[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]
IMPLICATIONS OF ELECTRIC VEHICLE
INVESTMENTS FOR AGRICULTURE AND
RURAL AMERICA
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON AGRICULTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
SECOND SESSION
__________
JANUARY 12, 2022
__________
Serial No. 117-25
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the Committee on Agriculture
agriculture.house.gov
_________
U.S. GOVERNMENT PUBLISHING OFFICE
49-767 PDF WASHINGTON : 2022
COMMITTEE ON AGRICULTURE
DAVID SCOTT, Georgia, Chairman
JIM COSTA, California GLENN THOMPSON, Pennsylvania,
JAMES P. McGOVERN, Massachusetts Ranking Minority Member
FILEMON VELA, Texas AUSTIN SCOTT, Georgia
ALMA S. ADAMS, North Carolina, Vice ERIC A. ``RICK'' CRAWFORD,
Chair Arkansas
ABIGAIL DAVIS SPANBERGER, Virginia SCOTT DesJARLAIS, Tennessee
JAHANA HAYES, Connecticut VICKY HARTZLER, Missouri
ANTONIO DELGADO, New York DOUG LaMALFA, California
SHONTEL M. BROWN, Ohio RODNEY DAVIS, Illinois
BOBBY L. RUSH, Illinois RICK W. ALLEN, Georgia
CHELLIE PINGREE, Maine DAVID ROUZER, North Carolina
GREGORIO KILILI CAMACHO SABLAN, TRENT KELLY, Mississippi
Northern Mariana Islands DON BACON, Nebraska
ANN M. KUSTER, New Hampshire DUSTY JOHNSON, South Dakota
CHERI BUSTOS, Illinois JAMES R. BAIRD, Indiana
SEAN PATRICK MALONEY, New York JIM HAGEDORN, Minnesota
STACEY E. PLASKETT, Virgin Islands CHRIS JACOBS, New York
TOM O'HALLERAN, Arizona TROY BALDERSON, Ohio
SALUD O. CARBAJAL, California MICHAEL CLOUD, Texas
RO KHANNA, California TRACEY MANN, Kansas
AL LAWSON, Jr., Florida RANDY FEENSTRA, Iowa
J. LUIS CORREA, California MARY E. MILLER, Illinois
ANGIE CRAIG, Minnesota BARRY MOORE, Alabama
JOSH HARDER, California KAT CAMMACK, Florida
CYNTHIA AXNE, Iowa MICHELLE FISCHBACH, Minnesota
KIM SCHRIER, Washington JULIA LETLOW, Louisiana
JIMMY PANETTA, California
SANFORD D. BISHOP, Jr., Georgia
______
Anne Simmons, Staff Director
Parish Braden, Minority Staff Director
(ii)
C O N T E N T S
----------
Page
Brown, Hon. Shontel M., a Representative in Congress from Ohio,
prepared statement............................................. 5
Davis, Hon. Rodney, a Representative in Congress from Illinois,
submitted article.............................................. 105
Delgado, Hon. Antonio, a Representative in Congress from New
York; submitted statement on behalf of American Public Power
Association, et al............................................. 103
Fischbach, Hon. Michelle, a Representative in Congress from
Minnesota, submitted blog...................................... 108
Scott, Hon. David, a Representative in Congress from Georgia,
opening statement.............................................. 1
Prepared statement........................................... 3
Submitted article............................................ 99
Thompson, Hon. Glenn, a Representative in Congress from
Pennsylvania, opening statement................................ 4
Witnesses
Strickland, J.D., Hon. David, Vice President for Global
Regulatory Affairs and Transportation Technology Policy,
General Motors, Washington, D.C................................ 7
Prepared statement........................................... 8
Supplementary material....................................... 109
Wood, Lincoln E., Electrification Policy Manager, Southern
Company, Atlanta, GA........................................... 10
Prepared statement........................................... 12
Supplementary material....................................... 110
Laughridge, Matthew, Owner and Managing Director, Terry Reid
Enterprises, Cartersville, GA; on behalf of National Automotive
Dealers Association............................................ 14
Prepared statement........................................... 15
Walter, Trevor, Vice President of Petroleum Supply Management,
Sheetz, Inc., Altoona, PA; on behalf of National Association of
Convenience Stores............................................. 17
Prepared statement........................................... 19
Supplementary material....................................... 117
Cooper, Geoff, President and Chief Executive Officer, Renewable
Fuels Association, Ellisville, MO.............................. 28
Prepared statement........................................... 30
Nassar, Josh, Legislative Director, International Union, United
Automobile, Aerospace and Agricultural Implement Workers of
America, Washington, D.C....................................... 37
Prepared statement........................................... 39
Supplementary material....................................... 118
Mills, Mark P., Senior Fellow, Manhattan Institute, Chevy Chase,
MD............................................................. 43
Prepared statement........................................... 45
Supplementary material....................................... 119
Submitted Material
Kovarik, Kurt Vice President, Federal Affairs, National Biodiesel
Board, submitted letter........................................ 120
Penmetsa, Praveen, Chief Executive Officer and Co-Founder, Zimeno
Inc. d/b/a Monarch Tractor, submitted letter................... 123
IMPLICATIONS OF ELECTRIC VEHICLE
INVESTMENTS FOR AGRICULTURE AND
RURAL AMERICA
----------
WEDNESDAY, JANUARY 12, 2022
House of Representatives,
Committee on Agriculture,
Washington, D.C.
The Committee met, pursuant to call, at 10:05 a.m., in Room
1300 of the Longworth House Office Building and via Zoom, Hon.
David Scott of Georgia [Chairman of the Committee] presiding.
Members present: Representatives David Scott of Georgia,
Costa, Vela, Adams, Spanberger, Hayes, Delgado, Brown, Rush,
Pingree, Kuster, Bustos, Maloney, Plaskett, O'Halleran,
Carbajal, Khanna, Lawson, Craig, Harder, Axne, Schrier,
Panetta, Bishop, Thompson, Austin Scott of Georgia, Crawford,
LaMalfa, Davis, Allen, Kelly, Bacon, Johnson, Baird, Jacobs,
Balderson, Cloud, Mann, Feenstra, Miller, Moore, Cammack,
Fischbach, and Letlow.
Staff present: Josh Lobert, Ashley Smith, Luke Theriot,
Paul Balzano, Patricia Straughn, Erin Wilson, and Dana Sandman.
OPENING STATEMENT OF HON. DAVID SCOTT, A REPRESENTATIVE IN
CONGRESS FROM GEORGIA
The Chairman. The hearing will come to order. Ladies and
gentlemen, we are at a very historic moment for our nation. Who
would have thought of it, even as soon as just a few years ago,
that we would have this golden opportunity to be able to
provide electricity that would motor our vehicles? But it is
bringing on some very serious questions, some very serious
issues, so that we know what it will take to make sure that our
people in this country are well aware and will be able to take
advantage and enjoy this movement, this great movement, that we
are making to transition from petroleum for our vehicles to
electricity.
And I want to welcome everyone to this hearing, and
especially our witnesses, because we are looking to you to tell
us what this means. What does it mean for jobs? What is the
impact that this will have in rural America if we do not move
and make sure that those in rural America can enjoy and be
productive from this move we are making? I am sure that none of
us want to deal with this move as we have with getting
broadband internet into our rural communities. The whole issue
is it is just not that if we go back to electricity. It took
almost forever for it to get to rural America, which harvests
our food and the necessities of our life, our clothing from
textiles and cotton, from our forestry for lumber and our
shelter. When we deal with agriculture, when we deal with rural
America, we are dealing with the heart and the soul of our
great nation.
And so, I am so delighted to have all of you here and for
us to move in this direction.
I want to also--before I get to that, I want to go over
some basic housekeeping here. Let me just make sure that
everyone understands how we will be proceeding. After brief
opening remarks, Members will receive testimony from our
witnesses today, and then the hearing will be open for
questions. Members will be recognized in order of seniority,
alternating between Majority and Minority Members, and in order
of arrival for those Members who have joined us after the
hearing was called to order. And when you are recognized, you
will be asked to un-mute your microphone, and each of you will
have 5 minutes to ask your questions and make your comments.
And also, Members, please, if you are not speaking, I ask that
you just remain muted in order to minimize background noise.
And in order to get to as many questions as possible, the timer
will stay consistently visible on your screen.
And now, before we begin, I want to welcome one of our
newest Members, our newest Member who has just come to be with
us just a few weeks ago. And so, we want to welcome Ms. Shontel
Brown from Ohio, our newest Member. Welcome, Shontel.
Ms. Brown. Thank you, Mr. Chairman.
The Chairman. It is great having you.
Ms. Brown. Thank you.
The Chairman. You are welcome.
Now, I want to turn to my own opening statement for a
moment. As I mentioned a little earlier, this is historic and I
am so, first of all, grateful to our staff for pulling together
this hearing and working it under the direction of Ms. Anne
Simmons. Ladies and gentlemen, I am sure she won't mind, but I
call her my Ethan Hunt. And for those of you who may not know
who Ethan Hunt is, he is a character that is played by Tom
Cruise in Mission: Impossible. But the thing here is, this
Agriculture Committee staff I have now coined our Mission:
Possible.
We are witnessing a point of major research and investment
and adoption of electric vehicles across the country and the
world, driven in large part in an effort to mitigate the
impacts of climate change. And as with so many other of our
technological advancements, like, as I mentioned a little
earlier, electrification, broadband, telephone service, and
even plumbing. I want to see that we make sure that our rural
America is not left behind as they were left behind in
movements to electricity, to plumbing, to all of the other
areas. This is our duty.
I want to make sure that we can ensure the needs also of
farming and agriculture. These are our vital producers of food,
of our fiber, of so many other areas that we are working on. We
need to know what impact this will have on the movement we have
made to biofuels and other areas that our Agriculture Committee
is working on. And as I mentioned about rural America, I want
to just share with you an article from The Atlanta Journal-
Constitution * that really provides the essence of why we are
here. It says here that Georgia has 1,500 EV charging stations,
seventh out of 50 states and the District of Columbia. Metro
Atlanta has 1,110 of them, the third highest among U.S. metro
areas, according to real estate data provider, Yardi Matrix.
But this is the major point. Outside of Atlanta, the article
says, good luck. In rural America, good luck. On I-16 between
Macon and Savannah, which is a 170 mile stretch of urban
America, drivers pass only four charging stations, just off the
interstate, according to the website PlugShare. This is why we
are here, to make sure that we know what we are getting into.
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* Editor's note: the article referred to is located on p. 99.
---------------------------------------------------------------------------
And as anyone who lives in a rural community knows, our gas
stations, our convenience stores are oftentimes the pillars of
these communities. Many of them don't have the kinds of
businesses and providers that we have in the urban areas. So,
we need to know what is the impact of these businesses? What
will this impact be?
And I am also hoping to hear about some of the positive
developments that could come from a more widespread adoption of
electric vehicles all across rural America. And with so many
input costs fluctuating for our farmers, could electric
vehicles also provide one additional stable cost on their
balance sheet? And beyond that, how will this electrification
of vehicles translate to tractors, to other farm elements, to
the huge trucking operations that are vital in our food supply?
We hope to find answers to this today. There are so many issues
that will impact agriculture and our rural communities, and I
want to ensure that this Committee has a seat at the table and
that the voice of America's farmers, America's ranchers,
America's foresters, and above all else, our rural residents
who go to school, who make life livable in our rural areas are
considered.
[The prepared statement of Mr. David Scott follows:]
Prepared Statement of Hon. David Scott, a Representative in Congress
from Georgia
Good morning, and welcome to a hearing that I have been greatly
looking forward to hosting. Today we will discuss the implications on
rural communities and agriculture from the ongoing investment and
adoption of electric vehicles.
We are witnessing a point of major research, investment, and
adoption of electric vehicles across the country and the world, driven
in large part in an effort to mitigate the impacts of climate change.
As with so many other technological advancements like electrification,
broadband, or telephone service, I want to see what can be done to make
sure that rural America is not left behind. And to that point, I want
to also ensure that the needs of agriculture and rural residents are
being considered with these important developments.
As anyone who lives in a rural community knows, gas stations and
convenience stores are often a pillar of those communities and are
sometimes the only place for miles to get food. With the ongoing
investment and transition to electric vehicles, we must know what the
long-term impacts to these businesses will be.
I am also hoping to hear about some of the positive developments
that could come from more widespread adoption of electric vehicles
across rural America. With so many input costs fluctuating for farmers
across the country, could electric vehicles provide one more stable
cost on their balance sheets? And beyond that, how will this
electrification of vehicles translate to tractors and other farm
implements? I hope to find out today.
As with so many issues that will impact agriculture and our rural
communities, I want to ensure that this Committee has a seat at a table
and that the voice of America's farmers, ranchers, foresters, and rural
residents are considered.
With that, I yield to Ranking Member Thompson for any opening
remarks he would like to share.
The Chairman. And so, with that, I now would like to
welcome our distinguished Ranking Member, the gentleman from
Pennsylvania, Mr. Thompson, for any opening remarks he would
like to make.
Thank you, Mr. Thompson.
OPENING STATEMENT OF HON. GLENN THOMPSON, A REPRESENTATIVE IN
CONGRESS FROM PENNSYLVANIA
Mr. Thompson. Thank you, I am pleased to be with you today
and being here in the middle of the week during 8 days when we
celebrate the largest indoor agriculture exposition, 24 acres
under one roof of the Pennsylvania Farm Show, the 106th annual
show. It is going to go through this coming Saturday. I
appreciate this hearing.
Mr. Chairman, electric vehicles are impressive feats of
technology and engineering, and the substantial industry
investment in EVs is testament to the hope that they can meet
the varied needs of drivers across America, including in rural
communities.
In recent years, the electrification of our transportation
systems and the elimination of liquid fuels has been advertised
as a critical component of the global fight to reduce carbon
dioxide emissions. I am not sure that is completely proven yet,
but maybe this hearing will help us with that. Last Congress,
the Democratic Members of the Select Committee on the Climate
Crisis called for eliminating internal combustion engines by
2035, and that is despite the fact that we have been using
these and our CO2 emissions have been steadily
reducing as a result of a lot of what we do in agriculture,
actually. Then this past August, President Biden pledged half
of all new cars will be electric by 2030. I don't think he
should be making those decisions for consumers, quite frankly.
I am skeptical such top-down planning from Washington will meet
the needs of rural residents. Congress should not be picking
winners and losers. Drivers in the marketplace must decide what
technology meets their transportation needs, especially rural
residents for whom vehicles and private transportation are an
essential service. And quite frankly, the utilization can be
much different from what we see in densely populated urban
areas. the ability to choose ensures vehicles remain a
productive tool and not a technological burden to work around.
Now, while I am encouraged by the substantial investments
being made by private industry in EVs, I do have a few honest
concerns associated with this government-first drive to
electrify the transportation system. Chief among those are,
number one, who will finance the huge investments in electric
generation and transmission capacity so that we don't wind up
with brownouts and blackouts with the significant increase in
demand when charging, new retail distribution points, and all
the associated equipment? Who is going to finance that? Will
electric vehicles be able to meet the needs of all drivers as
efficiently as a conventional vehicle without demanding
unacceptable tradeoffs in cost, range, capacity, or time of
service, particularly for rural residents? I would throw in
these wonderful cold temperatures we are experiencing right now
would be a factor. What will the impact of a transition to EVs
be on the liquid transportation fuel industry, particularly for
the agriculture producers and the oil producers, two industries
which have often formed the very foundation of regional rural
economies? And number four, will expanding electric vehicle
manufacturing increase our dependence on unfriendly, unstable,
and under-regulated foreign nations for the raw materials
necessary to build EV batteries?
Now I think those are fair questions, and perhaps we can
find some solutions to those, or get some answers to them and
then maybe some solutions.
Now, these potential costs associated with answering these
questions must be balanced against the purpose of the policy,
which is reducing global CO2 emissions. That should
be the driving force. If at the end of the day an accurate
accounting of the total emissions associated with transitioning
to electric vehicles fails to make a significant dent in global
carbon dioxide emissions, then Congress must ask the difficult
question of whether a national policy of promoting or imposing
EVs is worth it. If not, what other policies could meet our
goals of continuing to lower emissions, because America has
done better than the nine countries that follow us in terms of
reducing CO2 emissions--what can we do to further
our success at a lower cost and with more flexibility for
consumers?
Now, this question is especially pressing for rural
communities like those I represent in Pennsylvania's 15th
Congressional District, which stands to bear the brunt of the
cost of building new infrastructure and eliminating liquid
transportation fuels. I am not sure that President Biden's
Administration recognizes that liquid fuel's money are critical
in doing the road maintenance for rural roads. Are the global
emissions reductions worth the potential disruptions to rural
communities, implications for our national security, and costs
for our infrastructure?
Now, as we consider the impact of electric vehicles in
rural America, we should ensure policies are in place which
meet the needs of drivers and integrate these vehicles into the
transportation system as seamlessly as possible, without
exacerbating our public policy problems.
Now, I am really appreciative to all the witnesses that
agreed to testify before us today. I want to thank each and
every one of them for their time today, their expertise, and
their willingness to share their perspectives. I look forward
to hearing as each of you testify.
As I close, Mr. Chairman, I want to thank you again for
holding this hearing. I appreciate your convening a panel of
experts who can help us sort through our many questions.
And with that, I yield back the balance of my time.
The Chairman. Thank you, Ranking Member, and the chair
would request that other Members submit your opening statements
for the record so witnesses may begin their testimony and to
ensure that there is ample time for questions.
[The prepared statement of Ms. Brown follows:]
Prepared Statement of Hon. Shontel M. Brown, a Representative in
Congress from Ohio
Thank you, Chairman Scott and Ranking Member Thompson, for holding
this hearing. And thank you to all the witnesses for joining us today.
We are currently at a great inflection point. How we approach the
next 10, 20 years will determine where we will be in 50 years. The
existential threat of climate change to humankind is clearer than ever.
People in Ohio and around the country are experiencing the dire
consequences of climate change: devastating hurricanes in Louisiana,
raging wildfires in California, harmful algal blooms in Lake Erie, and
rising sea levels in south Florida, to name a few.
The generally accepted agreement that greenhouse gas emissions
contribute to the threats has led many to electric vehicles (EVs) which
are likely to have lower emissions than internal combustion engine
vehicles (ICEVs). While U.S. auto sales declined 23% in 2020, the sales
share of EVs increased two percent. My home State of Ohio has also seen
a steady increase in EV registrations in recent years. The EV market is
only going to continue to grow as consumer demand for the technology
increases. It is prudent to begin examining this new technology, so we
adequately address the needs of all stakeholders in America--urban,
suburban, and rural.
As we work to transition to a clean energy economy, we owe it to
our farmers and autoworkers to ensure they are not left behind. Many of
them have spent generations feeding and powering our country, and their
work has every bit as much dignity as the work of an EV battery
manufacturer.
I am confident that the investment of EVs is a step in the right
direction. It will supercharge America's efforts to lead the electric
future that will allow us to remain competitive and strong in the days
to come.
The Chairman. And now, I want to introduce our very
distinguished witnesses, and our first witness is the Honorable
David Strickland. Mr. Strickland is the Vice President of
Global Regulatory Affairs for General Motors.
Our next witness is Mr. Lincoln Wood, the Electrification
Policy Manager of our Southern Company, headquartered in
Atlanta, Georgia.
Our third witness today is Mr. Matthew Laughridge, the
owner and Managing Director of the Terry Reid Enterprises, on
behalf of the National Automobile Dealers Association of
Cartersville, Georgia.
Our fourth witness today is Mr. Trevor Walter, the Vice
President of Petroleum Supply Management for Sheetz, Inc., and
also on behalf of the National Association of Convenience
Stores of Altoona, Pennsylvania.
Our fifth witness is Mr. Geoff Cooper, the President and
Chief Executive Officer of the Renewable Fuels Association from
Ellisville, Missouri.
And our sixth witness today is Mr. Josh Nassar, who is the
Legislative Director for the International Union of the United
Automobile, Aerospace, and Agricultural Implementation Workers
of America, the UAW, here in Washington, D.C.
And our seventh and final witness today is Mr. Mark Mills,
who is Senior Fellow at the Manhattan Institute from Chevy
Chase, Maryland.
Thank you all for coming, and you represent the important
industries. You all are the ones that will make this happen,
and we thank you for it. I am so pleased to have such a
distinguished panel before us today.
Each of you will have 5 minutes. The timer should be
visible to you on your screen, and you will count down to 0, at
which point, your time has expired.
Mr. Strickland, please begin when you are ready.
STATEMENT OF HON. DAVID STRICKLAND, J.D., VICE
PRESIDENT FOR GLOBAL REGULATORY AFFAIRS AND TRANSPORTATION
TECHNOLOGY POLICY, GENERAL
MOTORS, WASHINGTON, D.C.
Mr. Strickland. Here we go. Yes, I fell prey to the mute
button once again, just like the Ranking Member.
Good morning. My name is David Strickland, and I am General
Motors Vice President of Global Regulatory Affairs. I would
like to thank Chairman Scott, Ranking Member Thompson, and the
other Members of the Committee for inviting me to tell you more
about General Motors commitment to an all-electric, zero
emissions future, and the opportunities of electric vehicle
investments for rural America.
At General Motors, our vision for the future is a world
with zero crashes, zero emissions, and zero congestion.
