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NAUGHTON: Let’s Be Rational About Electric Vehicles

Similar to most Americans, the high cost of gasoline is something I must consider as I move across the country. Either by car or airplane, it just costs more to get around.

Like clockwork, gas prices are also becoming politicized. Republicans want to blame President Biden, and the White House is trying to offer solutions that will do little to bring down gas prices. After all, the cost of a gallon of gas is mostly reflective of the price of a barrel oil, which is set on world markets and affected by everyone from the Saudis to Russian President Vladimir Putin.

With such unsavory forces in control of energy prices, it is only natural for the American people to demand answers from lawmakers about lowering gas prices.

But the harsh reality that many people don’t realize — or even acknowledge — is that our oil addiction is hard to break because we lack alternatives to replace petroleum that are cost-effective and secure.

One possibility offered, traditionally by progressive Democrats, is a full transition from gas-powered vehicles to electric vehicles, or EVs. Indeed, the Green New Deal touted by lawmakers like Sen. Bernie Sanders of Vermont and Rep. Alexandra Ocasio-Cortez of New York calls for “reaching 100 percent renewable energy for electricity and transportation by no later than 2030.”

It would be a wonderful thing for our planet, to walk away from petroleum and all drive EVs. But, we need to be honest about the challenges posed by EVs.

First, there are national security concerns. Specifically, China dominates the markets for rare earth metals, which are critical components for the batteries that power EVs. We don’t produce these mineral commodities — like lithium — in America. Even if we managed to tap into lithium resources domestically, China still controls cathode and battery manufacturing.

China would use this power over America as leverage to get us to bend to its will. Let’s not beat around the bush, China has become a totalitarian regime engaged in genocide. Beijing shows little respect for people’s basic human rights. With this in mind, do we want to both enrich China and depend on them to power our economy? Of course not.

Second, EVs are more expensive than gas-powered vehicles. How can we demand low-income Americans to spend more on their car or truck? If we want to subsidize the purchase to make an EV affordable for every single person, through tax credits or cash rewards, a good part of our nation’s budget will be dedicated to this endeavor.

Third, the American people are not in favor of going all EV. My organization recently commissioned a poll on this matter, and consider these findings:

—41 percent of respondents believe the shift toward EVs is happening and that additional federal investments are “not an effective use of taxpayer money.”

—When asked to rank federal spending priorities, funding for “increasing the number of electric vehicles” came in last, behind these more popular priorities (in order of favorability): “funding for ending childhood hunger,” “funding to fix our roads and bridges,” “funding for police training and hiring,” “funding to build K-12 schools,” “funding for wind and solar energy,” and “funding for public transportation.”

Our poll is clear: there is not the political will to spend billions of dollars to help people afford EVs. Think about this, every American without a driveway will need to have access to a publicly subsidized charger. How can the government possibly provide this charging capability to everyone? With skyrocketing inflation, Americans are simply trying to afford basic necessities. It’s no wonder EVs are lower on their immediate priority list.

Ultimately, I can foresee a future that is fully EV. Many of the challenges facing EVs could be resolved through innovation and smart government investments in clean technologies. But until we get there, let’s be realistic about EVs, and continue to support policies that help make gas-powered vehicles cleaner, and more fuel efficient.

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RUBIO: Re-Shore Rare Earths to Keep America Strong

A country incapable of providing for itself isn’t much of a great power. To ensure America stays strong for generations to come, we need to bring production of goods essential to our national security back home. That starts with re-shoring rare earth manufacturing.

For some, “industrial policy” is a dirty term associated with planned economies. But Americans have long accepted government action to help maintain domestic manufacturing in critical industries. It makes sense that we buy ships from General Dynamics, airplanes from Boeing, and missiles from Raytheon –– even if it would be cheaper to import them from abroad –– because it is clear they are goods vital to our national security. Well, the last two years have taught us that the list of such goods needs to be expanded.

One urgent addition to that list is rare earth minerals. In the 21st-century economy, rare earth minerals are crucial for powering advanced electronics. They form essential components of everything from batteries and household computers to wind turbines and military weapon systems. Without them, our modern way of life and capacity for self-defense would be crippled.

