Monday, April 09, 2018

Is your neighbor’s Tesla costing you money?

It certainly seems like going “green” is trendy these days. And we hear a lot about the benefits of renewable energy and electric cars. But there may be hidden costs in the pursuit of “clean energy,” and they may affect consumers more than expected.

Take California’s new Zero Emissions Vehicle (ZEV) mandate. California and nine other states are requiring automakers to sell a progressively larger number of electric cars each year. And so, automakers must either meet their annual ZEV quotas or purchase costly credits to make up the difference.

Unfortunately for automakers, consumers aren’t hurrying to buy electric cars. One reason, of course, is the price tag. Even the least expensive ZEVs, like the Nissan Leaf and Chevy Volt, cost roughly $30,000. Those prices are simply out of reach for much of America, where the median annual income is approximately $44,000. A more likely option, in contrast, would be a small, fuel-efficient vehicle like the $17,000 Chevy Cruze. But consumers may also be balking at the limited range of electric cars. The Chevy Volt travels only 53 miles per charge. A Tesla Model S, which currently costs $70,000, may travel 200 to 300 miles per charge.

California is clearly in the vanguard of environmental activism, but the ZEV mandate is having an outsized effect on consumers in others states. That’s because automakers are feeling the progressively rising cost of their ZEV obligations. In 2015, states following the ZEV mandate represented 28 percent of all U.S. vehicle sales. By 2025, those 10 states have mandated that ZEV purchases must exceed 15 percent of total car sales.

Automakers not meeting their ZEV quota must purchase credits from electric vehicle manufacturers, like Tesla, or pay a $5,000 fine for each credit they are short. Noting the hefty price tag for electric cars, and the obvious limitations of battery range, it’s likely that automakers will be forced to buy an expensive chunk of credits each year in order to meet their increasing ZEV obligations.

That’s when things get interesting, since auto manufacturers already survive on tight margins. Meeting ZEV requirements will mean automakers passing the cost of these credits on to their customers. And that means conventional autos rising in price to help subsidize more costly electric cars.

Realistically, the ZEV mandate means cash-strapped consumers in heartland America will be paying more to buy a conventional car. And they will be doing so to aid the purchase of electric cars for wealthier Americans. It’s a strangely convoluted scenario, since electric cars are typically purchased as a second or third vehicle for more affluent families. But now, wealthier America will purchase a Tesla more easily, thanks to the subsidies being shouldered by lower-income families.

There’s a further irony here, too, since almost two-thirds of all electricity generated in the U.S. comes from coal and natural gas power plants. Thus, these plug-in electric vehicles will still be powered mostly by fossil fuels.

If ZEV mandates increase, more Americans could be compelled to purchase electric cars — or face escalating auto prices. That could mean even middle class Americans struggling to afford a car. But that might well be the grand intention of those pushing so hard for electric cars — to simply price conventional automobiles out of reach for everyday Americans.


China is a paper tiger on rare earth metals and President Trump should make that clear by tapping abundant U.S.-based rare earth metals

Americans for Limited Government President Rick Manning today issued the following statement in response to a piece by Jeff Spross at The Week suggesting China could “win” a trade war by “clamp[ing] down on these exports”:

“With the U.S. increasingly vulnerable to Chinese stranglehold on the rare earth marketplace, it is time for President Trump and Interior Secretary Zinke to do whatever is necessary to open up rare earth mining facilities. The U.S. has an abundance of rare earth minerals in the west on federal lands which could be rapidly developed but extraordinary measures would need to be taken to overcome national security threatening regulations.

“Additionally, rare earth metals are being developed in Afghanistan where the United States has poured 17 years of blood and treasure incredibly the Chinese are being allowed to develop those rare earth metals. It might be worthwhile for President Trump to talk to Afghani President Ashraf Ghani about redirecting that development to be exported to the United States.

