Electric vehicles sales surge in Asia: Gerschenkron and EV production in China

A BYD dealership in Phuket, Thailand.

According to Bloomberg "BYD Showrooms Are Bustling Across Asia After Iran Oil Shock," people are reacting to gas price increases resulting from the war with Iran by looking at buying electric cars.

Maybe the US too ("What to Know About Electric Cars When Gas Prices Are Surging," New York Times).  From the article:

In the United States, prices for new electric vehicles have fallen but still average $6,500 more than vehicles that run on fossil fuels, according to Cox Automotive. From a purely financial point of view, an electric vehicle makes sense for people who will save that much on fuel and maintenance during the time they own it.

The New York Times offers a tool to help people make that calculation based on local electricity prices and driving habits. But there is more to the decision than dollars and cents. Some benefits of electric vehicles are hard to put a price on, like the peace of mind that comes from not being at the mercy of geopolitics.

Alexander Gerschenkron was an economist who studied development economics.  

In "Economic Backwardness in Historical Perspective," he makes the point that later developing countries have an advantage when it comes to adopting new technologies, because unlike legacy advanced economies, they don't have billions invested in older technologies.

Vintage Marathon Oil gasoline station in Miami, Oklahoma.

China (in many technologies) is a great example.  One is with motor vehicles.  While their development of the automobile industry started with gasoline cars, many built through joint ventures with then advanced car makers like GM and Toyota, the companies were able to adopt and adapt the technologies for the development of their own domestic auto industry.

But China, seeing fossil fuel as a legacy fuel and making them dependent on the world oil economy, moved to the development of electric vehicles (and solar power, although the country still burns a lot of coal and is adding coal plants, since they have large supplies of coal domestically sourced) ("Chinese BYD cars emerge as threat to automakers," Detroit Free Press).

BYD started making electric batteries before moving to cars.  More recently they've developed a fast charging system that allows cars to go up to 600 miles between charges--except to provide this at scale would require serious electricity transmission upgrades.

Now China is years ahead of the American auto industry, which is losing billions of dollars trying to compete in the electric vehicle market ("Carmakers Took a $50 Billion Loss on EVs," Autoweek). And they are an increasing force in global markets ("How America’s EV retreat is increasing China’s control of global markets," CNBC).

During the first Trump Administration, I remember the Economist writing about this ("America’s domination of oil and gas will not cow China"), and Trump's preference for coal ("Trump orders coal revival, but market favors natural gas," NPR) and oil, stating that in energy, China is the future, and the US is the past.  China is an electro-state and the US is a Petro-state ("The Petro States of America," Bloomberg). 

Foreign Policy Magazine develops this thesis further, ""How the Iran War Could Consolidate China’s Energy Dominance: Amid global oil and gas disruptions, China stands prepared for the electrostate era."

Petro states as a sub-national phenomenon.

Wind turbines operate at a wind farm near Whitewater, California. Renewables tend to be lower risk than oil projects, but they also tend to deliver lower returns. / Getty Images

I apply the concept of petro states at the sub-national scale as well--many states in the US are pro fossil fuels, and have hampered the development of alternative technologies ("Making oil is more profitable than saving the planet. These numbers tell the story," NPR).  

In large part, it's because excise taxes on oil and natural gas are a huge revenue source for states ("Congress gave a break to coal producers. Wyoming worries it’ll carry the loss," Wyoming Public Radio).  From the article:

Over the last 50 years, the state of Wyoming made bank from coal – billions of dollars to fund the government, schools, roads and parks. The state now has its own sovereign wealth fund thanks to coal.

Here’s how it works: When coal is mined on federal land, the mining company pays royalty fees. Half of those royalties go to the federal government and the other half goes to the state, and only Congress has the power to change that ratio.

President Trump’s GOP spending bill lowers those royalty fees for mining companies from 12.5% to 7% through 2034.

Or they continue to provide tax incentives for increased production ("Tax credit for huge oil producer raises questions about Utah board’s transparency," Salt Lake City Weekly) and other ways to promote production ("Supreme Court backs Utah oil railroad expansion, endorsing limited version of key environmental law," Colorado Public Radio).

For example, Oklahoma, with oil and natural gas interests (fracking especially) is fully committed to fossil fuels, but is toying with solar and wind ("As demand grows, Oklahoma considers its energy path forward," Daily Oklahoman).  Tulsa and Oklahoma City are home to many regional headquarters and a few national firms.

North Dakota ("Studies underscore oil and gas industry’s significant impact on North Dakota’s economy, communities").  Kentucky ("Heavy reliance on coal has eroded a KY economic advantage. Can Trump reverse the trend?," Kentucky Lantern). While New Mexico, which has a good producing section of the Permian Basin, and Pennsylvania--home to the nation's first oil well, but a center for fracking, are less committed.

It's the rare state, like California, pushing a sustainable fuel future despite historically having been a large producer.  Maybe the switch is due to significant drops in production ("As oil industry in California wanes, what will become of shuttered refineries?," Daily Breeze).

An oil pump jack stands near a field of wind turbines in Nolan, Texas. Oil companies are under pressure to pivot more swiftly toward renewable energy. Here's one reason why that's not happening so quickly: It's still incredibly lucrative to sell oil. / Getty Images

Texas is the mother lode of oil production in the US.  It is also a major wind power producer.  

Like the Trump Administration ("Trump Officials Weigh New $1 Billion Deal to Stop Offshore Wind Farms," New York Times), some pro-oil interests are working to deemphasize wind in the state's mix of energy sources ("The War on Wind Rages in Texas," Earth Day).

Originally the Humble Oil Building, named before Humble Oil and Refining Company was fully integrated in Esso (which later became Exxon, then ExxonMobil).  Now it's the ExxonMobil Building.

Texas is the big winner nationally as Houston is the center of the oil and gas industry.  For example, Chevron is moving there from California.  The company in various forms has been headquartered in the SF Bay region since 1879.  

Production and supporting services companies often relocate from regional centers ("The economic impact of Expand Energy moving headquarters from Oklahoma to Houston," News9 OKC), as the oil industry business cluster there continues to intensify.