North America contains a considerable quantity of unprocessed rare earth minerals. However, the vast majority of rare earth manufacturing occurs in China. Even rare earth minerals mined in America are shipped to China for processing. In the wake of COVID-19, the invasion of Ukraine, and the supply chain disruptions that followed, it should be clear to everyone that relying on hostile regimes for basic goods is dangerous.

Just look at Western Europe’s predicament. Nations like Germany remain addicted to Russian natural gas, giving Vladimir Putin leverage over them. Cutting off Russian energy will require tremendous sacrifice on their part.

With expansive energy reserves, America is better positioned to counter Putin. But if China cut us off from rare earth products –– which Beijing has restricted in the past and could easily do again –– the effects would be catastrophic. That’s why I have introduced legislation to bring rare earth manufacturing back to America.

If passed into law, the Obtaining National and Secure Homeland Operations for Rare Earth (ONSHORE) Manufacturing Act will provide financial assistance to entities building rare earth manufacturing plants on U.S. soil and create initiatives to secure our international rare earth supply chain from foreign disruption. The ONSHORE Manufacturing Act will also prohibit taxpayer dollars from funding rare earth manufacturing in designated “entities of concern.” Americans’ hard-earned money should not be used to prop up the industrial capacity of China, Russia, or Iran.

I hope my colleagues in the Senate will join me in passing this piece of legislation, which is vital to keeping our country safe. However, we can’t stop with rare earth metals. There are other industries equally essential to our national and economic security that need re-shoring. In the coming months, it is critical that we begin rebuilding our capacity to produce pharmaceuticals, semiconductors, and more.

This is the kind of targeted industrial policy America needs to maintain its status as a great power. The threats we face from our adversaries, especially China, are wide-ranging and immense. We will need a whole-of-society effort to ensure the 21st century is another American century, and securing supply chains will have to be a part of it.

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LIEBERMAN: Who NOT To Blame For High Gasoline Prices

Whenever the price at the pump increases, so does the finger-pointing, but much of the blame game over high gasoline prices is neither accurate nor fair and, most importantly, won’t lead to real solutions. Here are several false targets of America’s anger at record-prices:

1.  Gas Station Owners – Despite the big Exxon or Shell or other major oil company sign hanging above many of the gas stations where people fill up, most of these stations are franchise businesses. Proprietors set the price based on market conditions, including what their next gasoline delivery will cost them, not some secret phone call from corporate headquarters.

Ironically, gas stations may actually do worse in times of high pump prices, since they enjoy much bigger profit margins on the sodas, snacks, smokes, and other things motorists purchase than they do for gasoline. But at current gas prices customers have less money left over for extras.

2.  Oil Companies – Candidate Joe Biden repeatedly promised to curtail domestic oil drilling

for the sake of addressing climate change and started making good on that promise from day one.   But now he accuses the industry of holding back on supplies and has launched a  Federal Trade Commission investigation into the matter.

To be sure, if oil companies were the ones that had decided to halt new drilling on federal lands in Alaska (as well as the lower 48 and offshore) or refused to build the Keystone XL Pipeline and other needed infrastructure projects, the president might have a credible case of industry deliberately squeezing supplies in order to boost prices. But it is his own administration that did all these things.

3. Electric Vehicle Skeptics – Vice President Kamala Harris, Secretary of Transportation Pete Buttigieg, and others in the administration have touted electric vehicles (EVs) as a way to laugh your way past the gas station; and they have hinted that EV non-believers are part of the problem. But even with gasoline prices setting records, EVs still have major drawbacks of their own. This includes: sticker prices $15,000 or more above comparable gasoline-powered cars, relatively limited range, and long charging times. In addition, electricity prices are also headed up due to some of the same Biden administration climate change policies impacting gasoline prices. And reliability is growing issue. Anyone who has suffered through a power blackout lately will think twice about buying an EV. For these reasons,  EVs only sell to the extent they are heavily subsidized (up to $7,500 in federal tax credits, as well as several state incentives) and even then have captured less than 5 percent of the new vehicles market.

4. World Leaders – Vladimir Putin deserves a good share of blame for the price run-up in the weeks since the Ukraine invasion, but by then prices had already jumped by more than a dollar per gallon above the previous year. Furthermore, if domestic production wasn’t handcuffed by the Biden administration, the invasion would likely have a less severe impact as we are seeing.

