JUICE: The Art of Emissions Warfare

28 Jun 2017

Bay Area air regulators last week backed away from fighting the oil lobby head on. They did not vote to cap regional oil refineries’ greenhouse gas emissions as promised.

The move surely was in response to pressure from the governor who doesn’t want a direct confrontation with the powerful oil industry while pushing legislation to extend California’s carbon cap-and trade program.

Gov. Jerry Brown needs a two-thirds vote to extend until 2030 the state’s carbon trading program, which covers the combative petroleum industry. In addition, winning a continuation of the program beyond 2020 would be part of Brown’s climate protection legacy.

Meanwhile, there was considerable chaos—possibly intentional—at the Bay Area Air Quality Management District. A number of revisions were made to the regional emissions cap announced with much fanfare by the district May 31. The most recent change was released the day before the board’s scheduled June 21 vote.

Watching the regional air regulators’ meeting last week and imagining the action behind-the-scenes on if and how to cap refinery emissions reminded me of contrasting martial arts: Karate and Aikido.

Karate involves direct hits and blocks. In contrast, Aikido avoids them. The intended recipient instead gets out of the way of a powerful blow, using the oncoming force against the fighter.

Capping emissions of the five Bay Area refineries, presuming meaningful limits, would result in resource-constrained regional regulators having to try and break bricks lobbed by the oil lobby and related industries.

But that strategy, even if successful, would directly clash with Brown’s effort to persuade oil lobby-funded Democratic lawmakers from voting to extend the state’s carbon cap-and-trade program beyond 2020.

Some of the regional air quality regulators who pushed to adopt a carbon cap for the refineries at last week’s meeting in San Francisco—though a far looser one than announced three weeks earlier—claimed time was of the essence. They warned that the board may soon be preempted by state legislation from limiting refinery emissions in its region, which are the largest stationary source of greenhouse gases. In addition, the petroleum industry fuels the transportation sector, which is California’s largest source of carbon fumes.

Board chair Liz Kniss said that a June 21 vote was essential because the agency’s “voice could be taken from us.”

In contrast to the Bay Area air board’s threatened Karate moves, Brown’s doing some Black Belt Aikido. He is getting out of the oil lobby’s way and instead attempting to weaken the petroleum industry by advancing fossil-lite and fossil-free powered vehicles, which will erode the petroleum refinery industry’s market.

Earlier, the governor set a goal of having 1.5 million electric vehicles on California’s road by 2025, but that’s just a beginning. In its plan to cut greenhouse gases through 2030, the California Air Resources Board now says it’s aiming to get 4.2 million electric vehicles on the road by 2030. The push for electric vehicles is being backed by the California Energy Commission and the Air Board, which are doling out millions of dollars for EV charging infrastructure in the state. That includes funds for chargers that can recharge cars in not much more time than it takes for a pit stop along Interstate 5 between the state’s major cities.

Californians have been buying about 2 million new vehicles a year. So to go from 1.5 million zero emissions vehicles in 2025 to 4.2 million by 2030, zero emissions vehicles would have to be more than a quarter of total vehicle sales in the second half of the next decade, up from about 2.7 percent today. That’s according to data from the California New Car Dealers Association.

Promising developments in the electric transportation field may make that more than plausible.

While in China in early June, Brown advanced his aim by signing an agreement to expand cooperation on zero-emission vehicles with that huge manufacturing powerhouse. One part of the agreement will establish a new working group through the China-U.S. ZEV Policy Lab at the University of California at Davis.

Already, BYD (Build Your Dreams), a large Chinese automotive manufacturing company, is building electric buses and battery packs in Lancaster, where it employs 600 and is expanding.

Tesla is eyeing building a manufacturing plant in China, where sales of its cars—a new status symbol and badge of environmentalism under the dirtiest skies in the world—are leapfrogging. The company earned 15 percent of its revenue there in 2016, which rose to 19 percent during the first three months of this year.

Indeed, the growing synergy between China and California on electric transportation promises to be a major game changer.

It will finally bring electric cars to market in big numbers at a price point the average person can afford that can go far enough on a single charge to quell range anxiety, which has been the major stumbling block to electric cars in the past. The Tesla 3, the company’s low-end car that’s supposed to begin rolling off the assembly line later this summer, is expected to get up to 300 miles on a single charge.

UBS sees the growing EV muscle. In a recent report, the Scottish Bank estimated that 14 percent of world-wide car sales will be zero emission vehicles by 2025 because of overall price parity between petroleum-fueled and electric cars starting next year.

Although electric cars will play a small roll in cutting greenhouse gases worldwide over the next decade, in California they’ll pack a punch to gasoline sales.

And if electric vehicles continue to take off in China and spread to other nations, the market for the state’s petroleum refineries will shrink, requiring them to downsize and reduce emissions.

Petroleum by 2030 could look like today’s coal industry.

Brown’s Aikido move to avoid meeting the industry on the mat in order to get cap-and-trade reauthorized stands to create a win for the governor in the long-run. It will be a win too for people both inside and outside California.

Elizabeth McCarthy

Comments are closed.