US thinks it's doing better from war blowback than other nations

JD Vance bragged that the US isn't as impacted by the shutdown of the Strait of Hormuz as other countries ("'Overseas' doing worse with petrol prices than USA: Trump's vice president," 9News Australia).  But it's a global economy ("Iran war will scar the global economy," Financial Times). 

Bloomberg notes the Administration is looking at the wrong impact, as oil is used in so many other products ("The White House Is Using the Wrong Oil Price for the Iran War"). 

Also see, especially the comments where I update with other articles, "Oil dependent economies are vulnerable at all times, but especially during wartime in the Mideast | From energy dominance to energy vulnerability."

Other countries will hardly look upon the US with favor.  The Toronto Star, "How can Canada protect itself amid a global energy crisis?," lists some of the effects on Canada.

A friend's brother runs a grain elevator operation in Montana, including the sale of fertilizer in large quantities.  He's getting stiffed on deliveries.

From the Star:

Yet Canadian consumers are hostage to a volatile world price for oil and gas. And the crisis extends beyond oil. 

• It is a threat to world food security with looming shortages of the natural gas and other key ingredients of fertilizer produced by Persian Gulf States. As they plant for this year’s harvest, Canadian farmers can choose to absorb higher costs for fuel and fertilizer or cut back and suffer lower crop yields. Either way, food prices, already high, will rise further. 
•  Options for protecting Canadian consumers include the cap on pump prices that has been imposed by South Korea and other countries. 
•  China is among major oil consumers that are curtailing fuel exports to hoard domestic supplies. Brazil is cutting federal taxes on fuel and will tax oil exports to offset the revenue loss. 
• The Philippines has mandated four-day work weeks to conserve energy. 
• Some Asia-Pacific factories are scaling back production to preserve fuel and spare themselves higher production costs. 
• In a worst-case scenario, there will be more factory slowdowns and shutdowns in the global supply chain. 
• If prolonged, that disruption will raise the price of Canada’s imports, risking a resurgence of inflation. 
• Canada would be self-sufficient in oil and gas if it chose to redirect a large portion of its exports to refineries in Central and Eastern Canada that rely on imported oil. That would require construction of an east-west pipeline.
• Canada could also build strategic reserves of oil and LNG readily available to Canadian refineries to keep fuel prices under control. Canada is the only G7 country without a strategic oil reserve to draw upon in times of crisis.
• One of the few certainties of the moment is that Iran can bottle up Middle East fuel and fertilizer supplies whenever it chooses after the current conflict ends. The Economist warned of further Iranian attacks on the world economy in coming years, saying that “disruption of energy markets will come and go with geopolitical tensions, especially if Iran concludes that it needs a nuclear weapon to be safe.”

Oil dependent economies are vulnerable at all times, but especially during wartime in the Mideast | From energy dominance to energy vulnerability

Gasoline prices here have gone up about 25% since the start of the War with Iran.  And Salt Lake has five refineries refining oil produced in Utah, Wyoming and near by states.

It's hardly news that oil is a worldwide commodity, and even though it is produced and refined all over, world prices are set in Europe and the US and factor in supply risk.

The War ("Why Escalation Favors Iran," Foreign Affairs).  From the article:

The strikes that have killed Iran’s leadership demonstrated tactical mastery. Tactical mastery, however, is not strategy. Iran’s retaliation—geographically broad, economically disruptive, and politically calibrated—aims to reshape the conflict’s structure. By widening the theater and prolonging the war, Tehran is shifting the contest from a battle of military capabilities to one of political endurance.

As in Vietnam, the United States may win most engagements. As in Serbia, it may ultimately prevail after sustained pressure. But in both cases, the decisive arena was not the initial shock of airpower. It was the politics of an expanding war.

The decisive phase of this war began not with the first strike but with the regional crisis that followed—air defenses activated across multiple capitals, airports suspended, markets jolted, and alliance politics strained. Whether this conflict is merely a contained episode or it becomes a prolonged strategic setback for the United States will depend not on the next volley of missiles but on whether Washington recognizes the enemy’s unfolding strategy—and responds with one of equal clarity.

Energy independence as a form of dependence.  Even though the US is now the largest producer of oil in the world, under the Trump Administration it has promulgated policy that prioritizes fossil fuels and diminishes renewable energy sources  ("Trump Returns to Gasoline as Fuel of Choice for Cars, Gutting Biden’s Climate Policy," New York Times, "The owners want to close this Colorado coal plant. The Trump administration says no," NPR).

The Administration is also all in on nuclear energy, which isn't a fossil fuel per se, but is an extremely expensive form of energy, not once a plant is open, but the cost of building fission facilities has bankrupted many firms over the years.

Even though renewable sources diversify the energy mix and reduce system vulnerability ("Trump order halts offshore wind projects for at least 90 days," PBS, "Trump administration quietly canceled the nation’s largest solar project," CNN, "Wind and solar power frozen out of Trump permitting push," Reuters)  For example, electric vehicles are much less dependent on oil as the base fuel for electricity generation.

The Administration calls this "Energy Dominance" but "Energy Dominance" can just as easily be robust and include non fossil fuels as part of the mix ("Energy Dominance or Renewable Resilience?," German Marshall Fund, "Power up! Why the US needs every energy source to stay dominant," ING Bank, "Donald Trump’s call for ‘energy dominance’ is likely to run into real-world limits," AP, "How Trump’s ‘Energy Dominance’ Agenda Is Dominating You With Dirty Energy," The Contrarian).

Plus US nominal control of oil in Venezuela and Canada ("Trump Now Has His Very Own Oil Empire," Bloomberg).

Let’s do the math. Start with the oil production of the US and add Canada. Then include Venezuela and the rest of Latin America, from Mexico to Argentina and everywhere else in between: Brazil, Guyana, Colombia. Like it or not, all of them are living under the “Donroe Doctrine” — an increasingly belligerent Washington’s sphere of influence over the Americas. Together they account for nearly 40% of the world’s oil output.

... Having de facto control of the Western Hemisphere’s petroleum wealth is a geopolitical game changer. For decades, US military adventurism was constrained by the impact of any war on energy costs. Today the White House has primacy over oil-producing allies and adversaries alike — whether it’s Saudi Arabia or Iran, Nigeria or Russia.