“In the meantime, America has a great abundance with incredible mineral reserves that have been put under regulatory lock and key, it is time for us to get back in the domestic mining business so that we are no longer fully dependent on foreign powers for the critical materials necessary for a modern economy and military.”


US Is Net Natural Gas Exporter for 1st Time in 6 Decades Thanks to New Infrastructure

Natural gas has transformed the domestic energy industry. The United States now exports more natural gas than it imports – for the first time since 1957. While higher levels of production and the development of new sources such as the Utica and Marcellus shales have played a significant role, putting the energy transportation infrastructure in place is just as vital, as can be seen from the evolution of liquefied natural gas exports.

From 1975 to 2015, annual LNG exports never exceeded 0.2 billion cubic feet per day. LNG exports more than doubled in 2016 to a then-record of 0.5 billion cubic feet per day. The key was putting the infrastructure in place to make higher exports possible and updating the process to review applications to export LNG to countries for which there is no free trade agreement in place.

Previously the Department of Energy reviewed applications for conditional approval in the order in which they were submitted. This led them to review some applications from projects that were never viable or close to construction, while others that had already wound their way through the necessary environmental review process waited years for their export application to be approved.

The convoluted process contributed to lengthy export application times, which could stretch across multiple years. In February, 2014, the Energy Department had a backlog of 24 export applications to non-Free Trade Agreement countries working through the review process, compared to only 6 approvals. Under the new framework, the Department has now approved 29 of these applications, although 21 are still under review due to a higher total number of applications. While the Department has made some strides, it should strive to make further progress in reducing review times.

Without LNG exports, natural gas transportation to other countries is largely confined to pipelines, which face their own capacity constraints. In addition, pipelines are geographically limited to neighboring Canada and Mexico.

The only previously active terminal in the country, Kenai LNG Terminal in Alaska, ceased operations in 2015. Fortunately, the approval and construction of new LNG terminals has substantially increased capacity and helped facilitate strong export growth.

The Sabine Pass terminal in Louisiana began service in 2016, and now has four active liquefaction units with another on the way. The Cove Point terminal in Maryland was put into service even more recently, with the first cargo of LNG shipped in March 2018. These two terminals alone increased export capacity to 3.6 billion cubic feet per day.

The Sabine Pass terminal enabled LNG exports to quadruple, from 0.5 billion cubic feet per day in 2016 to 1.94 billion cubic feet per day  in 2017. The capacity to ship LNG to other countries has opened up more destination countries for exports, reaching 25 countries in 2017.

LNG exports increased both to countries that had previously been export destinations and to new markets. In 2017, LNG exports to Mexico were 5 times higher than in 2016, in China they were 10 times higher, and to South Korea they were 12 times higher than the previous year. These three countries accounted for more than half of LNG exports in 2017, and exports to just these countries were higher than total LNG exports for any year stretching back to 1975.

Other countries that had previously only imported a marginal amount of LNG from the United States, including Japan, Jordan, and Spain, are increasing their U.S. imports. U.S. exports to Asia, the Americas, and Europe all saw substantial growth from 2016 to 2017.

The approval for exports to non-Free Trade Agreement countries has also grown. Exports to those countries accounted for 53 percent of LNG export volume from February 2016 to March 2018.

The impressive growth last year was likely just the beginning. The Cove Point LNG terminal’s exports are not reflected in the 2017 growth, as its first cargo went out in 2018. Four additional LNG export terminals are scheduled to come into service in the coming years, and they will increase total export capacity to 9.6 billion cubic feet per day by the end of 2019. By that time, U.S. LNG export capacity will be more than six times higher than it was in latter half of 2016.

Prices, production levels, weather disruptions, and other factors will continue to be important, but U.S. infrastructure will be able to support much higher levels of exports. The Department of Energy has also reduced review times for LNG export applications due to a rule change, leading to more applications being approved. Due to these developments, the Energy Information Administration projects the United States to become the third-largest LNG exporter by 2020, after Australia and Qatar.

