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.

Climate change makes "ordinary living" a lot more risky

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This is mostly "old" writing that was in the draft folder, from 2022.

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Remember those Parkay Margarine ads? "You can't fool Mother Nature."

1.  Waterfront development.  The New York Times asks why are we still building on waterfronts, given sea level rise ("Why Is New York Still Building on the Waterfront?").  I have to admit I push waterfront based revitalization initiatives and don't always think about this.

The answer: people want to live on the water and it makes money.

Ricardo Arduengo/AFP via Getty Images. An aerial image shows the only access to the Matlacha neighborhood destroyed in the aftermath of Hurricane Ian in Fort Myers, Fla., on Sept. 30, 2022.

2.  Hurricane and Superstorm prone areas.  Florida.  The Times reports that many people can't afford to rebuild in the face of Hurricane Ian.  

And Florida actually improved its building codes, making them stronger in dealing with the effects of hurricanes, albeit that was when the state was run by Democrats ("South Florida, Tulsa, and Santa Fe as examples of regulatory success and Texas as an example of regulatory failure").  The problem is that as hurricanes become more powerful, those building codes need to be extended across the state.

-- To Save America's Coasts, Don't Always Rebuild Them"
-- "Rethinking Building in Storm-Prone Areas"
-- "Three Ways to Build Back Smarter After Hurricane Ian"
-- "Hurricane Ian's Financial Toll Threatens Florida's Real Estate Market"

3.  Casualty insurance.  Plus, most for profit insurers are leaving Florida, leaving the property insurance market to a state owned insurer of last resort, which can never be capitalized to the rate necessary to cover likely risks ("Will 2022 bring the collapse of the Florida homeowners insurance market?," Bankrate).

... I used to get angry when a person involved in selling insurance argued against creating historic districts in DC because the houses wouldn't be able to get insurance.  I would say, "what about Georgetown, Dupont Circle, Capitol Hill, etc.?"

But it would definitely be a lot higher if there were regular risks from weather. 

New York City.  The Times reports, "‘If We Wait, People Will Die’: New Yorkers Still Fend for Themselves in Storms," on how residents in Greater New York are taking steps to protect themselves in the face of severe rains, flooding, Superstorms, Hurricanes, etc. Especially as the effects are not limited to those abutting rivers and waterfronts.  From the article:

Whatever lessons had been learned after Sandy, which brutalized the area with storm surges, coastal flooding and widespread power outages, they didn’t prepare people for the storm risk that Hurricane Ida exposed: flash floods intensified by climate change, and aging sewage systems that cannot absorb storm water fast enough. In the aftermath of Ida, policymakers are still grappling with blind spots in their post-Sandy recovery plans, and homeowners and renters are wondering what, if anything, they can do to protect themselves from rapidly deteriorating conditions. ...

“Our structures are a lot more vulnerable than we thought,” said Eric Klinenberg, a sociology professor and the director of the Institute for Public Knowledge at New York University. “The challenge is more extensive than we recognized, it’s going to cost more than we budgeted, and it’s more urgent than we expected.”

In hindsight, Sandy stands as a book end — the beginning of an era of stronger and deadlier storms, capped a year ago by Ida, a Category 4 hurricane that managed to catch people unaware after making landfall days earlier in Louisiana.

 (We had to add a second sump pump to our DC house, after the terrible rain event a couple years ago, where as much as 5 inches of rain fell in less than an hour in Northwest DC and Montgomery County.  Our area is a little worse because there's an undergrounded creek which leads to a high water table.)

Also see "The Disaster to Come: New York’s Next Superstorm," NYT.

4.  Emergency management failures in Lee County, Florida led to more than 100 deaths ("Facing a Dire Storm Forecast in Florida, Officials Delayed Evacuation" and "Vulnerable and Trapped: A Look at Those Lost in Hurricane Ian," New York Times). "Thanks DeSantis."

Aerial view of the flooding of the Guadalupe River near Kerrville, Texas, on Saturday July 5th, 2025. Photo via U.S. Coast Guard/UPI

5.  Speaking of "if we wait, we will die," that's what happened in Texas earlier this year, with river flooding ("Why Texas Hill Country, where a devastating flood killed more than 135 people, is one of the deadliest places in the US for flash flooding," The Conversation, "24 dead in Texas floods and more than 20 children missing from a girls summer camp," AP).  