The US and China and global preeminence: Does it come down to energy policy?.  Another way to think of this is as looking forward versus looking backwards, a classic example of Alexander Gerschenkron's thesis that over time newer economies have an advantage in being able to invest in new technologies without incurring huge stranded costs.

China still buys a lot of oil, and they use coal powered electricity because of large domestic supplies.  But the focus on EVs is just one of China's green energy policies ("China, the climate superpower," "China, Energy and Climate: The Time has Come," special package, The Economist, "How China came to dominate the world in renewable energy," Washington Post).

As a slogan, “energy dominance” evokes images of the United States towering over the rest of the world, with prodigious production, as what Trump calls “a global energy superpower.” But the truth of energy dominance has nothing to do with empowering folks at home.

The administration has been rigging the game in favor of dirty energy — and giving fossil-fuel producers a license to dominate American consumers. In the process, Trump is boxing U.S. households out of cleaner alternatives and leaving Americans with less choice, higher energy bills, and an overheating climate.

Worse, by hobbling America’s green-energy industries, the administration is destroying jobs, even as it clears a path for China to dominate the next generation of energy production.

... A study out of Princeton University finds that Trump’s signature “Beautiful Bill” will reduce capital investment in our electrical system and clean fuels by half a trillion dollars over the next decade. It will also slash future solar capacity by about 140 gigawatts and wind capacity by about 160 gigawatts. (The Hoover Dam, by comparison, has a capacity of about 2 gigawatts.)

Plus the effect on jobs ("‘Deeply demoralizing’: how Trump derailed coal country’s clean-energy revival," Guardian).

Ethanol and other bad decisions.  Granted the US has some dumb policies.  One is the support of ethanol production as a feedstock for gasoline.  Unlike in Brazil, where the feedstock is used up sugar cane, here we spend money growing corn to convert to ethanol.  

Ethanol has less energy compared to gasoline.  So we're dedicating farmland to gasoline, which has a negative cost benefit.

And EVs primarily powered by coal and natural gas are less sustainable than those pow ered by renewables.

Ending EV tax credits forces the US automobile industry to double down on gasoline powered cars, while China and increasing Europe are shifting to EVs in substantive ways.  (Part of the concern in Europe is getting cleaner air--many of their cars are diesel, and comparatively high when it comes to polluting).

The Strait of Hormuz is extremely vulnerable.  While only 20% of the oil produced in the Mideast passes through the Strait, 80% goes to Asia, and 100% of Liquid Natural Gas to Europe, airplane fuels too.  Also 33% of fertilizers ("American farmers dealt new blow as Trump's Iran war escalates," Newsweek), and of course other goods.

That increases vulnerability across the globe, separate from the impact on the US economy, which isn't just on the cost of gasoline, but on farming, the transport of goods, the production of chemicals and other products, etc. ("Saudi Arabia Starts Oil Cuts as It Races to Reroute Exports" Bloomberg).

The lessons from the 1970s oil shock.  During the Israeli-Arab War and later in the decade, Middle Eastern Countries significantly raised the cost of gasoline, and took control of production and sale from the multinational oil companies.

I have often written that the US mobility paradigm is pretty much homogeneous in that it decidedly supports automobility and provides dribbles of support to other modes.  

By contrast, Germany, a leading car manufacturer (but not much of an oil producer), has a heterogenous policy.  It supports cars to the max, especially with its no speed limit autobahns, but recognizes cities are best served by transit, supports regional rail service despite its love of autobahns, and walking and biking--the Federal Biking Plan for the county is one of the best.

I contrast Denmark and Netherlands to the US in terms of response.  Not producing oil, and not having much of a car industry, Denmark and the Netherlands recognized that shifting to an automobile centric mobility paradigm made them vulnerable to cuts in supplies.  

An analogous example is how in the US, gasoline supplies are often interrupted during extreme weather events, leading to long lines and disruption in all sorts of activities, because people seemingly lack alternative ways to travel ("Oil dependence | The US as a Petro-state and gasoholic | and war").

Being poor before WW2 and for awhile after, the countries had been more walking (compact cities, no sprawl), biking and transit oriented.  They were giving this up in favor of the automobile as their economies became more successful.

Amsterdam.  Bike parking, lots of bikes, and transit in the background.

Not only cuts in supply but a significant raise in prices made their countries extremely vulnerable.  So they shifted away from the car and back to transit and biking in the development and transportation policies and practices.  

Unlike the US, which says transit and biking is okay, but primarily invests in automobility, they made their policies congruent with the new paradigm, for example significantly increasing gas taxes and car registration fees.  

Of course, the countries like others in Europe also refocused attention on energy efficiency in all elements of their economy.

The US: Still vulnerable to oil shocks.  By contrast, while the US did adopt some energy efficiency mechanisms, including mpg standards for cars, mostly the US focused on maintaining access to oil supplies.  

That meant refocusing military resources on the Mideast ("There are two winners in Iran. Neither one is America," Washington Post) and creating the Strategic Oil Reserve which bought and stored oil for use, holding it for sale when prices get "too high."  

A Permian Basin oil pumping station.

And increased production, which was was boosted on steroids in the late 1990s with the invention of fracking ("The economic benefits of fracking," Brookings, "How Has Fracking Changed Our Future?," National Geographic).  

Note that fracking has major environmental effects, the use of water, contamination of the aquifer, and air quality.

Article.  Another side of dependence.

But it didn't make the US less vulnerable to the fissures in the supply chain, not so much with access to oil, but in all the other ways an oil dependent economy experiences higher costs as increased oil costs make their way through the supply chain of various goods.

Public Power week: October 5-11 | Let's think more broadly about utility issues

This week is Public Power Week, calling attention to public power producers (federal dams) and local utilities in electricity (and sometimes gas) that are owned by the local government.  The webpage calls these "community owned utilities."  

-- promotional resources

The American Public Power Association doesn't represent public water utilities (although some local governments are exploring the possibility of harnessing energy from temperature-controlled water streams).

October is also National Energy Awareness Month ("October is National Energy Awareness Month," 2021).