5.  Donald Trump– Gasoline was cheaper when Trump was president, and he aggressively pursued an agenda of “energy dominance” that included several petroleum supply-expanding projects that have since been blocked by his successor. Nonetheless, that has not deterred some from finding orange-man culpability. The Trump-blamer rationales are understandably hazy, but they suggest that the former president contributed to closing the domestic oil spigot, initiated the federal spending increases that contributed to overall inflation, including gasoline, and facilitated Russia’s invasion of Ukraine. Why none of this bad stuff happened until Biden took over is apparently just a coincidence.

If we can get beyond scapegoats, we can debate solutions. One such solution that should be crystal clear is making the most of the oil we have in the United States. Maximizing domestic oil production makes a lot of sense when the world is at peace and even more in times like these when it isn’t.

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ERVIN: Absence of Secure Mineral Supply Chain Poses Threat to U.S. Manufacturers

Now is the time to ask: How important is the mining of minerals and metals in the United States to the advancement of clean energy technologies? As demand for clean energy metals soars, and as global supply chain challenges only grow more pronounced, the answer is exceedingly clear. Building a domestic mineral supply chain is foundational to the energy transition and electric vehicle revolution.

Geopolitical considerations are an important dimension of the need for U.S. mobilization in the minerals and metals space. U.S. mineral import reliance is at alarming levels and China is now the dominant producer of half of the more than 30 minerals the U.S. government has deemed critical to our economic and national security. Overreliance on a geopolitical rival for fuel or critical materials is not a place we want to be—just ask the E.U. as it deals with Russian dominance of the European gas market. But even putting aside grave geopolitical considerations, soaring commodity prices, and the threat they pose to clean energy deployment are reasons enough for the U.S. to fully engage in mineral supply chains.

Consider what is happening with the metals used for lithium-ion batteries, the enabling technology for EVs. Lithium prices jumped a staggering 437 percent in 2021 and they continue to rise this year. New battery manufacturing capacity is coming online far faster than miners can open new mines and bring production to market. The result is a tear in the lithium market that is showing no signs of slowing down.

What’s happening with lithium – while extreme – is precisely what could happen with so many other metals essential to the energy transition. From copper and nickel to rare earth minerals there’s well-founded concern the world is financing far greater demand for these minerals and metals than their supply. New mining projects are not coming online at nearly the volume or speed needed to keep up with the accelerating pivot to green energy.

The International Energy Agency (IEA) predicted in a landmark study last year that demand for some key metals, like lithium, could grow 40-fold by 2040. The mining industry is woefully ill-suited to keep up with that kind of demand. Mining projects are notoriously complex and time-intensive. While a new battery mega factory that can crank out batteries for millions of new EVs can be built and begin operation in just two years, the mines needed to supply it take far, far longer. In fact, from inception to completion, major new mining projects in the U.S. take 17 years on average to bring to market.

The machines of the green revolution have an acute materials problem and as we’ve seen, supply challenges can upend economies. This past year car dealerships were left empty when chip shortages deeply constrained new car production. The same kind of scenario could be coming for solar panels, wind turbines, and EVs as the materials needed for their production simply don’t materialize at scale.

The American manufacturing renaissance the Biden administration envisions led by the auto sector is being built upon a supply chain that for all intents and purposes doesn’t exist. That Made-in-America parade isn’t going to march unless there’s a swift and decisive commitment to mined-in-America.

Counting on global materials production to meet demand is a recipe for failure. As the IEA implored, mineral-producing nations must lean into the challenge. And despite our growing import reliance, the U.S. is rich in mineral resources. From lithium to nickel, copper, rare earths, and even cobalt, the U.S. has vast reserves. What we need is the policy commitment to ensure we can produce them and do so quickly. The U.S. has world-leading mining environmental and labor standards, what we must do is ensure we use those standards to encourage responsible production, not block it.

The world cannot afford for the U.S. to only be a materials consumer during the energy transition. We must also become a leading producer. Instead of depending on, or hoping for, imports from foreign-trade adversaries like China, we must help produce the materials that are the building blocks for the emissions-free technologies needed to win the climate fight. American manufacturing policy and energy policy should rest on the shoulders of American mining policy.

