Federal favoritism.
It’s what oil and gas legend T-Boone Pickens says about the way the government favors electric car development over fossil fuels.
Writing in the Austin Statesman, Pickens came out against the way the Texas Commission on Environmental Quality proposes to use $200 million the state will get from the VW emissions scandal.
Here’s what he wrote:
A state government agency is poised to pass a spending plan for $191 million awarded to Texas after the Volkswagen emissions scandal, and the public has a chance to weigh in. So, here’s what you need to know about how Texas can get the best bang for its buck.
The Texas Commission on Environmental Quality (TCEQ) released its plan for the almost $200 million for Texas in the $2.7 billion settlement to the states, negotiated by the Environmental Protection Agency (EPA) under the Obama administration. In February, I wrote about how TCEQ should proceed with a plan that would be best for Texas. However, TCEQ has not exercised its discretion to eliminate key terms, negotiated by the Obama EPA, that limit the potential of the money.
First, the settlement as negotiated by the EPA permits states to allow grants for private sector electric vehicles for up to 75 percent of the cost, while all other fuel types are capped at 25 percent. Make no mistake, this is federal favoritism, and TCEQ has largely carried it through, allowing electric vehicles to receive funding up to 60 percent while capping all other fuel types at 25 percent.
I, for one, am surprised that Texas would allow the now-defunct Obama EPA to pick fuel winners and losers inside its own borders.
Luckily, it’s an easy fix. I’m a free market guy, but I’m for free and fair. Let the fuels compete on an even field, and let the best fuels – economically and environmentally – win. TCEQ should level the cap for funding in the private sector, as it has for the public sector.
On an even field, it’s clear that there is no economic or environmental case to play favorites with electric vehicles. Natural gas vehicles are more cost-effective and have been shown to be just as clean as electric vehicles. Cleaner, if you factor in the fossil fuels used in electric generation.
Surprisingly, Texas can look to California for evidence. An LA Times investigation found that LA’s electric buses have suffered performance and mechanical issues. A Chinese battery manufacturer had promised local officials clean vehicles, but nine years and $330 million later, they’re left with buses that can’t run more than a hundred miles. The Times concludes that the EV industry “has struggled to make buses that run as reliably and cheaply as the fleets they seek to replace.”
In contrast, a study by the Center for Environmental Research and Technology, University of California showed that an ultra-low emission natural gas heavy-duty engine achieved and maintained California’s lowest emissions standard. From buses and trash trucks to heavy-duty vehicles hauling and moving goods, natural gas vehicles performed steadily and consistently.
If California is more likely to meet its clean air goals using near-zero emission natural gas engines than electric batteries, Texas should take heed, and TCEQ should put Texas on the right path.
As a Texan, I’d rather use our own resources – reducing emissions, but also increasing revenues from the state’s 7.5 percent natural gas production tax. That’s more money for our schools and the state’s Rainy Day Fund. It’s a win-win.
Another way TCEQ can improve the plan is by amending the scrappage requirement. Under the settlement, grantees are required to scrap a pre-2010 vehicle in order to receive a grant for a new one. TCEQ should allow grantees to buy a vehicle to scrap. This way, participation in the program can grow, since grants are not limited to only fleets which operate decade-old trucks. Furthermore, fleets that operate old trucks don’t tend to purchase new trucks.
With these recommendations, TCEQ can maximize the benefits of its spending plan. By leveling the field for all fuels, TCEQ ensures that the money is spent cost-effectively. Cheaper solutions mean more vehicles for less money. This helps achieve the intended environmental goals of the settlement more fully, and Texas can move quickly, economically and efficiently to a cleaner environment.
TCEQ is accepting public comments until Oct. 8 online at www.TexasVWFund.org
Pickens is an oil tycoon and founder of Dallas-based BP Capital Management.