Roots in the rural electrification movement.  Public power organizations grew out of the Rural Electrification movement in the 1930s.  

Since outside of center cities it was rural, some public power utilities exist on the outskirts of cities, like the Southern Maryland Electric Cooperative in Suburban Maryland.  

The ones, like SMEC, that buy electricity from traditional sources just like "investor owned" utilities, don't have a lot of pricing discount compared to those based on hydroelectric power sources.

Community power boards.  Interestingly, with the TVA, many of the communities have community owned utilities, called Electric Power Boards, although TVA like other federal dams, sell power to both for profit and non profit utilities.

Some, like the EPB in Chattanooga, sell cable and Internet services--they did this because they needed an Internet backbone to run their system of smart meters, and made it more robust and a separate service for their customers.  It's an economic development tool ("Chattanooga, Tenn., Makes Economic Case for Municipal Broadband," Government Technology, "The Infrastructure Success Story in Chattanooga," American Prospect) as well.

Drought and power generation.  Note that in the West, where a majority of federal dams generating electricity are located, drought is making it tougher for the dams to be able to generate electricity in the face of water levels dropping below water entranceways for the generating systems ("Lake Powell forecasts show hydropower generation is at risk next year as water levels drop," Colorado Sun).

Local governments want to buy out investor owned utilities.  Some municipalities like Ann Arbor ("Ann Arbor residents plan ballot initiative to dump DTE and begin shifting city toward public power," Michigan Advance), or previously Montgomery County explore(d) taking over electricity services but the cost of buying out the utility is too high.  

-- "Publicly-owned utilities as a way to move sustainable energy policy and practice forward + better operation," 2020

Already in Ann Arbor, the city "sustainable energy utility"--other cities have them too, like DC, is working to build a parallel system to DTE ("Ann Arbor’s sustainable energy utility aims to build the electric power grid of the future − alongside the old one," The Conversation).

The city, with voters’ strong support, is launching its own sustainable energy utility. This new utility won’t replace DTE Energy, the local investor-owned power company, or even use DTE’s wires.

Instead, Ann Arbor will slowly build out a whole new modern power system, starting with installing rooftop solar and battery storage and reducing energy usage in individual homes and businesses whose owners opt in. The city then plans to expand by connecting homes and neighborhoods into microgrids and by using community solar and networked geothermal to allow broader access to clean energy.

When their multi-state utility went bankrupt, the City of Portland tried to buy the city electric utility infrastructure but were denied by the Bankruptcy Court.

LA has a municipal power authority, while San Diego has the capability to do it, but keeps selling franchise rights to San Diego Gas & Electric.  While not cheap either, LA's electricity costs are significantly less than SDGE.

Should California buy PGE.  Because of the wildfire issue, it's even been suggested that the State of California should buy and operate Pacific Gas & Electric, to get them focused on service, and hardening, not just generating profits ("Let’s end the devastation by making PG&E public," San Francisco Chronicle).  Regardless, the Wall Street Journal, "Here are 5 fixes for PG&E," suggests fixes:

1. Stop running equipment til it breaks [and only then replacing it].
2. Use predictive tools to assess risk.
3. Regulate utility safety separate from rates.
4. Manage forests more aggressively.
5. Threaten PG&E's monopoly franchise.

Utility costs are rising.  While not directly a part of the Public Power Week promotion, it should be part of National Energy Awareness Month and provides an interesting opportunity to think about that state of utility costs--electricity and gas--in the US.  Because most markets are profit driven and prices are based on international and national pricing systems, prices are going up.

Over the past 15 years, many companies switched from coal to natural gas because prices were cheaper.  This has combined with increased solar and wind energy to keep prices down, until recently.

But now that international systems for selling and delivering natural gas have been developed, US electricity costs are trending higher, because utilities have many more competitors ("Fracking didn't drive down PA energy bills. What happened?," Spotlight PA).

The Trump Administration is addicted to fossil fuels.  One reason is because the Trump Administration is deliberately de-supporting cheaper forms of electricity generated by solar and wind power ("Trump’s hatred for renewables means the US is falling behind the rest of the world," Guardian, "Puerto Rico’s rooftop solar boom is strengthening grid resilience — why is a federal board trying to stop it?," UtilityDive, "New Report Examines Fossil Fuel Ties of Dozens of Trump Administration Hires," Inside Climate News, "The Trump administration's war on wind & renewable energy," KALW/NPR).

It's also de-funding a wide range of clean energy programs ("US green energy forecast cut by half under Trump despite global surge in solar and win" Financial Times).  From the article:

The IEA said a major factor in the US downgrade was President Trump’s One Big Beautiful Bill Act, which has sped up the end of tax credits for green developments. Permits for wind and solar projects on federal land or waters have also been suspended.

“With the pushing forward of deadlines, renewable capacity additions are now projected to peak in 2027, then decline in 2028 and remain stable through 2030,” the IEA said. 

Doubling back on "conservative fuels/a conservative economy" [I read about this idea recently but I can't find the citation--that for example fossil fuels are conservative and renewable energy sources progressive) reduces US economic competitiveness and resiliency.

Focusing on coal, to some extent oil, and the revived interest in nuclear power ("The New Nuclear Age: Why the World Is Rethinking Atomic Power," Goldman Sachs, "Trump dreams of nuclear as he axes grid projects," Politico) will only increase rates. 

Conservative state action against "progressive power" is an increasing problem as well ("Blaming the Wind for the Mess in Texas Is Painfully Absurd," New Yorker, "With Federal Support for Wind and Solar Waning, States Are Trying to Push Policy Through on Their Own," Inside Climate News

Other issues are:

• strengthening the transmission grid for more resilience in the face of more violent weather ("Building a more climate resistant grid," NRDC, "Three Ways to Prevent Our Next Massive Power Failure," Mother Jones).
• the increased demand for electricity from electric vehicles, although there is the counter-argument that EVs can serve as "batteries" to provide back up power ("The Truth About Electric Vehicles and the Grid: Strengthening—Not Straining—Our Energy Future," NRDC).
• the increased demand for electricity from data centers and AI ("Data centers," 2025),
• that regulatory cost systems for electricity infrastructure push a lot of the cost of servicing data centers on residences ("AI Data Centers Are Sending Power Bills Soaring," Bloomberg, "Big Tech’s A.I. Data Centers Are Driving Up Electricity Bills for Everyone," New York Times).
• continued public opposition to large scale renewable energy projects "in their backyard" ("Nearly all 50 states face local opposition to renewable projects, report finds," Factor This).
• weatherization and electrification household improvement programs to reduce energy demand ("Local neighborhood stabilization programs: Part 5 | Adding energy conservation programs, with the PUSH Buffalo Green Development Zone as a model," 2021). 