Building an inclusive, all-electric future is the right thing
to do for the world, U.S. competitiveness, and our company,
which includes more than 85,000 U.S. employees across the
country. We are committed to bringing everybody in on this
future, and we are working hard to ensure we leave no community
behind.
While we can't achieve this alone, GM is committed to doing
our part. We are on track to invest $35 billion in electric and
autonomous vehicles by 2025, and planning to launch more than
20 electric vehicles in North America over that same timeframe,
including options at every price point and for every lifestyle.
We are increasing range and decreasing costs of EVs to make
them more affordable and accessible. In addition to our
manufacturing incentives, we are investing $25 million in our
climate equity fund, which is dedicated to closing equity gaps
in the transition to electric vehicles and other sustainable
technologies.
We just revealed the Chevrolet Silverado EV, which is the
vehicle in my background. This new electric pickup will
integrate the capability Silverado customers have come to
expect in terms of strength, durability, and performance.
Silverado EV will offer a GM-estimated range of 400 miles on a
full charge, which is a round trip from Atlanta to Albany, and
with 664 horsepower, our customers in rural America will find
it satisfies all their needs, both on and off the farm.
With GM's EV portfolio today and those that are just on the
horizon, which includes a range of vehicles from pickups, SUVs,
and commercial vehicles, we believe that no other auto maker
matches the depth and range of our portfolio. To support this
growing portfolio, we are converting large portions of our
manufacturing footprint for EV production. GM is committed to
bringing our workforce and our dealers with us on this journey,
as well as to continue to create good-paying U.S. jobs.
By 2025, our North American EV assembly capacity will reach
20 percent, and climb to 50 percent by 2030. We have announced
nearly 9,000 jobs and more than $9 billion in new electric
vehicle or battery cell manufacturing facilities in Michigan,
Ohio, and Tennessee, and there is more to come. Furthermore, we
are working to secure the raw material supply chain needed to
build and grow at the scale required.
Another critical aspect of preparing communities for an
all-electric future is ensuring access to charging. Today,
charging deserts still exist in many rural and underserved
areas. GM will invest nearly $750 million to expand home,
workplace, and public charging. We are developing a community
charging program with our more than 4,000 dealers to expand
access by installing up to 40,000 level 2 destination chargers
at key locations throughout their communities, including rural
communities. This is significant because nearly 90 percent of
the U.S. population lives within 10 miles of a GM dealership.
These charging stations will be interoperable, available to all
EV customers, not just those who purchase a GM EV.
GM is leading integration with major EV charging networks
to simplify the charging experience. Customers can use their
app to see real-time information from over 100,000 charging
spots throughout the U.S. and Canada. To get to an all-electric
future, we must ensure customers can get from farm to city,
from coast to coast.
Governments across the globe have recognized the
competitive advantages to be gained by leading EV and battery
technology. If the U.S. is to remain the global leader in
automotive technology, several key policy elements are needed
to help augment private-sector efforts in leading
electrification. They include investing in infrastructure that
includes fast charging stations along highway corridors. The
IIJA's (Pub. L. 117-58) investments are an important first
step, and we welcome the opportunity to work with the Committee
to leverage existing USDA programs to further that effort.
Investment tax credits to incentivize companies to establish
battery and EV manufacturing capacity in the U.S., and to help
build the U.S. supply chain, and also, consumer incentives,
which include a modification to the EV tax credit for new and
used vehicles, which has proven to be an effective accelerator
for adoption.
As we implement our strategy, we have the opportunity to
create a better future for generations to come. Thank you again
for the opportunity to testify, and I look forward to answering
your questions.
For just a small moment of personal privilege, I see that
Representative Rush is on the call, on the hearing, and when I
was first nominated and confirmed to be NIST Administrator, Mr.
Rush called me to his office and gave me, frankly, some of the
best advice that any new Federal executive could have, and the
kindness he showed me I will never forget.
Mr. Rush, please enjoy getting home to your grandbabies,
and thank you so much for all that you have done for me and for
the country.
[The prepared statement of Mr. Strickland follows:]
Prepared Statement of Hon. David Strickland, J.D., Vice President for
Global Regulatory Affairs and Transportation Technology Policy,
General Motors, Washington, D.C.
Good morning.
My name is David Strickland, and I am General Motors' Vice
President of Global Regulatory Affairs. I want to thank Chairman Scott,
Ranking Member Thompson, and the other Committee Members for inviting
me to tell you more about General Motors' commitment to an all-
electric, zero emissions future and the opportunities of electric
vehicle investments for rural America.
At General Motors, our vision for the future is a world with zero
crashes, zero emissions, and zero congestion. The key to unlocking that
vision is automobile electrification. Building an inclusive, all-
electric future is the right thing to do for the world, U.S.
competitiveness and our company--which includes more than 85,000 U.S.
employees across the nation. We're committed to bringing everybody in
on this future, and we are working hard to ensure we leave no community
behind. While we can't achieve this alone, GM is committed to doing our
part.
We are on track to invest $35 billion in electric and autonomous
vehicles by 2025, powering our plants to launch more than 20 electric
vehicles in North America over that same timeframe--including options
at every price point and for every lifestyle. We are increasing range
and decreasing the cost of EVs to make them more affordable and
accessible. In addition to our manufacturing investments, we are
investing $25 million in our Climate Equity Fund, which is dedicated to
closing equity gaps in the transition to electric vehicles and other
sustainable technologies.
Just last week at the Consumer Electronics Show, we revealed the
Chevrolet Silverado EV. This new electric pickup will harness
Silverado's proven credentials as the brand's best-selling nameplate
and integrate the capability Silverado customers have come to expect in
terms of strength, durability, and performance. Based on GM's
revolutionary Ultium battery platform, Silverado EV will offer a GM
estimated range of 400 miles on a full charge (a round trip from
Atlanta to Albany), and with 664 horsepower, our customers in rural
America will find it satisfies all their needs, both on and off the
farm. The Silverado EV will be built in our first ever fully dedicated
EV Assembly Facility, Factory Zero, which just opened in Detroit after
a $2.3 billion investment to retool the plant from the production of
internal combustion engine vehicles.
With GM's EV portfolio today and those just on the horizon--
including Chevrolet Silverado EV, Equinox EV, Blazer EV, Bolt EV and
Bolt Electric Utility Vehicle, GMC Sierra EV, GMC HUMMER EV and EUV,
Cadillac LYRIQ, and BrightDrop EV600 and EV450--GM believes that no
other automaker today matches the depth and range of our all-electric
portfolio. We will deliver electric vehicles that fit all needs and
price points, for all customers, including those in rural America. To
support this growing portfolio, we are converting large portions of our
manufacturing footprint for EV production. GM is committed to bringing
our workforce and our dealers with us on this journey as well as
continuing to create good paying U.S. jobs as we transition to an all-
electric future.
By 2025, our North American EV assembly capacity will reach 20
percent and climb to 50 percent by 2030. We have recently announced
nearly 9,000 jobs and more than $9 billion in new electric vehicle or
battery cell manufacturing facilities in Michigan, Ohio, and Tennessee,
and, there is more to come. This transformation has already happened at
Factory Zero, and is underway in Spring Hill, Tennessee. To meet the
demand for batteries, two of our battery plants are already under
construction today in Ohio and Tennessee, and two more U.S.-based
plants are also being planned as we build the scale that will enable us
to lower the cost of EVs to make them accessible to everyone.
Furthermore, we are working to secure the raw materials supply chain
needed to build and grow at the scale required.
Another critical aspect of preparing communities for an all-
electric future is ensuring access to charging. Today, charging
``deserts'' still exist in many rural and underserved areas that lack
the critical EV charging infrastructure necessary for the more
widespread adoption of EVs. GM is committed to helping expand access
and offering ubiquitous charging solutions that can help meet customers
where they are. Last year, we announced that GM will invest nearly $750
million to expand home, workplace, and public charging. As part of this
investment, we are developing a new community charging program working
with our more than 4,000 dealers to expand access by installing up to
40,000 Level 2 destination chargers at key locations throughout their
communities, including rural communities and other areas where charging
is limited. This is significant, because nearly 90 percent of the U.S.
population lives within 10 miles of a GM dealership. These charging
stations will be available to all EV customers, not just those who
purchase a GM EV. It is critical that America's charging infrastructure
be an interoperable network.
Beyond this Dealer Community Charging Program, GM is leading
integration with major EV charging networks to simplify the charging
experience. Customers can use their GM brand mobile apps to see real-
time information from over 100,000 charging spots throughout the U.S.
and Canada, find stations along a route and initiate and pay for
charging. We know that to get to an all-electric future we must ensure
customers can get from farm to city, from coast to coast. We are
working with our partners, and with the Federal, state, and local
governments to make this happen.
Many governments across the globe have recognized the competitive
advantages to be gained by leading in electric vehicle and battery
technology. China has included EV development as a key industry in
their Made in China 2025 initiative and provided billions in government
subsidies to develop their domestic industry. European countries have
provided similar levels of support to domestic EV manufacturers. If the
U.S. is to remain the global leader in automotive technology, several
key policy elements are needed to help augment private sector efforts
to lead in electrification. They include:
Investing in infrastructure that includes fast-charging
stations along highway corridors. We look forward to working
with Congress and the Administration to implement funding plans
from the recently enacted Infrastructure Investment and Jobs
Act to make EV charging accessible to all, including rural
communities. Further, we would welcome the opportunity to work
with the Committee to leverage existing USDA programs to
further support EV charging infrastructure. We are also
committed to working with our dealers and community partners,
using our learnings from years of electric vehicle experience,
to make charging ubiquitous and convenient.
Investment tax credits to incentivize companies to establish
battery and EV manufacturing capacity in the U.S. and to help
build out the U.S. supply chain for critical EV components.
Investment tax credits can help ensure the U.S. remains
competitive for capital.
Consumer incentives including a modification to the EV tax
credit for new and used vehicles, which has proven to be an
effective accelerator for EV adoption. As we make significant
investments to bring 20 models to market in the U.S. by 2025,
we support a modification that lifts the cap.
As we implement our strategy, we have an opportunity and, frankly,
a responsibility to create a better future for generations to come. Our
mission is to leave no one behind. Thank you again for your invitation
to testify on this topic that is critical to the future of our company,
our customers, our industry, and our country. I look forward to
answering your questions.
The Chairman. Thank you so much. I agree with you. Bobby
Rush is legendary in terms of his leadership in representing
the fine folks in Chicago.
Mr. Wood, please begin when you are ready.
STATEMENT OF LINCOLN E. WOOD, ELECTRIFICATION POLICY MANAGER,
SOUTHERN COMPANY, ATLANTA, GA
Mr. Wood. Chairman Scott, Ranking Member Thompson, Members
of the Committee, thank you for having me here today to
testify. I am Lincoln Wood, Electrification Policy Manager for
Southern Company.
Southern Company, as you may know, is an Atlanta-based
energy company. We serve nine million customers through our
electric and gas subsidiaries across the country.
This is an important hearing on an important topic that, as
already has been discussed today, there is lots of opportunity.
In our understanding, electric vehicles are cheaper to operate,
fuel, and maintain, and it represents an opportunity to
decarbonize the transportation sector, which aligns well with
Southern's net-zero carbon goals by 2050.
But first, I want to offer a bit of thanks to Congress for
passing the bipartisan Infrastructure Investments and Jobs Act.
The $7\1/2\ billion of EV infrastructure that is allotted is a
welcome development for EV drivers nationwide. Paired with
regulated utility programs and private market investment, that
will dramatically expand the availability of EV charging. Thank
you.
To tell you a bit about Southern Company and our efforts,
we have a long history in electric transportation and
supporting the industry and our involvement continues to grow.
For over 50 years, our research and development organization
has been at the forefront of researching electric
transportation technologies both on road and off road. We are a
founding member of Energy Impact Partners, which is a clean
tech venture capital fund, which counts EV charging among its
product portfolio.
Our activities really can be broken down into six kind of
big buckets, the first being rolling out public EV charging
infrastructure, of course, but then paired with that, rates
that incent EV charging, including mitigating the demand charge
component where needed. The third piece of it would be fleet
electrification, so if you have large customers that have fleet
delivery vehicles or whatnot that can be converted into
electric and they are interested in that, we have partners
through a turnkey process that can help with that. We have a
long history of industry involvement, with Southern being a
founding member of two electric transportation industry
organizations since 2017.
Workforce development and preparing the workforce for the
future is a key area of focus for us. We are working with the
University of Georgia, University of Alabama, and Mississippi
State on e-Mobility curriculum development, and with that goes,
of course, economic development for our cities, for our
communities, for the states in which we serve. A battery plant,
EV manufacturer, and a battery recycling plant announcement
coming out of Georgia all in the past year are just three
examples of the growth in the industry.
Of special note for this Committee, Southern Company is
helping the Administration with their electrification goals
where we are piloting the first ET turnkey service at Marine
Corps Logistics Base in Albany, and we hope that process will
be a, I guess, a template for us internally, but also one we
can share with regulatory utilities nationwide.
So, as I came here today, I wanted to offer a few thoughts
around where Congress could be helpful going forward, the first
being an agriculture--Chairman Scott, to your point. There is a
need to understand the implications of agriculture
electrification. There could be a research program created. In
doing that, it needs to be a multi-stakeholder process, so to
have the manufacturer of the equipment, the utilities, of
course, to understand the implications of charging, but also
the farmers' involvement in that case so that they do not bear
the full cost of the new equipment all by themselves. With
that, we have a joint DOT/DOE Office of Transportation
Electrification, so that agriculture still qualifies as moving
people, moving good with electricity. So, whatever learnings we
have there, we should be able to make sure those learnings are
allocated to that DOE/DOT office. And Chairman Scott, I have to
mention: I have contacts at UGA through our e-Mobility
curriculum. I know UGA has a College of Agriculture, and I
certainly can't speak for this school, but I think should it
please the Committee, there are avenues we can explore on how
we can get there and what action might be needed.
And the last piece I will leave you with would just be in
terms of battery recycling. That is still an issue for the
industry that we are working toward, but obviously through
research budgets that come up, we want to fund research
programs. That is a place we need to focus.
And a bit of personal privilege, just so you know, I am
Atlanta-based, you may can hear it in the accent. I actually
drove to D.C. this week in an electric vehicle through rural
North Carolina and Virginia, so 660 miles of gasoline-free
driving. I am happy to be here, happy to answer your questions.
Thank you for having me.
[The prepared statement of Mr. Wood follows:]
Prepared Statement of Lincoln E. Wood, Electrification Policy Manager,
Southern Company, Atlanta, GA
Chairman Scott, Ranking Member Thompson, and Members of the
Committee, thank you for inviting me to testify today. My name is
Lincoln Wood, and I serve as the Electrification Policy Manager of
Southern Company.
Southern Company is one of America's largest energy companies, with
42,000 megawatts of generating capacity and 1,500 billion cubic feet of
combined natural gas consumption and throughput volume serving nine
million customers through its subsidiaries, as of July 31, 2021. The
company provides clean, safe, reliable, and affordable energy through
electric operating companies in three states, natural gas distribution
companies in four states, a competitive generation company serving
wholesale customers in 11 states across America and a nationally
recognized provider of customized energy solutions, as well as fiber
optics and wireless communications.
I am pleased to address the Committee today to share what steps
Southern Company and its affiliates are taking to electrify the
transportation sector. This is an important hearing on an important
topic. According to EIA \1\ the transportation sector is now the number
one emitter of greenhouse gases; moving people and goods with
electricity represents an un-paralleled opportunity to reduce the
sector's carbon footprint. Additionally, it makes good economic sense--
electric vehicles typically are cheaper to fuel, operate, and maintain.
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\1\ http://www.eia.gov/todayinenergy/detail.cfm?id=29612.
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First, on behalf of Southern Company, thank you to Congress for
passing the bipartisan Infrastructure Investment and Jobs Act. The EV
charging infrastructure investment of $7.5 billion is a welcome
development for the transportation sector and growing number of EV
drivers nationwide. Paired with existing EV infrastructure investment
both through regulated utility programs and private market investment,
the Infrastructure Investment and Jobs Act will dramatically increase
the availability of EV charging.
The energy we provide to charge electric vehicles continues to
become cleaner. In 2018, Southern Company was among the first U.S.
utilities to set a bold goal of net-zero greenhouse gas (GHG) emissions
by 2050--and we're on the right track. We have rapidly transitioned our
system's generation fleet. In 2020, the Southern Company system reduced
GHG emissions 52% from its 2007 benchmark levels, exceeding its
intermediate 2030 goal to reduce GHG emissions by 50%.
Electric Transportation Programs
Southern Company has a long history of supporting electric
transportation. For more than 5 decades, Southern Company's world-class
Research and Development (R&D) organization has remained at the
forefront of innovation, including researching electric transportation
technologies, both on-road and off-road. The Company is testing Smart
Charging strategies to maximize the number of vehicles that can be
charged with our current energy capacities, as well as ways to maximize
range from battery packs. Additionally, Southern Company is a founding
member of Energy Impact Partners,\2\ a venture capital fund focused on
clean energy technologies including electric transportation.
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\2\ http://www.energyimpactpartners.com/.
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Southern Company's electric operating companies offer specific
electric vehicle programs and pricing options designed to meet customer
electric transportation requirements. Alabama Power and Georgia Power
both offer EV rates that provide clean, reliable, and affordable
electricity for all EV charging requirements, from home charging to
public fast charging.
As part of DOE's Clean Cities Program, Southern Company affiliates
hold board seats in Alabama Clean Fuels Coalition and Georgia Clean
Cities. These organizations work to promote the use of domestic,
affordable alternative fuels including electricity, and improve
transportation efficiency at the local, state, and national levels.
Both Alabama Power and Georgia Power are actively supporting EV
charging infrastructure rollouts in their respective states. Alabama
Power Company (APC) contributed $737k to Alabama Dept. of Economic and
Community Affairs (ADECA) awardees served by APC to assist their
installation of DCFC along Interstate Corridors at ten sites.
As the largest of SoCo's electric subsidiaries, Georgia Power
Company (GPC) offers additional infrastructure programs to accelerate
adoption of EVs. GPC offers EV charger rebates for both residential and
business customers. The rebates range from $100 to $500 depending on
the type and purpose of the installation.
Additionally, Georgia Power offers an EV time-of-use rate that
offers 1 /kWh charging overnight, which allows an EV customer to charge
their vehicle all month long for about $20.\1\
Georgia Power offers two regulated electric vehicle charging
infrastructure programs:
Community Charging Program--Business & Residential (GPC branded
charging).
Georgia Power's Community Charging program provides fast-
charging sites along travel corridors to give charging options
and increase EV drivers' confidence traveling throughout
Georgia. Through this program, Power is addressing gaps in EV
corridors according to the Federal Highway Administration in
hopes to help Georgie become ``EV Corridor Ready.''
The Community Charging locations are sited in partnership
with GPC commercial business customers on their properties.
Through this structure, both the business (site host) benefits
as well as the public who rely on the EV charging
infrastructure to travel both short and long distances.
Make Ready Program--Business & Residential: this program pays for
infrastructure from the electricity meter up to but not including the
charger.
Georgia Power's Make Ready EV infrastructure program
provides charging infrastructure to business owners to
significantly reduce the cost of installing chargers for
public, employee, or their business operations use.
The Company partners with a variety of business customers
that want to install infrastructure to support electric
mobility technology charging. Examples of customer
installations include public transit agencies, warehouse
applications, multifamily residential properties, colleges and
universities, and many others.
Additional Programs in 2022
Southern Company Fleet Electrification Turnkey Offering: Strategic
partnerships provide a turnkey offering for our customers who want to
electrify their transportation fleets.
Through strategic partnerships, each of Southern Company's
electric subsidiaries offers:
software and consulting to analyze current fleet needs
and understand the power implications of transitioning a
customer's fleet.
resources for charging installation and financing, to
effectively meet customers' needs and leverage any
regulated utility programs.
Southern Company Electric Transportation--Industry Involvement
In 2020, Southern Company played a leadership role with the
Department of Energy to produce a state-of-the-industry report,
``Voices of Experience: An EV Transition''.\3\ This report represents
the feedback from more than 3,500 industry stakeholders worldwide,
representing 700 unique entities. Topics covered include deploying EV
charging infrastructure, managing load, fleet electrification, new
technology implications, and conventional fuel retailing.
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\3\ http://www.evplusgridworkshop.com/.
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Southern Company is a founding member of two dynamic electric
transportation trade associations, the Alliance for Transportation
Electrification, and the Zero Emissions Transportation Association.
Established in late 2017, the Alliance for Transportation \4\ (ATE)
is state-focused, aligning EV policy at the state level. Counting
automakers, utilities, EV charging providers, engineering firms, and
standards-based organizations in its membership roster, ATE is one of
North America's largest electric vehicle industry coalitions.
Priorities include:
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\4\ http://www.evtransportationalliance.org/.
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Increasing EV charging infrastructure
A strong utility role in EV charging
A ``big-tent'' approach for all stakeholders
Open standards among EV charging hardware and firmware
The Zero Emission Transportation Association \5\ (ZETA) was
established in 2020 with a singular vision: 100% electric vehicle sales
in 2030. ZETA's policy focus is at the Federal level; policy pillars
span light, medium, and heavy-duty vehicles; recommendations for a
national charging initiative, domestic manufacturing, performance and
emissions standards, and Federal leadership.
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\5\ http://www.zeta2030.org/.
