Through a recently signed Presidential Memorandum, Barack Obama is continuing the push to regulate greenhouse gas emissions from the transportation sector using its authorities under the Clean Air Act (CAA) and the Energy Independence and Security Act of 2007 (EISA). While the memorandum includes provisions for passenger cars, light-duty trucks, and support of an electric vehicle charging infrastructure, the most notable component involves vehicles that have eluded fuel efficiency regulators.
When it comes to GHG emissions and the transportation sector, the elephant in the room has been medium- and heavy-duty vehicles (freight trucks). The recently released memorandum will bring these vehicles under the regulatory umbrella and increase the likelihood that the transportation sector will contribute its share to economy-wide GHG emission reductions.
Previous posts in this series discussed how the demand for electricity from plug-in electric vehicles (PEVs) would affect the grid as well as a potential problem related to clustering. This final post describes an opportunity for these vehicles to help increase the stability of the grid and hold down utility rates for consumers. As a reminder, a PEV is either an all-electric vehicle (EV) or a plug-in hybrid electric vehicle (PHEV).
In our previous post in this series, we provided evidence that the existing electrical grid has enough spare capacity to accommodate plenty of plug-in electric vehicles (PEVs), if the right incentives are put in place. In this post, we will discuss a technical problem that has its roots in social behavior.
The transition from traditional powered vehicles to electric vehicles will not be without its hiccups. While the aggregate impact of PEVs on the grid is likely moderate, one concern is clustering, which can be thought of as the realization of the famous comic strip Keeping up with the Joneses. If people buy what their neighbors have, this could lead to a clustering of PEVs in certain neighborhoods which might place excessive demand on local areas of the grid.
One of the main concerns over the electrification of vehicles is their impact on the electrical grid. Will they lead to power outages due to the increased demand in certain areas? Will a marked increase in electricity demand raise prices for consumers who don’t own a plug-in hybrid electric vehicle (PHEV) or an all-electric vehicle (EV)? In a series of blog posts, we’ll take a look at a claim from some utilities that vehicle electrification could actually help improve the stability of the grid while keeping costs low through a process called frequency regulation.
In this post, we’ll try to answer the capacity question. In order to determine whether the grid has the capacity to handle the influx of Plug-in Electric Vehicles (PEVs or PHEVs/EVs), utilities must estimate at what time of day these vehicles will demand power from the grid and how many of them the grid can charge at a time without causing power disruptions.
We recently released a report that describes the petroleum sector from production to consumption and examines options for including greenhouse gas (GHG) emissions from petroleum use under climate policy (e.g., GHG cap and trade). Currently, policymakers are considering multiple approaches for coverage of petroleum under comprehensive climate and energy legislation. In deciding how to address a sector of the economy or a particular fuel, policymakers must balance the goals of ensuring maximum coverage of emissions, minimizing administrative complexity and burden, avoiding creating perverse incentives or market distortions, and promoting emission reductions.
While the details of the Kerry-Graham-Lieberman climate and energy proposal in the Senate are yet to be released, press reports indicate that the trio is likely to adopt a new approach to covering transportation fuels—the so-called “linked fee.” Unlike other proposals in the House or Senate, the Kerry-Graham-Lieberman approach would reportedly levy a “carbon fee” on transportation fuels with the fee amount linked to the carbon price from a GHG cap-and-trade program covering at least electric utilities. The forthcoming details of how the “carbon fee” is linked to the cap-and-trade market will determine whether such an approach can lead to significant emissions reductions from transportation and whether such an approach can yield the economy-wide emissions reductions needed to protect the climate.
Our new report includes information relevant to the linked-fee approach. For example, the report calculates that about 80 percent of combustion emissions from petroleum use are attributable to transportation fuels that are already subject to federal fuel excise taxes. Untaxed transportation fuels and large and small stationary combustion sources account for the remainder of emissions from petroleum use. This means that a linked fee could be implemented at least in part by covering the same entities that currently pay the fuel tax.
Another Senate proposal, the Cantwell-Collins Carbon Limits and Energy for America's Renewal (CLEAR) Act, creates an economy-wide cap-and-trade program—in this case just covering CO2 emissions from fossil fuel use. The CLEAR Act adopts an entirely “upstream” point of regulation that would make “first sellers” (i.e., coal mine and natural gas and oil well owners) responsible for surrendering cap-and-trade allowances for end-use emissions from the fossil fuels they sell. As the new Pew Center report explains, there are about a half million oil wells in the United States. Of the nearly 14,000 domestic well operators tracked by the U.S. Energy Information Administration (EIA), the 10 largest (e.g., BP, Chevron) account for about half of total production, and the 670 largest account for about 90 percent of production.
The House-passed comprehensive climate and energy bill (H.R. 2454, the Waxman-Markey American Clean Energy and Security Act of 2009) also included an economy-wide GHG cap-and-trade program. Waxman-Markey, however, would require petroleum refiners and importers to surrender cap-and-trade allowances equal to the GHG emissions from the final end use of their products (e.g., tailpipe emissions from vehicles). This point of regulation for petroleum would achieve complete coverage of combustion emissions and regulate a small number of entities and facilities (about 150 refiners with 67 different owners and a larger number of importers and points of entry). Of note, Waxman-Markey adopted different points of regulation for different emission sources--including large sources (e.g., coal and natural gas power plants and industrial sources) and local natural gas distribution companies (residential, commercial, and small industrial natural gas users).
With different proposals in play, our new report can inform policymakers and others considering options for reducing GHG emissions from petroleum use and help advance approaches that balance the goals of emissions coverage, administrative ease, and cost-effective and significant emission reductions.
Steve Caldwell is a Technology and Policy Fellow