New LNG terminals have supported massive growth in exports, which played a role in America becoming a net natural gas exporter for the first time in six decades. LNG exports will play an increasingly important role in the years to come, and this rapid growth has only been made possible by having the necessary energy infrastructure in place.


3 Reasons the Left Hates Scott Pruitt

You know why they are going after Environmental Protection Agency secretary Scott Pruitt?  I can give you at least three reasons.

No. 1: He has led the Trump administration’s efforts to dismantle President Barack Obama’s expensive and ineffective climate legacy piece by piece.

From the Clean Power Plan, which was all about Obama’s climate agenda and which had nothing to do with creating clean air (we already have laws about that), to the Waters of the United States regulation, which could turn a puddle in your front yard into environmentally-protected swamp land—Pruitt has been rolling back many of the regulations put in place by Obama’s overzealous, power-grabbing, and arguably unconstitutional EPA.

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No. 2: They also don’t like the fact that just this week Pruitt’s team at the EPA revised a mandate on fuel standards that will make new cars significantly cheaper—maybe as much as $7,000 cheaper.

No. 3: Under Pruitt, the EPA has announced it will no longer develop regulation based on “secret science”—meaning studies only the so-called experts at the EPA, but not the public, can see. It’s called transparency, and believe me, the deep state in Washington hates that.

So no, Pruitt doesn’t believe the EPA is an all-powerful agency with no accountability except to itself. And no, he doesn’t believe we should be creating useless regulations that eliminate jobs and make families pay more for energy just so Al Gore and most of Hollywood can feel good about themselves.

And that is why they are going after Scott Pruitt.


Hawaiian Nene Goose May Be Knocked Off Its Endangered Species Perch After 51 Years

The nene, the state bird of Hawaii, has been listed as an endangered species since 1967. But now, after 51 years on the endangered list, the U.S. Fish and Wildlife Service (FWS) wants to reclassify the nene from endangered to threatened.

The reclassification proposal, posted on April 2 at the website, runs 209 pages and 25,830 words.

Under the Endangered Species Act, a species may warrant reclassification from endangered to threatened if it is no longer in danger of extinction. "The Hawaiian goose (nene) is listed as endangered, and we are proposing to reclassify nene as threatened because we have determined it is no longer in danger of extinction," the proposal says.

FWS said Hawaii's current nene population totals 2,855 -- up from 600 in 1983 -- and that population is "self-sustaining" and "well distributed" in the Hawaiian islands.

"The species continues to be conservation-reliant (dependent on long-term predator control and habitat management), but with ongoing management we expect these populations to continue to be self-sustaining without additional releases of captive-bred birds."

A species is listed as “threatened” if it is likely to become endangered within the foreseeable future throughout all or a “significant portion of its range.” The FWS proposal lists every potential and actual threat to the nene -- from cats to bees, from vehicles to parasites, to mankind and climate change -- then concludes:

We have carefully assessed the best scientific and commercial information available regarding the past, present, and future threats to the nene. Based on the analysis above and given increases in population numbers due to recovery efforts, we conclude the nene does not currently meet the Act's definition of an endangered species in that it is not in danger of extinction throughout all of its range.

Although population numbers have increased, our analysis indicates that because of significant remaining threats, the species remains likely to become in danger of extinction in the foreseeable future throughout all of its range. Because the species is likely to become in danger of extinction in the foreseeable future throughout all of its range, the species meets the definition of a threatened species. Therefore, we propose to reclassify the nene from an endangered species to a threatened species.

FWS said adoption of the proposal would recognize that the nene, known for its "nay-nay" call, is still impacted by predation, habitat loss and degradation.




Preserving the graphics:  Most graphics on this site are hotlinked from elsewhere.  But hotlinked graphics sometimes have only a short life -- as little as a week in some cases.  After that they no longer come up.  From January 2011 on, therefore, I have posted a monthly copy of everything on this blog to a separate site where I can host text and graphics together -- which should make the graphics available even if they are no longer coming up on this site.  See  here or here


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