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Southern Company is a founding member of the National Electric
Highway Coalition \6\ (NEHC). The NECH, which was announced in December
2021, is comprised of 50 investor-owned utilities, one electric
cooperative, and the Tennessee Valley Authority, and represents
approximately 120 million U.S. electric customers across 47 states and
the District of Columbia. The NEHC is committed to providing electric
vehicle (EV) fast charging stations so that the public can drive EVs
with confidence along major U.S. travel corridors by the end of 2023.
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\6\ https://www.eei.org/issuesandpolicy/Pages/NEHC.aspx.
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Workforce Development
In 2021, Southern Company and Georgia Power partnered with the
University of Georgia's College of Engineering to create an e-Mobility
Certificate program. With elements of engineering, public policy,
public health, and business acumen, this new program will prepare
Georgia's workforce for an electrified future. The Company is also
working closely with design students at Georgia Tech to evaluate the
environmental benefits and future workforce opportunities of
transportation electrification.
Also in 2021, Alabama Power, in partnership with Mercedes-Benz and
the University of Alabama, launched the Alabama Mobility and Power
(AMP) Center in Tuscaloosa. The AMP Center will serve as a research and
development hub for creating and sustaining modern mobility and power
technologies, developing charging infrastructure and managing power
delivery to support large-scale growth in electric vehicles.
Considerations for Ongoing Congressional Assistance
As Congress looks to 2022 and beyond, I wanted to leave you with a
few ideas to provide additional support to transportation
electrification:
Create a multi-stakeholder, agriculture-focused
electrification research program where new technology can be
tested at reduced risk to farmers
Continue to provide budgetary support to ARPA-E and other
research programs, especially battery recycling and autonomous
technologies
Consider funding a specific electric vehicle education
center at the Federal level as a resource for K-12, technical
schools, and universities nationwide, using the joint DOT and
DOE office as a starting point
I am honored to have the chance to testify. I look forward to your
questions.
The Chairman. Thank you.
Now, Mr. Laughridge, please start when you are ready. You
may need to un-mute, Mr. Laughridge. Okay.
STATEMENT OF MATTHEW LAUGHRIDGE, OWNER AND
MANAGING DIRECTOR, TERRY REID ENTERPRISES, CARTERSVILLE, GA; ON
BEHALF OF NATIONAL AUTOMOTIVE DEALERS ASSOCIATION
Mr. Laughridge. Mr. Chairman, Ranking Member Thompson,
Members of the Committee, my name is Matt Laughridge, and I am
a Hyundai/Genesis dealer in Cartersville, Georgia. I am honored
to appear here today representing the National Automobile
Dealers Association, or NADA, a national trade association with
more than 16,000 franchise new car and truck dealers. Most NADA
members are small businesses, and franchise dealers employ more
than one million Americans.
Mr. Chairman, the transition from internal combustion
engines to electric is well underway. Dealers right now are
making substantial investments to sell and service the dozens
of new electric vehicles, or EVs, which automakers already or
will soon be manufacturing. NADA estimates that dealers
nationally will spend between $2 to $3 billion installing
electric chargers, purchasing special equipment, and investing
in training sales and service personnel.
Franchise dealers are not only all in on selling and
servicing EVs, dealers are essential to the speedy adoption.
With EVs currently comprising 2.9 percent of sales, dealers
will be critical in transitioning from internal combustion
vehicles to EVs. As with any unfamiliar technology, consumers
will need to be educated on owning and operating EVs. Consumers
will need a reliable, nationwide network of qualified service
technicians to service their EV or perform safety recalls.
Consumers will also want a place where they can kick the tires,
test drive a new EV, trade in their old vehicle, and obtain
affordable financing, preferably all under one roof. The dealer
network is perfectly positioned to assist consumers with the
transition to electric vehicles, as franchise dealers already
perform all these necessary services.
The franchise dealer model benefits rural America. In some
communities, the franchise dealership is one of the largest
private employers. Many franchise dealerships are family-owned
and operated, and have served their local community for
decades, just like mine. State vehicle franchise laws are also
key ensuring price competition and market success for EVs. As
Members may be aware, states traditionally license and regulate
the distribution, sale, and service of vehicles within their
state, including EVs. These laws are based on the state's
interest to protect consumers, preserve price competition,
support local jobs, and provide local tax revenue. These laws
also regulate the economic relationship between dealers and
automakers which ensure small dealers in rural areas are
treated fairly. We urge Congress to preserve the states'
traditional role to regulate vehicle commerce by rejecting any
attempt to preempt state dealer franchise law.
Mr. Chairman, America's franchise dealer will help usher in
the next chapter of American automotive history by doing what
dealers do best: providing our customers with reliable and
affordable private transportation.
Thank you for the opportunity to testify.
[The prepared statement of Mr. Laughridge follows:]
Prepared Statement of Matthew Laughridge, Owner and Managing Director,
Terry Reid Enterprises, Cartersville, GA; on Behalf of National
Automotive Dealers Association
Mr. Chairman, Ranking Member Thompson, Members of the Committee, my
name is Matt Laughridge, and I am a Hyundai/Genesis dealer based in
Cartersville, Georgia. I'm honored to appear before you today
representing the National Automobile Dealers Association (NADA), a
national trade association representing more than 16,000 franchised new
car and truck dealers, most of whom are small businesses as defined by
the Small Business Administration, and who collectively employ more
than one million Americans.
Mr. Chairman, this hearing is timely, as the transition from
internal combustion engines (ICE) to electric is well underway. Dealers
right now are making substantial investments to sell and service the
dozens of new electric vehicles (EVs) which automakers already are or
will soon be manufacturing. In the aggregate, NADA estimates that
dealers across America will spend between $2 to $3 billion on
installing electric chargers, purchasing special equipment, parts and
tools, and investing in training sales and service personnel. My two
dealerships have already committed to spend $160,000 in upgrades to
prepare for future EV sales.
Franchised dealers are not only ``all-in'' on selling and servicing
EVs; dealers are essential to their speedy adoption by consumers. With
283.8 million vehicles on the road today, and EVs currently only
comprising 2.9% of sales, dealers will be critical to advancing the
process of transitioning from ICE vehicles to EVs. As with any
unfamiliar technology, consumers will need to be educated on owning and
operating an EV. Customers will also need a reliable nationwide network
of qualified service technicians to service their EV or perform safety
recalls. Customers will also want a place where they can ``kick the
tires,'' test drive a new EV, trade in their old vehicle, and obtain
affordable financing--preferably under one roof.\1\
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\1\ For example, the Georgia Automobile Dealers Association has
created the ``Georgia in Charge'' dealer network, which establishes
criteria relating to the sale and service of EVs. Participating dealers
must commit to the criteria.
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The good news is that all this infrastructure is already in place,
as franchised dealers across the country perform these necessary
services for tens of millions of Americans annually. In 2021 through
thousands of retail locations nationwide, franchised dealers sold a
total of 14.9 million new vehicles and 15 million used vehicles, while
completing 279 million service and repair orders. Clearly, consumers
trust their local franchised dealers to meet their individual
transportation needs, so this expansive retail network is perfectly
positioned to assist customers with the transition to electric
vehicles.
The franchised dealer model especially benefits rural America. In
some small communities, the franchised dealer is one of the largest
private employers. Many franchised dealerships are family owned and
operated and have served their local community for decades.
As Members may be aware, states traditionally license and regulate
the distribution, sale and service of vehicles within their state,
including EVs. These laws are based on the states' interest to protect
consumers, preserve price competition, support local jobs and provide
local and state tax revenue.\2\ These laws not only protect consumers,
but also regulate the economic relationship between dealers and
automakers, which helps to ensure small dealers in rural areas are
treated fairly.
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\2\ See Franchise Law Journal, ``An American Solution: Automotive
Franchise Laws Serve Local Communities and Consumers,'' pgs. 665-680,
(2021) https://www.americanbar.org/content/dam/aba/publications/
franchising_law_journal/spring21/franchiselaw-spring21.pdf
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However, some in academia claim that EVs are significantly
different from ICE vehicles. These academics believe that Congress
should circumvent these long-standing state laws which provide consumer
protections and regulate vehicle commerce--but only for EVs. They claim
that ``[d]ealerships are often found in out-of-the way locations'' and
EVs should be offered ``in places like shopping malls and city
centers.'' \3\
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\3\ Open Letter by Academics in Favor of Direct EV Sales and
Service, Apr. 14, 2021.
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This argument ignores one of the key benefits of a national
franchised dealer network--that no one part of America is forsaken. As
a rural dealer, I can attest that my customers find my dealerships
conveniently located, and even an ``out of the way location'' can be a
godsend for the traveler who breaks down on the road, far away from a
city center or shopping mall. The jobs and local tax revenue my
dealerships provide also help keep my community vibrant.
Mr. Chairman, it makes no sense to have a system where the sale of
one vehicle is under one set of rules and the vehicle next to it is
under no rules at all. Additionally, the assertion that EVs are
significantly different from ICE vehicles, and that this justifies
nullifying every state franchise law protecting local businesses and
their customers is simply false. Last year, over 135,000 EVs were sold
by franchised dealers, and it is likely dealers will be selling more
EVs as new models are introduced. An EV is still a motor vehicle, and
dealers know how to sell and service the vehicles their customers want.
State vehicle franchise laws are key to ensuring price competition \4\
and market success for EVs.
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\4\ See T. Randolph Beard, George Ford & Lawrence J. Spiwak,
``Spatial competition in automobile retailing,'' Applied Economics,
(2021), https://www.nada.org/WorkArea/
DownloadAsset.aspx?id=21474865303.
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We urge Congress to continue to preserve the states' traditional
role to license and regulate vehicle commerce by rejecting any attempts
to preempt state dealer franchise laws.
Obviously, the transition from ICE vehicles to EVs will present
challenges, especially in rural America where distances can be great.
In the near future, we expect that the majority of EV customers in
rural areas will be commercial, centrally charged fleets owned by small
businesses which serve rural communities and agricultural operations
ranging from small family owned to larger commercial farms.
Another challenge that will disproportionately impact rural America
is the ease and availability of public charging. Today any gasoline-
powered vehicle can be refueled at any gasoline pump, but not every EV
charger is compatible with every EV. In our view, one of the biggest
potential impediments to widespread EV deployment could be avoided if
all publicly funded charging stations were made non-proprietary and EVs
were standardized so they could be recharged at any charging station.
Dealers are also committed to working with local utilities to help
ensure that public charging is rolled out in an effective manner.
Additionally, rural Americans are more likely to purchase sport
utility vehicles and pick-ups, both of which are underrepresented in
the EV market. Last year, 77% of the fleet sold in the U.S. were light-
duty trucks. In some states, the percentage of light duty trucks is
notably higher. For example, 80% of vehicle sales in Maine are light
duty trucks, and in Michigan, 84% of the fleet sold were light duty
trucks.\5\ We expect this situation to improve for rural Americans as
more electric light duty truck models are introduced in the coming
years.
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\5\ Alliance for Automotive Innovation, ``Economic Impacts: Every
State is an Auto State'' https://www.autosinnovate.org/resources/
insights.
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Mr. Chairman, the auto industry is always changing. A little over
100 years ago, dealers who sold wagons drawn by horses began the
transition to selling vehicles propelled by fossil fuels. While the
internal combustion engine has been a mainstay for the past century,
America's franchised dealers have adapted over the years as the
technology in motor vehicles has evolved dramatically, reducing
environmental impact, increasing safety and enhancing the consumer
experience. For example, the sophisticated driver assist functions in
vehicles today are much more advanced compared to vehicles manufactured
just a few years ago. Our role in explaining these enhancements to our
customers keeps evolving with the technology. In some ways, I expect
the transition to EVs may be less dramatic, as the manufacturers we
represent send us EVs that match the functionality of the ICE vehicles
on the road today. America's franchised dealers look forward to helping
usher in the next chapter of America's automotive history by doing what
dealers do best: selling and servicing automobiles that provide our
customers with reliable and affordable private transportation.
Thank you again for the opportunity to testify and I look forward
to answering any questions you may have.
The Chairman. Thank you very much.
Now, Mr. Walter, you may begin.
STATEMENT OF TREVOR WALTER, VICE PRESIDENT OF
PETROLEUM SUPPLY MANAGEMENT, SHEETZ, INC.,
ALTOONA, PA; ON BEHALF OF NATIONAL ASSOCIATION OF CONVENIENCE
STORES
Mr. Walter. Chairman Scott, Ranking Member Thompson, and
Members of the Committee, thank you for the opportunity to
testify today. My name is Trevor Walter, and I am the Vice
President of Petroleum Supply Management at Sheetz. I am
testifying today on behalf of the National Association of
Convenience Stores.
The companies that currently provide transportation energy
to motorists are well-positioned to play an important role in
decarbonizing the transportation sector through the sale of
cleaner liquid fuels and alternative technologies, such as
electricity. We want to partner with Congress to help achieve
environmental goals in a market-oriented and consumer-friendly
manner.
We know that one of the challenges to the development of
the electric vehicle market is consumer perceptions on the
availability of chargers, often referred to as range anxiety.
These perceptions often do not match reality. By far, the best
way to address this problem is for more chargers to be
deployed. Our industry's locations are purposely visible.
People already have established patterns using them, and we
typically show the prices of fuels we offer on large signs that
motorists can see as they are driving. When drivers are able to
readily see that they can get electricity the same way and in
the same places they refuel now, range anxiety will no longer
be an impediment to the purchase of the vehicles.
The importance of our industry to tackling this problem is
particularly relevant to rural America. Eighty-six percent of
Americans living in rural America live within 10 minutes of a
convenience store. This shows the remarkable reach of our
industry. This reach is even more true in urban areas, as 93
percent of Americans overall live within 10 minutes of a C
store.
For our industry to play an important role and for charging
to be good for consumers, the sale of electricity must be
reformed such that a functioning retail market for selling
electricity to vehicle drivers emerges. We have several
impediments to that today. First, utilities hit commercial
users of electricity, such as convenience and fuel retailers,
with punitive demand charges. Given the large electricity
demands associated with fast chargers, these demand charges
overwhelm the cost of electricity and make it impossible for
retailers to sell electricity and make a profit.
Second, many utilities have had the rates they charge
adjusted so that residential and business customers pay higher
rates in order to underwrite the construction and operation of
EV chargers. This, too, creates an unlevel playing field and
prevents a competitive market from emerging because other
businesses that deploy chargers must try to recover
construction and operating costs from vehicle drivers
themselves.
Third, a handful of states still prohibit businesses from
selling electricity to vehicle drivers. They only allow
regulated utilities to do that. This makes businesses with
chargers engage in awkward practices such as renting the
chargers based on time spent on a charger, rather than selling
electricity. This makes for confusing experiences and stunts
the growth of the market. These barriers must be addressed.
We should also take advantage of healthy competition among
technologies to reduce carbon. One of those technologies is the
renewable fuels that are part of our system of powering
vehicles today. Those renewables are responsible for some of
the largest gains we have made in decarbonizing the
transportation sector.
Unfortunately, some policymakers want to pick technology
winners and losers, rather than allowing competing options to
deliver the best environmental results they can. The risk is
that we may pick wrong and miss some benefits. There is also a
risk that too much of one technology will be more than the
system can bear. Specifically, those who would ban internal
combustion engines are making a grave mistake. Such a ban would
end investment in those technologies and the technologies that
fuel them. A ban would set renewable fuels on a path to
elimination, and would cause economic hardship for the farmers
who produce and sell the feedstocks for those fuels. Those
farmers have relied on the long-term policy decisions that
Congress has made to gear their operations towards production
of these feedstocks and renewables. To pull the rug out from
under them now would betray their trust.
The problem for us to focus on is on carbon emissions, not
the internal combustion engine. That is why technology-neutral
performance goals that honestly take into account the life
cycle of carbon emissions in the supply chain, including the
carbon emissions from electricity generation, must be part of
the foundation for sound policy. And that is why this Committee
has such an important role to play in this debate. This
Committee has a recognition of the role played by agriculture
in transportation fueling and decarbonization that must be part
of policy in this area.
We look forward to working with the Committee to deal with
these questions and come up with policies that most effectively
support reducing carbon emissions and delivering a market that
brings reliable, sustainable, and cost-effective energy to
American consumers.
[The prepared statement of Mr. Walter follows:]
Prepared Statement of Trevor Walter, Vice President of Petroleum Supply
Management, Sheetz, Inc., Altoona, PA; on Behalf of National
Association of Convenience Stores
I. Summary of Testimony
The retail fuel industry is an indispensable asset to any
alternative source of powering vehicles, including electricity and
renewable fuels, that lower the carbon footprint of transportation fuel
in the United States. Fuel retailers should be viewed as surrogates for
the consumer in that we identify the most reliable, lowest cost
transportation energy available, and deliver that energy to every
community in the country. In so doing, we compete with one another on
price, speed, and quality of facilities and service.
To be effective, policies designed to encourage private sector
investment in alternative fuel infrastructure, including but not
limited to electric vehicle (``EV'') charging stations, must be based
upon clear policy signals that such alternatives create attractive
economic propositions for our industry and for our customers.
This can be done. Not even 2 decades ago, Congress passed the
Renewable Fuel Standard (``RFS''). Although the RFS is far from
perfect, it created market incentives for fuel retailers to invest in
new fuel dispensers and storage infrastructure to accommodate higher
amounts of biofuel. Many fuel marketing companies have invested in the
physical and intellectual capital necessary to participate in
agriculture and commodities markets. Fuel retailers did this in order
to efficiently incorporate those products into our fuel supply in a
manner that improved fuels' greenhouse gas (``GHG'') footprint while
also enabling us to sell the alternative fuel to customers for less
money at retail than purely petroleum-based fuels. This has caused more
customers to gravitate toward those cleaner burning fuels and renewable
fuels should not be abandoned in our collective effort to increase the
availability of electricity as a vehicle fuel. Doing that would be
harmful to the environment and to rural economies.
Our industry is eager to work with policymakers, such as the House
Committee on Agriculture, to find market-driven ways to address
concerns about carbon. To do that, Federal policy should incentivize
and leverage private investment in bringing to market a variety of
alternatives. Equally important, Federal policies should not undercut
the incentives for retailers to invest in alternatives such as EV
charging. There has to be a viable pathway to profitability for any
alternative to gain any meaningful market share.
For any solution to work, it must promote competitive market
dynamics and work with consumers' existing behavior and the business
infrastructure we have. If policy does that and ensures a functioning
private market--then private dollars will make sure infrastructure is
there to meet consumers' needs. If that is not done, it is likely that
any public dollars spent will be stranded and wasted in ways that do
not serve an appreciable number of consumers and cost far more than any
benefit they produce.
At the moment, there are several impediments that make it
challenging for fuel retailers to find a pathway to profitability with
respect to EV charging. Most of these impediments involve an
electricity market structure that was not designed for--and is not
surprisingly incompatible the competitive retail fuel market.
Foremost among these obstacles is the threat of regulated utilities
making use of their status as monopolies to gain a competitive edge
over private businesses. Throughout the country today, for example,
regulated utilities are seeking to convince public utility commissions
that they should be able to charge all of their ratepayers--regardless
of income--a higher dollar figure on their monthly electric bill in
order to underwrite the utilities' investment in EV charging stations.
Private companies do not have access to such a pool of risk-free
capital. What's more, many regulated utilities want to bill EV charging
station owners more money for electricity than their own cost to power
their utility-owned chargers by adding extra tariffs or fees, such as
demand charges. If these efforts persist, fuel retailers will not
consider EV charging stations to be an attractive investment. No amount
of grant money or tax incentives will change that fundamental reality.
On the flip side, if policymakers signal that there must be a
productive partnership between utilities and fuel retailers, with each
sector incentivized to concentrate on its core competencies, progress
can be made faster and at a lower cost. For utilities, the focus should
be on modernizing the power grid and ensuring a reliable and adequate
supply of clean power to meet dramatic increases in demand that will
come with enhanced EV penetration. At the same time, the market
dynamics that govern the retail fuel industry today should be
replicated to accommodate EVs. This will ensure that customers have
multiple fueling options at locations where they travel every day that
are competing for their business.
Simple, modest guardrails around how any Federal money going to
alternatives such as electric vehicle charging can be used to leverage
rather than waste Federal dollars, such as was included in the
Infrastructure Investment and Jobs Act. Any future Federal incentives
for EV charging infrastructure should stipulate that businesses that
are putting capital at risk in order to own and operate EV charging
stations are prioritized over other potential funding recipients. This,
in conjunction with other tax credits and incentives, can move us
toward a viable business model, rather than exacerbating the various
challenges that already exist.
Such guardrails have been crafted in a way that would impose no
limitations on utilities' ability to use ratepayer funds and access
Federal funds for any infrastructure development up to and until the
point of owning and operating the chargers and allows utilities to
compete with the private sector with no disadvantage if they are
putting their own capital at risk and not increasing all of their
customers' electricity bills to pay for EV chargers.
Replacing the highly familiar, price competitive fuel market in
place today with the opaque and monopolistic pricing of electricity
would reduce efficiency, raise costs, and impose large regressive costs
on lower income Americans. That is not an attractive solution.
Changes must also be made to electricity pricing related to EV
charging. Retailers with EV chargers today are forced to pay retail
prices for electricity that include very high demand charges. There is
no business case for buying at retail prices and selling at retail
prices. Regulated utilities that own and operate their own charging
stations, on the other hand, are not subject to demand charges and thus
have an insurmountable competitive advantage over anyone else in that
market.