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McGILLIS: California Has It Wrong on EV Mandate; Pennsylvania Shouldn’t Follow Suit

Notorious for its crime and its outrageous cost of living, California seems an odd choice for Pennsylvania to mimic. And yet, with the adoption of California’s onerous electric vehicle rules, the commonwealth would be doing just that.

The Pennsylvania Department of Environmental Protection has submitted a proposal for wholesale adoption of the California Air Resources Board’s electric vehicle (EV) program. The California rules import would impose new requirements on automakers and dealerships to stock lots with EVs.

In essence, the combined California-Pennsylvania mandate would command automakers to deliver increasing numbers of EVs for sale in Pennsylvania each year. Should they fail to meet the quotas, automakers will be required to buy credits from others that have banked them, like EV-only Tesla. There’s little doubt that adopting the California program would result in more EV proliferation. In the most recent data year, more than 7 percent of the new cars sold in California were EVs, leading the nation as a percentage of sales and pushing the cumulative number of EVs on the state’s roads to nearly half a million. But does the value-add of the program exceed the additional costs to the auto industry that eventually filter down to all of us? The evidence says no.

One commonly peddled myth about California’s EV program is that it increases consumer choice. The truth is there’s no barrier to EV purchases as it is and EV sales are already growing. In the last three years, the number of EV registrations in Pennsylvania has tripled.

While for some families, especially those with smaller budgets or more kids, EVs make little sense; for others, EVs are a smart choice, particularly if they have the luxury of another longer-ranger vehicle for road trips. In the open market, EVs have already earned a significant share of sales and are here to stay. They don’t need more help.

The great irony is the world’s leading electric vehicle mogul, Elon Musk, agrees. According to Musk, the government should “get out of the way and not impede progress,” serving more as a “referee” and less as a “player on the field.”

Of course, Pennsylvania’s adoption of California’s rules would be just one small part of a larger government push for EVs. Other parts of this agenda include the existing $7,500 tax credit for the wealthy car buyers who choose to go electric and the proposed $7.5 billion of spending on subsidized EV charging stations.

“Rules and regulations are immortal,” Musk said at The Wall Street Journal’s December CEO Council event. “They don’t die. The vast majority of rules and regulations live forever … there’s not really an effective garbage collection system for removing rules and regulations, so this hardens the arteries of civilization where you are able to do less and less over time.”

Convoluted programs like California’s EV rules are prime exhibits of this odious phenomenon, clogging our economy with red tape that only drives up costs.

No state shows the harms of government tangles like California. Ranking 48th in the Cato Institute’s state economic freedom list, California also has the highest poverty rate in the country and is among the states with the highest levels of income inequality.

EV subsidies and requirements do nothing to resolve these issues, and likely make them worse. With its requirements on automakers and dealers and its extensive state subsidies for buyers, California policy is shifting the cost of expensive EVs onto the general public, despite the fact that EV buyers are far richer than average.

While just over 30 percent of U.S. households have an annual income in excess of $100,000, more than 55 percent of new EV buyers do. Even looking at the used car market, the EV purchases skew severely towards the rich. In California for example, the average income of a used EV buyer is 66 percent higher than the average income of someone buying a conventional used car.

Adding insult to injury, EV evangelists like Transportation Secretary Pete Buttigieg tout the savings a household will benefit from in the absence of weekly tank fill-ups, seemingly forgetting that the average household cannot afford the delta in upfront purchase costs between expensive EVs and more affordable, comparable, conventional cars. Compounding this injustice, California taxes gasoline purchases at the highest clip in the nation while giving wealthy EV drivers a free pass to use the same infrastructure shared by everyone.

EV policies are a microcosm of California’s two-tiered society. It’s not a model Pennsylvania should follow.

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DelVal Dems Tout Infrastructure Spending, Dismiss Impact on Inflation

Delaware Valley U.S. Reps. Chrissy Houlahan (D-Chester) and Madeleine Dean (D-Montgomery) are celebrating the billions of federal dollars the new bipartisan infrastructure bill will bring to Pennsylvania. And they reject the argument that trillions in new federal spending will add to the nation’s rising inflation problems.