Despite past experience with bad flooding, local authorities punted on funding emergency warning systems, partly because they didn't want to spend the money, even with grants as part of the funding mix.  Emergency siren systems are more effective in the middle of the night when people are mostly asleep, and when the flooding happened ("Texas state leaders call for more sirens, flood gauges and mitigation efforts," Texas Tribune).

6.  Wildfire.  Oregonians aren't happy about having to cover the cost of wildfire risk ("Oregon tried to inform residents about wildfire risk. The backlash was explosive," Grist Magazine). From the article:

Last summer, after a series of devastating wildfires, the Oregon state legislature passed a sweeping bipartisan bill to protect against future blazes. The law unlocked money to develop new building codes in vulnerable areas and help residents who wanted to fireproof their homes. It reached the governor’s desk with support from Portland-area Democrats and rural Republicans alike.

Before state officials could implement the new regulations, though, they needed to figure out which areas faced the greatest fire danger. For this reason, the bill required the state forestry department to create a comprehensive wildfire risk map within a year, assigning a risk score to every household in the state. The forestry department finished the map right on time in June. It then mailed a letter to every homeowner who was in a high-risk zone, alerting them that new regulations would be coming soon.

The first version of the Oregon Wildfire Risk Explorer map, published earlier this year. The state retracted the map after public outcry. Oregon Wildfire Risk Explorer

This seemingly anodyne mapping measure produced a frenzy of backlash from every corner of the state. Hundreds of residents showed up at public meetings to berate state officials for designating their homes high risk, and hundreds more wrote in to contest their risk status. Many argued that the state was going to make their insurance more expensive and their property less valuable.

The same Republican lawmakers who had supported the wildfire bill then pounced on the map as an example of state overreach. In early August, the state caved and withdrew the map, vowing to spend another year gathering feedback before releasing a final version. In a tight race for state governor that will be decided next week, the Democratic candidate has distanced herself from the old version of the risk assessment, saying the revision “must address concerns from property owners.”

Like covid, fire pretty much ignores politics.

In Washington State, given federal cutbacks to the US Forest Service and Federal Emergency Management Administration, more wildfires are expected ("WA’s wildfire future: More volatile forests amid slashed budgets," Seattle Times). 

In 2019, Texas paid for billboards in California making fun of electricity shortages in the summer.

7.  Electricity.  With extreme cold and extreme heat, electricity demands are now high throughout the year, rather than peaking and dropping, with demand approaching the edge of capacity.

Supply failures are increasingly likely because of increased demand by Internet data centers ("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, blog entry, "Data centers").

Hundreds of people died in Texas in 2021 because of utility failures in winter ("Talk and lying versus doing: The electricity crisis in Texas is produced by state regulatory failure").  And it turned out that when electricity fails, so do water systems, furthering the negative impacts of the failures.

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).

8.  Extreme heat and deaths.  Communities in hot regions are experiencing a lot more heat-related deaths in the summer, as a result of extreme temperatures having disproportionate effects on those of lesser means. 

More cities are appointing "chief heat officers" to plan for and address the effects ("Planning for heat/climate change | Public health" and "Climate change is already here in many US communities | "Heat Officers" versus Climate Change Officers").

Columbia South Carolina has a pilot program measuring heat islands ("Scientists look for help to exactly measure Columbia’s heat," AP).

9.  Flooding and impact on stormwater and water treatment infrastructure.  Rain events are a lot stronger than they were when most communities built their stormwater capture infrastructure.  Now it is common for the piping to be overwhelmed during storms.  

In 2022, rain-related flooding overwhelmed the water treatment infrastructure in Jackson, Mississippi ("EPA determines water in Jackson, Mississippi, is safe to drink two months after treatment plant failure," CNN), calling attention to how racism leads to underfunding of urban needs, but also the reality that there are billions of dollars in unfunded needs for improvements to existing sewer, stormwater, and water treatment infrastructure.

A man rides his motorcycle through a flooded street in the Melrose Park neighborhood in Fort Lauderdale on Friday. (Carline Jean/South Florida Sun Sentinel)

Last Friday, the Fort Lauderdale Sun-Sentinel reported on high-tide induced flooding there ("Heavy rain during high tide swamps Broward roads ahead of weekend cold front").