For the private market to work, there must be a pathway to
retailers buying electricity at wholesale prices (like the internal
transfer cost that utilities have to deliver electricity) without
punitive demand charges. That would make the economics work not only
for retailers but, more importantly, for consumers.
In addition, retailers must be allowed charge EV drivers for the
cost of electricity by kilowatt/hour and not be regulated as a utility.
Though many states are addressing this issue, there remain over a dozen
states that have not addressed this impediment for private sector
investment in EV charging.
The bottom line is that any changes to the transportation energy
mix must make it work for American consumers--which means those changes
must work for our industry. Fuel retailers already have the real estate
that customers visit when they refuel. The industry offers the services
and amenities that consumers have come to expect alongside the
refueling network (such as foodservice facilities, restrooms, security,
and the like). Until consumers see alternatives like electricity at the
outlets where they currently refuel, they will not adopt those
alternatives in large numbers.
Fuel retailers are surrogates for the consumer. If you ensure there
are competitive market dynamics governing refueling--including
alternatives like electricity--you will make the transition more
affordable and attractive for the public. We are eager to work with you
to ensure policy accounts for that reality.
II. Introduction
Chairman Scott, Ranking Member Thompson, and Members of the
Committee, my name is Trevor Walter. I am the Vice President of
Petroleum Supply Management at Sheetz, Inc.--a Pennsylvania-based
marketing and retail company with locations primarily in the mid-
Atlantic area of the country--and am testifying today on behalf of the
National Association of Convenience Stores (NACS). The fuel retailers
that currently provide transportation energy across the United States,
including Sheetz, are well positioned to play an important role in the
development of infrastructure to offer American motorists not only
traditional liquid motor fuels but also a range of alternatives,
including electricity to power their vehicles, so long as the policy
framework and incentive regime established facilitates a competitive
and level playing field. In fact, it is nearly impossible to
effectively decarbonize the transportation sector without working with
our industry to offer a range of alternatives to our nation's drivers.
III. Background
Sheetz operates 637 retail fuel and convenience stores across six
states: Pennsylvania, Ohio, West Virginia, Maryland, Virginia and North
Carolina. Sheetz employs around 23,000 individuals across its divisions
and subsidiaries. More than half of our stores offer E15 and E85 fuels
for our customers. In fact, our sales of E15 have grown 92 percent
since 2019 and more than 300 percent since 2017.
With respect to electric vehicle charging, we were one of the first
retailers in the nation to offer EV chargers more than a decade ago. We
currently offer EV charging at 78 locations and plan to grow that
offer. But, to date, charging electric vehicles has not been a
financial winner for our company due to the market impediments that I
describe in this testimony. We are eager to work with Congress to help
ensure that these substantial investments can become beneficial for
everyone.
The National Association of Convenience Stores (NACS) is an
international trade association representing the convenience store
industry with more than 1,500 retail and 1,600 supplier companies as
members, the majority of whom are based in the United States. We are
also a member of two other national trade associations representing our
industry--the National Association of Truck Stop Operators (NATSO) and
the Society of Independent Gasoline Marketers of America (SIGMA). NATSO
currently represents more than 4,000 travel plazas and truck stops
nationwide, comprised of both national chains and small, independent
locations. SIGMA represents a diverse membership of approximately 260
independent chain retailers and marketers of motor fuel.
The industry as a whole represents approximately 90 percent of
retail sales of motor fuel in the United States. The fuel wholesaling,
fuel retailing and convenience industry employed about 2.34 million
workers and generated more than $548.2 billion in total sales in 2020,
representing more than three percent of U.S. gross domestic product. Of
those sales, approximately $292.6 billion came from fuel sales alone.
Members of the industry process more than 160 million transactions
every single day.
That means about half the U.S. population visits one of the
industry's stores on a daily basis. In fact, ninety-three percent of
Americans live within 10 minutes of one of our industry's locations.
These businesses are particularly important in rural areas of the
country that might not have as many large businesses. In these
locations, the convenience store not only serves as the place to get
fuel but is often the grocery store and center of a community.
The average time a customer spends in a convenience store is about
3\1/2\ minutes and industry members compete to ensure the customer's
needs are met as efficiently as possible--saving them time and money.
Our industry's sole objective is to sell legal products, in a
lawful way, to customers who want to buy them. While agnostic as to
what types of fuel they sell to satisfy consumer demand, industry
members do have a bias: they believe it is best for the American
consumer and America's industrial position in the world marketplace to
have reasonably low and stable energy prices.
A. Environmental Transportation Policy Principles
The industry believes the most expeditious and economical way to
achieve environmental advancements in transportation energy technology
is through market-oriented, consumer-focused policies that encourage
our industry to offer more alternatives. With the right alignment of
policy incentives, the private-sector is best equipped to facilitate a
faster, more widespread, and cost-effective transition to
alternatives--including electricity--in the coming years.
Policies attempting to improve the environmental characteristics of
transportation energy in the United States should adhere to the
following principles:
(1) Science should be the foundation for transportation climate
policies--Any effort to improve transportation energy's
emissions characteristics requires an accurate accounting
of the lifecycle carbon intensity associated with
particular fuels and technologies. This analysis should
include everything from acquisition of natural resources,
engine and battery manufacturing, tailpipe emissions, and
vehicle end-of-life consequences. It should also be
regularly updated so that policy is nimble enough to adjust
to efforts to innovate and improve the environmental
characteristics of different alternatives. Additionally,
every sector of the economy should assume a burden of
reducing carbon emissions.
(2) Establish performance goals without mandating specific
technologies to allow for the benefits of innovation and
technology development--Sound policy must recognize that
the state of technology can change rapidly, and tie
incentives to technologies' lifecycle environmental
attributes rather than the underlying technology itself. No
one solution will decarbonize transportation energy and
policies should incentivize multiple technologies. What
policymakers think is the best solution today may be
surpassed by subsequent ingenuity and innovation. Sound
policy should not stifle innovation by mandating specific
fuel solutions. Instead, policy should set performance
goals and let the market--guided by consumers--innovate to
find the best way to meet those goals.
(3) Develop competitive market incentives to ensure a level playing
field and provide long-term consumer benefits--As described
in more detail below, fuel retailers today are best
positioned to provide alternative sources of transportation
energy--including EV charging stations--because we are fuel
agnostic and have a keen understanding of consumer
preferences and tendencies. Fuel retailers have
strategically located themselves where refueling demand is
greatest and they compete with one another on price, speed,
and quality of service. Moreover, fuel retailers offer the
security and amenities that consumers demand regardless of
the type of fuel their vehicle consumes. Fuel retailers
have made investments in renewable fuels and existing
alternative fuel incentives allow retailers to offer lower
carbon fuels to consumers at a price at which they are
willing to purchase them.
(4) Harness existing infrastructure to help commercialize new
technology, maximize diverse investments, and achieve near-
term and long-term emission reduction goals--It is far less
expensive to leverage existing infrastructure than create
entirely new supply chains and infrastructure. To the
extent environmental objectives can be achieved by
harnessing existing infrastructure, especially retail fuel
outlets, customers will more seamlessly gravitate to new
types of fuels and vehicles. American companies have spent
more than sixty years building out a refueling
infrastructure system that optimizes logistics and
maximizes customer benefits. Deployment of new technology
that complements this infrastructure will (all else being
equal) be less expensive and thus more likely to generate
consumer loyalty.
(5) Set consistent, uniform national policy so that (i) the market
has certainty to help it invest, and (ii) state policies do
not create inconsistent or counterproductive measures--
Federal policy should be designed to lower the cost of
alternative fuels to make those sources of transportation
energy more competitive with petroleum-based fuels. This is
the only way to ensure that consumers will gravitate toward
low carbon technologies. Although some state incentive
programs adopt this approach, others have vacillated
between different approaches in a way that does not allow
private market participants to plan long-term investments
in alternatives. These inconsistent policies are ultimately
self-defeating and should be avoided.
(6) Ensure fair treatment so that all households are not forced to
subsidize alternative energy users--Fundamental tenets of
fairness dictate that users of transportation energy pay
for that energy and related infrastructure. It is patently
unfair and inequitable for policymakers to force most
households to subsidize the refueling costs for EV drivers.
When utilities rate-base their EV infrastructure
investments in EV chargers, however, it raises the monthly
utility bills for all of a particular rate class, even
though the benefits are confined to a small group of users.
Vehicle owners should pay the costs of powering their own
vehicles in order to create a market system that will keep
energy prices down and avoid regressive charges. Moreover,
it is imperative that highway infrastructure funding comes
from all highway users, and not just those that rely on a
particular technology.
By observing these principles, environmental transportation
policies can create new jobs, accelerate the deployment of advanced
alternative fuel infrastructure and vehicles, benefit consumers through
a competitive and robust marketplace and drive massive economic
investment and improvements in air quality-objectives fuel retailers
and lawmakers share.
IV. Fuel Retailers Understand Consumer Behavior and Respond to Consumer
Demand
A. Overview of the Retail Fuels Marketplace
The retail fuels market is the most transparent, competitive
commodities market in the United States. Retailers post fuel prices on
large exterior signs that consumers use to shop for the best prices.
Many consumers drive out of their way to save a few cents per gallon.
Our members operate on small margins--generally measured in cents per
gallon of fuel sold.
Fuel retailers are agnostic to the type of fuel sold to satisfy
consumer demand and have demonstrated they are prepared to invest in
any transportation energy technology that their customers desire. Over
the last thirty years, our industry has adapted to meet consumer demand
with increased biofuel blends and other alternative fuels, as well as
healthy and made-to-order food and beverage offerings. Fuel retailers
provide the security and amenities desired by the motoring public more
than any other type of location. These dynamics can be harnessed to
facilitate the transition to a growing market for alternative
transportation energy sources, such as electricity.
The competitive nature of the retail fuels market compels retailers
to pass through cost savings to consumers in order to maintain and
increase their market share. It is in retailers' interests to increase
the amount of energy they sell to consumers. This is not only because
those sales drive profit opportunity in and of themselves, but also
because such sales drive in-store traffic, which is another source of
profit for the retailer.
B. Fuel Retailers Are the Solution to Range Anxiety
To have any chance to be successful, the refueling experience for
alternative fuels should be as similar as possible to today's refueling
experience. Fuel retailers are best positioned to provide alternative
sources of transportation energy because they have a keen understanding
of consumer preferences and habits. This fact is essential when it
comes to adoption of EVs or other alternative fuel vehicles. The
transition to EVs will require what was previously a quick stop to
become a 30 minute consumer experience. Currently, it takes the driver
of a passenger vehicle approximately 2 to 3 minutes to complete a
fueling experience. It takes the driver of an EV, on the other hand, 20
to 40 minutes to recharge at a Direct Current (``DC'') Fast Charger
(depending upon the vehicle and the capacity of the charger available).
Fuel retailers will be forced to compete on the service and amenities
they offer their customers during this refueling experience to maintain
their share of the market. This is a positive market dynamic for
consumers.
Observers of vehicle trends and consumer behavior agree that one of
the major factors deterring consumers from transitioning to EVs is
concern about where they will (and will not) be able to ``refuel''
those vehicles. This ``range anxiety'' is such a strong sentiment that
consumers often underestimate the availability of EV charging
infrastructure that already exists today.\1\ Beyond the number of EV
chargers available, desirability of the location also factors into
concerns about ``range anxiety.''
---------------------------------------------------------------------------
\1\ There are currently 102,621 public charging outlets available
at 42,078 public stations across the United States, of which 17,861
charging outlets at 5,040 public stations are DC Fast Chargers. See
Alternative Fueling Station Locator available at https://
afdc.energy.gov/fuels/electricity_locations.html.
---------------------------------------------------------------------------
Availability of EV charging stations at our locations is the most
effective way to solve range anxiety. Consumers freely drive their gas-
and diesel-powered vehicles to every part of the country today without
concerns about whether they will be able to refuel whenever they need
to do that along the way. Offering EV charging at fuel retailing
locations would mean drivers would not need to change their habits if
they choose not to--they can refuel on the go at the same convenient
locations they do today. The availability of EV charging on large price
signs at fuel retailers' locations as they drive down the streets in
their communities and traverse America's highways will effectively
relieve EV range anxiety.
Consumers frequently use their vehicles for travel--including
visits to family and friends and vacations. And, the majority of
consumers are not in a position to purchase or rent a separate vehicle
solely for these types of trips. If EV charging is not available in the
neighborhoods they want to visit as well as along Interstate locations,
many Americans simply will not purchase an EV.
Placing chargers only in individual garages in private homes,
apartment buildings, and parking lots cannot combat the notion of
``range anxiety'' the way fuel retailers offering that service would.
This is particularly true in rural and urban areas where fewer people
live in single-family homes with garages that are conducive to private
charging equipment. If EVs are to be adopted at the rate policymakers
desire and by broader demographics than those that currently can afford
an EV, the charging model must include the full range of options
available in the refueling experience that exists today. The majority
of renters across the nation do not have garages nor do many
homeowners. And, those that have garages often do not have space in
their garage for the number of vehicles their family drives nor do they
have the electrical capacity in their garage to support a charger or
multiple chargers. This is also true for workplaces; many employees
will not have the option, for a variety of reasons, to charge at work.
Consumers must have viable charging options available outside of their
home or workplace.
Refueling stations are strategically located throughout the country
where refueling demand is greatest, competing with one another on
price, speed, and quality of service. In fact, we currently have about
150,000 fueling stations across the country in local communities of all
kinds, including in every single Congressional district. Furthermore,
these locations include accessible restrooms and parking lots, food and
beverage options, vehicle service and repair centers, and even showers
and other amenities for professional drivers. Consumers demand all of
this, regardless of the type of fuel their vehicle consumes, and fuel
retailers respond accordingly.
C. EV Charging Needs Price Competition
As described above, there are about 150,000 locations across the
country for drivers to currently refuel. This refueling capacity drives
aggressive price competition which, in turn, keeps prices as low as
possible for consumers. Consumers know how much a gallon of gas costs
at a location--either due to a big price sign on the street or some
type of fuel price comparison resource--before they decide to refuel.
This forces retailers to shave every penny they can off of the price of
a gallon of fuel to compete for market share. When adjusted for
inflation, the 3 years with the lowest average gas prices in the United
States since 1978 are 2020, 2018, and 2019, in that order.\2\ That is
not an anomaly. While the pandemic and some other events have created
pricing anomalies the past couple of years, in general, fuel prices
stay as low as possible and generally trend slightly downward over time
when adjusted for inflation due to price competition. If electricity is
to be the transportation fuel of the future, EV drivers should get the
benefits of that remarkable price competition.
---------------------------------------------------------------------------
\2\ See https://www.usinflationcalculator.com/gasoline-prices-
adjusted-for-inflation/. Figures for 2021 are not yet available though
the year was a anomaly due to supply chain and crude oil price issues.
---------------------------------------------------------------------------
The overarching structure of wholesale and retail electricity
markets are not designed for--and is thus incompatible with--the retail
fuel market. Many states are exacerbating this problem by allowing
utilities to pass through the costs of EV charging stations to all of
their customers on their monthly utility bill, rather than having EV
drivers pay for the costs of refueling their own vehicles. And, there
are no wholesale purchasing options or pricing structures for retailers
to provide electricity as a fuel. If that practice were to continue and
become the prevalent model, this country will risk replacing one of the
most price-transparent and price-competitive consumer markets in the
world (retail fuel pricing) with one of the least price-transparent and
price-competitive markets in the United States (utility electricity
pricing).
V. Federal Policies Should Incentivize Private Investment
Competitive markets with a level playing field for investments must
be the focus for any alternative fuel to be successful. Existing
alternative fuel incentives--such as biofuel blending and alternative
fuel infrastructure tax credits--have allowed retailers to offer less
expensive, lower carbon fuels to their customers, while also supporting
investments in renewable fuel production. Regardless of how one may
feel about ethanol and biodiesel, the incentives Congress established
for those fuels have successfully displaced a large volume of
petroleum-based fuel by these renewable fuels since 2005.
In just the past decade, there has been extraordinary growth in
consumption of biofuels such as ethanol and biodiesel, as well as other
low carbon fuels such as renewable natural gas, compressed natural gas,
renewable diesel, and biobutanol. These are all liquid fuels that are
mostly compatible with existing infrastructure that was originally
developed for hydrocarbons. With all of these fuels, fuel retailers
have responded to policy signals by allocating capital toward bringing
the fuels to market. Retailers then sell the fuels to consumers for
less money than the fuels that were being displaced. This has created
enormous environmental benefits in a relatively short period of time
and has been beneficial to U.S. agriculture.
Federal policy should be designed to lower the cost of alternatives
to make those sources of transportation energy more competitive with
petroleum-based fuels. This is the only way to ensure that consumers
will gravitate toward low carbon technologies. Although some state
incentive programs adopt this approach, others have vacillated between
different approaches in a way that does not allow private market
participants to plan long-term investments in alternatives. Such
inconsistent policies are ultimately self-defeating, and that approach
should be avoided. Federal policy instead should incentivize and
leverage private investment in bringing alternative fuels to market. By
the same token, Federal policies should not undercut incentives for
retailers to invest in alternative fuels. Policymakers can leverage
existing infrastructure to achieve meaningful environmental benefits
while also incentivizing fuel retailers to invest in new technology if
policymakers adopt a market-oriented and consumer-focused perspective.
VI. Challenges
In an effort to decarbonize the transportation sector, the Biden
Administration has committed to adding 500,000 EV charging stations
over the next decade. One of the biggest impediments currently to fuel
retailers investing in EV charging infrastructure is the practice of
utilities charging all of their electricity customers more in order to
pay for their investments in EV charging stations--in other words,
their ability to use rate base. Where this occurs, utilities are able
to compete with private sector groups without risking a single dollar
of their own. This tilts the cost for EV charging infrastructure in
favor of utilities such that the private market cannot compete, placing
existing and new market participants at a competitive disadvantage
which they cannot overcome. That the private market is reluctant to
risk capital investing in EV charging infrastructure is entirely
predictable when it knows it cannot make a return on that investment
due to the threat of monopolistic and anti-competitive practices from
investor owned utilities.
As described above, many states allow utilities to charge all of
their customers, regardless of the type of vehicle they drive (or if
they drive at all), for the utility's investments in EV charging
stations via their customers' monthly electric utility bills. There is
no public policy rationale for pursuing this approach with respect to
refueling, as it will only decrease transparency and competition,
increase costs, and stifle innovation.
This type of pricing system was designed for fixed locations, such
as homes and commercial properties. It does not take into account EVs.
The use of rate base or passing along the costs of a project to all
ratepayers makes sense for projects that benefit the whole, such as
generation plants, transmission grid, interconnection systems. Funding
necessary electricity infrastructure investments to carry the
electricity to fixed locations through rate increases therefore makes
sense and should be done for the increasing future demands our
electricity grid will face.
EVs move from place to place rather than remaining in one spot.
Policy should enable the motoring public to access every benefit that
our competitive market system has to offer. If that customer interface
is funded through consumer utility bills, consumers will collectively
pay far more than they should for the chargers and electricity to fuel
EVs.
That cost burden will hit hardest on those least able to afford it.
Individuals who struggle to pay their monthly bills should not be
required to underwrite investments that the private sector is willing
and better equipped to make. EV drivers--who today have above-average
incomes and drive cars that cost much more than average--can and should
pay the costs of charging their vehicles. As EVs become more common in
less affluent communities, it will be especially important that drivers
know that they will pay the smallest amount possible due to retail
price competition.
Furthermore, some states classify businesses that sell electricity
for the purpose of charging EVs as utilities, effectively prohibiting
such sales from anyone other than utilities. Federal policy preempting
these state regulations should be established, allowing non-utilities
such as fuel retailers to resell electricity for refueling
commercially.
Finally, Federal policy should maintain the ban on commercialized
Interstate rest areas, including disallowing EV charging within Federal
Interstate rights-of-way. This will ensure that off-highway businesses
are not discouraged from investing in EV charging. Our industry has
supported the ban on commercial activity and electric charging should
be treated no differently from any other commercial service. If EV
charging is opened up at Interstate rest areas, it will undercut
private-sector investments in that infrastructure at Interstate exits.
That will mean fewer, not more, EV chargers. The bipartisan
infrastructure bill that became law kept this ban in place and did not
include an exception for EV chargers. Regulatory efforts to the
contrary should be stopped.
In addition to the challenges fuel retailers face investing in EV
charging infrastructure, there are challenges with the electricity
market that must be addressed before a robust EV charging marketplace
is viable. Utilities do not simply charge their commercial customers a
fixed price for electricity that is used. Instead, commercial consumers
are charged a rate for the energy itself, billed as kilowatt-hours
(kWh), and then an additional rate to provide reserve capacity when
needed, known as a demand charge, billed as kilowatts (kW).
Demand charges are based on the largest amount of power that a
business needs at a particular time during the entire month. They are
there to compensate the utility for having enough power in reserve to
meet spikes in demand. Private businesses that have short, but high
spikes in their power needs will be hit hard by this pricing structure.
Utilities' demand charges make it very challenging for private
companies to offer electricity to EV drivers at a price that is
competitive with gasoline or diesel.