“This [spending] is the answer to that problem,” Houlahan said.

The two Democrats held a press conference with local officials at the Paoli Train station on Saturday to tout the $1.2 trillion Infrastructure Investment and Jobs Act, now signed into law.

“As a former teacher and engineer, I’m a particularly grade and data-driven person,” said Houlahan. “Pennsylvania now has a grade of C minus for roads and bridges and a grade of D for inlands waterways, according to the American Society of Civil Engineers report card, she said. “And those grades are simply unacceptable. And the data show that must change and we must make changes for safety and for a better way of life.”

The IIJ Act, sometimes referred to as the “bipartisan infrastructure bill,” will provide $11 billion for highways in Pennsylvania; $1.6 billion for bridge replacement and repairs over the next five years; $2.8 for the Amtrak corridor that serves the Delaware Valley region; and $5 billion in grants for rail safety.

“These historic investments will transform our nation and this region so we can better meet the demands of the 21st century with upgraded roads, bridges, modernized transportation, clean drinking water and reliable internet access,” said Dean.  The act includes $18 billion for the commonwealth, she said. There is also $244 million to help low income families with weatherizing their homes and $355 million for airport improvements.

And, Houlahan added, the funding will help area communities “ravaged” by flooding from Hurricane Ida last summer. The act provides money to rebuild, along with mitigation to prevent future flooding.

Polling shows Americans in general and Pennsylvanians in particular are more worried about rising inflation than they are the state of roads and rail. The Consumer Price Index reached a 6.8 percent annual rate in November, the highest since June 1982. Just days before Saturday’s presser, the Producer Price Index numbers were released “showing the biggest annual gain since the series was revamped 11 years ago,” according to Reuters.

Asked about the impact of this spending on inflation, Houlahan denied there was a problem.

“Well, I think this is actually the exact opposite of that concern,” she said. “We have an issue with inflation right now and we need to be attentive to it. But we also have an issue where we need to be creating jobs and opportunity for people. Where we need to be able to provide pathways literal and figuratively to be able to create those jobs and opportunities to be able to expand…This is the answer to that problem.”

Polls show most Americans don’t agree. A new Fox Business poll released last week found 47 percent of Americans believe the Biden administration’s policies are  “hurting” the country’s ability to fight inflation. And 46 percent say the Build Back Better social spending bill Dean and Houlahan helped pass last month will just drive inflation even higher.

DVJournal also asked about the infrastructure bill’s spending on electric vehicles (EVs), whose production is reliant on rare earth metals like lithium and cobalt. China is the dominant processer of these elements and, critics say, would overwhelmingly benefit from spending on green tech like EVs.

Houlahan said that as a former chemistry teacher, “I geek out on the periodic table and I serve on the armed services committee and actually passed a lot of legislation on rare earth elements.”

She called the term “rare earth” a “misnomer,” saying those minerals are everywhere but “China, amongst others, has a pretty big corner on the market on those processes and that mining, because it is also a very dirty process. And this is something understandably that here in the United States, we are more reticent to do. We do have a lot of work that needs to be done on rare earth elements. We need to become less reliant on China.”

Houlahan said she plans a trip to Australia, Japan, and South Korea to investigate how those countries deal with China and are able to “to diversify their reliance on rare earth elements and their reliance on China. That being said, we can’t walk away from the importance of electric vehicles.”

State Secretary of Transportation Yassmin Gramian, who attended the press conference, discussed how the increase in electric vehicles has decreased the state’s revenue from the gasoline taxes that funds road and bridge repairs.

Gramian said the new act provides the largest amount of funds earmarked for transportation since the Eisenhower administration.

“We have unmet needs of $8.1 billion annually in our highway and bridge program,” said Gramian. “And $9.3 billion altogether for all modes of transportation,” Gramian said. “We are so excited to see more electric vehicles on the road, we are so excited to see that the cars are becoming efficient…But that has really, truly impacted the revenue that’s been generated for our transportation system.

