American Oil and Gas Reporter - October 2024 - 42

to develop the efficiency gains and software solutions
you suggested.)
At the risk of understatement, a revival of shuttered
coal plants seems unlikely to jibe with Harris administration
climate goals, so natural gas-fired generation
may be one the few sources of relatively timely,
lower-emitting supply for many regions. However,
without permitting reform to facilitate construction
of plants and pipelines (or carbon dioxide pipes and
injection wells for facilities that contemplate carbon
capture), state policies that favor new construction
and supporting infrastructure may be the primary
drivers of new capacity.
inflation. If we don't reverse course soon, like Germany,
where residential electricity rates are 300%
of the U.S. average, we can expect to suffer the
consequence of ever-increasing electricity prices:
deindustrialization.
As to the notion that AI and data centers will
produce net gains in energy efficiency, that may be
possible during the long term, but there is no evidence
to suggest that will occur any time in the near future.
Efforts by many corporations, especially in the tech
sector, to falsely claim that they only use power generated
by wind, solar or nuclear are highly problematic.
It is physically impossible to connect to the power
grid and receive power from different sources than
your neighbor. The U.S. power grid is supplied predominantly
by fossil fuels. Corporations should not
continue to intentionally deceive the public, their
customers and shareholders about this reality. I think
that is called fraud.
Q: Numerous media reports and analysts suggest short-term market
adoption of electric vehicles may have plateaued. In one example, press
accounts note Ford Motor Company's EV unit lost $132,000 for each of
the 10,000 vehicles it sold. At the same time, AI data centers and other
X-factors may cause electricity demand to skyrocket. What are these
trends' implications for federal efforts to promote electric vehicles?
H
ClearView: Leaving aside consumer choice-
and the prospect that many EV purchasers must
pay more for longer fueling and/or shorter range-
we would suggest that policy conflicts may be impeding
federal efforts to promote EVs. At a high level, we
view the IRA as an industrial policy with two potentially
competing objectives: decarbonization through clean
energy deployment and deglobalization through a
revival of domestic manufacturing.
To harmonize these goals, the IRA infused green
energy incentives-including several legacy credits
such as the Section 30D Clean Vehicle Credit-with
labor-friendly attributes, including domestic content
requirements. Despite the Internal Revenue Service
and U.S. Treasury Department having interpreted those
requirements more leniently than intended by IRA
sponsor Joe Manchin, I-W.V., relatively few vehicles
are eligible for the full $7,500 credit value because
qualifying domestic supply chains do not yet exist.
Harris may choose to reopen the IRA if a blue
" sweep " also puts Democrats in control of the U.S.
House and Senate, giving her administration an opportunity
to expand existing end-user and manufacturer-side
EV incentives. But Democrats also may
seek to offset EV price premia by monetizing other
value streams, perhaps through state and federal
policies that enable drivers to generate income from
vehicle-to-grid connections.
42 THE AMERICAN OIL & GAS REPORTER
T
AEI: The market has spoken, and consumers
simply don't want EVs. The Biden administration
has tried its darndest to force EVs on the
masses but is quickly discovering that government
mandates won't change American minds. The federal
government should let the free market work, roll
back burdensome regulations and massive subsidies
and allow car manufacturers to make products their
customers actually want.
It is critical that the public and policymakers understand
the price of an EV has nothing to do with its
cost. The price incorporates massive cross-subsidies
forcibly and often unknowingly paid by the buyers
of gasoline and diesel vehicles. The only way to
achieve the Biden-Harris and California EV mandates
will be to dramatically increase the price of gasoline
and diesel vehicles (which consumers want) in order
to achieve the mandated EV sales (which consumers
do not want).
Barring a highly unlikely major near-term technological
breakthrough in solid-state batteries, new
vehicle quality will decline, used car prices will go
through the roof and the United States will start to
look increasingly like Cuba, with citizens clinging to
and maintaining increasingly older, higher-mileage
vehicles. The average U.S. light-duty vehicle is now
13 years old. The Biden-Harris agenda is driving that
number higher. It is a boon for used car dealers, but
American Oil and Gas Reporter - October 2024

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