man-made vulnerabilities of affected regions.
“We must acknowledge the human-made components of both vulnerability and hazard and emphasize human agency in order to proactively reduce disaster impacts,” three Europe-based researchers write in Nature today.
AIR FRANCE-KLM ADDS CHARGE FOR SUSTAINABLE AVIATION FUEL: The Franco-Dutch company said yesterday it will add to tickets a surcharge of up to 12 euros, or $13.50, in order to help pay for the use of pricey sustainable aviation fuel.
“In the absence of industrial production, the cost of using sustainable aviation fuels is four to eight times higher than that of fossil fuels,” Air France-KLM said in a statement yesterday.
Airlines see sustainable aviation fuel, made from things like cooking oil and waste products, as the most immediately workable emissions-reduction strategy for the industry because it has demonstrated up to an 80% reduction in carbon dioxide emissions as compared to conventional jet fuel.
“We’re not going to be able to fly big airplanes long distances on batteries, or even hydrogen, anytime in the foreseeable future,” United Airlines CEO Scott Kirby said in December.
United, through its Eco-Skies Alliance, is working with other corporate partners to collectively buy 7.1 million gallons of SAF this year. British Airways also signed an agreement with Phillips 66 to purchase SAF refined in the U.K.
For Air France-KLM, SAF will constitute between 0.5% to 1% of total fuel used this year. It aims to make SAF 5% of total fuel in 2030 and 63% by 2050.
CARBON OFFSET MARKET’S VOLATILITY: BloombergNEF estimates that carbon offset prices could reach as high as $120 or as low as $47 per ton in 2050 depending on how restrictive an offset product the market allows.
The fates of offsets that avoid emissions that would otherwise occur, versus those that remove carbon from the atmosphere and store or sequester it, will be the determining factors.
“Should all types of offsets continue to be permitted, including those which avoid emissions that would otherwise occur, the market will be oversupplied with largely worthless credits, thereby driving down prices and attracting criticism around quality,” researchers with BloombergNEF said in a blog post yesterday.
“Conversely, if the market is restricted to just offsets that remove, store or sequester carbon, there will be insufficient supply to keep up with demand, causing significant near-term price hikes and damaging liquidity,” the post added.
TURKMENISTAN PRESIDENT WANTS ‘GATES OF HELL’ FIRE EXTINGUISHED: President Gurbanguly Berdymukhamedov has called for the ‘Gates of Hell’ natural gas fire to be put out after half a century.
The backstory, per Turkmen news site Turkmenportal, is that a 1971 gas-drilling collapse formed a giant crater just north of the capital of Ashgabad. Geologists lit a fire to prevent the spread of gas, expecting it to burn off in weeks. Instead, it’s still burning today, and has become a tourist attraction.
Berdymukhamedov called in remarks reported by state media Saturday for a new effort to end the fire, citing the fact that the fire was hurting the environment and the health of people nearby, as well as the problem that the country is wasting a commodity “for which we could get significant profits,” according to oilprice.com.
The government has sought to close the fire before and failed.
The Rundown
Washington Post The first offshore wind lease sale under Biden is coming soon. Will the fishing industry intervene?
Bloomberg Germany to triple speed of emissions cuts after missed targets
Calendar
WEDNESDAY | JAN. 12
10 a.m. The American Petroleum Institute and Energy Citizens will host the 13th annual 2022 “State of Energy” forum.
THURSDAY | JAN. 20
12 p.m. The National EV Charging Initiative will host a first-of-its-kind electric vehicle summit.
