Alternative Energy for Cars: Electric Cars and Cap And Trade Taxes

6 years ago

In February 2011 blogger John Addison noted that the sales of electric cars soared in the face of Middle East instability and rising oil prices. He quoted Charles Maxwell, the oil industry analyst as predicting that regardless of the politics of the Middle East oil will reach $300 per barrel by 2020, a 300% increase. He says that the success of electric hybrid cars will pave the way toward an all electric car which is 80% efficient compared to 15% for gasoline driven engines and 20% for diesel. The Volt is 95% pure electric for all phases of driving while other hybrids are something like 70% gas, 30% electric. He ended his upbeat and informative article with “Welcome to our electric future”.

By May 2011 despite Chevrolet and Nissan not listing their EV sales numbers in their press releases sales had slowed. Autoblog Green reported that the Volt's sales declined from January Tally of 321 to an even less impressive 281, while the Leaf closed February with only 67 US sales, down 20 on last month. The numbers indicate that sales suffer from constrained supply. One major auto seller in Michigan was granted an allotment of only 12.

Toyota Motor Sales posted sales of 8,968 hybrid vehicles, a decrease of 49.2 percent compared to the same period last year. Of that total Toyota Division sold 7,665 hybrids, while Lexus Division reported sales of 1,303 hybrids.


June 2011 General Motors CEO Dan Akerson expressed his concern over the U.S. government's high deficit and what he called a “jobless economic recovery”.

It hardly needed to be said but he said it anyway, without jobs we do not buy cars or other durable goods. A surprisingly small crowd of around 100 stockholders attended the first annual meeting in 3 years.

Neither President Obama nor Akerson are “worried”. The President is not worried about a double dip recession and Akerson is not worried about his company's slumping stock price. It recently closed at $28.56 from its initial $33 per share price, its lowest closing price since the IPO. To prove it he bought 30,000 GM shares withhis own $940,000.  He told stock holders that the basis for his ‘not worry’ is that all of its competitors have seen stock declines in recent months. Misery is apparently comforted by miserable company. He did not mention that GM has underperformed its competitors despite being bailed out and partially owned by the US government.

The U.S. government will release its remaining 500 million shares, will this further depress GM's stock price? The slowing economy and high gasoline prices may hurt sales of SUVs and pickups, GM's most profitable vehicles. The higher costs for steel and other materials, and transporting them could further limit GM’s profitability. Unlike Akerson, the investors do worry.

Bailed out GM did pull off a remarkable even miraculous turnaround in 2010 after emerging from bankruptcy protection the year before. It went from red $80 billion in the five years before bankruptcy and needing a government bailout to the black $4.7 billion in 2010. U.S. sales are up almost 19 percent this year.

Akerson calls on the government to raise taxes on gasoline by $1.00 per gallon to “move people toward more fuel-efficient vehicles”. He contends that this tax would assist the US to cover its deficits and may change consumer behavior. He said the company would meet the increased demand for its hybrids. He announced that Cadillac and Chevrolet brands will be sold globally while other brands will be sold regionally. He hopes to start producing Cadillacs outside North America in the next 12 to 18 months. Does this pit the US government bailed out company against international car makers in their own selling arenas?  What will that do for international relationships?

Akerson can afford to pay the $1.00 per gallon tax. Shareholders approved his pay package valued at just over $2.5 million for his four months employed as GM’s CEO.

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Are electric cars truly “clean”? You plug it in your garage, no mess no fuss. You drive it, no noise no exhaust pollution. But wait, in reality all it does is change the site of pollution. Most electricity in most of the US is dependent upon coal. That coal is not “clean”. It does not fit the green agenda.

In June 2011 Gary White West Virginian Coal Association chairman said that the EPA will close 3 of its coal fueled electric plants by 2014. What cannot be done by Congress will be done by departmental mandate. The EPA sent a wrecking ball through the state and the coal industry when it revoked the mining permit for a huge mountaintop removal mine in West Virginia. After two weeks in which House Republicans reiterated that one of their top priorities is to limit the EPA’s power, the agency's response was a determined declaration that it will not back down. The mine operator fears that this will open the door for a wave of similar shut downs.

With the easily accessible coal having been mined already West Virginia resorted to aggressive mining techniques that are unacceptable to the EPA. Coal has been a major player and the engine of the economy there for a very long time. West Virginians who oppose the EPA’s heavy hand upon their state’s economy have been called “backwards”. These closures fit with President Obama’s goal for the coal industry, ergo to cause the price of electricity to skyrocket.