DC Fast Chargers require a large amount of power in a short time
frame to recharge vehicles quickly. A DC Fast Charger pulls 150% more
power than a typical store and fueling operation combined does at its
peak moment in a month. Accordingly, when businesses offer EV charging,
these large demand costs restrict profitability and increase the cost
for drivers of EVs to ``refuel.'' DC Fast Chargers are capable of
filling a vehicle up half-way in about 20 minutes and 80 percent of the
way in about 35 minutes. For a customer, a charge can cost anywhere
from $10 to $30 depending how much charge is required to refuel the
battery. For a typical business, adding a single DC Fast Charger can
increase its monthly bill by about $1,600. The demand portion of this
bill is $1,500 and the energy portion of this bill is $100.
But, it is very difficult for businesses to have consumers fully
pay the demand charge. The business would have to precisely know ahead
of time how many people would use its chargers over the course of an
entire month in order to do that. If it turned out to make the wrong
assumptions, consumers could be dramatically undercharged or
overcharged--leading to difficult consumer protection questions or
business losses, respectively. No matter the incentive for charging
infrastructure, the ongoing costs for electricity, particularly demand
charges which cannot effectively be passed through to consumers today,
make profitability near impossible to achieve for private businesses
without changes.
Fuel retailers getting hit with demand charges also cannot compete
with a utility that has substantially lower costs for energy and power.
Utilities have excess capacity and much lower energy costs that allow
them to offer EV charging with little impact to their bottom line.
What's more, demand charges are compounded so a fuel retailer will be
saddled with higher demand charges for every additional charger
available to their customers. That will make it more difficult for
retailers to deploy DC Fast Chargers and give consumers the benefit of
competitive pricing. The utility demand pricing model could not be
further from the current retail fuel model, where increased consumption
and volume results in efficiencies and lower costs for consumers. The
utility model, then, will not work for EV charging on a large scale.
The challenges with electricity pricing as it exists today threaten
to stunt the growth of the EV market. Congress could address this
problem by ensuring businesses offering EV charging only pay the costs
that utilities pay for the electricity, without demand charges. Such a
wholesale rate would allow businesses to offer charging, compete, and
develop the competitive market for EV charging. Demand charges are the
greatest barrier to entry to mass adoption of DC Fast chargers by
private business, even greater than the large capital costs to install
DC fast chargers.
VII. The Need for Multiple Technologies
One key to decarbonization of the transportation sector is ensuring
that we pursue advances wherever we can. If government policymakers
pick technology winners and losers, that denies us the chance to
squeeze gains out of existing technologies and creates huge risks that
any misreading of future markets or advances in technology could deny
us the benefits those markets or advances would have delivered. We have
seen huge mistakes made in exactly this way--for example, when Congress
and regulators pushed for MTBE in gasoline decades ago. Let's avoid
repeating these mistakes.
In particular, some states have called for banning internal
combustion engines. This would be a bad policy mistake for a number of
reasons.
First, if combustion engines are banned, investments to find ways
to take carbon out of the operation of those engines will be stunted.
No one wants to make major investments in research in a technology that
has been given a death sentence. American ingenuity remains one of the
most powerful forces we have at our disposal. If people have a way to
make money, they are remarkably good at finding ways to make that
happen. We should use that potential rather than shutting it down.
Second, renewable fuels have already delivered most of the
decarbonization gains we have made in the transportation sector to
date. One study from the Biotechnology Innovation Organization
estimated that renewables had reduced carbon emissions by 589 million
tons over 10 years.\3\ Renewables help reduce carbon emissions and
could be a larger part of the fuel mix to deliver additional
decarbonization gains. Banning internal combustion engines means
killing off the renewable fuels that are helping us keep carbon out of
the atmosphere.
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\3\ See New Study: Biofuel Use Saved 589.3 Million Tons of Carbon
Emissions Over the Past Decade--BIO (https://archive.bio.org/media/
press-release/new-study-biofuel-use-saved-5893-million-tons-carbon-
emissions-over-past-decade).
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Third, a ban on internal combustion engines would have significant
negative consequences for agriculture and rural America. Many farmers
grow crops that produce renewable transportation fuels today. This is a
huge market and losing it would dramatically reduce the prices of some
farm commodities and leave many growers without an adequate market.
Fourth, no matter how rapidly electric vehicles are adopted, we
will have large numbers of people driving traditional cars and trucks
for a long time. Recent projections from the consulting firm McKinsey &
Co. demonstrate that we need to keep making advances in traditional
technologies. Experts from McKinsey project that by 2030, 50 percent of
new vehicles sold in the United States will be electric. That is a
large, aggressive number but it also comports with goals laid out by
many political leaders looking to move to EVs. But, even at that level,
it means that EVs will only be around 17 percent of the total vehicle
mix in the United States. This is because some of those new EV sales
will be replacing older EVs and people keep driving internal combustion
engine cars for a long time.
And, even with those numbers, overall gasoline consumption will
only decline at that point by four percent. Why? Because EVs tend to be
purchased and used as second cars and people drive their combustion
engine vehicles more miles each year. Even among the EV sales that
replace combustion engine cars, most of those will replace cars that
are relatively fuel-efficient while the least efficient vehicles stay
on the road longer. These projections demonstrate that we must continue
to invest in getting more efficiency out of combustion engines.
Electrifying transportation alone simply doesn't do enough.
Fifth, electricity has more emissions than many people assume. The
transportation sector accounts for more carbon emissions than any other
sector of the U.S. economy. But, the second highest sector for
emissions is--electricity generation. In light of the emissions
attributable to EV batteries, it takes 7 or 8 years of driving for an
EV to make up for carbon emissions involved in batteries and produce
overall reductions compared to today's internal combustion engine
vehicles. Further advances in carbon output from combustion engines--
for example from the use of higher concentrations of renewable fuels
and engines that take advantage of those fuels--could change that
balance. If our goal is to reduce carbon in the environment, then we
should be open to those gains no matter where they come from.
The bottom line is that competition among technologies that can
help us achieve our climate goals should be a positive dynamic for us
to use to our advantage. Banning internal combustion engines takes that
positive dynamic off the table and undermines the renewable fuels
industry in a way that would be bad for the environment and bad for
agricultural economies and communities.
VIII. Policy Solutions
Finally, there are inherent challenges in shifting our
transportation fuel from the liquid marketplace of today, where
retailers have the ability to price shop among a variety of suppliers,
toward a market with one power provider operating in a regulated
environment. Without injecting competitive forces throughout the fuel
supply chain, fuel retailers will be limited in their ability to lower
the prices to the consumer. Congress can help alleviate that challenge
by ensuring that utilities sell power to EV charging retailers at their
own internal transfer price. Demand charges, which set our rates
exorbitantly high during peak demand times, are another impediment to
make the EV business case for retailers. Again, demand charges do not
make sense for refueling on the go. A driver should not be penalized
for needing to refuel at certain times of the day and fuel retailers
should not be penalized for providing the fuel this Committee wants
sold. Addressing the cost-prohibitive demand charge model will be
beneficial to building the business case for investment by our
industry.
The Committee should consider policy mechanisms to address these
concerns, including:
Ensure Federal funding does not block private sector
investment by compounding the problem of utilities charging all
their customers more for chargers and not putting capital at
risk.
End the electricity pricing problem of demand charges that
make the business case unattractive for retailers to sell
electricity.
Prioritize credit regimes and/or tax incentives that make
alternative energy less expensive for the end user, thereby
providing a stable economic case for upstream investment. Tax
credits and other incentives targeting the underlying economics
of different fuels are a far more efficient, effective way to
incentivize behavior than grant and rebate programs.
Permit all EV charging station owners to generate a profit
by selling electricity to EV owners without being subject to
regulation as a utility. This allowance is essential if fuel
retailers are to have any incentive to invest in EV charging
technology.
Adopting uniform retail pricing measurements (e.g., dollars
per kilowatt-hour) and requirements for consumer-friendly price
disclosures.
IX. Conclusion
We believe decarbonization efforts should incentivize private
sector investments in the desired behavior--offering alternatives that
reduce carbon output. To be effective, any alternative--including
electricity--should be offered in an open, competitive market that
gives American consumers the fullest economic benefits of robust price
competition. This has worked well for consumers for nearly one hundred
years with liquid fuels because the market had a business case to
invest to meet consumer needs. It can work for alternative energy
sources in the future if we follow those lessons.
Our industry is eager to work with the Committee to help it achieve
this objective and place critical guardrails on any programs the
Committee may pursue to decarbonize the transportation sector.
The Chairman. Thank you very much, Mr. Walter.
Mr. Cooper, please begin when you are ready.
STATEMENT OF GEOFF COOPER, PRESIDENT AND CHIEF
EXECUTIVE OFFICER, RENEWABLE FUELS ASSOCIATION, ELLISVILLE, MO
Mr. Cooper. Thank you, and good morning, Chairman Scott,
Ranking Member Thompson, and Members of the Committee. My name
is Geoff Cooper, and I am President and CEO of the Renewable
Fuels Association. We are the leading trade association for
America's ethanol industry. Thank you for convening this timely
and important hearing today, and I appreciate the opportunity
to share our industry's unique perspective.
The emergence of electric vehicles and the push to
decarbonize transportation could have important implications
for farm country, and we commend the Committee for thinking
carefully about those issues. As you know, the massive increase
in public and private investment in electric vehicles is being
driven by the need to reduce greenhouse gas emissions and
achieve economy-wide carbon neutrality by 2050. Transportation
is the leading source of greenhouse gas emissions in the U.S.,
accounting for nearly \1/3\ of our nation's total emissions.
Thus, any strategy to achieve net-zero emissions by mid century
must include measures that rapidly decarbonize the
transportation sector.
We agree that electric vehicles will be an important part
of that strategy, but given the time needed to transition the
light duty vehicle fleet, continued reliance on fossil fuels
for electricity generation, the difficulty of electrifying
medium and heavy-duty vehicles, and other barriers, electric
vehicles alone will not get our transportation sector to net-
zero emissions by 2050.
Today, there are more than 267 million light duty vehicles
in the U.S. Just 2.3 million of those vehicles--that is less
than one percent--are battery electric or plug-in hybrid EVs.
The other 99 percent run on liquid fuels, and the Energy
Information Administration projects that four out of five new
vehicles sold in 2050 will still be internal combustion engines
requiring liquid fuels. So, even with increased electric
vehicle sales in the years ahead, it would take decades to turn
over the fleet. And that means hundreds of billions of gallons
of liquid fuels will continue to be burned for years, for
decades to come.
So, given these realities, other complementary solutions
clearly will be needed to decarbonize transportation by mid-
century, and that is where agriculture comes in.
Through increased production and use of renewable fuels
like ethanol, the agriculture sector offers an effective and
immediate solution for decarbonizing all segments of the
transportation sector. Today's corn ethanol already cuts
greenhouse gas emissions by approximately 50 percent compared
to gasoline, according to the Department of Energy, Harvard
University, and others. With increased adoption of low-carbon
farming practices, carbon capture, sequestration and storage,
and other technologies, we are well on our way to producing
zero carbon corn ethanol. In fact, the members of my
organization are so confident about this that they adopted a
resolution last July, pledging to achieve a net-zero carbon
footprint for corn ethanol by 2050 or sooner.
But for this vision to become a reality, we need fairness
and consistency in how the carbon footprint of different fuels
and vehicles is measured. For ethanol's carbon footprint,
regulators count the emissions associated with every step in
the supply chain, from planting the seed all the way to
delivering the fuel to the consumer at retail. For the carbon
footprint of electric vehicles, however, the upstream emissions
associated with electricity generation and battery
manufacturing are often overlooked, giving the false impression
that electric vehicles are zero emission vehicles. These
overlooked emissions can be quite significant. In fact,
analyses we have conducted shows that a Ford F-150 flex fuel
vehicle, which happens to be what I drive, running on an 85
percent ethanol blend will generate far fewer greenhouse gas
emissions over its lifetime than a new Ford F-150 Lightning
electric vehicle running on fossil-generated electricity.
We believe any future decarbonization policy should take a
technology-neutral, performance-based approach that focuses
strictly on greenhouse gas emissions reduction, and increasing
fuel efficiency without dictating the use of specific fuels and
vehicles to achieve those reductions. That is why we support
the concept of a national Low Carbon Fuel Standard. We also
support the Next Generation Fuels Act of 2021 (H.R. 5089) that
was introduced by Congresswoman Bustos, which establishes
carbon performance and minimum octane standards for liquid
fuels, again without dictating what fuels would be used.
In closing, we believe electric vehicles will play a key
role in reducing emissions over the long-term, but if we are
serious about achieving a carbon neutral transportation sector
by 2050, we must take a comprehensive approach that also
capitalizes on the ability of agriculture to deliver low- and
zero-carbon renewable fuels.
Thank you, and I look forward to your questions.
[The prepared statement of Mr. Cooper follows:]
Prepared Statement of Geoff Cooper, President and Chief Executive
Officer, Renewable Fuels Association, Ellisville, MO
Chairman Scott, Ranking Member Thompson, and Members of the
Committee, thank you for the opportunity to testify today. My name is
Geoff Cooper and I am the President and Chief Executive Officer of the
Renewable Fuels Association (RFA), the leading trade association
representing the U.S. ethanol industry.
RFA's mission is to drive expanded demand for American-made
renewable fuels and bioproducts worldwide. Founded in 1981, RFA serves
as the premier organization for industry leaders and supporters. With
over 300 members, we work every day to help America become cleaner,
safer, and more economically vibrant.
We thank the Committee for convening this timely hearing, and I
appreciate the opportunity to share our industry's unique perspective.
RFA believes the emergence of electric vehicles and the push to
decarbonize the transportation sector could have important implications
for the farm economy and rural America, and we commend the Committee
for thinking carefully about these issues.
I. Summary of Testimony
The massive increase in public and private investment in electric
vehicles is being driven by the urgent need to reduce greenhouse gas
(GHG) emissions and achieve economy-wide carbon neutrality by 2050.
While increased deployment of electric vehicles will indeed play a
vital role in reducing GHG emissions from transportation, other
complementary solutions will also be required to truly decarbonize the
sector by mid-century.
That's where agriculture comes in. Through the increased production
and use of low-carbon renewable fuels like ethanol, the U.S.
agriculture sector offers an effective and immediate solution for
further reducing carbon emissions from liquid fuels across all segments
of the transportation sector.
Today's corn-based ethanol already cuts GHG emissions by
approximately 50 percent, on average, compared to gasoline. With the
increased adoption of low-carbon farming practices and carbon capture,
utilization, and storage (CCUS) technologies, the U.S. ethanol industry
is well on its way to producing zero-carbon corn ethanol. In fact, in a
July 2021 letter to President Biden, RFA's member companies pledged
that ethanol will achieve a 70 percent GHG reduction, on average,
compared to gasoline by 2030 and a net-zero carbon footprint for
ethanol by 2050 or sooner.\1\
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\1\ Letter from RFA member companies to President Joseph R. Biden.
July 27, 2021. https://ethanolrfa.org/file/2036/RFA-Net-Zero-
Commitment-Letter-to-President-Biden--1.pdf.
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But for this vision to become a reality, the biofuels industry
needs smart policy and regulation, including:
fairness and consistency in how the carbon footprint of
different fuels and vehicles is measured;
removal of unnecessary regulatory barriers that are blocking
the use of fuel blends that contain higher levels of ethanol,
such as 15 percent ethanol blends (E15);
investment in storage and distribution infrastructure for
higher ethanol blends like E15 and flex fuels like E85;
implementation of strong Renewable Fuel Standard volume
requirements in 2023 and beyond;
equitable incentives for the production of flex-fuel
vehicles that can operate on fuels containing up to 85 percent
ethanol; and
a nationwide technology-neutral, performance-based low
carbon fuel standard.
In addition to its environmental benefits, ethanol also makes a
vital contribution to our nation's economy. The 206 ethanol
biorefineries across the country serve as crucial drivers of employment
in the communities in which they operate. Even as the COVID-19 pandemic
continued to disrupt the U.S. economy and world energy markets in 2021,
the production of 15 billion gallons of ethanol directly employed
73,000 American workers in the manufacturing and agriculture sectors.
In addition, the ethanol industry supported 330,000 indirect and
induced jobs across all sectors of the economy. Meanwhile, the industry
generated $29 billion in household income and contributed $52 billion
to the national Gross Domestic Product (GDP) in 2021.\2\ These
significant employment impacts and economic contributions should be
taken into consideration by Congress as it examines potential future
energy and climate policies that may impact the biofuels sector.
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\2\ J.M. Urbanchuk (ABF Economics). ``Contribution of the Ethanol
Industry to the Economy of the United States in 2021.'' Forthcoming
(February 2022).
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II. As the leading source of GHG emissions in the United States, the
transportation sector must be a central focus for national
decarbonization efforts.
According to the U.S. Environmental Protection Agency (EPA), the
United States was responsible for 6.56 billion metric tons of carbon
dioxide equivalent (MT CO2e) in 2019.\3\ As shown in the
chart below, the transportation sector accounted for approximately 29
percent of total U.S. GHG emissions, followed by the electricity
generation sector at 25 percent.
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\3\ U.S. EPA. ``Sources of Greenhouse Gas Emissions.'' Viewed Jan.
8, 2022. https://www.epa.gov/ghgemissions/sources-greenhouse-gas-
emissions.
---------------------------------------------------------------------------
Total U.S. Greenhouse Gas Emissions by Economic Sector in 2019
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Source: U.S. Environmental Protection Agency (2021).
GHG emissions from transportation primarily result from the burning
of fossil fuels (mainly petroleum) in passenger cars, trucks, ships,
trains, and planes. The increased use of renewable fuels like ethanol
has already helped reduce GHG emissions from the transportation sector,
and EPA notes that ``using renewable fuels such as low-carbon
biofuels'' is an important GHG ``reduction opportunity'' for the
sector.\4\ After peaking at 1.98 billion metric tons of carbon dioxide
equivalent (MT CO2e) in 2006, transportation-related GHG
emissions fell 12 percent to 1.75 billion MT CO2e in 2012
and stood at 1.88 billion MT CO2e in 2019.\5\ Recent
research shows that the use of biofuels under the Renewable Fuel
Standard resulted in the cumulative avoidance of nearly 1 billion
metric tons of GHG emissions from the transportation sector between
2008 and 2020, equivalent to 75 million MT CO2e per year.\6\
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\4\ Id.
\5\ U.S. EPA. ``Greenhouse Gas Inventory Data Explorer.'' Viewed
Jan. 8, 2022. https://cfpub.epa.gov/ghgdata/inventoryexplorer/.
\6\ S. Unnasch and D. Parida. ``GHG Reductions from the RFS2--A
2020 Update.'' Life Cycle Associates Report LCA.6145.213.2021. February
11, 2021. Prepared for Renewable Fuels Association. https://
ethanolrfa.org/file/748/LCA_-_RFS2-GHG-Update_2020.pdf.
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Despite progress in reducing GHG emissions from transportation, the
sector remains as the most substantial source of emissions in the
United States and, thus, should be the central focus of a national
strategy to achieve net-zero GHG emissions by 2050.
III. Increased deployment of electric vehicles will play an important
role in reducing transportation-related GHG emissions, but
other complementary solutions will also be required to truly
decarbonize transportation fuels by mid-century.
Recognizing the urgent need to reduce GHG emissions from the
transportation sector, public and private entities have massively
expanded investments in the development of electric vehicles and the
infrastructure to support them. Battery and plug-in hybrid electric
vehicles are generally believed to offer a much smaller carbon
footprint than vehicles with internal combustion engines operating on
petroleum fuels.
As shown in the chart below from the International Energy Agency
(IEA), mid-sized battery electric vehicles (BEV) are found to reduce
lifetime GHG emissions by about 50 percent, on average, compared to an
internal combustion engine (ICE) vehicle operating on petroleum.\7\ It
is notable, however, that the magnitude of the GHG reduction achieved
by the BEV can vary from just seven percent to 77 percent, according to
IEA, depending on the source of electricity used to charge the
vehicle's battery and the origin of the minerals used in the
manufacture of the battery.
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\7\ International Energy Agency. ``The Role of Critical Minerals in
Clean Energy Transitions.'' May 2021. https://www.iea.org/reports/the-
role-of-critical-minerals-in-clean-energy-transitions.
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Life-cycle GHG Emissions of a BEV and ICE Vehicle
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
IEA. All rights reserved.
Source: International Energy Agency (2021).
While the current 50 percent average GHG reduction offered by BEVs
(as estimated by IEA) is already a significant improvement over ICE
vehicles operating on petroleum, the GHG emissions associated with
producing and operating BEVs are expected to decrease further in the
future as electricity generation from renewable sources (e.g., biomass,
wind, solar) increases and more efficient battery technologies are
introduced.
Still, the contribution of electric vehicles to decarbonization
efforts will be constrained--especially in the near-term--due to the
sheer size and scale of the U.S. light-duty vehicle fleet and the
amount of time required for the fleet to turn over. On average,
consumers keep their vehicles for more than 12 years, meaning that an
ICE vehicle purchased today will likely still be in use well beyond
2030.\8\ Today, there are more than 267 million passenger cars, SUVs,
pick-ups, vans, and other light-duty vehicles registered in the United
States.\9\ Just 2.3 million of those vehicles--less than one percent--
are battery electric or plug-in hybrid electric vehicles,\10\ meaning
the other 99 percent are ICE vehicles that operate on liquid fuels.