October is National Energy Awareness Month

I didn't know that a number of years ago, the US Department of Energy designated October as National Energy Awareness Month.  

It's particularly appropriate this year given:

• the need to improve the reliability of the energy grid more generally and increased stress due to the rise in renewable energy sources and electrification of motor vehicles 
• heat wave related energy blackouts and deaths of people without air conditioning (blog entry)
• cold wave related energy blackouts, especially in Texas (blog entry)
• how failures in Texas this past winter led to massive price escalation throughout the Midwest because of natural gas production and distribution
• big increases in energy prices being likely this winter
• the seeming failure of energy grid privatization in Puerto Rico ("Who's to blame for Puerto Rico's power crisis? It's complicated, a report shows," NBC News), etc.

We'll see if this time Texas follows the recommendations of the Federal Energy Regulatory Commission concerning system reliability ("Feds call for more regulation of Texas power grid, natural gas industry," Austin American-Statesman).

The UK in particular and Europe more generally faces significant energy price escalation for a variety of reasons: (1) increased demand; (2) a drop off of investment in response to demand declines during the pandemic; (3) teething pains in the transition from fossil fuels to renewable energy sources; (4) fall off in renewable energy production, etc. ("Europe's energy crisis: Continent 'too reliant on gas,' says von der Leyen," Euronews).

(Separately, the UK has a Brexit-induced gasoline shortage, because there aren't enough truck drivers to take fuel to stations.  Although there is plenty of fuel. AP photo.)

For similar reasons, it's expected that energy prices will rise in the US this winter as well ("Home heating costs set to spike this winter amid global energy crunch," Sinclair Television, "U.S. home heating bills expected to surge this winter, EIA says," Reuters).  From Reuters:

Last year energy prices plunged to multi-year lows due to coronavirus demand destruction, particularly natural gas, the most popular U.S. heating fuel, which hit a 25-year-low. 

Depending where people live, the EIA said residential costs will rise to about $11-$14 per thousand cubic feet (mcf) for natural gas, about $2.50-$3.50 per gallon for propane, and $3.39 per gallon for heating oil. 

That compares with last winter's residential costs of around $8-$12 per mcf for natural gas, $1.50-$2.50 per gallon for propane, and $2.55 per gallon for heating oil.

Photo: "Insulate Britain: Who are the protesters and why do they keep blocking roads?," Big Issue.

In response to price rises in the UK, the advocacy group Insulate Britain has been demonstrating by shutting down major freeways ("Who are Insulate Britain and what do they want?," Guardian). 

More recent UK government home energy conservation programs failed and were cancelled ("Green deal scheme did not deliver energy savings, audit finds," Guardian). 

Photographer unknown.

The forthcoming rise in utility bills this winter  re-raises the issue of energy poverty.  

It would be very beneficial to have a massive home energy conservation initiative as part of a "Green New Deal" and President Biden's Build Back Better initiative which is having a hard time making it through Congress between the Republicans and the Democratic-lite Senators Sinema and Manchin.

Sadly, I doubt that energy conservation is much on the mind of Senator Manchin given how he earns millions each year from his investments in coal ("Joe Manchin’s ‘blind trust’ is an utter farce," Philadelphia Inquirer).

Photo: "Coming Up ‘Down the Hill’ On Peoria’s South Side," Belt Magazine.

Earlier in the year, I was shocked at an article in the Washington Post about people in Peoria's South Side neighborhood with monthly utility bills over $1,000 in the winter months, and I was surprised about reporting on how many low income households pay higher utility rates with "deregulation" rather than lower rates.

Energy conservation assistance programs for low income households should be an element of neighborhood improvement programs.  In response, I added "Local neighborhood stabilization programs: Part 5 | Adding energy conservation programs, with the PUSH Buffalo Green Development Zone as a model," which suggests systematic energy conservation programs to address equity and energy poverty programs in low income communities, to my series of articles on creating neighborhood revitalization initiatives ("A once 'wonderful' part of Peoria eroded with blight and crime. Why these residents stayed," Peoria Journal-Star).

It's also a way to provide job opportunities.

But I forgot to mention the importance of trees in addressing summer heat.  The New York Times has a couple of important pieces on inequitable distribution of trees in cities ("Since When Have Trees Existed Only for Rich Americans?" and "Why an East Harlem Street Is 31 Degrees Hotter Than Central Park West") and the contribution to the heat island effect.  

Also see this blog entry and "Boston’s ‘heat islands’ turn lower-income neighborhoods from hot to insufferable," Boston Globe. (Although I remember high income areas of San Francisco being without many trees also, due to small lots and virtually 100% lot coverage by buildings.)

My piece on energy conservation as an element of neighborhood revitalization didn't mention the tree canopy as a way to address summer heat island issues, which will be of increasing importance going forward.  Therefore, tree planting programs should be an element of such programs as well.

The next time I re-write "Local neighborhood stabilization programs: Part 5 | Adding energy conservation programs, with the PUSH Buffalo Green Development Zone as a model" I'll add a section on a massive tree planting program.