In a January 2008 interview with the San Francisco Chronicle candidate Barack Obama promised to bankrupt anyone foolish enough to build coal-burning power plants, he also told the editors that his policies would make energy prices “skyrocket” as the energy industry passed along the exorbitant costs of his cap-and-trade policy.

He said “The problem is not technical, uh, and the problem is not mastery of the legislative intricacies of Washington. The problem is, uh, can you get the American people to say, “This is really important,” and force their representatives to do the right thing? (for)… climate change…Under my plan of a cap and trade system, electricity rates would necessarily skyrocket. Even regardless of what I say about whether coal is good or bad. Because I’m capping greenhouse gases, coal power plants, you know, natural gas, you name it — whatever the plants were, whatever the industry was, uh, they would have to retrofit their operations. That will cost money. They will pass that money on to consumers.

They — you — you can already see what the arguments will be during the general election. People will say, “Ah, Obama and Al Gore, these folks, they’re going to destroy the economy, this is going to cost us eight trillion dollars,” or whatever their number is.”

Even in this confused answer it is clear his support for an allegedly green agenda usurped his concern for the economic well being of the country.  He apparently sees them as opponents rather than partners in the success of the nation.

Akerson and Obama want to use increased taxes and costs to “move people” into doing what is good for them to decrease man’s impact on the now scientifically suspect man made climate changes.

In Australia two pieces of legislation currently being considered by parliament have the potential to drastically add to the cost of fuel. The first introduces an excise tax on alternative fuels and the second imposes a carbon tax on transport fuels. The excise legislation will come into effect from 1 December 2011 and the carbon tax from 1 July 2012. The proposed changes to the excise arrangements for alternative fuels will dramatically increase the price of these alternative fuels between 2011 and 2015, effectively increasing the time taken for households to recover the additional capital cost of converting to an LPG vehicle ($2,500 to $4,500).

2 June, 2011 an Aussie Parliamentarian said that Australian households and small businesses face the prospect of Gillard (Labor = Democratic) Government’s latest tax grab on LPG and alternative fuels. Ian MacFarlane, the Shadow Minister for Energy and Resources calls these proposed taxes a “tax grab on household energy budgets”.  

Mr MacFarlane said “the Taxation of Alternative Fuels Legislation Amendment Bill 2011, will result in a tax of 12.5 cents a litre on LPG and 26.13 cents per kilogram on LNG and compressed natural gas (CNG)”. MacFarlane adds “The Gillard Government is out of touch with Australian families. At a time when cost of living pressures are soaring it is bringing in tax after tax after tax. Its latest tax grab will hit one of the expenses families and small businesses have very little control over – their fuel bills.

“The tax hike is a betrayal of the hundreds of thousands of Australians who have made the switch to cleaner LPG, instead of unleaded fuel.

“These are families who have been encouraged to do so by the Labor Government, which continued the Coalition Government’s LPG conversion scheme.

“Now they find they are little more than a cash cow for a Government up to its elbows in debt.

“At a time when the Government is also planning to force up electricity prices with its carbon tax, its hit on cleaner fuels makes no sense and Australians have every right to ask exactly what this Government stands for.

“On the one hand the Government says Australians must make the switch away from traditional fuel sources to cleaner energy, but at the same time it is penalising those who have done so by increasing the price of LPG at the bowser.

“As the majority of taxis run on LPG, Australians will feel the pain from the Gillard Government’s tax spree every time they have to call a cab and because many capital city buses run on CNG, people can also expect to pay more for public transport.

“The Coalition (mainly Republicans) is opposed to this tax grab and will stand up for small businesses and families by opposing the Gillard Government’s latest tax grab on alternative fuels.”…

Former tax incentives moved Aussies away from gasoline fuel and into converting to LPG for their cars. Overwhelmingly Aussies bought the notion that LPG would be a greener, cleaner option and would save them money as LPG was less than 50% of the cost of gasoline, even though it takes approximately 1/3 more LPG than it does gasoline to travel the same distance.

Australia is years ahead of the US when it comes to private vehicle LPG usage. It is a clean, readily available energy source. With their cars converted, LPG pumps in place at most gas stations Australians face a Labor Government plan to drive up the cost of that alternative fuel.

Significant numbers of Aussie voters polled said they would feel “duped” if they had been actively encouraged (via Government rebates) to convert their petrol cars to LPG only to be hit with alternative gas taxes.

How will Americans feel when they discover they have been “moved” to buy electric cars, believing them to be greener and cleaner, and cost effective as they avoid the artificially increased price of gasoline  only to find all they did was to shift the site of pollution as the cost of electricity skyrocks under President Obama’s supervision?


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