---------------------------------------------------------------------------
\8\ IHS Markit. ``Average age of cars and light trucks in the U.S.
rises to 12.1 years, accelerated by COVID-19.'' June 14, 2021. https://
ihsmarkit.com/research-analysis/average-age-of-cars-and-light-trucks-
in-the-us-rises.html.
\9\ Federal Highway Administration. Highway Statistics 2020.
``State Motor-Vehicle Registrations--2020.'' https://www.fhwa.dot.gov/
policyinformation/statistics/2020/mv1.cfm. (Note: 8.3 million
motorcycles and one million buses are excluded from the 267 million
figure.)
\10\ Argonne National Laboratory. ``Light Duty Electric Drive
Vehicles Monthly Sales Update.'' Dec. 2021. https://www.anl.gov/es/
light-duty-electric-drive-vehicles-monthly-sales-updates. (Note:
Argonne reports, ``In total, 2,257,292 PHEVs and BEVs have been sold
since 2010.'' We assume all of those vehicles remain in service today.)
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While electric vehicle sales are growing, they continue to
represent a relatively small share of overall light-duty vehicles sales
(i.e., electric vehicles accounted for 1.7 percent of light-duty
vehicle sales in 2020 \11\ and were expected to account for roughly
four percent in 2021 \12\). Growth in electric vehicle sales is
expected to continue in the decades ahead, but there is significant
uncertainty and debate around the rate of growth. For example, the
Energy Information Administration's (EIA) Annual Energy Outlook 2021
forecast that roughly 80 percent of new light-duty vehicles sold in the
U.S. in 2050 will be powered by an ICE that requires liquid fuel.\13\
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\11\ U.S. DOE, Office of Energy Efficiency & Renewable Energy.
``Sales of New Electric Vehicles in the U.S. Were Up for 2020 While
Conventional New Light-Duty Vehicle Sales Were Down.'' Aug. 23, 2021.
https://www.energy.gov/eere/vehicles/articles/fotw-1200-august-23-2021-
sales-new-electric-vehicles-us-were-2020-while.
\12\ ING. ``Slow start for U.S. electric vehicles, but times are
changing.'' Dec. 1, 2021. https://think.ing.com/articles/slow-start-
for-electric-vehicles-in-the-us-but-times-are-changing/.
\13\ .S. EIA. ``Annual Energy Outlook 2021: Transportation.'' Feb.
3, 2021. https://www.eia.gov/outlooks/aeo/pdf/
05%20AEO2021%20Transportation.pdf.
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Even with increased electric vehicle sales expected in the years
ahead, it would take decades to entirely turn over the fleet. As such,
hundreds of billions of gallons of liquid fuel will continue to be used
in ICE vehicles for many years to come. To achieve true carbon
neutrality in the U.S. transportation system by mid-century, strategies
focused on decarbonizing those liquid fuels will need to be undertaken.
This reality was recognized in a recent study published by the Rhodium
Group, which concluded, ``While efficiency improvements and vehicle
electrification can cut transport emissions by up to \2/3\ by 2050,
low-GHG liquid fuels are needed to fill the remaining gap and achieve
net-zero emissions in the transportation sector by mid-century.'' \14\
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\14\ Rhodium Group. ``Closing the Transportation Emissions Gap with
Clean Fuels.'' Jan. 15, 2021. https://rhg.com/research/closing-the-
transportation-emissions-gap-with-clean-fuels/.
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IV. Through renewable fuels like ethanol, the U.S. agriculture sector
offers an effective and immediate solution for decarbonizing
liquid fuels across all segments of the transportation sector.
As established in the remarks above, a national strategy to achieve
net-zero GHG emissions by 2050 cannot rely exclusively on electric
vehicles to decarbonize the transportation sector. Complementary low-
and zero-carbon solutions in the ICE vehicle market will also be
required to secure carbon neutrality by mid-century.
Fortunately, U.S. agriculture offers one of those complementary
solutions. Through renewable fuels like ethanol, the U.S. farm sector
presents an effective and immediate opportunity for decarbonizing
liquid fuels across all segments of the transportation sector.
Today's corn ethanol already reduces GHG emissions by roughly half,
on average, compared to gasoline (i.e., similar to the GHG reduction
offered by BEVs, according to the IEA study cited above). According to
the Department of Energy's Argonne National Laboratory, typical corn
ethanol provides a 44-52 percent GHG savings compared to gasoline.\15\
Similarly, researchers affiliated with Harvard University, MIT, and
Tufts University concluded that today's corn ethanol offers an average
GHG reduction of 46 percent versus gasoline.\16\ In addition, the
California Air Resources Board found that from 2011 to 2020, the use of
ethanol cut GHG emissions from the California transportation sector by
27 million MT CO2e, more than any other fuel used to meet
the state's Low Carbon Fuel Standard requirements.\17\
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\15\ Lee, U., Kwon, H., Wu, M. and Wang, M. (2021), Retrospective
analysis of the U.S. corn ethanol industry for 2005-2019: implications
for greenhouse gas emission reductions. Biofuels, Bioprod. Bioref., 15:
1318-1331. https://doi.org/10.1002/bbb.2225.
\16\ Melissa J. Scully, et al. (2021), Carbon intensity of corn
ethanol in the United States: state of the science. Environ. Res. Lett.
16 043001. https://iopscience.iop.org/article/10.1088/1748-9326/abde08.
\17\ CARB. ``Low Carbon Fuel Standard Reporting Tool Quarterly
Summaries.'' Viewed Nov. 20, 2021. https://ww2.arb.ca.gov/resources/
documents/low-carbon-fuel-standard-reporting-tool-quarterly-summaries.
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With the rapid emergence of new technologies and more efficient
practices, even greater GHG reductions are coming to the corn ethanol
sector. In fact, analysis by USDA found that some biorefineries could
produce corn ethanol that offers a 70 percent GHG reduction versus
gasoline as soon as this year.\18\
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\18\ Jan Lewandrowski, Jeffrey Rosenfeld, Diana Pape, Tommy
Hendrickson, Kirsten Jaglo & Katrin Moffroid (2020) The greenhouse gas
benefits of corn ethanol--assessing recent evidence, Biofuels, 11:3,
361-375, DOI: 10.1080/17597269.2018.1546488 https://
www.tandfonline.com/doi/full/10.1080/17597269.2018.1546488.
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Indeed, the U.S. ethanol industry is well on its way to producing
corn ethanol that is fully carbon neutral. With the adoption of carbon
capture utilization and storage (CCUS); biogas substitution; and
climate-smart farming practices, corn ethanol is expected to achieve
net-zero emissions, on average, by 2050 or sooner. In fact, RFA's
member companies are so confident about the promise of carbon neutral
ethanol that they adopted a resolution last summer to achieve a net-
zero carbon footprint, on average, for ethanol by 2050 or sooner. This
pledge was memorialized in a letter to President Biden last July.
Clearly, the U.S. agriculture sector--through increased production
and use of ethanol and other biofuels--has the ability to jumpstart
decarbonization efforts now. America's farmers and biofuel producers
offer an effective and economical solution for drastically reducing the
carbon impacts of liquid fuels across all segments of the
transportation sector, including light-, medium-, and heavy-duty
vehicles; the marine sector; and even the aviation sector, through the
utilization of ethanol as a feedstock in the production of sustainable
aviation fuels (SAF).
V. Decarbonization strategies must adopt fair and accurate
methodologies for assessing the lifecycle GHG emissions of
various fuel and vehicle options.
To ensure a wide variety of low- and zero-carbon technologies are
allowed to contribute to national decarbonization efforts, fair,
accurate, and consistent methodologies are needed for assessing the
lifecycle carbon footprint of different fuels and vehicles.
For typical measurements of corn ethanol's carbon footprint,
emissions associated with every step in the supply chain--from planting
the seed all the way to delivering the fuel to a retail gas station--
are included. For the carbon footprint of electric vehicles, however,
the upstream emissions associated with electricity generation and
battery manufacturing are often underestimated or entirely overlooked,
giving the false impression that electric vehicles are ``zero-emissions
vehicles.''
As underscored by the IEA report cited above in this testimony,
emissions associated with battery minerals and electricity generation
can be a significant determinant of the overall carbon performance of
an electric vehicle (especially if the electricity is generated using
coal, petroleum, or natural gas). As shown in the chart below from the
EIA, coal, petroleum, and natural gas accounted for 60 percent of U.S.
electricity generation in 2020, while wind and solar combined accounted
for less than 11 percent.\19\
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\19\ U.S. EIA. ``Electricity explained: Electricity in the United
States.'' Viewed Jan. 7, 2022. https://www.eia.gov/energyexplained/
electricity/electricity-in-the-us.php.
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Sources of U.S. electricity generation, 2020
Total = 4.12 trillion kilowatt-hours
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Note: Electricity generation from utility-scale generators. *
Hydro is conventional hydroelectric; petroleum includes
petroleum liquids and petroleum coke, other gases,
hydroelectric pumped storage, and other sources.
Source: U.S. Energy Information Administration, Electric
Power Monthly, February 2021, preliminary data.
Source: U.S. Energy Information Administration (2021).
To further underscore the importance of accurate carbon footprint
measurements, analysis recently conducted by RFA shows that a Ford F-
150 flex-fuel vehicle (FFV) running on an 85 percent corn ethanol blend
(E85) will generate far fewer GHG emissions over its lifetime than
Ford's new electric F-150 Lightning running on fossil fuel-generated
electricity. Yet, certain policies and regulations--like EPA's light-
duty vehicle GHG standards--strongly incentivize the production of
electric vehicles by treating them as ``zero-emission vehicles''
regardless of the source of electricity, while discouraging production
of flex-fuel vehicles that can operate on high concentrations of low-
carbon ethanol.
As Congress considers future climate and energy policies, RFA
strongly recommends that each potential fuel and vehicle combination
should be evaluated based on the GHG emissions associated with its full
``cradle-to-grave'' supply chain. The Department of Energy's Argonne
National Laboratory GREET model is recognized worldwide as the ``gold
standard'' for conducting this type of analysis, and RFA strongly
supports its use for policy and regulatory decision-making.
VI. Smart policy can ensure agriculture and renewable fuels are able to
effectively contribute to national decarbonization efforts.
In addition to a level playing for lifecycle GHG analysis, certain
policy and regulatory actions are needed to fully leverage the
potential of agriculture and biofuels to decarbonize transportation.
First, removal of EPA's arcane fuel volatility barrier would
facilitate the rapid expansion of E15 in the marketplace. Not only does
E15 typically sell for 5-10 per gallon less than regular gasoline with
ten percent ethanol (E10), it also reduces lifecycle GHG emissions.
Simply switching from E10 to E15 would reduce the annual GHG emissions
from a typical passenger car by seven percent. If E15 replaced E10
nationwide, annual GHG emissions from the transportation sector would
be reduced by nearly 18 million MT CO2e. RFA supports the
Year-Round Fuel Choice Act of 2021 (H.R. 4410), introduced by Reps.
Angie Craig (D-MN) and Adrian Smith (R-NE), which would remove the
illogical volatility barrier to E15 expansion. We also support
administrative action to address this obstacle, and we have recently
encouraged EPA to undertake such action.\20\
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\20\ RFA. ``Farm, Biofuel Groups Ask EPA to Resolve Summertime E15
Barrier.'' Dec. 9, 2021. https://ethanolrfa.org/media-and-news/
category/news-releases/article/2021/12/farm-biofuel-groups-ask-epa-to-
resolve-summertime-e15-barrier.
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Second, implementation of strong Renewable Fuel Standard (RFS)
volume requirements in 2023 and beyond will ensure low-carbon biofuels
have access to a growing market. This year is the final year for
statutorily prescribed RFS volume requirements, and EPA is expected to
propose RFS requirements for 2023 and beyond this summer. In order to
maximize the GHG emissions benefits of the RFS program, we believe EPA
must implement future RFS volume requirements that continue to grow
beyond the levels proposed for 2022.
Third, our nation cannot fully capitalize on ethanol's low-carbon
benefits unless more vehicles are produced that can run on flex fuels
like E85. Over the course of a year, a flex fuel vehicle (FFV) running
on E85 made from today's typical corn ethanol will reduce GHG emissions
by roughly 29 percent compared to the same vehicle model operating on
E10. Indeed, if all 21 million FFVs on American roadways were using E85
in lieu of E10, annual GHG emissions would be reduced by some 32
million MT CO2e. Accordingly, RFA strongly supports the
Clean Fuels Vehicle Act (S. 2267) introduced in the Senate by Sens.
Klobuchar (D-MN) and Ernst (R-IA), which would encourage increased
production and deployment of flex-fuel vehicles by creating a $200
refundable tax credit for each light-duty FFV manufactured for a period
of 10 years. The legislation would also restore certain Corporate
Average Fuel Economy credits that were previously available to
automakers for producing FFVs.
Fourth, additional public and private investment is needed in the
infrastructure necessary to distribute higher ethanol blends like E15
and flex fuels like E85. RFA supported the Renewable Fuels
Infrastructure Investment and Market Expansion Act (H.R. 1542)
introduced last year by Reps. Cindy Axne (D-IA) and Rodney Davis (R-
IL), and we thank this Committee for its efforts to ensure nearly $1
billion in biofuels infrastructure funding was included in the House-
passed Build Back Better legislation.
Finally, we believe future decarbonization policies should take a
technology-neutral, performance-based approach that focuses on reducing
carbon emissions and increasing fuel efficiency without dictating the
use of specific fuels or vehicles. That's why we support the concept of
a national Low Carbon Fuel Standard, and we are hopeful Congress begins
serious discussions around such a policy in 2022. It's also why we
support the Next Generation Fuels Act of 2021 (H.R. 5089), introduced
last year by Rep. Bustos (D-IL). The bill would require liquid fuel
suppliers to meet certain carbon performance and fuel efficiency
standards, without dictating what specific fuels are used.
VII. Conclusion
On behalf of the membership of the Renewable Fuels Association,
thank you again for the opportunity to share our perspective on the
potential implications of electric vehicle investments on agriculture
and rural America. We believe both electric vehicles and increased
production and use of low- and zero-carbon renewable liquid fuels will
be necessary to achieve our national goal of net-zero carbon emissions
by 2050.
The Chairman. Thank you very much.
And now, Mr. Nassar, you are recognized.
STATEMENT OF JOSH NASSAR, LEGISLATIVE DIRECTOR, INTERNATIONAL
UNION, UNITED AUTOMOBILE, AEROSPACE AND AGRICULTURAL IMPLEMENT
WORKERS OF AMERICA, WASHINGTON, D.C.
Mr. Nassar. Thank you, Chairman Scott, and I want to thank
you, Ranking Member Thompson, and Members of the Committee for
the chance to testify today on behalf of UAW's one million
members and retirees, and our Executive Board President, Ray
Curry.
Just first of all, I want to say that our membership and
retirees, their livelihoods depend on having a healthy auto
industry, and the reality is, is that there is a global
transformation going to electric vehicles. We have countries
like China and the European Union that have already made
massive public investments to establish their industries, and
frankly, they are beating us. So, we do really--but as has been
said by other witnesses, it is going to take time. So, I think
it is really important that we do look to biofuels and other
things to also reduce carbon emissions and we also support the
Next Generation Fuels Act of 2021 very strongly.
But there are things that I would encourage everyone to
keep in mind, too. One is that the agricultural implement
industry is also moving forward with electrification and
autonomous vehicles. John Deere just made a recent announcement
about an autonomous tractor that is going to be online pretty
soon. So, electrification is going to impact manufacturing kind
of across the board, and I think that is something that we need
to take into account. In fact, we have over 15,000 members who
work in the agricultural implement industry.
Now, back to electric vehicles. It is--in order to have--
so, the bottom line for us is that companies our members work
for, and the industry at large, have made huge investments, and
those investments if they fail will be bad for our economy and
will be bad for our members, and for working families across
the board. So, we need this transition to work, and part of
that is going to be having--we need a strong domestic market.
We are not going to export our way into having a strong EV
market. We need people in the U.S. buying them. And that is
only going to happen if we have a strong infrastructure the
infrastructure laws start in that direction. We also need
strong policies to help the transition when it comes to
retooling and things like that. I should add, some of that is
in the infrastructure laws in the Build Back Better. We also
need strong consumer incentives, and we commend Representative
Kildee, and frankly the House of Representatives for including
provisions which would add extra incentives for vehicles built
by union workers, and we think that is really important because
the reality is, is that auto jobs, auto manufacturing jobs
really helped establish manufacturing jobs as middle class jobs
some time ago. But that is really changing. It is really going
in the wrong direction. Adjusted for inflation, real wages have
dropped roughly 20 percent over the past 15 years for auto
workers and auto parts. So, we are not--a lot of the jobs are
not what they used to be. And a big way to change that is to
allow workers the free choice to join unions. It is true that
unionized workers comparative fields have a ten percent--
usually ten percent higher wages. So, I mean, there is serious
economic impacts for the workers for joining a union. And, one
thing that we have seen is that a lot of foreign-based
automakers who are unionized pretty much everywhere around the
world, when they come to the U.S. they end up being quite
opposed to unionization.
So, we need to do a few things in our view. One is, we need
to pass the Next Generation Fuels Act. We think that is going
to be helpful. We also need to move forward on these three
prongs in order for the EV transition to work. I mean, our view
is that the transition is--I mean, and that is what all the
analysts say, too, is that it is coming whether we like it or
not. So, it is better to be in the race and to have a strong
auto industry making EVs than not. And the only way that is
going to happen is if there is--with public policy as well as
the private investments.
So, I am very much looking forward to answering questions
and really appreciate the opportunity. Thanks again.
[The prepared statement of Mr. Nassar follows:]
Prepared Statement of Josh Nassar, Legislative Director, International
Union, United Automobile, Aerospace and Agricultural Implement
Workers of America, Washington, D.C.
Chairman Scott, Ranking Member Thompson, and Members of the
Committee, on behalf of the over one million active and retired members
of the International Union, United Automobile, Aerospace, and
Agricultural Implement Workers of America (UAW), UAW President Ray
Curry, and the UAW International Executive Board (IEB), I want to thank
you for the opportunity to share our perspective on the implications of
electric vehicle investments for agriculture and rural communities. It
is my honor to appear before you today.
Importance of the U.S. Motor Vehicle Industry
The United States' motor vehicle industry is advanced, competitive,
and a cornerstone of American manufacturing. The domestic vehicle
assembly and parts industries are vital to our manufacturing base, and
it is imperative that we stay strong and competitive now and into the
future.
A majority of our members and retirees work in or have retired from
the auto industry. They are directly impacted by decisions made in
Washington, D.C., and corporate board rooms regarding this critical
sector of our economy.
By extension, investments in motor vehicle manufacturing jobs
impact workers, their families, and communities. Over 900,000 people
work in the auto and auto parts manufacturing sectors.\1\ Of course,
the economic impact of the auto industry reaches far beyond the workers
employed at the plants and their families. It has been estimated by the
Center for Automotive Research that when jobs from other linked
industries are considered, the auto industry is responsible for over
7.25 million jobs nationwide.\2\ The long-term health of the industry
is critically important to both workers and the economy at large.
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\1\ Bureau of Labor Statistics, ``Automotive Industry: Employment,
Earnings, and Hours'', https://www.bls.gov/iag/tgs/iagauto.htm.
\2\ Hill, Kim, Deb Menk, Joshua Cregger, and Michael Schultz.
``Contribution of the Automotive Industry to the Economies of All Fifty
States and the United States.'' Center for Automotive Research. January
2015.
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Furthermore, auto manufacturing is not a regional issue and extends
far beyond the upper Midwest. For example, in recent months,
significant investments in motor vehicle and battery manufacturing have
been made in Tennessee, Georgia, and Kentucky.
The UAW supports a coordinated industrial policy centered on
maintaining and growing high-quality jobs in U.S. manufacturing while
combating climate change and advancing equity. As we work toward the
future of clean transportation, it will be critical to ensure this
transition benefits American workers, enhances U.S. competitiveness,
and promotes economic security. Unless comprehensive policies are
adopted which focus on raising standards for U.S. workers and boosting
domestic manufacturing, we will continue to fall behind in the
production of EVs and union jobs in the auto sector will be eroded even
further.
Union Difference
The difference between being in a union versus not being in a union
is significant. According to the Economic Policy Institute (EPI),
unionized workers earn on average 10.2% more than their non-union
counterparts.\3\ Union workers are more likely to have paid sick days
and health insurance compared to non-union workers. 94% of union
workers participate in a retirement plan compared with 67% of non-union
workers. Policies that strengthen labor standards and support workers'
right to collectively bargain is foundational to building a strong
middle class.
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\3\ Economic Policy Institute. Unions Help Reduce Disparities and
Strengthen Our Democracy, April 2021.
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Electric Vehicles (EVs) Are Coming
EV sales have grown steadily over the past decade, but they still
represent a fraction of vehicle sales. EVs and PHEVs (Plug-in Hybrids)
combined represent just 4% of U.S. auto sales in 2021.\4\ And EVs face
several hurdles to mass-adoption. EVs are more expensive to produce,
making them less profitable and dependent on consumer incentives. In
most parts of the country, EV charging infrastructure is woefully
inadequate, and the electrical grid is unprepared. And moreover,
consumers shopping for an EV face barriers in battery range and
charging speed, as well as a limited selection of models and segments.
To be clear, this transition will take time and will occur at different
rates throughout our country and world.