Local neighborhood stabilization programs: Part 5 | Adding energy conservation programs, with the PUSH Buffalo Green Development Zone as a model

-- "The need for a "national" neighborhood stabilization program comparable to the Main Street program for commercial districts: Part I (Overall)"
-- "To be successful, local neighborhood stabilization programs need a packaged set of robust remedies: Part 2"
-- "Creating 'community safety partnership neighborhood management programs as a management and mitigation strategy for public nuisance programs: Part 3 (like homeless shelters)"
-- "A case in Gloucester, Massachusetts as an illustration of the need for systematic neighborhood monitoring and stabilization initiatives: Part 4 (the Curcuru Family)"
-- "Local neighborhood stabilization programs: Part 5 | Adding energy conservation programs, with the PUSH Buffalo Green Development Zone as a model," 2021

In August 2020, I wrote a series of pieces about the need for focused neighborhood stabilization and improvement programs, particularly in weak market neighborhoods.  It recommended as a proposed model the reworking of the Main Street commercial district revitalization approach, but for neighborhoods, which the State of Pennsylvania has already done, calling it "Elm Street." 

-- Elm Street program, Pennsylvania Downtown Center
-- Elm Street Managers Handbook
-- Chambersburg Elm Street Neighborhood Plan 

Part 2 discusses packaging a set of remedies, so the programs can act expeditiously. To do that programs need to collect data and information and create maps showing the condition and state of properties, and identify potential solutions, including organizing community volunteer and self help/DIY initiatives such as the "Paint Ypsilanti" initiative that helped residents in the Depot Town neighborhood, when their houses were in need of a new paint job.

Part 3 discussed creating focused "community safety partnership" initiatives to manage and mitigate nuisances, and Part 4 discussed a particular example in Gloucester, Massachusetts involving shaming of a household that needed help in order to maintain their house and property which is large, old, and in need of serious maintenance.

Unfortunately, unlike how the "Main Street" commercial district revitalization program was fostered by the National Trust for Historic Preservation, because they saw it as a way to help preserve historic buildings and towns, there just isn't a good national organization out there set up to take on, develop, and "spread" the Elm Street Approach across the county.

(Note that the Main Street model was developed from an initiative in Corning, New York, which started in 1964!!!!!!, where the town realized that to compete with new shopping malls, they ought to manage their downtown similarly, and they hired a downtown manager.  It still took 15 years from that point to develop the Main Street program.)

Energy efficiency programs to support low income residents.  There's nothing new about energy efficiency programs.  Most states have them.  HUD has programs that support energy efficiency retrofitting for seniors and low income households.  So do the Department of Energy including its Weatherization and Intergovernmental Programs Office and the Environmental Protection Agency.  Even the USDA's Rural Development Program.  There are plenty of examples of nonprofit or social enterprise organizations working in this space.

-- Low-Income Energy Efficiency: A Pathway to Clean, Affordable Energy for All, Environmental Defense Fund
-- "Study Highlights Energy Burden for Households and How Energy Efficiency Can Help," Natural Resources Defense Council
-- ADVANCING ENERGY EFFICIENCY IN DEVELOPING COUNTRIES: Lessons Learned from Low-Income Residential Experiences in Industrialized Countries, National Renewable Energy Laboratory
-- Energy Efficiency for Low Income Households, European Parliament
-- "Low-Income Households Pay A Lot For Energy. Efficiency Can Help Cut Costs," Alliance to Save Energy

El Paso Electric Power plant.

Although it has been getting a renewed focus lately, because energy efficiency is seen as reducing electricity demand enough to take the edge off of load and generation problems resulting from extreme weather such as what happened in Texas in February ("Cold wave: the Texas power debacle disproportionately impacts the less well off") and currently, with hotter temperatures ("Gov. Greg Abbott downplays electric grid concerns as Texans are told to conserve," KXAN-TV).

Infographic, American Public Power Association

While it could be a stand-alone piece, since reading some pieces about how Baltimore's low income residents tend to have very expensive electricity plans ("Retail electricity deregulation mostly benefits companies at the expense of consumers" and "Why the Poor in Baltimore Face Such Crushing ‘Energy Burdens’," Inside Climate News) and a terrible story about low income people in Peoria having $4,000+ electricity bills ("OFF THE GRID: A flood of federal aid often fails to reach America’s poorest families," Washington Post), I think a fifth piece should be added to this series, because energy efficiency issues are particularly pressing in low income neighborhoods.

Helping people avoid $4,000+ electricity bills is a way to reduce the financial precariousness of low income households.

Minnesota Power Pyramid of Conservation, residential version

Other reporting.  Since the March piece ("Retail electricity deregulation mostly benefits companies at the expense of consumers") there's been more reporting on this topic, supporting the idea of a renewed emphasis on energy conservation as a strategy to support low income households..  

Low income households use more energy and pay more.  First, a study ("Measuring social equity in urban energy use and interventions using fine-scale data") published in the Proceedings of the National Academy of Sciences finds that low income households and people of color spend significantly greater amounts on energy than higher income households ("Tackling 'Energy Justice' Requires Better Data. These Researchers Are On It," NPR).  From the article:

The researchers found that in low-income communities, homes averaged 25 to 60 percent more energy use per square foot than higher-income neighborhoods. And within all income groups except for the very wealthiest, non-white neighborhoods consistently used more electricity per square foot than mostly-white neighborhoods. The results were even starker during winter and summer heating and cooling seasons.

"This study unpacks income and racial inequality in the energy system within U.S. cities, and gives utilities a way to measure it, so that they can fix the problem," says Ramaswami, a professor of civil and environmental engineering at Princeton University who's the lead investigator and corresponding author of the study. It's part of a larger project funded by the National Science Foundation to promote 'equity first' infrastructure transitions in cities.

This seems to confirm the real world experiences reported in Baltimore and Peoria.

Energy conservation programs don't do a good job reaching low income households.  Second, Yvonne Abraham, a columnist at the Boston Globe, writes ("Energy efficiency is a low-hanging fruit to combat climate change. So why can’t everyone get access to it?") that energy efficiency programs in Massachusetts tend to extraordinarily benefit higher income households, that lower income households need more help, more outreach in order to reap the benefits.  From the article:

Though Mass Save is available to every ratepayer in the Commonwealth, those who live in affluent towns are more likely to take advantage of it: Participation in places like Bolton, Carlisle, and Hingham is up to seven times greater than in Lawrence, Fall River, and New Bedford. 

 “The program as designed works really well for single-family homeowners who have money to spend to make their homes more efficient, and who speak English,” said Eugenia Gibbons, Boston director of climate policy at Health Care Without Harm. For others, not so much. 

