When you see bipartisan agreement on energy and transportation policy, it means one thing: truckloads of subsidies for well-connected big businesses touting some unproven high-tech “green” solution.
Most green subsidies are mostly harmless (if also useless) — such as solar and wind subsidies. But in recent weeks, lawmakers are lining up behind one green idea that could waste unprecedented amounts of
resources — venture capital, taxpayer money, intellectual innovation — by approving
vast new subsidies to make plug-in electric cars the dominant mode of transportation.
A cabal of government-friendly big businesses — ranging from lobbying king General Electric to made-for-subsidies startups like Coda Automotive and GridPoint, Inc. — have formed the Electrification Coalition, which lobbies for expanded subsidies for plug-in cars.
Plug-in cars do have upsides. Burning no gasoline has environmental and geopolitical benefits (no tailpipe emissions and no foreign oil). Even if the car is charged ultimately by a coal-fired power plant (the source of half our electricity), there are some savings on greenhouse emissions, and the pollution is moved from our streets to the edge of town.
But for much of the country, plug-in cars are a nonstarter — at least given the technology available now and in the near future. If you're in New Mexico and regularly drive hundreds of miles in a day, you'd need quite a battery to get the job done. If you live in Adams Morgan and regularly park two blocks from your front door, you'd need quite the extension cord to recharge your battery at night.
A similar analysis holds for ethanol. In Missouri, corn ethanol makes sense. If your soil and climate are such that your corn fields require little watering and fertilizing, and your distilleries are nearby, and you're not shipping the finished product hundreds of miles, ethanol can work as a renewable fuel. But once you try to nationalize it, you've got poor-quality corn fields in the Dakotas making ethanol that's carried in petroleum-fueled trucks to San Diego.
But the Electrification Coalition declares the electric car not as one alternative to foreign oil, but as the car of the future. It wants 75 percent of all miles driven to be driven by plug-in vehicles. To reach this goal, they say, government should pile on the subsidies to build a national infrastructure of recharging stations.
The project reminds me of my college days, when the school spent thousands of dollars running Ethernet cords into every library study carrel and the dorm rooms. By the time they finished, every freshman had his own laptop with built-in wireless.
Nobody knows how technology and culture will change the way we get one place to another. Maybe someone will make the super-efficient internal combustion engine. Maybe cars will run on human waste. Maybe we'll start driving less. Maybe hydrogen fuel cells sold at 7-Eleven will take off.
There are a million ways GE's proposed plug-in-car infrastructure could be rendered obsolete immediately. Worse, the subsidies for this new Manhattan Project could divert resources from more promising alternatives.
The Electrification Coalition has a small lobby, but it's already made a mark. In-house lobbyist Stephanie Leger Short, is married to the former top energy staffer for outgoing Sen. Byron Dorgan, D-N.D., who has co-sponsored the legislation the Coalition wants. Rep. Ed Markey, D-Mass., has a similar bill on the House side — a former aide of his is lobbying for the coalition at the Podesta Group.
But electric cars are already heavily subsidized. Obama's energy department issues billions in loan guarantees and direct grants to automakers and others so that they can make electric cars or batteries. Convert your regular car to an electric car, and get a $4,000 tax credit. Buy a plug-in, you get a $5,000 tax credit.
The coalition worries that these tax credits only help buyers that actually owe taxes, and so they want the credits to be made transferable — that is, saleable. “Tax credits” for nontaxpayers are just handouts, but that's what this coalition is all about.
The coalition last week issued a paper that makes a good point: Companies with large fleets of trucks, cars and vans are the best candidates for buying electric vehicles. These companies have better financing options, may have more predictable mileage demands, can create central charging stations, and may drive enough miles to recoup overhead more quickly.
So, the Electrification Coalition should be pitching AT&T and UPS. But instead, they're pitching the Ways & Means Committee and Beltway journalists. This is the formula for profit in the Bush-Obama era of bailouts, handouts and national energy policy: Dress in green, hire lobbyists and wait for the profits.