On June 30, 2021, Robert Bryce provided testimony before the House Select Committee on the “climate crisis”. Bryce points out that our electrical grid has become fragile in recent years, largely because of the actions by our state and local governments.
Forcing the grid to accept wind and solar energy, energy that is renewable but not reliable, is taking its toll. Bryce summarizes his view of the current policies as follows:
“Electrifying parts of our transportation system may result in incremental reductions in greenhouse gas emissions. But a look at history, as well as an analysis of the supply-chain issues involved in manufacturing EVs, the resource intensity of batteries, and the increasingly fragile state of our electric grid – which is being destabilized by bad policy at the state and national levels – shows that a headlong drive to convert our transportation systems to run on “green” electricity could cost taxpayers untold billions of dollars, increase greenhouse gas emissions, be bad for societal resilience, make the U.S. more dependent on commodity markets dominated by China, make us less able to respond to extreme weather events or attacks on our infrastructure, and impose regressive taxes on low and middle-income Americans in the form of higher electricity prices.”
Bryce’s testimony dealt with Affordability, Grid Fragility and Supply Chains. This posting will only deal with Affordability. The next posting will grapple with other two. His testimony is some 14 pages long, all worth reading. In the interest of your time however, I will attempt to abbreviate the testimony citing key points.
Bryce notes that while EV sales are increasing, they are only a fraction of the US vehicle population. He says:
“But policymakers must be cautious. While that growth in EV sales is notable, EVs still account for less than 1% of the 276 million registered vehicles in the U.S. Of all the EVs on U.S. roads, about 42% of them are in California. By contrast, states like South Dakota, North Dakota, Montana, and Wyoming each have less than 1,000 registered EVs. Furthermore, in 2020, fewer than 300,000 EVs were sold in the U.S. For comparison, Ford Motor Company sold nearly 800,000 F-series pickup trucks last year”.
Bryce notes that 42% of the EVs are in California making it the best place to sample the experiences and expectations.
“The history of EVs in California provides context for the rest of the country. In 1990, the California Air Resources Board passed a measure that required 10% of all auto sales in the state be zero-emission vehicles by 2003. But today, 31 years after California implemented the ZEV mandate, the state has nearly 15 million automobiles, and of that number, less than 900,000, or about 6%, have an electric plug. Over the past century, the history of the EV sector in California and the rest of the country can be summarized as lots of government push, but not enough consumer pull.”
Bryce examines current and future prices of EVs. With respect to future prices, he turns to an expert:
“Policymakers must also be aware that future EV adoption rates depend heavily on the ability of automakers to continue cutting costs and improving the utility of EVs. Earlier this month, Jeremy Michalek of the Vehicle Electrification Group at Carnegie Mellon University, questioned the ability of the industry to continue slashing costs. In an article titled, “I’m an EV expert, and I’m skeptical about how quickly electric cars will go mainstream in the U.S.”
Michalek explained that: economies of scale drove early reductions in battery costs, but now they are all but exhausted, and we shouldn’t expect big factories or growing demand alone to make EV batteries much cheaper. Second, production process improvements have also driven cost reductions, but even a utopian production process can’t push battery prices below material costs. Third, prices can temporarily dip below costs when firms leverage subsidies, take temporary hits to establish a foothold in the market, or crosssubsidize to comply with regulation, but prices can’t stay below costs for long.
He concluded that we should, “remain skeptical about predictions of exactly how fast battery costs will drop and how quickly EVs will be adopted in the future.” Michalek’s conclusion brings me to my first point: affordability.”
Bryce expands on EV affordability:
“In 2019, the National Bureau of Economic Research published a study that found the average household income of EV buyers was about $140,000. That’s twice the median household income in the U.S., which was nearly $69,000 in 2019. The average owner of a Tesla Model S has a household income of about $153,000”
“Wealthy EV buyers are being subsidized by low and middle-income consumers. In 2016, two academics at the University of California at Berkeley, Severin Borenstein and Lucas W. Davis published a paper that concluded the majority of the money being collected under federal programs aimed at promoting energy efficiency and alternative transportation was going to wealthy Americans. They found “the most extreme disparity is in the program aimed at electric vehicles, where we find that the top income quintile has received about 90% of all credits.” They continued saying that taxpayers who had adjusted gross incomes “in excess of $75,000 have received…about 90% of all credit dollars aimed at electric cars.”
Bryce used the June 9 report by the California Energy Commission (CEC) for the following comments:
“Low and middle-income ratepayers will also be forced to pay for the generation capacity and grid upgrades needed to accommodate electrification of transportation. The same CEC report found that by 2030, “electricity consumption from passenger EV charging could reach about 5,500 megawatts (MW) around midnight and 4,600 MW around 10 a.m. on a typical weekday, increasing electricity demand by up to 20–25 percent at those times.” To put that 5,000 MW or so of new generation capacity in perspective, it is roughly equal to the rated output of all of California’s existing geothermal and nuclear plants, combined. It must be noted here that the state is slated to close its last remaining nuclear plant, the Diablo Canyon Power Plant, by 2025. “The California grid will have difficulty providing electricity from midnight until the early morning hours because it is heavily dependent on solar energy to meet demand. Thus, it is highly likely that to meet the power demand needed to charge EVs, the state will have to deploy more natural gas-fired capacity. The timing of EV charging will have a big effect on greenhouse gas emissions. If the state has to rely on gas-fired generators to charge EVs at night, the climate benefits of widespread EV adoption may be negated.”
Bryce notes this about California energy prices:
“In 2020, California’s electricity prices jumped by 7.5%, making it the biggest price increase of any state in the country last year and nearly seven times the increase that was seen in the United States as a whole. According to data from the Energy Information Administration, the all-sector price of electricity in California last year increased to 18.15 cents per kilowatt-hour, which means that Californians are now paying about 70% more for their electricity than the U.S. average all-sector rate of 10.66 cents per kWh.“
Bryce paints a realistic picture of the future if we continue down the path set out by the Biden Administration and progressive States. The lower- and middle-income families will be paying regressive taxes in the form of higher electricity prices. if we do not resist going down the progressives’ path that might be the least of our problems.
Trying to talk to a brainwashed Liberal about these obvious truths is to be met with blank stares, incredulity, recitation of Alarmist talking points and ultimately the Liberal turning on their heel with a huff.
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