JUICE: Carbon Copy?

A recent meeting in Portland, Oregon--billed as the “Smart Garage Charrette”--was a self-proclaimed “ah ha” moment for the assembled utility, automotive, telecommunications, software and government executives. In what’s billed as the nation’s greenest city, they realized that plug-in hybrid vehicles rolling off assembly lines can create new business opportunities. That includes smart meters, telecommunications and automotive control devices, software and hardware, and new machine tools on automotive assembly lines and public policy vistas. All that’s needed to sell hundreds of billions of dollars worth of new goods and services in the coming decade is to integrate the cars in the nation’s garages into the grid. Utilities see that the cars can help integrate renewable power into the grid. That’s because their batteries can store wind and solar power when not being used for transportation. There is, however, a minor catch. Huge, costly infrastructure is needed to keep the cars plugged in whenever they aren’t moving--from household garages to shopping center and office building parking lots. This way the cars not only can be charged up with excess renewable energy almost all the time, but also tapped with intelligent computer-controlled communications systems to feed the grid whenever the wind doesn’t blow and the sun doesn’t shine. Oh, and that drivers plug their cars into the grid wherever they park. It’s touted as a green panacea to stop global warming, promote renewable energy, eliminate air pollution, boost energy security, and create the green jobs economy promised on the Presidential stump and from the dais in Sacramento. Give us just a little public money to jumpstart the technology, say those fresh from the Portland charrette. Once we achieve economies of scale, plug-in hybrids integrated into the smart grid will grow geometrically, creating new profits, hundreds of thousands of new jobs, and consumer savings. The Smart Garage Charrette sounded like a carbon copy of the story in my new book, Smogtown: The Lung-Burning History of Pollution in Los Angeles, about the state’s effort to commercialize the electric vehicle going on 20 years ago. In the name of clean air in 1990, the California Air Resources Board adopted the state’s zero emissions vehicle mandate. It is credited with pushing the envelope toward plug-in hybrid vehicle technology. Resisted by many at first, the electric vehicle mandate picked up backers one early spring day in 1992 when General Colin L. Powell swung through Los Angeles to deliver a blunt warning: “Everyone needs to wake up and smell the coffee.” He went on to foretell the coming disintegration of Southern California’s defense industry, which had long been one of the major pillars of the region’s economy. Powell announced that the U.S. government would shrink its defense budget after the fall of the Soviet Union. A report released just a few days before Powell came to town predicted the region would see the demise of a web of companies--including household names like McDonnell Douglas and Lockheed Martin, as well as small job shops--that made everything from screws to sophisticated satellite surveillance systems. The report by the Los Angeles County aerospace task force warned the county alone could lose 420,000 jobs by 1995 and lose $84.6 billion in personal income as a result of the end of the Cold War. “County communities will be affected by relocation, tax revenue loss and economic ripple effects” warned the report. “More tragically, the lives of hundreds of thousands of persons within Los Angeles County will be painfully disrupted. Employment opportunities for tens of thousands of workers will be severely limited.” Sound eerily familiar to what is happening on a national scale? Now, how about what came next? In desperation, as the dire prediction turned out to come true, Los Angeles County sought federal assistance for retraining the displaced workers, but for what? Enter Lon Bell, a man with a plan. Bell, a lifetime engineer educated at the California Institute of Technology, had spent much of his life as president of an automotive components manufacturing concern that he started in 1967 and sold to TRW in 1986. The company produced crash sensors used to deploy air bags in cars, as well as other types of electronic controllers that incorporated computer technology into vehicles. After the state adopted its zero emissions vehicle mandate, the energetic Bell formed a new company called Amerigon, which worked out of rented quarters in the heart of the smoggy San Gabriel Valley, directly east of Los Angeles. On the strength of Bell’s engineering and automotive background, the startup won a $375,000 grant from the South Coast Air Quality Management District to build a prototype electric vehicle. But Bell realized that simply building a prototype would not be enough to generate the excitement he would need to create a viable electric vehicle industry in the Los Angeles area. So he produced a report entitled Advanced Electric Transportation Technology Commercialization: A California Plan. He released it with great fanfare the day after Powell delivered his “wake up and smell the coffee” speech. Bell’s timely report heralded the state’s zero emissions vehicle mandate as the cornerstone for a new economy in Southern California that could create 20,000 electric car jobs in 1995, and 65,000 by 1998, the first year the standard was to be enforced. After that the burgeoning industry would see annual job growth at a 50 percent compound rate. Bell believed that California’s aerospace talent and plants were well positioned to provide many of the components that automakers at home and abroad would need to assemble electric cars--everything from heaters to instruments. It was a popular message in a region where unemployment hit 11 percent and housing values were in free-fall. Enamored with the promise of the new technology, politicians and environmental regulators rushed in with untold millions of dollars in subsidies to help early adapters buy the new electric cars produced by GM and other carmakers. Soon there were tax write-offs, rebates, and a subsidized network of battery chargers installed at public expense in the basement parking garages of law firms and corporations throughout Los Angeles. Indeed, there were so many subsidy programs that the state Air Resources Board could not tally how much public money went to support the electric vehicle. Despite these hefty incentives, California motorists showed little interest in driving electric vehicles, turning instead to the large sport utility vehicles and pickup trucks that clog state highways today. The range of the electric car was just not long enough to meet all the needs of motorists and few could afford to own an electric vehicle just for commuting. By 2003 there were just 3,000 freeway-capable electric vehicles on the state’s highways and 9,000 glorified golf carts, marketed as neighborhood electric vehicles. That same year there were 23 million cars in the state. A 2000 study by CalStart found that only 767 new jobs in California could be directly attributed to the development of the electric car. But by then the Southern California economy had recovered by becoming the import hub for cheap goods from Asia through its burgeoning ports. Will it be different this time? My answer is a qualified yes. First, with its onboard gasoline-powered engine for longer drives, the plug-in hybrid vehicle overcomes the range limitations of the pure battery-powered electric vehicle, so it makes the technology feasible for the state’s and nation’s legions of long distance commuters. Second, just like with smog, there is growing political will to tackle the problems of global warming and foreign energy dependence. But policy makers could easily spoil it all if they do not heed lessons from their earlier attempt to capitalize on the battery electric vehicle. Public leaders must resist the constant pressure to engage in political cronyism and pressure as they disburse public subsidies. They must administer public subsidies in a way that really benefits the broad middle class. Businesses and political leaders must not over-promise. This will lead to political backlash that can undermine green programs before they mature. Fees must be put into place to stabilize energy prices to eliminate their wide and sudden swings and then let the resulting market forces take their course. High energy prices drive interest in energy efficiency, hybrid vehicles, and renewable power. But the price collapse in today’s bad economy will undermine green energy technology, which inevitably will be more expensive than conventional fossil fuel energy. Finally, leaders must stay the course in good times and in bad. That’s because the transition to the smart grid, renewable energy, and plug-in hybrid vehicles is not an “ah ha moment.” It is the life’s work of a generation or two that will need sustained policies that avoid the fits and starts of past efforts.

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JUICE: Carbon Copy?

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