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\4\ Wards Intelligence. Jan. 2022. ``U.S. Light Vehicle Sales,
December 2021'': https://wardsintelligence.informa.com/WI966151/US-
Light-Vehicle-Sales-December-2021.
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The industry is preparing for EVs to be a much larger part of the
market going forward, both in the U.S. and abroad. Major automakers
around the world have announced several billion in EV investments and
ambitious new product plans and target dates. As automakers improve
technology, decrease battery costs, and produce at scale, EVs will
become more competitive with ICEs (Internal Combustion Engine). And in
the coming years, automakers plan to launch EVs in the segments that
are most popular with American consumers: CUVs, SUVs, and pickups.
Union workers must lead this transition and in fact, UAW members
are currently building the vehicles of the future. Our members
currently make advanced technology vehicles that include battery
electric (Chevy Bolt, GMC Hummer), plug-in hybrids (Jeep Wrangler PHEV,
Ford Escape PHEV), and autonomous vehicles (Cruise AV (Autonomous
Vehicle)). UAW employers have announced plans to make EVs and PHEVs at
UAW plants in a range of segments, including CUVs, SUVs, pickups, and
delivery vans. This year will also see production launches by several
start-ups. If new entrants are hostile to unions and provide subpar
wages & benefits, it will further erode job quality in the industry.
Electrification is not limited to the auto industry. The UAW also
represents over 15,000 workers who manufacture farm, construction, and
mining equipment. These manufacturers are also investing in future
technologies for electrification and autonomy, including those in the
agricultural equipment sector. For example, John Deere Senior Vice
President Pierre Guyot has said that ``John Deere is committed to a
future with zero emissions propulsion systems and is investing in and
developing technologies for batteries as a sole- or hybrid-propulsion
system for vehicles.'' \5\ Just last week, John Deere revealed a fully
autonomous tractor that will be available to farmers later this year
and is ready for mass production.\6\ The over 10,000 UAW members who
build John Deere equipment, most of whom are working and living in Iowa
and Illinois, are ready and able to build the latest agricultural
equipment that helps feed the nation. But we need policies that ensure
industry invests to produce advanced technologies domestically and
creates quality manufacturing jobs that sustain communities across the
country.
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\5\ https://www.deere.com/en/our-company/news-and-announcements/
newsroom/kreisel-announcement/.
\6\ https://www.deere.com/en/our-company/news-and-announcements/
news-releases/2022/agriculture/autonomous-tractor-reveal/.
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As the Committee is aware, climate change presents significant
challenges for the agricultural sector. A large body of scientific
research predicted for decades that climate change would increase the
number and strength of extreme weather and climate events such as heat
waves and droughts. Unfortunately, these predictions regarding climate
change are proving correct right before our eyes, and we all have a
responsibility to take action to mitigate its impacts. We need cleaner
and more efficient vehicles on the road and jobs building these cleaner
vehicles must pay family and community-sustaining wages and provide
benefits that workers can count on to care for themselves and their
loved ones.
The U.S. is far behind other nations in public and private
investments needed to make the U.S. a competitive player in vehicle
electrification. China has invested more than $60 billion to support EV
manufacturing. Chinese firms, either owned or supported by the Chinese
Government, currently produce 60% of passenger EVs sold around the
globe and produce almost 70% of battery cells.\7\ China also controls
some 80% of the supply of rare earth minerals--which are essential for
aerospace, defense, and EV production--and may impose export controls
on these vital materials.\8\ The European Union (EU) has established
the European Battery Alliance to promote the production of batteries
and key components within EU.\9\ South Korea is home to LG Chem, the
world's largest producer of lithium-ion batteries for electric
vehicles, with a 24.6% market share. The company has plans to triple
its battery production.\10\
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\7\ The New York Times, ``The U.S. Auto Industry Bets Its Future on
Batteries,'' February 16, 2021. The Auto Industry Bets Its Future on
Batteries--The New York Times (nytimes.com (https://www.nytimes.com/
2021/02/16/business/energy-environment/electric-car-batteries-
investment.html)).
\8\ Financial Times, China targets rare earth export curbs to
hobble U.S. defence industry, February 16, 2021. Available Online:
China targets rare earth export curbs to hobble U.S. defence industry--
Financial Times (ft.com).
\9\ European Battery Alliance, ``EBA 250,'' accessed Jan. 15, 2020.
Available online: www.eba250.com/about-EBA250?/cn-reloaded=1.
\10\ Reuters, ``LG Chem to Triple its EV Battery Production
Capacity,'' October 21, 2020. Available online: LG Chem to triple its
EV battery production capacity (autoblog.com (https://www.autoblog.com/
2020/10/21/lg-chem-to-triple-ev-battery-production/)).
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The global market is moving towards ever more efficient vehicles,
including hybrid and electric vehicles. Global electric car
registrations increased by 41% in 2020, despite the pandemic-related
worldwide downturn in car sales, in which global car sales dropped
6%.\11\ It has been projected that by 2040, over 50% of new car sales
globally will be electric.\12\ If the U.S. fails to make public
investments and adopt smart public policies to encourage and attract
investment in the growing electric vehicle market, companies will
locate production and supply facilities in countries that are making
these investments. The greener vehicles of the future are going to be
made somewhere and other countries are preparing for these innovative
technologies. We could see the U.S. auto industry fall behind on
advanced technology, hurting the American economy and American workers.
Ignoring these realities is not an option because it cedes the future
to other nations that have a significant auto manufacturing footprint.
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\11\ International Energy Agency, ``Global EV Outlook 2021.''
https://www.iea.org/reports/global-ev-outlook-2021.
\12\ BloombergNEF, ``Electric Vehicle Outlook 2020.'' https://
about.bnef.com/electric-vehicle-outlook/.
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We are at a pivotal crossroads as automakers transition many of
their fleets from gas- and diesel-powered vehicles to electric ones.
The shift to EVs cannot come at the expense of good wages and benefits
and it is critical that we do not leave workers behind as the industry
transitions to electrification.
The EV transition reinforces the continued importance of putting in
place policies that facilitate vehicle and parts production in the
United States and easing impediments to workers at non-union automakers
to organize. As the nation invests in a transition to innovative
technology, we must seize upon these opportunities to preserve and
increase quality jobs. We have an opportunity, right now, to ensure
that future EV investments incentivize production of EVs in the United
States, made by union workers.
A three-pronged approach is needed to achieve these goals including
robust investments in EV infrastructure such as charging stations:
supporting tax subsidies to incentivize consumers to purchase EV's; and
targeting investments towards retooling facilities. We commend Congress
and the Biden Administration for passing the bipartisan Infrastructure
Investment and Jobs Act (IIJA) which contains historic investments in
EV infrastructure including $7.5 billion for EV charger infrastructure,
$5 billion for EV school buses and $3 billion over 5 years for battery
processing. Furthermore, we commend the House of Representatives for
approving the Build Back Better Act (BBBA). The Build Back Better Act
includes the Kildee-Stabenow EV consumer tax credit which makes
historic investments in domestic electric vehicle production that are
good for the environment, our economy, and working families. IIJA and
BBBA, together, address all three prongs that are needed for a
successful transition. The UAW believes that government subsidies and
tax breaks must be paired with a commitment to locate these jobs in the
U.S. at comparable wages and benefits to the jobs they replace.
Fortunately, the Kildee-Stabenow amendment in the BBBA continues a
$7,000 consumer credit for EVs and adds a $4,500 bonus for autos
assembled in the U.S. by unionized workers as well as a $500 domestic
battery bonus. It is our hope that the Senate passes BBBA and maintains
this provision to reward good jobs.
Future of the EV Manufacturing in the United States
While EV sales have grown steadily over the past decade, but they
still represent a fraction of vehicle sales. EVs and PHEVs combined
represent just 4% of U.S. auto sales in 2021.\13\ And EVs face several
hurdles to mass-adoption. EVs are more expensive to produce, making
them less profitable and dependent on consumer incentives. In most
parts of the country, EV charging infrastructure is woefully
inadequate, and the electrical grid is unprepared. And consumers
shopping for an EV, face barriers in battery range and charging speed,
as well as a limited selection of models and segments.
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\13\ Wards Intelligence. Jan 2022. ``U.S. Light Vehicle Sales,
December 2021'': https://wardsintelligence.informa.com/WI966151/US-
Light-Vehicle-Sales-December-2021.
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Global Challenges
The ongoing pandemic has a direct impact on the topics before us
today. According to John Hopkins University, the U.S. now averages more
than 700,000 new COVID (coronavirus disease) cases per day, far more
than any previous point in the pandemic. By just April of last year,
more than 35% of the U.S. population had been infected by COVID-19,
putting the current death toll over 830,000 Americans.\14\ Of course,
the pandemic has impacted both production and demand. As we are all
painfully aware, the global coronavirus pandemic is by no means over
and will take many years until we fully appreciate the profound impact
it has had on our country and the world.
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\14\ ``COVID Tracker.'' Center for Disease Control, January 10,
2021.
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Regarding the motor vehicle sector, lack of resilience in our
global supply chains has painfully demonstrated that the slightest
disruption can have significant impacts on working people and the
economy. Our members have been severely impacted by the pandemic-driven
shortage of automotive-grade semiconductors. Production at numerous
U.S. plants have been idled and tens of thousands of workers have been
laid off, with ripple effects across the automotive value chain.
The current shortage is relevant to the discussion of electric
vehicles (EVs) and autonomous vehicles (AVs). EVs and AVs are heavily
reliant on semiconductors. It is estimated that an EV autonomous
vehicle will have over a thousand dollars' worth of semiconductors.
This increase in semiconductor usage comes at a time when U.S.
semiconductor manufacturing has been in decline. The total number of
U.S. fabrication plants have decreased from 123 in 2007 to 95,\15\
while the industry employs 100,000 fewer production workers than it did
at the turn of the century.\16\ Currently, U.S. manufacturers account
for only 13% of the global semiconductor supply. This is because the
U.S. is no longer attracting new fabs. In 2011, of 27 high-volume fabs
built worldwide, only one was in the U.S.; 18 were in China and four in
Taiwan. In 2018, 20 new fab projects were announced in China, with
total investment exceeding $10 billion.\17\
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\15\ MForesight, ``Manufacturing Prosperity: A Bold Strategy for
National Wealth and Security'', June 2018: http://mforesight.org/
download/7817/.
\16\ BLS, Quarterly Census of Employment and Wages (QCEW) for NAICS
334413, http://www.bls.gov/cew/.
\17\ MForesight, ``Manufacturing Prosperity: A Bold Strategy for
National Wealth and Security'', June 2018: http://mforesight.org/
download/7817/.
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We applaud Congress for passing the Creating Helpful Incentives to
Produce Semiconductors (CHIPS) for America Act in the FY 2021 National
Defense Authorization Act which included funding to address the
semiconductor shortage facing auto manufacturing, but more work
remains. We urge the House to pass the CHIPS for America Act provisions
from the U.S. Innovation and Competition Act (USICA), providing more
than $52 billion to fully implement this program aimed at spurring
domestic production of semiconductors that are crucial for auto
manufacturing and a host of other sectors.
Need to Create and Maintain Good Jobs
U.S. manufacturing workers face serious headwinds, including weak
labor laws that fail to protect workers' rights to join a union, bad
trade deals that put interests of investors before workers, and
misguided tax incentives that allow corporations to pay fewer U.S.
taxes on profits earned overseas than those earned within our borders
and some to pay no corporate taxes at all. Over the past fifteen years,
U.S. automotive production workers' wages have fallen significantly.
When adjusting for inflation, average hourly earnings for production
workers in auto assembly have declined by 21%, while wages in the auto
parts sector have declined by 19%.\18\ The status quo is unacceptable.
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\18\ Bureau of Labor Statistics. ``Average hourly earnings of
production and supervisory employees.'' Series CEU3133610008 &
CEU3133630008, Data from January 2006-January 2021. Adjusted using BLS
CPI Inflation Calculator.
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Labor law reform is desperately needed. In fact, the National Labor
Relations Act (NLRA) has not been strengthened since becoming law over
85 years ago. Our laws must ensure workers are able to collectively
bargain for better wages, safer worker conditions and a dignified
retirement. We urge the Senate to pass the Protecting the Right to
Organize (PRO) Act. The PRO ACT could help raise job standards in the
motor vehicle industry. We applaud the House for passing it in the
117th and 116th Congresses on a bipartisan basis. If signed into law,
the PRO Act will protect a worker's right to join a union by
strengthening penalties against corporations that violate workers'
rights, provide for mediation and arbitration of first contracts,
eliminate right to work laws, prohibit captive audience meetings, and
support workers' right to strike. Passing the PRO Act will go a long
way in strengthening outdated labor laws and rebuilding our nation's
middle class. We call on the Senate to swiftly pass the bill.
As Congress deliberates on legislation aimed at improving the
environment and ensuring that jobs of the future are good jobs, it is
incumbent to incorporate provisions related to shoring up domestic
supply chains and strengthening labor standards. Consumer and
deployment incentives must support domestic assembly and high domestic
content requirements. Lawmakers should include U.S. domestic content
requirements for key vehicle components, like those considered super-
core components in the USMCA (United States-Mexico-Canada Agreement),
focusing on domestic EV batteries, plug-in hybrid engines, hybrid
transmissions, and electric motors. Companies that fail to meet labor
standards and U.S. final assembly requirements will still be able to
sell their automobiles, they just should not get taxpayer assistance.
President Biden has rightfully prioritized buying American
products, made here by American workers by signing the Executive Order
to Strengthen Buy America provisions. We commend the Biden
Administration for emphasizing the importance of building out and re-
shore critical supply chains, including medical equipment,
semiconductors, energy and grid resilience technologies, key
electronics and related technologies, telecommunications
infrastructure, and key raw materials. These initiatives have the
potential to create new jobs and protect U.S. supply chains against
national security threats. We urge you to work with the Administration
to strengthen domestic supply chains and support U.S. made products.
Conclusion
We do not have to choose between protecting our environment and
economic prosperity. This is a false choice that hinders our ability to
tackle real dangers and build a better future. In fact, to effectively
combat climate change and strengthen our middle class, we must do both.
To lead the future, electric vehicles and other green technologies must
create good U.S. jobs where workers have a voice on the job. It is
important to ensure all manufacturing workers can join a union free
from intimidation by employers seeking to maintain the status quo.
The transition from traditional gas-powered engines will require
patience and public resources. Even with billions in planned
investments, auto companies are relying on public subsidies and other
policies to promote sales, transform production capacity, and speed up
profitability for EVs. Strategic government support is a crucial tool
for strengthening American innovation and manufacturing capacity. But
if the public is going to foot the bill, the public must get economic
benefits in return, in the form of domestic investments and quality
jobs. To make EVs work for American workers, we need policies that
promote domestic manufacturing and quality union jobs.
We stand ready to work with you and all other stakeholders to
ensure the transition is good for working people, the U.S. economy, and
our planet. Thank you for considering our views. I look forward to
answering your questions.
The Chairman. Thank you very much.
And now, Mr. Mills, you are recognized. You may need--oh,
go right ahead.
STATEMENT OF MARK P. MILLS, SENIOR FELLOW, MANHATTAN INSTITUTE,
CHEVY CHASE, MD
Mr. Mills. Thank you, Mr. Chairman, and good afternoon.
Thank you for the opportunity to testify.
As you probably know, my work focuses on technology
forecasting, so I would be remiss in not starting out by noting
that I just published a new book about America's broad-based
and exciting technology and economic future, with a subtitle,
The Roaring 2020s. So, you might imagine, I am pretty
optimistic about America's future.
But onto the subject today. As the Committee knows, so far
despite rapid growth in EV sales, batteries power only about
0.6 percent of the vehicles on America's roads, and it is at
least ten times lower than that in rural areas. So, the issue
is whether the rural/urban asymmetry is amenable to policies
that would incentivize greater rural EV use and, of course, at
what cost? Also relevant is whether or not greater EV use in
rural America would significantly impact global carbon dioxide
emissions.
So, let me focus on summarizing three key realities. First,
as great as the new EVs are, they still can't meet the overall
practical performance requirements, especially in rural areas.
The conventional wisdom is that consumers' reluctance to
embrace EVs in general, and especially for rural use, arises
primarily from so-called range anxiety, and of course, cost.
The former, it is argued, can be solved with more charging
stations; the latter, we are told, can be fixed with subsidies
that would soon become unnecessary because of expectations of
the inevitable decline in costs for batteries.
But the facts suggest otherwise. Most EVs today offer range
comparable to a conventional car, including the newly announced
GM offering and Ford's Lightning, both have 400 mile range
batteries. The practical problem is the time it takes to refuel
a battery. Instead of 5 minutes to fill up a pickup truck's
tank, a standard level to charge it takes about 10 hours. The
so-called super charger can drop that to 40 minutes, but that
is obviously still nearly ten times longer than normal. So,
providing the same consumer experience means installing at
least ten-fold more electric pumps, super chargers, than exist
as gas pumps. And the former super chargers cost about twice as
much as a gasoline pump. So, that 20-fold higher infrastructure
cost per consumer served is only part of the story. Super
chargers operate at about ten-fold higher power levels than
standard chargers, so the rural electrical distribution
infrastructure will have to be upgraded radically, and it is an
infrastructure that is already far more expensive per household
than in urban areas.
Then there are hidden costs. Of course, rural grid outages
are about 50 percent more frequent than in urban areas. Today,
a rural resident can ensure travel is possible during an
outage, whatever the cause of the outage, by spending a few
hundred dollars on enough gasoline storage capacity to fill up
a pickup truck's tank. But if a grid outage happened when,
let's say, a Ford Lightning is only half charged, that
homeowner will have to spend over $30,000 on a home-based
battery storage system that could hold enough backup power to
fill up just half of the pickup truck's battery.
So, that brings me to the assumption that EV subsidies will
become unnecessary because of the expectation that batteries
will soon become far cheaper. The fact is that the mass
adoption of EVs will dramatically stress global supply chains
and lead probably to higher, not lower, prices for batteries in
the coming years. The global plans to expand battery
production, along with solar and wind construction, are
parallel. Studies have shown, including from the IEA, that they
expect demand to increase from 400 percent to over 4,000
percent for the various critical minerals that are needed to
build all the planned hardware. On average, it is important to
note that compared to a gasoline vehicle, an EV entails at
least 1,000 percent increase in the overall tonnage of
materials that are extracted from the Earth to deliver the same
lifetime miles.
So, the growth in demand for materials will be far greater
right now than the rate at which the world's miners are
planning or likely able to supply, and keep in mind, the global
average to open a new mine is 16 years, and it is far longer in
the United States. So, in basic commodity economics, this
demand for EV battery minerals up strips supply, it will fuel a
price increase, not the decrease that is assumed by many
enthusiasts. Commodities alone comprise 60 to 70 percent of the
cost to fabricate a battery.
Even with energy mineral supply chain that is not yet fully
stressed, because remember, EVs still account for under five
percent of new vehicle purchases. Even then, the overall price
for the sort of suite of EV battery metals, the price for those
commodities is up 200 percent over the past 2 years. What that
has done is caused last year's lithium battery costs to decline
by barely six percent. The dramatic slowdown from sort of the
decadal trends, and the current forecast to see lithium battery
costs rise next year as commodity inflation continues.
So, the future price for batteries is now determined mainly
by the mining and the commodities markets. And it bears noting
that most of the primary minerals and the chemical processing
of those minerals takes place overseas. The issue of foreign
dependencies on energy materials used to be something that
Congress worried about. Today, Chinese firms dominate the
critical mineral mining and processing supply chains, and the
majority of growth in the mining and processing is expected
offshore. Just for the record, the U.S. depends on imports for
100 percent of some 17 critical minerals and for over half of
the supply of another 28 minerals. It goes without saying that
the inverse is the case for----
The Chairman. Mr. Mills, your time is expiring.
Mr. Mills. Oh, let me just say as a final point that the
data shows that EVs will only have a trivial impact in global
oil use, maybe three percent reduction of rural oil use, and in
fact, potentially lead to increased carbon dioxide emissions
when the fabrication of batteries is counted.
Thank you.
[The prepared statement of Mr. Mills follows:]
Prepared Statement of Mark P. Mills, Senior Fellow, Manhattan
Institute, Chevy Chase, MD
Good afternoon. Thank you for the opportunity to testify. I'm a
Senior Fellow at the Manhattan Institute where I focus on science,
technology, and energy issues. I am also a Faculty Fellow at the
McCormick School of Engineering at Northwestern University where my
focus is on supply chain systems and future manufacturing technologies.
And, for the record, I'm a strategic partner in a venture fund focused
on software startups in energy.
Since the purpose of this hearing is to explore actions that might
be directed at ``the needed infrastructure and possible impediments to
electric vehicle (EV) adoption in rural America,'' permit me to
highlight some of the infrastructure realities and some of the
impediments emerging from the underlying engineering and physics of
EVs, in particular for rural markets.
I should begin by pointing out the obvious. Without regard to
government interventions or incentives, we will see a lot more EVs on
roads in the future. Electric cars are now a viable consumer product.
This transformation happened because of the combination of the
unheralded advances in high-power semiconductors along with the far
more heralded, forty-year-ago, invention of lithium battery chemistry.
It bears noting that these twin technology revolutions emerged without
government intervention or policies. The ultimate extent to which EVs
can displace internal combustion engines, and how soon, will be
determined, ultimately, by the limits of the technologies that now
exist.
