Tesla And Electric Cars Don’t Replace Oil And Natural Gas

Tesla’s Electric Cars: A Part of the Climate Solution

With Tesla announcing its 200,000 US sale in July, augmented by Elon Musk’s antics of late, it is time for some deep thoughts.

An article the other day from Amy Harder at Axios got my wheels turning: “Putting Elon Musk’s Tesla into climate change perspective.” That “perspective” is easy enough to understand. Although Tesla and electric cars are widely seen as the solution to climate change, they are just a small part needed in our bag of tricks.

Using calculations from think tank Third Way, Amy puts forth the CO2 emissions saved by each Tesla electric car to the CO2 savings of other sources of energy.

The conclusion is that “electric cars, and one company in that category (Tesla), are but one highly dependent piece of the puzzle in addressing climate change.” Their shortcomings are bigger than advertised. For example, there are a ton of GHG emissions in the electric car manufacturing process, including batteries, which routinely gets ignored by their sellers and promoters. This is something the International Energy Agency has been trying to bring to our attention for many years now.

More Oil and Gas, Far Better US Air Quality

It is therefore just as clear that oil and natural gas solutions will remain integral to our mission to cut GHG emissions and combat climate change. They have to be: for as far as our Department of Energy’s National Energy Modeling System forecasts (now until 2050), oil and gas will still supply the bulk of our energy.

Fortunately and undeniably, US oil and natural gas have already proven to be part of the climate solution, with non-stop technological evolution at the heart of their ongoing success.

One of the great advancements in American life that for some reason routinely goes unreported is the plummeting of US concentrations of common pollutants and the ongoing improvement in US air quality.

For some, better US air quality is “an inconvenient success story” because it does not exactly necessitate the rush to their favoured sources of energy.

But, perhaps what is most important here is that this incredible progress has come with an immense increase in US oil and gas usage. For example, environmental progress made in the refining of fuels and improvements in vehicles is inarguable.

Cleaner fuels used in today’s more efficient vehicles are slashing pollutants in tailpipe emissions  and quietly like a fine wine, the internal combustion engine just keeps getting better.

The US Environmental Protection Agency (EPA), for instance, reports that today’s new cars, trucks, heavy-duty trucks, buses, and SUVs operate about 99% cleaner than models produced back in the 1960s.

Overall, these improvements in the way that we utilise oil – our most vital source of energy since 1950 – have helped reduce US air pollution by 73% from 1970 to 2016, even as vehicle miles travelled nearly tripled and the economy grew 253%.

Here are some overwhelming numbers to illustrate. Since 1970, the US has averaged a whopping 7.8 million barrels of gasoline used each day, or 328 million gallons consumed every 24 hours. That’s 47 straight years of devouring an average of 120 billion gallons of gasoline per year, or a mind-blowing 5.64 trillion gallons of gasoline used in the country since 1970.

Stacked up as gallon jugs, that is an insane 3,321,870,701 Empire State Buildings tall of gasoline used in the US since Coach Vince Lombardi died (September 1970)!

Yet, despite this amazing amount of oil utilised, our city skies continue to get cleaner. EPA reports that “we are leading the world in clean air” and documents the drastic decline in emissions. I am suddenly reminded of a Forbes oldie but goodie: “As We Consume More Fossil Fuels, Air Quality Actually Improves.”

As for natural gas, currently our second most important source of energy and our primary source of new demand, rising use of natural gas in the US electric power sector, up 60% since 2005 to become our main source, is the chief reason why US CO2 power sector emissions have plummeted to their lowest levels since 1985.

This is far more of a “climate change fighting victory by our natural gas” than some want you to know: CO2 accounts for over 80% of all GHG emissions. And relentlessly, without pause, US natural gas plants are becoming more efficient, using less and less fuel to generate more and more electricity.

The US has been cutting emissions faster than any nation on Earth , yet we use more oil and gas than anybody else. Still legendary to me: “Facts Not Fear on Air Pollution.”

So, the question: why are the environmental groups themselves not screaming from the rooftops about these incredible US environmental achievements that have come with so much more oil and gas usage?

Letting Energy Markets Decide

Indeed, the Tesla story offers much for us to ponder. It is crucial to know that as we seek to reduce GHG emissions and continue on our path toward the deep electrification that I discussed a few weeks ago, we must also know that electric cars are just a part of the picture.

In stark contrast to what their opponents want you to believe, the incumbent oil and gas technologies are constantly evolving – apparently in the dark because so few talk about it.

It is absolutely assured that oil-based cars are not going away anytime soon. Their numbers are simply overwhelming. The US oil-based car fleet totals more than 260 million, and we are selling over 17 million oil cars a year.

With still less than one million electric cars now on US roads, supporting the ongoing oil-based car evolution with R&D is therefore mandatory.

As for electricity, there is almost unlimited room “for more.” Just think about it.

Electricity accounts for 20% of the energy used in the US, so the goal of deep electrification, again something that even the most strident environmental groups want us to do, still has 80% more market share to seek.

From cars and heavy-trucks to operations at our biggest ports (like Long Beach) to fuelling industrial equipment, deep electrification means massive latent power demand on the horizon.

In fact, in its US National Electrification Assessment released in April, the Electric Power Research Institute (EPRI) finds that a “progressive” track for electrification would increase our demand by around 35% and a “transformative’ track would increase demand by 50% or so. And EPRI confirms the obvious: “demand for natural gas is projected to grow across all scenarios alongside the electrification trend.”

Now the ultimate punch line: with gas increasingly our main source of electricity, Tesla’s electric cars themselves are, quite literally, “natural gas cars.”

Given the great potential for more electricity, the world’s top experts from Carnegie Mellon University’s Electricity Industry Center have long warned us about the dangers and impracticalities  of choosing winners and losers in the marketplace.

We have seen government rebates and mandates designed to lift sales of electric cars, but that is a choice consumers and markets should make on their own.

Electric cars gaining market share depends on a variety of factors, namely improving battery range, lowering costs, more charging infrastructure, and higher consumer acceptance.

Government intervention in markets creates an un-level playing field. Tax transfers from one sector should not be used to subsidise another, and tax policy should provide equal treatment among industries.

Subsidies such as federal and state income tax credits to buy electric cars, or special tax credits to install accompanying charging infrastructure, distort free markets and hurt American consumers.

Tesla, for instance, will apparently see its US$7,500 federal tax credit completely gone by the end of next year, potentially crushing sales.

Source: Global Energy World