“Seventy-eight percent of our revenue for highways and bridges comes from gas taxes and it’s been going down month after month to the tune of $15 to $10 million. Last year around this time, we came very close to shutting down our transportation projects. We were down in our revenue by $600 million. We did not have enough cash to pay for our construction projects and pay our bills. That’s how bad the situation was at PennDOT because we are so much relying on gas taxes.”


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CARUSO: Why PA Can’t Afford to Be Next in the EV Mandate Plague

Interest in electric vehicles has been popular among public officials this year. Even President Joe Biden issued an executive order in August incentivizing EV sales. They are a key part of the “Build Back Better” framework the White House released Thursday.

Now we are seeing this issue gain traction in Pennsylvania. Gov. Tom Wolf should know his state’s economy depends greatly on natural gas for jobs, economic activity, and supporting most residents’ transportation needs.

Natural gas produced in places like Pennsylvania can be converted to liquid fuel – such as gasoline – and is directly stored in the fuel tanks, sent to the combustion chamber, and ignited to make your car drive. We have all seen the signs on public busses saying “this bus runs on natural gas.”

Yet Wolf is disregarding that fact by proposing measures that would also deny consumers a choice for their vehicle use and ignore the clear environmental downsides about EVs.

The proposals laid out in the Pennsylvania Climate Action Plan surrounding electric vehicles are far too ambitious and give preferential treatment to programs that won’t be beneficial to the state. The Drive Electric PA (DEPA) Coalition, Alternative Fuels Incentive Grant (AFIG), and the C-PACE expansion are just a few programs that give clean energy unfair advantages and take away from funding for the already clean and profitable natural gas industry. The AFIG sets up four different incentive programs that provide things such as rebates to people who use alternative fuels. C-PACE expansion gives benefits to businesses like low-interest loans only for clean energy efforts. The plan itself notes the significant upfront costs that will be required to make any of it possible.

The natural gas industry has a unique importance to Pennsylvania, and this resource is a key element in traditional vehicles. Pennsylvania is the second-largest producer of natural gas in the U.S., making it a net exporter of gas to other states and countries. The sector supported half a million jobs in 2019 and contributed $78.4 billion. These unique statistics make it all the more concerning that public officials are considering subjecting Pennsylvania to other states’ standards. For example, the Zero Emission Vehicle (ZEV) Program in California is emulated in the PA Climate Action Plan. It would essentially implement a part of California’s smog and pollution control standards with the requirement of a percentage of electric vehicles in the state, even though California’s and Pennsylvania’s climates are on opposite ends of the spectrum. In addition, those two states’ economies are vastly different. California does not depend on a natural gas industry for driving economic activity as Pennsylvania does.

To force this kind of mandate on a state like Pennsylvania makes no sense. One argument Pennsylvania officials have enjoyed using thus far is that analysis shows even though EVs require a large upfront investment, they will eventually be cost-effective. As a former administrator for the U.S. Energy Information Administration, I have devoted my career to prioritizing the reliance on credible and accurate data for informing sensible policymaking. With electric vehicles on average costing $13,000 more than typical combustion vehicles, it would take an extraordinary amount of time to see the returns that are being predicted, if ever.

Electric vehicles may have some benefits for reducing emissions, but they are by no means a silver bullet solution. A recent Brattle Group study shows the switch to require these cars that use massive amounts of electricity will put a large strain on power production. There is also a misconception behind how they emit a significantly less amount of greenhouse gasses. Electric vehicles are not zero-emissions vehicles. In reality, all types of vehicles produce emissions at some point, even electric vehicles. During the manufacturing phase of electric vehicles down to having to charge them, there is still emission of carbon involved. The more you have to charge the battery the more worn down it gets, resulting in it losing its ability to maintain charge and increasing methane emissions by up to 16 percent. If we try to move towards EVs too quickly, we won’t have enough power to fuel the production, and our need for electricity will grow too quickly.  Current EIA data shows that 19 percent of electricity still comes from coal, a fuel source with a higher emissions intensity. Using more coal-fired electricity to power electric vehicles will therefore undercut any potential emissions reductions benefits with EVs.

Mandates for EVs are being proposed in various states, and to some degree are even included in the $3.5 trillion Reconciliation bill being put forth by Congress. It is high time we take a look at all the options and all the facts, instead of forcing something that does not meet the needs of most Pennsylvania residents.