 It takes time, trust, and money to participate in Mass Save: time to apply for a visit and to meet with a consultant; trust that the energy utility, which administers the program, is really offering you something for free, with no catch; and money to pay your share of the subsidized insulation and boiler bills. All three are in short supply in places where blue collar workers, immigrants, and renters are concentrated. Language barriers widen the gap...

Those who live in less advantaged places need Mass Save the most: They’re spending as much as 15 percent of their disposable income on energy bills; they tend to live in older, draftier, less energy-efficient housing; and they suffer from poorer air quality and its attendant maladies, including asthma. 

We have to fix this, and not just for the sake of the underserved people who are paying into the system but not getting its benefits, though that is reason enough. Reducing fuel consumption anywhere in the Commonwealth serves everyone: It is crucial to our quality of life, and the planet’s survival.

It turns out a recent effort in the UK to promote energy conservation both as a jobs program and to reduce household energy costs was junked soon into the program because of mismanagement ("UK government scraps green homes grant after six months," Guardian).

This point is similar to those made in Parts 2 and 4 of the series, that there need to be programs packaged to implement and deliver revitalization solutions at the district/neighborhood and household scales, and that the programs need to be very proactive in trying to reach people.  

Not unlike the current issues with vaccination and the reticent, although the issues are subtly different, but also just in the ways the programs are designed.  For example, USA Today reports on success in Minnesota and failures in Michigan, which come down to how the programs were designed ("Michigan bet big on mass vaccine events for COVID-19. It didn’t work out as hoped").

Provide heat pumps?  Third, a piece in the Guardian ("Poorer households in UK should get free heat pumps, say experts") suggests that one way to promote energy efficiency for low income households is to just give people heat pumps.  From the article:

Households on low incomes should be supplied with free heat pumps in order to kickstart the market for low-carbon heating equipment and meet the UK’s climate targets, experts have told the government. 

 Heat pumps can currently cost thousands of pounds to install, but the more that are installed, the faster that cost is likely to come down. They are widely regarded as the best way to replace the UK’s gas boilers and reduce carbon dioxide emissions from homes...

About 14% of the UK’s greenhouse gas emissions come from heating the UK’s poor housing stock, most of which is also draughty and energy inefficient. The group also called for insulation to be made available to people on low incomes.

It reminds me of programs focused on assisting people in transitioning from coal furnaces and ovens to gas and electricity.  Utility firms to this day have programs that finance the purchase of furnaces, etc.

PUSH Buffalo Green Development Zone as a neighborhood revitalization model also. There should be renewed and refocused attention paid to energy conservation programs benefiting low income households.  One example is the PUSH Buffalo community organization's Green Development Zone.  The GDZ is comparable to various "ecovillage" initiatives (I can think of some in DC, Cleveland, and elsewhere) in the 1990s and early 2000s, as a revitalization effort.

It's designed to promote green jobs, equity, to achieve environmental goals, etc.  It's also a way to deliver energy conservation programs in low income neighborhoods (PUSH Buffalo’s Green Development Zone: a Model for New Economy Community Development, Building A “Community Growth Machine”: The Green Development Zone as a Model for a New Neighborhood Economy).

You could argue that the Green Development Zone is:

1.  another way to position a neighborhood-based stabilization and revitalization initiative and deliver programs ("HOW PUSH BUFFALO MODELS HOLISTIC, EQUITABLE AND GREEN COMMUNITY DEVELOPMENT," NCRP)

2.  that can be integrated with the "Elm Street Approach" that the series suggests

3.  with a greater focus on building economic benefits within the neighborhood for the residents (Community Economic Development Handbook: Strategies and Tools to Revitalize Your Neighborhood  by Mihailo Temali, "Lessons from CNN story on Allentown, Pennsylvania,") and 

4.  while building into the program more directly, equity and environmental justice.

Note there are other examples, including the Evergreen Energy Solutions division of Evergreen Cooperatives in Cleveland, which also has a focus on solar energy.

Most states require utilities to provide programming along these lines (Supporting Low-Income Energy Efficiency: A Guide for Utility Regulators, American Council for an Energy Efficient Economy), and that's great, but the idea here is to implement programs at scale in terms of neighborhoods, districts, cities and counties.

Glass buildings are bad for the environment, the use of energy and the generation of greenhouse gases

Buildings with curtain walls made of glass in Boston's Seaport District.  Photo: David L. Ryan.  

The Boston Globe has a nice article on this, "Boston wants to fight climate change. So why is every new building made of glass?."

From the article:

If architects, planners, and public officials in Boston mean everything they say about sustainability and climate readiness, why is the city’s latest construction boom filling the skyline with so much glass? From the shimmering height of the Millennium Tower to the waterfront views of 22 Liberty, and a boxy office and condo complex going up at Pier 4, glass exteriors have become a major feature of today’s urban landscape. Just as we associate periods in Boston’s history with specific materials and styles — like 19th-century brick apartment blocks and 20th-century monumental concrete forms — glass is the material of the moment. The new buildings mimic others being erected in New York, London, Dubai, Singapore, and other cities around the world. Glass walls have become a shortcut for architecture that is sleek, cosmopolitan, and of-the-moment.  .....  

Yet glass buildings also take a lot of energy to heat and cool. When New York started tracking energy use by skyscrapers, the gleaming 7 World Trade Center — one of that city’s more efficient glass towers — scored worse than the 1930s-era Empire State Building. Oddly, glass buildings are proliferating even as cities like Boston set ambitious goals to deal with climate change. Former mayor Thomas Menino vowed to cultivate “the most sustainable city in the United States”; his successor, Martin Walsh, has called Boston “America’s climate champion” and set a goal of being carbon neutral by 2050. ...  

But all the talk about sustainability among architects hasn’t actually translated into lots of sustainable buildings in the real world. In reality, the industry faces a massive problem: By some estimates, the building sector consumes nearly half of the energy and produces 45 percent of greenhouse gas emissions in the United States. Many architects have signed on to an industry challenge to become carbon neutral by 2030, but new buildings are already slipping behind the targets to get there. Permissive building codes, industry inertia, and market demands — like clients clamoring for floor-to-ceiling views — have widened the discrepancy between the kind of buildings cities say they want and what they actually allow. So while the industry inches towards better environmental performance, buildings in Boston and other cities still fall short of the sustainability goals that everyone claims to embrace.