Residents on the west side of Salt Lake City were flooded out a couple weeks ago, after the strongest rain event in 120 years--rain also made entry into the foundation wall of our bedroom ("The Oct. 4 rainstorm is just one example of the severe weather in our future," Salt Lake Tribune, "Salt Lake City mayor issues emergency declaration in response to weekend flooding," KSL-TV).

People clean up on Sunday, after Saturday’s historic rain caused significant flooding in a Rose Park neighborhood. Salt Lake City Mayor Erin Mendenhall declared a state of emergency over the flooding late Monday. Wesley Barton, KSL-TV

10. Systems of local government finance, created when the US was growing, are hard pressed to meet demands for new infrastructure needs induced by climate change ("The real lesson from Flint is about municipal finance," 2016).

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). 

Quantum change in technologies can change industrial agglomeration economies, business and sector organization, location etc. | Electric vehicles

One of the things that has struck me about the introduction of the electric car is how it is transforming the automobile manufacturing industry which has been clustered in Michigan and the Midwest after the initial period of experimentation and development in the early 1900s, although some manufacturing was always distributed around the country such as in New Jersey, Maryland, Missouri, New York, California, etc.

But in the 1980s, increasingly companies, especially non-US based manufacturers, began opening plants in the South, because it is more difficult for successful labor organization of the workers at those plants, therefore generating lower labor costs.  In the 1990s, seeking even lower labor costs, firms moved more production to Mexico as well. 

Increasingly, engineering and design functions are developing in Southern locations, especially when the companies are outside of the traditional Big 3 firms ("Driving force: San Antonio picks up speed in auto industry," San Antonio Express-News).  From the article:

The shift to automotive research and development could make San Antonio a hub for high-wage jobs in zero-carbon transportation in the years ahead, city officials say. DeLorean said its San Antonio employees will earn, on average, about $140,000 annually. 

“The long-term play is to get more of the value-added work. So when you see Navistar coming here, they didn’t just bring a truck factory, they brought their engineering plant,” Marquez said. “That’s what our county strategy has been from the beginning.”

The onset of the electric car has created a similar kind of exogenous shock, with Tesla having plants in California and Texas, Rivan opening a plant in Georgia, states like Oklahoma are vying for plants ("What to know about Oklahoma's embrace of the electric vehicle industry," Daily Oklahoman), and distributing development, design, and engineering functions away from the Midwest, etc.

The Detroit News has an interesting article about GM and how its president, Mark Reuss (son of a former GM president also) remains committed to keeping Michigan and the Midwest as central locations for the production of electric vehicles, rather than moving elsewhere.  

-- "Mark Reuss kept GM investing in Michigan, Detroit to build EV future here"

Transportation costs.  An article in the New Yorker about logistics said that with the rise of the container, shipping costs dropped from almost $6 per ton to 16 cents ("When Shipping Containers Sink in the Drink").  That's why firms became free to move manufacturing overseas.

If the rise in the cost of energy and the difficulty of having enough truck drivers persists, along with other supply chain and logistics problems, it could well be that moving automobile manufacturing outside of its traditional areas could be costly in terms of sourcing parts, etc.

Political costs: legacy versus new industries | Fossil fuels versus green energy industries. Another thing is that by moving plants into Republican states, they can be subject to more criticism and opposition, which may be fomented by businesses committed to a fossil fuel based economy ("The pollution paradox," Guardian).   And what I call the intra-national "Petro State" effect, where states like Texas and Oklahoma promote pro-fossil fuel policies.

For example, Governor Kemp of Georgia has been criticized for providing tax incentives to Rivian ("Rivian electric car plant blasted by foes at Georgia meeting," AP).  (The Economist argues that such lobbying helps countries like China, who are more focused on developing new technologies and industries rather than saving old ones. See "China’s plans for the electrified, autonomous and shared future of the car.")

But what will happen to states like Texas and Oklahoma as electric vehicle related firms rise in importance?  Will the states have to be more "fair" about representing multiple sets of interests?  Probably not, fossil fuels in the short run are far more important economically to the economies of those states.

