Teaming Up with the Fossil Fuel Industry

April 18, 2015 in News, Obama, POTUS by RBN Staff

Source: CounterPunch

Teaming Up with the Fossil Fuel Industry

KEVIN WALSH and his wife, Jeri Countryman, are young professionals in San Francisco with jobs requiring a fair amount of commuting. By himself, Mr. Walsh, a process engineer for a large international pharmaceutical company in San Carlos, Calif., logs a total of 43 miles each day.

With pump prices in the area creeping over $4 a gallon, the family was spending $200 or so a month on gasoline.

At the beginning of March, however, Mr. Walsh joined a tiny revolution, cutting the connection between his daily commute and foreign oil when he bought what is arguably the first plug-in electric car aimed at capturing the middle-American market: a Nissan Leaf.

“When available and practical, we make decisions to cut back on nonsustainable usage,” Mr. Walsh, 38, said about his motives.

President Obama made it a campaign pledge, and later a goal of his administration, to put one million electric vehicles on the highways by 2015 and set aside more than $2 billion in the 2009 economic stimulus package for advanced battery and electric car research to help make it happen.

But the promise of an electric car revolution in the United States has come and gone before, and the question is where Mr. Walsh ends and mainstream America begins.

For electric car enthusiasts, the good news is that the right combination of technology and policy is now in place to ensure that plug-in cars are almost certainly here to stay — in some form. Battery range is longer, and government incentives are nudging consumers and industry to expand the market beyond the luxury niche it has occupied.

General Motors has just come out with the Chevrolet Volt, a gas-electric plug-in hybrid, and other consumer models, including the Ford Focus Electric and Toyota Prius plug-in, are coming.

“Things have really turned a corner,” said Phyllis Cuttino, the director of the Pew Environment Group’s Clean Energy Program. “There’s just a whole broad segment of the population who now see how electric cars can work for them.”

What’s a little less clear, though, is just how quickly all this will unfold, and analysts seem to disagree over what it will take for electric cars to command any sizable portion of the market.

Part of the problem, said Robert Bryce, a senior fellow at the Manhattan Institute’s Center for Energy Policy and the Environment, is that even at $4 a gallon, the price of oil still is not high enough to nudge mainstream Americans beyond the gasoline-fueled engines they know and love.

“The history of the electric car is the history of failure tailgating failure,” Mr. Bryce said. “Maybe this time it will be different, but part of the problem is that the energy density of gasoline is very nearly miraculous.”

James Schlesinger, the former Energy Department secretary, put it more bluntly to the Web site Politico last month: “Anybody who’s talking about energy independence is smoking pot,” he said. “There’s no way we’re going to get to energy independence as long as we depend on the internal combustion engine.”

Of course, early adopters with disposable income don’t necessarily have to.

“I drove past the gas station the other day and gasoline was $4.19 a gallon,” Mr. Walsh said. “My round-trip commute cost me less than a dollar in electricity that I produced on my own roof,” he said, referring to the photovoltaic array he installed at his home four years ago.

That kind of enthusiasm is what’s needed to lure the first wave, but electric cars like the Leaf still face hurdles to wider adoption, including a lack of public charging stations, the time it takes to charge (seven hours in most cases) and range limitations.

Faster-charging technologies are in the works, and a number of companies, including General Electric, Better Place and Coulomb Technologies, are vying to grab parts of the charging station market. As for range, the Leaf’s battery permits a nominal driving distance of 100 miles on a full charge, though in actual traffic conditions that is likely to look something more like 60 or 70 miles.

For someone like Mr. Walsh, the Leaf works well. For other consumers, that might seem tenuous.

Sam Jaffe, an analyst with the market research firm IDC Energy Insights, said the other challenge for electric cars remains the upfront cost, which still exceeds comparably built conventional cars. A Leaf, for example, will be priced at about $33,600, Mr. Jaffe said, compared with Nissan’s Versa model with roughly the same frame at about $15,000.

A federal tax credit for an electric car will shave $7,500 off the difference. But even if an electric car costs just pennies to operate, Mr. Jaffe said that’s not enough for many buyers.

“What most people don’t grasp is that in terms of operational costs — what it costs you to drive the car around — electric cars are advantageous today. You come out on top today. But people don’t buy cars based on operating costs. They buy based on upfront costs.”

Of course, it can take years before the lower operational cost makes up for the higher upfront cost of the Leaf. It would take Mr. Walsh, for example, almost five years to recoup the price difference between the Versa and Leaf.

So what’s the market outlook?

In January 2010, the market research firm IHS Global Insight declared that “plugged-in vehicles” — a category that includes plug-in hybrids and fully electric vehicles — would make up 20 percent of the global market for light vehicles by the end of the decade. In November, Bloomberg New Energy Finance speculated that sales of such cars could hit 1.6 million, or 9 percent of the American market, by 2020 and perhaps 4 million, or 22 percent of the market, by 2030.

That would seem roughly in line with Mr. Obama’s goal, but Mr. Jaffe thinks that’s a bit unrealistic. He predicted that even by the end of 2011, only about 74,000 electric vehicles would be on the nation’s highways, including conversions and street-legal golf carts. That would be out of a total of 250 million cars and trucks, or about 135 million traditional passenger cars, according to the latest government figures.

Mr. Jaffe estimates the number of electric vehicles will hit 885,000 by 2015. It’s a solid, if modest number, and by then, most of the early adopters will have, well, adopted.

At that point, it will be up to everyone else. And at that pace of penetration, electric utilities should have enough time to work out systems for managing new demands on the grid. This will probably include lower off-peak prices, Mr. Jaffe said, to encourage electric car owners to charge their cars at night, when overall loads on the system are lighter.

For Mr. Walsh, such compromises ought to be taken in stride.

“While many people will argue about pollution and global warming, one way to look at it that I think many can agree on is that continuing to use fossil fuels and create air pollution is clearly not helping the environment,” he said, “so why not make a better choice when it is available?”