On a number of issues--more to come--it's clear that the kinds of initiatives underway mostly in Europe:

•  with converting a whole country to electric cars, such as in Norway ("How electric cars take over oil-rich Norway," Deutsche Welle)
• bans on the sales of internal combustion engine powered cars and the creation of low emissions zones ("Diesel Vehicles Face a Grim Future in Europe’s Cities," Yale Environment 360) 
• creation of car free zones in city cores out of concern for air quality ("Here are 11 more cities that have joined the car-free revolution," Fast Company)
  
  
  
• creation of congestion zones where cars are charged a daily fee to enter the urban core, such as in Stockholm, Singapore, or London 
• low emissions zones ("Emerging practices in Low Emission Zones throughout Europe," Mass Transit Magazine)
• free transit to discourage car use, such as was implemented earlier this year in Luxembourg

are nowhere near being implemented in the US.  

Yes

• Salt Lake City and Pittsburgh have fare free zones and many cities have free circulator buses, like Denver
• a number of communities are now doing composting
• California has banned gasoline powered cars effective in 2035 ("California Plans to Ban Sales of New Gas-Powered Cars in 15 Years," New York Times)
• states on the West Coast are creating an electricity charging network for trucks along major freeways ("A plan to install electric truck charging stations up and down the West Coast," San Diego Union-Tribune)
• pre-pandemic, New York City had put forth plans to implement a congestion zone ("New York becomes first city in US to approve congestion pricing," Guardian)
• plenty of developers build allegedly "green buildings" 
• many cities have announced plans to consume only green electricity ("What are 100% Green energy commitments?," Sierra Club)
• Caltrain is electrifying its main line ("Caltrain electrification is coming to Palo Alto. What should you expect?," Palo Alto Weekly)

but for the most part, substantive world changing initiatives by cities, counties, and states seem to be rare.

More big initiatives are being led by industry, especially in the (sustainable) energy sector (solar power, wind turbines), Elon Musk and Tesla have redefined the automobile industry in terms of the viability of electric cars, and there are significant increases in individual households installing solar electricity systems, although the decline of tax incentives and industry push back on compensation rates could lead to a decline.

The biggest thing cities have been addressing are autonomous vehicles ("The 4 cities competing to fully implement autonomous vehicles," Electronic Engineering Times), and while they can reduce accident, injury and death rates compared to people-operated vehicles, they aren't an environmental initiative.

A little bit of knowledge is a dangerous thing #2: Demand for coal as an energy source

I am a big fan of Little Free Libraries, and recently I came across a book published in 1953, The Big Coal Truck, by Frances R. Norwich.  It's about a boy watching the delivery of coal to an apartment building in an unnamed city, the coal being used for the on-site heating plant/furnace.


I love the illustrations in children's books generally, especially when they illustrate urban matters.

Because we are familiar with how things work now, we aren't so familiar with how things were "back then," in the same way that the youth of today don't know how to use rotary phones.

Into the 1950s, it was not uncommon for houses and apartment buildings to be heated by on-site furnaces powered by coal.

There were also coal yards across DC (and other cities) selling coal, often in areas alongside railroads, but not exclusively.

Recently, I was surprised to come across "shopping bags" from some DC-based coal companies at an antiques store in Maryland.


In fact, my house was constructed in 1929, and still has the coal chute.  At some point, the furnace was  converted to natural gas through a hookup to a bigger gas distribution system.  (Somewhere we still have a piece of ephemera that was on a wall, explaining about using coal.)

This kind of power generation had many deleterious effects on air quality.  And so laws were passed to force people to shift to natural gas and electricity based systems, powered through larger distribution systems rather than on-site energy sources.  And compared to site-based power generation by coal, large scale systems of electricity generation anchored by coal-fired generation plants was better for air quality generally--although not in the area where the power plants were built.

The switch was costly for many.  For example, a few months ago while reading a biography (Don't Call Me Boss: David L. Lawrence: Pittsburgh's Renaissance Mayor) of David Lawrence past mayor of Pittsburgh and Governor of Pennsylvania, I was surprised to see that one of his issues was helping to defray the cost to lower income households of a required changeover to electric or gas powered ovens.  That's stuff we don't even think about today.

Coal for a long time was the cheapest energy source for power generation.  But over time hydroelectricity, oil (usually for peak time generation), natural gas, and nuclear power were added to the mix, which today now includes wind and solar power, the latter moving back to a more site-based power generation paradigm, which in turn alters the economics of power distribution.

With fracking, natural gas has become even cheaper than coal, and power generation firms are shutting down coal generation plants in favor of natural gas generation.  Plus solar and wind sources are further reducing the demand for coal.

As is the more widespread use of LED lighting, which is cutting demand for electricity by up to 10%.

So the Trump Administration's desire to "bring back coal" faces the headwinds of various market forces that are driving the switch.

... not to mention global warming and climate change issues, which the current administration chooses to not believe.

I was blown away recently to read about this in terms of financial investment and risk analysis.  Basically now it's too risky to invest in coal or nuclear plants because it isn't clear given changes in the industry, that a plant will operate long enough to pay back loans.

I can't seem to find the article that I was reading about this, but these shed light on the concept:

-- "The Coal Cost Crossover: 74% Of US Coal Plants Now More Expensive Than New Renewables, 86% By 2025," Forbes Magazine
-- "Global 'collapse' in number of new coal-fired power plants," Guardian

One advantage coal has as a jobs generator is that it is very physical and tangible. Oil and natural gas are mostly distributed by pipeline, especially to power plants, while coal is moved by trains, has to be loaded and unloaded, and then at the plant, loaded into the plant. That takes lots of people, and it's a form of mass production. By contrast, natural gas delivery involves very few people.

One reason that freight railroads are experiencing a decline in business is because of the fall off in the use of coal for power generation ("Coal downturn hits railroads hard," High Country News).