As the Committee knows, while in recent years we've seen rapid
growth in consumer purchases of EVs, the total number of EVs in use
today remains, overall, at about a 0.6% share of all light duty
vehicles on America's roads. And, relevant to this hearing, the EV
share of vehicles in rural America is at least ten times lower than
that. At issue is whether that rural-urban asymmetry is amenable to
policies that would incentivize greater rural EV penetration, and at
what cost. Also relevant to this exploration is whether subsidizing
greater EV use in rural America would make a significant difference in
global carbon dioxide emissions. I'll focus on three key realities.
EVs still can't meet overall practical performance requirements,
especially in rural areas.
It is well-known and obvious that rural residents drive more miles,
on average about 40% \1\ more per person per year than urban drivers.
And similarly well-known is the fact that pickup trucks make up about
40% \2\ of the share of new car purchases in rural areas, compared to a
20% share nationally. Manufacturers are rushing to offer all-electric
pickups. Rural consumers will soon have that option.
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\1\ https://vtc.rutgers.edu/wp-content/uploads/2014/04/
Articles.Urban-Rural_differences.pdf.
\2\ https://www.eesi.org/articles/view/beyond-cities-breaking-
through-barriers-to-rural-electric-vehicle-adoption.
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The conventional wisdom has it that consumer reluctance to embrace
EVs in general, and especially in rural areas, arises primarily from
so-called ``range anxiety,'' and cost. The former, it is commonly
argued, can be solved with more charging stations. The latter we're
told can be alleviated with subsidies while awaiting ostensibly
inevitable declines in costs. The facts, however, suggest otherwise.
Most EVs available today, or announced, offer a range comparable to
a conventional car's full gasoline tank, including for example the new
Ford F-150 Lightning pickup truck, as well as GM's emerging offering.
Both the latter have 400 mile range batteries. The practical problem is
the time it takes to refuel a battery. While that's an issue that can
be ameliorated, solutions come at great cost both for the consumer and
for the electrical infrastructure. And in the time frames proposed in
aspirational policies, there's no visible path to refueling a battery
even close to as fast as filling up a gasoline tank.
A standard gas station pump can fill a 26 gallon F-150 fuel tank in
about 5 minutes. Meanwhile, charging an EV with a standard Level 2
charger (which constitutes the majority of both public and home
chargers today) takes about 10 hours.\3\ A so-called supercharger can
drop that time to 40 minutes, which is still nearly ten times longer
than filling up a gas tank. Set aside the inconvenience for most
drivers, most of the time, of a 40 minute fill-up, using superchargers
has critical infrastructure implications. In order for an EV filling
station to provide the same functional utility consumers experience for
their vehicles today, far more electric `pumps' will be needed than gas
pumps; maybe ten-fold more. And the capital cost \4\ of a supercharger
is roughly double the cost of a gasoline \5\ pump. Thus, in rough
terms, that constitutes a 20-fold higher infrastructure cost per
consumer served to provide the same functional utility. That cost
differential is anchored in basic electric equipment realities that are
not subject to profound or rapid cost reductions.
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\3\ https://www.forbes.com/wheels/news/2022-ford-f-150-lightning-
ev-pickup-debuts-300-mile-range-priced-at-40k/.
\4\ https://blog.carvana.com/2021/07/how-much-does-it-cost-to-
install-an-ev-charger/.
\5\ https://www.commtank.com/ufaqs/how-much-does-a-gas-station-
fuel-pump-cost/.
---------------------------------------------------------------------------
Then there are the incremental costs for the local electrical
distribution infrastructure. In order to achieve a faster charge rate,
superchargers operate at about a ten-fold higher power level.
Supporting that kind of power, especially for multiple superchargers
operating simultaneously, will require a radical and expensive upgrade
to the existing rural power distribution infrastructure. Such upgrade
costs are often ignored but are unavoidable and particularly impactful
in rural areas where distribution infrastructure costs are far greater
per household than in urban areas.
It is very unlikely that a significant share of either rural or
urban households will spend the 20-fold higher costs to have a so-
called Level 3 superchargers. The more common Level 2 chargers that
take overnight to refill pose other practical challenges in rural areas
where the frequency of grid outages is, on average, about 50% \6\
higher than for urban and suburban grids. In order to ensure the
ability to travel during outages--which, if caused by weather or
natural disasters, is even more important--rural homeowners using
gasoline vehicles can spend a few hundred dollars on a storage tank
that can hold enough gasoline to fill an F150's tank. But in the event
of a grid outage with an F150 Lightning that's, say, only half charged,
one would need to have an onsite a Generac or Tesla Powerwall with
enough stored power to fill up the pickup's battery. A Powerwall with
that much storage--half a `tank'--costs over $30,000.\7\ The other
alternative for that rural homeowner of course would be to keep a small
tank of fuel on hand and a $5,000 generator to charge the truck.
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\6\ https://www.eaton.com/content/dam/eaton/products/medium-
voltage-power-distribution-control-systems/reclosers/distribution-
system-reliability-and-outage-rate-analysis-td280026en.pdf.
\7\ https://sunwatts.com/13-5-kwh-generac-pwrcell-energy-storage-
system/.
---------------------------------------------------------------------------
Finally, none of this says anything about the practical utility of
a truck with a fuel system--the battery--that weighs 1 ton instead of
150 pounds. The latter is the weight of full gasoline tank for a
conventional truck with the same range. Of course, for rural homeowners
with two vehicles, it is possible many people would choose to own
second vehicle with limited emergency fuel capability, and more limited
cargo capacity, if there were no cost penalty because of subsidies.
Which brings us to the ubiquitous policy assumption that EV
subsidies can decline and soon become unnecessary because of the
expectation that batteries will soon become far cheaper. Whether costs
decline at the rate assumed, or at all, is an issue anchored in supply
chains.
Mass adoption of EVs will stress global supply chains and lead to
higher, not lower, prices.
The energy transition, as it's conceived today will create an
upstream demand for tens of gigatons of materials to be mined in order
to fabricate car batteries. In addition, gigatons more will be needed
for the grid storage batteries contemplated, and yet more to build
solar and wind machines. Using batteries entails at least a 1,000%
increase in the tonnage of materials extracted from the earth to
deliver the same mile driven by a gasoline vehicle. Given the
integration of the transition proposals, it is relevant that a similar
increase in materials is associated with using solar and wind to
replace hydrocarbons to make the same unit of electricity to charge the
battery. The IEA has observed that the transition is a ``shift from a
fuel-intensive to a material-intensive energy system.'' This
unavoidable, physical reality has profound implications for costs, not
to mention the implications in environmental and geopolitical domains.
So far, the upstream, energy minerals supply chain has yet to be
fully stressed with EVs still accounting for well below 5% of new
vehicle purchases. The increase in demand for materials to build EVs at
the rate proposed by governments around the world will be far greater
than the rate at which the world's miners are planning, or likely able
to expand supply.
The contemplated increase in solar/wind/battery construction is
estimated to create a jump in demand for the various critical energy
minerals from 400% to over 4,000%. In a nearly 300 page report \8\
issued last year by the IEA, that agency's analysts observed that an
energy transition plan that is more ambitious than implied by the Paris
Accord, but one that remains far short of eliminating hydrocarbons,
would increase demand for minerals such as lithium, graphite, nickel
and cobalt rare earths by 4,200%, 2,500%, 1,900% and 700%,
respectively, by 2040.
---------------------------------------------------------------------------
\8\ https://www.iea.org/reports/the-role-of-critical-minerals-in-
clean-energy-transitions.
---------------------------------------------------------------------------
The fact that an EV uses, for example, about 300 to 400% more
copper than a conventional car has yet to impact global supply chain
because EVs still account for such a small share of global auto
production. Producing EVs at scale, along with plans for grid batteries
as well as for wind and solar machines, will push the ``clean energy''
sector up to consuming over half of all global copper (from today's 20%
level). For nickel and cobalt, to note two other relevant minerals,
energy transition aspirations will push \9\ clean energy use of those
two metals up from a negligible share today of global demand for all
other purposes, to 60% and 70%, respectively, of all demand.
---------------------------------------------------------------------------
\9\ https://www.iea.org/reports/the-role-of-critical-minerals-in-
clean-energy-transitions.
---------------------------------------------------------------------------
Relevant to the transportation sector alone is a recent analysis
from Wood Mackenzie of the mineral demands to fabricate automotive
batteries to meet the goal to have EVs account for \2/3\ of all new car
purchases by 2030. Such a goal would create a demand for lithium,
nickel and copper, requiring dozens of new mines to be opened, before
2030, each the size of the world's biggest in each category today. Such
a possibility is fantastical considering, as the IEA reported, that the
global average is 16 years to open a new mine. That average timeline is
far longer in the U.S., and often infinite.
As demand for EV battery minerals rises--and that increase occurs
contemporaneously with rising demand for minerals for grid batteries,
and for solar and wind machines--it will inevitably lead to price
increases in those commodity markets, not the decreases that are
assumed in nearly all forecasts. Few analysts seemed to have
incorporated that fact in the assumptions about the future cost of the
necessary minerals for a far producing a far greater quantity of
batteries.
The commodity materials alone comprise 60[%] to 70% of the cost to
produce a battery. This is a testament to the incredible progress on
reducing costs in the engineering and manufacturing of battery cells
and systems. But it also means that modest rises in commodity prices
can now wipe out future gains in reducing the far smaller share of
costs associated with the electronics and labor. The IEA has noted as
much in its report, concluding that future mineral price escalations
could ``eat up the anticipated'' reductions in manufacturing costs
expected from the ``learning effects'' in further scaling up of battery
production.
It is notable that 2021 saw a rise in commodity material costs, and
that lead directly to a dramatic slow-down in the decadal trend of
declining battery costs. Lithium battery costs declined by only 6% last
year. And the current forecast \10\ is for batteries to rise in cost in
2022, again because of the ongoing increases in materials commodities
prices. The overall price index \11\ for the suite of EV battery metals
is up some 200% over the past 2 years. And that trend comes with EVs
still at only about 5% of new car sales. The future price direction for
batteries is now determined mainly by the mining and commodities
markets and not by the manufacturing.
---------------------------------------------------------------------------
\10\ https://about.bnef.com/blog/battery-pack-prices-fall-to-an-
average-of-132-kwh-but-rising-commodity-prices-start-to-bite/.
\11\ https://www.mining.com/mining-com-launches-ev-battery-metals-
index/.
---------------------------------------------------------------------------
Commodity inflation has begun to escalate the cost to build solar
and wind machines as well, also slowing or reversing long-run cost
declines. Solar module prices were up nearly 50% \12\ last year over
2020. Progress in manufacturing efficacy has reduced those costs so
much that commodity inputs now make up about 70% \13\ of the cost of
solar modules.
---------------------------------------------------------------------------
\12\ https://www.pv-magazine.com/2022/01/04/higher-pv-module-
prices-may-point-to-stable-demand-and-more-sustainable-pricing-trends/.
\13\ https://www.pv-magazine.com/2021/12/11/the-weekend-read-solar-
pv-development-disrupted/.
---------------------------------------------------------------------------
Producers do respond to higher prices by adding more supply, in
every business. But for infrastructure-scale supplies of minerals and
metals it takes at least a decade, under ideal circumstances, from
discovery and decision to see production emerge from new mines. And
even then, expansion typically begins a while after producers come to
believe that prices will stay escalated long enough to recover multi-
billion-dollar investments.
Finally, it bears noting that most of the primary minerals and the
chemical processing of those minerals takes place overseas. The issue
of foreign dependencies on energy materials used to be something that
Congress worried about because of both practical supply chain exposures
and geopolitical challenges. The U.S. is today dependent \14\ on
imports for 100% of some 17 critical minerals and, for 28 others, net
imports account for more than half of existing domestic demand.
Insufficient attention has been afforded the impact of accelerating
adoption of EVs and the resultant realignments of energy-material
supply chains. Shifting the United States from hydrocarbon energy self-
sufficiency to energy-mineral dependency entails some obvious
consequences, and almost certainly some wildcards that are not obvious
today.
---------------------------------------------------------------------------
\14\ https://pubs.er.usgs.gov/publication/mcs2020.
---------------------------------------------------------------------------
As it stands today, Chinese firms dominate the production and
processing of many critical rare earth elements, and nearly all the
growth in mining is expected offshore, increasingly in fragile,
biodiverse wilderness areas. More mining can be done in an
environmentally responsible way, but so far there's little evidence of
support for a massive expansion of new mines in America. The path the
United States is proposing with EVs is the practical, economic, and
geopolitical equivalent of building conventional cars in America but
importing nearly 100% of all gasoline.
This brings me to my final point regarding the off-shoring of
energy materials. Mining and processing minerals is an energy-intensive
activity that is dominated by the use of fuel-burning machinery. Since
the primary, if not sole motivation for incentivizing the purchase of
EVs is to reduce carbon dioxide emissions, there has been insufficient
attention afforded the issue of the offshore and out-of-sight emissions
from accessing, processing, and transporting all the associated
materials to fabricate the batteries themselves.
EVs will reduce oil use only slightly, and have an even smaller
impact on carbon dioxide emissions.
The question of how much carbon dioxide--as opposed to how much
oil--is eliminated by using an EV is not one solely about counting the
emissions resulting from producing the electricity to charge the
battery. Instead, it's dominated by what know about the ``embodied''
emissions arising from the labyrinthine supply chains to obtain and
process all the materials needed to fabricate batteries.
When considering all the factors in mining the necessary minerals
to fabricate a battery, fabricating a single 1 ton EV battery for a
pickup truck can entail digging up and moving a total of about 500 tons
of earth. After that, an aggregate total of roughly 100 tons of ore are
transported and processed to separate out the targeted minerals. That's
where all the hidden, upstream energy and emissions come from.
As a benchmark, the technical literature \15\ shows that the
embodied \16\ energy associated with all that industrial activity
ranges from two to six barrels of oil (in energy-equivalent terms)
needed \17\ to fabricate a battery that can store the energy-equivalent
of 1 gallon of gasoline.
---------------------------------------------------------------------------
\15\ https://kundoc.com/pdf-the-environmental-impact-of-li-ion-
batteries-and-the-role-of-key-parameters-a-re.html.
\16\ https://www.sciencedirect.com/science/article/pii/
S0306261917305433.
\17\ https://www.mdpi.com/2313-0105/5/2/48.
---------------------------------------------------------------------------
Embodied emissions can be difficult to accurately quantify. And
unlike the petroleum fuel cycle, nowhere are there more complexities
and uncertainties than with EVs. For example, one review \18\ of fifty
academic studies found estimates for embodied emissions to fabricate a
single EV battery ranged from a low of about 8 tons to as high as 20
tons of CO2. And that's for a battery that is half the size
of what is used in an electric pickup truck. The high end of that
ranges is nearly as much CO2 as is produced by the lifetime
of fuel burned by an efficient conventional car. Again, that's before
the EV is delivered to a customer and driven its first mile and does
not include emissions associated with producing the electricity to
charge the battery.
---------------------------------------------------------------------------
\18\ https://www.mdpi.com/1996-1073/13/23/6345.
---------------------------------------------------------------------------
The uncertainties come from inherent--and likely unresolvable--
variabilities in both the quantity and type of energy used in the
battery fuel cycle with factors that depend on geography and process
choices, many of which are proprietary. Thus, any calculation or claim
about emissions saved by using an EV is necessarily an estimate based
on myriad assumptions.
The embodied energy is also impacted by a mine's location,
something that is in theory knowable today but is a guessing-game
regarding the future. Remote mining sites typically involve more
trucking and depend on more off-grid electricity, the latter commonly
supplied by diesel generators. As it stands today, the mineral sector
alone accounts for nearly 40% \19\ of global industrial energy use. And
over \1/2\ of the world's batteries or the key battery chemicals are
produced in Asia with its coal-dominated electric grids. Despite hopes
for more factories in Europe and North America, every forecast sees
Asia \20\ utterly dominating that supply chain for a long time, a part
of the supply chain where coal produces over half of the electricity
used.
---------------------------------------------------------------------------
\19\ https://discovery.ucl.ac.uk/id/eprint/1528681/.
\20\ https://www.woodmac.com/press-releases/global-lithium-ion-
cell-manufacturing-capacity-to-quadruple-to-1.3-twh-by-2030/.
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Some forecasts of emissions savings from EVs explicitly \21\ assume
\22\ that the future battery supply chain will be located \23\ in the
country where the EVs operate. One widely cited analysis \24\ assumed
aluminum demand for U.S. EVs would be met by domestic smelters and
powered mainly from hydro dams. While that may be theoretically
possible, it doesn't reflect reality. The U.S., for example, produces
just 6% \25\ of global aluminum. If one assumes instead the industrial
processes are located in Asia, the calculated lifecycle emissions are
150% \26\ higher.
---------------------------------------------------------------------------
\21\ https://theicct.org/sites/default/files/publications/Global-
LCA-passenger-cars-jul2021_0.pdf.
\22\ https://link.springer.com/content/pdf/10.1007/s11027-019-
09869-2.pdf.
\23\ https://www.mdpi.com/2313-0105/5/2/48.
\24\ https://www.mdpi.com/2313-0105/5/2/48.
\25\ https://www.world-aluminium.org/statistics/.
\26\ https://link.springer.com/content/pdf/10.1007/s11027-019-
09869-2.pdf.
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For EV carbon accounting, the problem is that there are no
reporting mechanisms or standards equivalent to the transparency with
which petroleum is obtained, refined, and used. Researchers \27\ are
aware of this issue, even if concerns don't show up in popularized
claims. One often finds cautionary statements such \28\ as a ``greater
understanding of the energy required to manufacture Li-ion battery
cells is crucial for properly assessing the environmental implications
of a rapidly increasing use of Li-ion batteries.'' Or in another paper:
\29\ ``Unfortunately, industry data for the rest of the battery
materials remain meager to nonexistent, forcing LCA [lifecycle
analysis] researchers to resort to engineering calculations or
approximations to fill the data gaps.''
---------------------------------------------------------------------------
\27\ https://www.ivl.se/download/18.14d7b12e16e3c5c36271070/
1574923989017/C444.pdf.
\28\ https://iopscience.iop.org/article/10.1088/2515-7620/
ab5e1e#fnref-ercab5e1ebib8.
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As the IEA report also observes, the direction of global mining is
toward a higher ``emissions intensity,'' because the energy-use-per-
pound of mining is rising because of long-standing declines in ore
grades. If mineral demands accelerate, miners will necessarily chase
ever lower grade ores, and increasingly in more remote locations. The
IEA sees, for example, a 300% to 600% increase in emissions to produce
each pound of lithium and nickel respectively.
Those realities mean that as the world's mineral supply chain
expands to support the production of tens of millions more EVs, the
future embodied emissions could easily mean there are nearly trivial
decreases--and even an increase--in overall transportation carbon
dioxide emissions.
For the record, a world going from today's ten million to having
500 million EVs on the roads would eliminate only about 15% of world
oil use. And, bringing the realities back to rural America: if half of
all rural homeowners could be induced to replace their second vehicle
with an electric pickup truck, that would reduce U.S. oil consumption
by barely 3%, and world oil consumption by about 0.5%. And it would
have even less impact, perhaps none, on global carbon dioxide
emissions.
The Chairman. Thank you very much.
At this time, Members will be recognized for questions in
order of seniority, alternating between Majority and Minority
Members. You will be recognized for 5 minutes each in order to
allow us to get in as many questions as possible. And please,
keep your microphones muted until you are recognized in order
to minimize background noise.
I now recognize myself for 5 minutes.
Mr. David Strickland with General Motors, Mr. Strickland,
you mention in your testimony plans for General Motors to bring
20 different--let me remind Members, please, mute yourselves.
Thank you very much.
And now, Mr. Strickland, you mention in your testimony
plans for General Motors to bring 20 different models to the
United States auto market by 2025, including your announcement
last week for a new electric pickup truck. Let me ask you, how
are the needs of rural America taken into consideration when
you at General Motors were designing these vehicles?
Mr. Strickland. Mr. Chairman, we have a responsibility to
continue to fulfill our customers and the market that we serve,
and as America's largest automaker, we really do embrace the
fact of servicing a full line of products and capabilities.
As an example, the Silverado EV has a range of 400 miles,
and it has 664 horsepower, which is comparable performance-wise
to what you see in a dealership today for a Silverado. We have
every expectation to be able to meet the wants and the needs of
rural America and for farmers to have that same capability.
In addition to that you gain some advantages with an
electric vehicle, because it also, out in the field--if it
comes an individual power supply or power plant for other farm
instruments and tools that may need to be charged. So, in
addition to having the typical capability that you are looking
for, there is actually some advantages it has as well.
The Chairman. Thank you very much. I really appreciate
that.
Now, to you, Mr. Lincoln Wood, with Southern Company. How
prepared is the electric grid to handle an influx of EV--and
again, Members, mute your phones. Thank you. How prepared is
the electric grid to handle this influx of EV users? What steps
are our electric utility companies taking to prepare for
additional demand on the grid, particularly in regards to
outdated infrastructure in rural areas?
Mr. Wood. Thank you, Chairman Scott, for the question.
First, utilities have a track record of integrating
technology over the past 50, 60 years, air conditioning comes
to mind of integrating that technology into our electric grid
successfully. In particular at Georgia Power, we have a $1.3
billion grid investment plan, and that is looking at the grid
holistically to figure out how we can increase its reliability,
because electric vehicles are not the only reason to make
investments into the grid. