Happy Thursday friends! Here’s my weekly take on the five most interesting developments in future fuels and vehicles trends over the last week.
- BNEF/BCSE Factbook: Battery electric vehicles (BEVs) are as cheap or cheaper than many gasoline vehicles, but only when incentives are applied, just one nugget from this year’s Factbook.
- Megacities and Future Transport: An insightful infographic may provide some clues about the future of fuels and transport.
- Carbon Tax: Conservative pillars in the U.S. have put forth a plan for a carbon tax that even a populist President could get behind. Maybe? Maybe not?
- More Outlooks: This time, from Carbon Tracker and the Grantham Institute which found that energy companies are “seriously underestimating” low-carbon advances, especially EVs and solar with their approach to forecasting.
- Black Carbon: A new study published in the journal Proceedings of the National Academy of Sciences found that transport is responsible for 38% of black carbon in the Russian Arctic.
1. Bloomberg New Energy Finance (BNEF)/Business Council for Sustainable Energy (BCSE) : 2017 Sustainable Energy in America Factbook
This week BNEF and BCSE released the fifth annual Sustainable Energy in America Factbook with all kinds of data on renewable energy, including electrification, natural gas and biofuels for transport. Key highlights respecting transport from the factbook include the following:
- Battery electric vehicles (BEVs) are as cheap or cheaper than many gasoline vehicles, but only when incentives are applied, as shown in the figure below.
- Sales of electric vehicles rebounded in 2016, jumping 38%. The surge was primarily driven by plug-in hybrid vehicles, such as the upgraded Chevy Volt and new models like the BMW X5 xDrive, attracting 70% more buyers. BEVs, including the Tesla Models S and X, saw an additional 18% in units sold. EV sales remain a small portion of total auto sales, topping 1% for the first time in Q3 2016. EV model availability 2008-2016 is shown in the figure below.
- At the same time, hybrid electric vehicles (HEVs) – which compete more directly with traditional internal combustion engines – saw their sales plunge 10%, likely due to the continued pressure from low oil prices. The falloff in HEV purchases, combined with a rebound in consumer interest in large SUVs (up 22% in 2016), kept the average fuel economy of vehicles sold flat at 25 miles per gallon (mpg) for the third straight year.
- The diminishing cost of lithium-ion battery packs is the driving factor behind the falling cost of BEVs, shown in the figure below.
- The return to less fuel efficient vehicles and low gasoline prices have resulted in two consecutive years of rising gasoline consumption. In 2016, sales of gasoline rose 3.3% to 136bn gallons, only 1.5% below the all-time peak achieved in 2005 and 7.1% above the trough achieved in 2012.
- Driven by rising fuel economy standards, the availability of fuel-efficient vehicles continues to climb. The market saw greater penetration of fuel-saving start-stop technologies, which automatically switch off the engine while the car is stopped to cut fuel use and reduce idling emissions. Availability of internal combustion engine models with start-stop technology exceeded 90 vehicles, or 9%, in 2016, up from less than 1% in 2012. EV model availability is also climbing, giving consumers the option to choose among 55 EV options in 2016, including three fuel cell vehicles. Plug-in hybrid vehicles have experienced the greatest growth in the past two years, with 24 models available at the end of 2016, versus only 18 at the end of 2014.
- Natural gas continues to make inroads as a cleaner alternative to gasoline-powered vehicles, particularly within the heavy-duty vehicle segment. Industry estimates suggest that 163,000 natural gas vehicles (NGVs) were on the road at the end of 2015, including over 45,000 heavy-duty NGVs. The falloff in crude oil prices has partially eroded natural gas’s price advantage; however, technological improvements continue to improve the emissions profile of NGVs: a new low-NOx “Near-Zero” heavy-duty natural gas engine released in 2016 exceeds U.S. EPA standards by 90%. Renewable natural gas (RNG), which can be used to meet the Renewable Fuels Standard (RFS), makes up a large share of total natural gas fuel sales for vehicles. Year-on-year, RNG use surged 25%. The figure below shows demand for natural gas for natural gas-fueled vehicles.
This terrific site posts insightful infographics on all kinds of topics, including energy. This one on global cities caught my eye because of what we might be able to extrapolate about energy/transport issues. Read more about it here.
This op-ed from Reagan appointees George Schultz and James Baker is the latest from conservatives looking to shift the anti-climate stance the Republican Party largely continues to take. Schultz and Baker, along with other former conservative U.S. government appointees and thinkers, have created the Climate Leadership Council and released a plan this week that addresses both climate change and the rising sentiment of populism that brought President Trump to office. Their plan:
- Create a gradually increasing carbon tax;
- Return the tax proceeds to the American people in the form of dividends;
- Establishing border carbon adjustments that protect American competitiveness and encourage other countries to follow suit; and
- Roll back government regulations once such a system is in place.
With respect to dividends, the authors say:
“Perhaps most important, the carbon-dividends plan speaks to the increasing frustration and economic insecurity experienced by many working-class Americans. The plan would elevate the fortunes of the nation’s less-advantaged while strengthening the economy. A Treasury Department report published last month predicts that carbon dividends would mean income gains for about 70% of Americans.”
They say a $40-per-ton carbon tax would provide a family of four with roughly $2,000 in carbon dividends in the first year, an amount that could grow over time as the carbon tax rate increased. And the tax itself would reduce more GHGs than the various climate regulations that were promulgated during the Obama Administration (and perhaps other administrations). “Unlike the current cumbersome regulatory approach, a levy on emissions would free companies to find the most efficient way to reduce their carbon footprint.” Goodbye fuel efficiency standards, and goodbye Renewable Fuels Standard?
While President Trump has disavowed climate change and has promised to pull the U.S. out of the Paris Agreement, the geopolitics will make it hard to continue to do both. But this is a plan he might be able to sell to his constituency. Will he go for it and will Republicans go for it? That remains to be seen. The trollers on both sides of the aisle say no way, but I’m not so sure because of its populist appeal. This one’s worth watching.
According to these organizations, the falling costs of electric vehicle and solar technology could halt growth in global demand for oil and coal from 2020. Read more about it here.
According to a new study published in the journal Proceedings of the National Academy of Sciences, 35% of black carbon in the Russian Arctic originates from residential heating sources, 38% comes from transport, while open fires, power plants, and gas flaring are responsible for only 12%, 9%, and 6% respectively. These estimates confirm previous work for some areas of the European Arctic, but for Siberia, the findings differ from previous research, which had suggested that contribution from gas flaring were much higher, according to the Institute.