Oil dependence | The US as a Petro-state and gasoholic | and war

 

People crowding a train platform in Kharkiv, Ukraine

Twitter photo: Nexta_TV

The Business Week article "The Petro States of America" dating to the Obama Administration made the point that the US is a petro state too, and it has built an economy dependent on oil, especially when it comes to transportation.  More than 90% of all trips are made by car.  

The development of hydraulic fracking in oil and gas production made the US one of the world's top producers, after production had been in decline.  But in response, Saudi Arabia and Russia lowered the price of oil to drive US fracking firms out of business, because they have relatively high production costs per barrel.  So US production has dropped.

Norway shows a different way.  By contrast, Norway, in the face of new riches from oil and gas production in the North Sea, maintained its hydroelectric-based energy economy, and instead of using royalties and other revenues to lower taxes (that's what Britain did) it invested the receipts in a sovereign wealth fund.   Although the US-based Tax Foundation, an advocate for low taxes, doesn't like it ("Norway’s Addiction to Taxes on Oil").

Norway's state-owned "gasoline" brand, Statoil, is installing EV charging points at their stations.

Again, because of  hydroelectricity, Norway is an early leader in the development of electric vehicles ("Why Norway Leads In EVs—And The Role Played By Cheap Renewable Electricity," Forbes, "Environment-friendly mobility: Norway’s high-voltage EV push offers a template for India," Indian Express).

Netherlands and Denmark shift to sustainable mobility.  Similarly, the Netherlands and Denmark, in response to the Oil Crisis of 1973, recognized that they put their countries at risk by shifting to a mobility paradigm dependent on cars and gasoline.  So they instead prioritized transit, biking, and walking, and the necessary land use, transportation and energy policies to shift the paradigm.  

For example, excise taxes on gasoline and automobile purchases are high, and significant monies are invested in transit and biking biking infrastructure.

Separately, Germany is a car manufacturer, but not an oil producer.  Regardless of the importance of car manufacturing to its economy, it has never deemphasized the primacy of transit (complemented by walking, and later biking) as the optimal mode for urban mobility.  (By contrast, the US has a more homogeneous approach to mobility, abandoning transit in favor of the car, when at one time the US had the densest transit network in the world.)

A gasoline-dependent economy is susceptible to disruptions in supply.  In the US, the recent cyberattack on a gasoline pipeline ("Automobility dependence and how the Colonial Pipeline gasoline transportation failure affects gasoline supplies on the Atlantic Coast") and disruptions in gasoline supply due to weather events.

For example, as a result of Superstorm Sandy, gasoline supplies were restricted and many states declared states of emergency, not just because of disaster damage from the storm, but because of reduced access to gasoline ("After Sandy, New York will hold strategic gasoline reserves," Washington Post, "After Sandy, gas lines stretch for miles," CNN). 

A Shell station without gasoline in 1973.

A gasoline-dependent economy is susceptible to changes in world conditions.   Even though the US is one of the largest producers of oil, it is one of the largest consumers of oil too, and because oil is an international commodity, the price for oil is not set based on local production.

If it were, gas would be cheap in Salt Lake City because there are five refineries in and around the city, and it is priced the same as everywhere else.  Instead, oil is priced globally, based on international demand and perceptions of future supply and risks.

In response to the Ukraine War, gasoline prices in Downtown Salt Lake City have risen more than $1 per gallon in less than one week.  Prices are significantly higher in California.  

And governors and US Senators are calling for temporary elimination of gasoline excise taxes to reduce prices slightly ("A pair of Senate Democrats want to suspend the federal gas tax through the end of 2022," Yahoo News, "Push to Pause Gas Taxes Increases as Prices Surge Amid Ukraine Conflict," Newsweek).

Even though the US was devastated at the time by the 1970s oil crisis, which crushed US automobile manufacturers, whose less efficient cars were supplanted by foreign manufacturers, for the most part the land use and transportation planning paradigm dependent on the automobile and gasoline did not change.

The major policy change was putting energy efficiency requirements for higher miles per gallon for car production, measured against an automaker's entire fleet of vehicles ("CAFE Requirements," NAS).  

But the business model for US manufacturers doesn't favor the production of small cars, and over time, foreign manufacturers dominated the market for cars while US manufacturers shifted to SUVs and trucks.

