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Fossil Fuel Industry Has Enough Political Power to Destroy the Planet


Source: Center for Economic and Policy Research

Charles Lane used his Washington Post column to brag about the fact that the fossil fuel industry and climate denialists have had enough political power to prevent more widespread use of electrical cars, as he had apparently predicted would be the case a decade ago. He seems very proud of this fact. He also concludes by citing a prediction that there will be 125 million electric vehicles on the road worldwide in a decade, less than one-tenth of the total. And he is confident that the actual number will be below this.

Okay, I’m sure it’s fun to use your column in the Washington Post to predict a climate disaster, but let’s take a look at some of the facts here, insofar as Lane has any.

He starts by telling readers:

“gas-powered cars account for between one-sixth and one-fifth of U.S. carbon emissions.”

Lane’s source actually says that transportation accounts for 29 percent of carbon emissions. Cars and trucks account for 82 percent of this, with ships, boats, and “other” accounting for another 7.0 percent. If we assume that half of those emissions could also be readily replaced with electric motors, that would get us to 85.5 percent of the 29 percent of emissions attributable to transportation, which would put us at just under a quarter of total emissions. That’s a bit more than “between one-sixth and one-fifth,” but why quibble?

Then Lane informs us:

“government subsidies for them [electric cars] will be a regressive transfer of social resources in return for little climate benefit, given that the U.S. power grid the cars draw from is 64 percent fueled by coal and gas.”

Okay, there may have been someone somewhere who did not realize that the climate benefits from switching to electric cars are minimal unless we also switch to clean power sources, but I’ve never encountered such a person. The obvious point here is that even if we have a massive switch to clean sources of electricity generation, we will still be emitting huge amounts of greenhouse gases if most of our cars are still powered by fossil fuels.

Then Lane tells us the horrible news:

“Government, both federal and state, subsidized electric-car sales and production to the tune of several billion dollars, yet as of March 2019.”

Wow, several billion dollars! That’s a lot of money. He doesn’t tell us how many billions “several billion” is, but his source warns that it could be as high as $20 billion in total. Let’s see, that would be around 3.0 percent of the annual military budget. But since these are subsidies that took place over a decade, we would be talking about somewhere in the neighborhood of 0.5 percent of military spending over this period.

Lane also shares his great wisdom for those who want to see mass adoption of electric cars:

“Mass adoption of electric cars, however, cannot occur unless they can do everything gas-powered vehicles can do — including the ability to go hundreds of miles before refueling, and refueling easily — at a comparable total cost of ownership.”

When we think about the total cost of ownership and go back to Mr. Lane’s great insights on the issue of electric cars a decade ago, it might be worth considering projections for the price of oil at that time. Back in 2010, the OECD projected that the price of oil in 2020 would be $120 a barrel in 2009 dollars, which would translate into more than $140 a barrel in today’s dollars.

That would easily add another $2 a gallon to the current price of gasoline. It would be interesting to know if Lane had recognized a decade ago that the OECD and other forecasters had hugely over-projected the price of oil, or alternatively, if he thinks it would not affect the competitiveness of electric cars if gas was selling for $5 a gallon instead of $3 a gallon.

This also raises the obvious point that folks who care about the future of the planet might want to tax gas by $2 a gallon (or more) as is done in Europe. Of course, if we think it is cute to wreck the planet for future generations, then we would never think of making people pay for the damage they cause.

In terms of what is possible, China sold almost 1.3 million electric cars in 2018 and sales are projected to grow at more than a 33 percent annual rate through 2024.  The industry has taken somewhat of a hit this year, as the government cut back subsidies, but it appears that the leadership is renewing its commitment to electric cars, which means it is likely to get back on this growth path. (China also leads the world in production of electricity from wind and solar power, so electric cars will make a difference there.)

Anyhow, Lane could be proved right. His friends in the fossil fuel industry may be able to thwart any serious efforts to reduce greenhouse gas emissions here and around the world. That will give him something to gloat about in 2030.

It is worth noting, for anyone making nonsense arguments about affordability, the worldwide savings between the oil price projected from 2010 and the actual price of oil today comes to more than $2.7 trillion a year. If we add in savings from lower priced natural gas and coal, which would be at least comparable, the total would be in the neighborhood of $5.4 trillion a year.

The $5.4 trillion in savings that the world is seeing each year from lower than projected fossil fuel prices would be enough to buy 180 million electric cars a year, if they cost $30,000 each. In other words, switching to electric cars on a large scale is affordable, if anyone cares about the future of the planet.

1 comment

  1. avatar
    Michael January 4, 2020 10:42 am 

    Excellent article, many fine points.

    But at the very end a $30,000 electric car is deemed “affordable.” For whom?

    Where I live public transportation is limited and often impractical. Thus, finding other ways to live normally means some kind of private vehicle, which does not work for many.

    The $30,000 electric car is not affordable for most, that’s the brutal truth. We’re going to have to do better than that or better than taking on a 5 or 6 year “mortgage” to buy a car!

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