Lawrence M Friedman, an expert in legal history and property law, was one of my favorite law professors. As a student at the University of Chicago and its law school, he had been part of the Second City cast with Elaine May and Mike Nichols, and it you think there’s no way someone can make the subject of property law engaging, you haven’t had a class with Professor Friedman. An author of a number of books (including fiction) he said something in his work, “The Horizontal Society,” which strikes me as particular appropriate as the Biden administration rolls out its fantasy energy and infrastructure plans:
The average citizen, who has no idea how... a refrigerator works. still feels that scientists, if they worked hard enough, could cure AIDS or the common cold, or get electric power out of turnip juice, or send a satellite zooming off to Pluto.
No better example of this sort of fantasy thinking can be found in the plan to transform the auto industry. And no better example can be found of the way lunatic ideas and the greedy grab by myriad interests for federal funds for ridiculous projects can be found than this one.
Like plugging in a toaster!
On March 29 something called the Alliance for Automotive Innovation , an alliance of auto manufacturers, supplies and the United Auto Workers wrote to the President supporting the shift to electric-drive vehicles. Like courtiers praising the emperor’s new clothes, the Alliance dubs the Biden plan a “bold, comprehensive vision and innovation that will place the U.S. at the forefront of creating a cleaner future for motor vehicle transformation.”
Then it goes on to the cost (certainly just a down payment for something that will cost even more). It turns the notion of supply and demand on its head, seeking funds to first create demand and then to supply the products for the demand they just created. It is slathered with blather like “we need a comprehensive plan that takes present market realties [only about 2 percent of 14.5 million worth of new vehicle sales were for electric vehicles] as well as the on-going investment and innovation in internal combustion engine (ICE) technologies."
Ignoring the spin we see a bottom line that stretches out endlessly and pays off all the Democrat interest groups it can possibly grease. Here's what they want on the demand side:
- to extend the 30 B Fuel Cell Motor vehicle Tax Credit because electric vehicles are more costly.
- to prioritize more research and development to reduce costs and improve battery, fuel cell and hydrogen fuel generation.
- ambitious federal fleet requirements to adopt EVs “to increase consumer awareness,”
- to extend the availability of EV charging to “the tens of millions of Americans who rent or live in multi-unit dwellings,” and encourage the enactment of EV charging installation in building codes.
- to seek tax incentives, grants, rebates and other giveaways to create more charging and refueling infrastructures in homes, workplaces, highways and “other public installations."
Increasing demand, however, will not increase the supply without yet more federal largesse. So here’s what they want to do to increase the supply:
- Expand tax credits to allow manufacturers to “retool, expand, or build new facilities for the manufacturing, recycling, of these vehicles, batteries, fuel cells, components and infrastructure."
- Expand the domestic manufacturing conversion grant program to accelerate the needed technologies.
- Develop (presumably through more federal money or tax credits) extraction, processing and recycling of the critical minerals needed for these vehicles (now mostly imported from China).
- Research and development grants for new innovation “that will make the zero-emission future a reality."
- Grants and loans for advanced technology.
- Training and development programs to “upskill” the work force.
- New investment tax credits for hydrogen production and storage.
- Grants to “reequip, expand, and establish facilities for the manufacturing of clean energy technologies and components."
The cost of these ambitious efforts is predicted at the very end of this wish list: $4-12 billion in the tax-credit expansion alone and another $12-25 billion for manufacturing conversion. I don’t think this covers more than a fraction of what this proposal suggests. Do you?
No fumes, no worries, no explosions!
On the other hand, I've reread it several times, and besides scratching my head at the new economics in which we are asked to create and greatly fund a non-existent demand to deal with a non-existent problem ("climate change") and then to create a fount of new funds to meet this confected demand. Puzzling.
More puzzling in this paean to electric vehicles is the absence of the need for more electric power production. Not one word of it. Toyota’s president is one auto manufacturing leader skeptical of the entire notion of massively increasing electric vehicles:
Toyota President Akio Toyoda said Japan would run out of electricity in the summer if all cars were running on electric power. The infrastructure needed to support a fleet consisting entirely of EVs would cost Japan between ¥14 trillion and ¥37 trillion, the equivalent of $135 billion to $358 billion, he said.
“When politicians are out there saying, ‘Let’s get rid of all cars using gasoline,’ do they understand this?” Mr. Toyoda said Thursday at a year-end news conference in his capacity as chairman of the Japan Automobile Manufacturers Association.
Toyota is a leader in hybrid autos and has no small experience to back up their president’s concerns.
In what was undoubtedly a rare moment of reality, the Washington Post acknowledged the increased amount of electric energy these “clean cars” need is energy produced almost entirely by fossil fuels now that in this country atomic energy has been so reduced.
How much more electricity will be needed for electric cars? About 150,000 electric vehicles were sold in California in 2018 — 8 percent of all state car sales. The state projects that electric vehicles will consume 5.4 percent of the state's electricity, or 17,000 gigawatt hours, by 2030.
California, for one, doesn’t have sufficient capacity to meet existing demand, and there are no plans I know of in the works to increase it.
There’s one more thing radically wrong with this blinkered notion that substituting more expensive transportation and servicing it when conventional transportation and the means to fuel it is cheaper, more readily available, and requires no enormous outlays to continue.
Unless someone comes up fast with a way to create electric power for electric vehicles from turnip juice, a transportation policy that has at its core an enormous switch to electric vehicles without a substantial increase in electric power production is, on its face, insane.