Demand for oil and natural gas empowers producing countries: Resource Curse, Pollution Paradox.  And because most countries are consumers not producers of oil, this gives disproportionate power to renegade countries like Russia and Saudi Arabia, who end up with the double whammy of the "resource curse" and the "pollution paradox."  

The resource curse was coined to describe countries dominated by extractive industries and how few of the financial benefits from oil and mineral production end up fostering positive social and economic development in those countries, and the political structure is often authoritarian.

The pollution paradox, coined by Guardian columnist George Monbiot, describes how companies and people (like the Koch family of Kansas) all in on resources like oil and gas do everything in their power to prevent a switch to more sustainable methods of energy production or alternatives to the automobile.  

And they are super motivated, whereas advocates for change don't have the same level of self interest, and their efforts pale by comparison to the pollution caucus.  

For example, Koch interests fund organizations focused on supporting tax benefits for oil production, developing anti-regulatory state legislation, and opponents to transit and solar energy ("Charles Koch Personally Founded a Group Protecting Oil Industry Handouts," The Nation).

Energy dependence enables war: The Ukraine.  Other countries dependence on Russian oil and gas, especially European countries, is at the heart of Putin's willingness to go to war in the Ukraine.  He figured that Europe would back off because they need his oil and especially natural gas, which is the primary heating source across Europe.

Many US states show the effects of the Resource Curse and the Pollution Paradox.   In the US, many of the states that are large producers of oil and gas, California being a major exception, tend to have politics as fouled as countries like Russia and Saudi Arabia.  They too are victims of the double whammy of the resource curse and the pollution paradox.

For example, Texas has refused to winterize its natural gas production, and blamed last year's disruptions on renewable energy, even though the failures were largely due to natural gas production going off line ("Cold wave: the Texas power debacle disproportionately impacts the less well off," "Texas largely relies on natural gas for power. It wasn’t ready for the extreme cold," Texas Tribune, "One Year Later: The Texas Freeze Revealed a Fragile Energy System and Inspired Lasting Misinformation," Inside Climate News).  

And because natural gas for Texas fuels the energy grid across the midwest, consumers in many states faced massive price increases and problems because of the disruption ("Minnesota gasps at the financial damage it faces from the Texas freeze," Washington Post).  Despite last year's debacle, which killed hundreds, the state is still delaying winterization.

Electric vehicles.  At the same time, shifting to electricity powered automobiles, in combination with a rise in the utilization of wind and solar energy, reduces demand for oil and dependence on other countries for supplies.  

While the total costs for EV power in the US may be higher than gasoline when you figure in the costs of adding infrastructure, that's only true when gasoline is relatively cheap.  If priced at European levels, $7 per gallon or more, EVs are cheaper.  

Fear of EVs is another reason Saudi Arabia aimed to keep oil prices lower.  But Russia has complicated this immeasurably, by invading Ukraine.  

US bans Russian Oil/Could it be a way to foster a shift to green energy?  The US has just banned the purchase of Russian oil--not a particularly large amount, but the heavier oil helps East Coast refineries run more efficiently, and there is talk that the US should accompany the ban with a greater focus on green energy production ("What Does the Russian Oil Ban Mean for the Clean Energy Transition?," Inside Climate News).

Automobile dependence is still an economic vulnerability.   But the cost of creating a national electric charging infrastructure is high, may be less environmental beneficial without the shift to renewable energy sources, and sustainable mobility has a variety of benefits in terms of health, costs, land consumption, environment, etc., that will still be negative even with an EV centric automobile dependent land use and transportation planning paradigm.

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Iraq War/Middle East destabilization.  After 9/11 there were Internet screeds about how the automobile manufacturers weren't donating enough.  I scoffed.  I said it was automobile dependence that created the stage for 9/11.  

As long as the US saw the necessity of protecting Middle Eastern oil supplies, strife would obtain as the resource curse meant the US supported authoritarian rulers, which in some cases ended up with them being deposed.

Invading Iraq only destabilized the Mideast further.  And in turn, outmigration spurred by the war and other strife destabilized Europe and in some respects, contributed to Brexit, because of the rise in the fear of the negative impacts of immigration, especially radicalized Islamists.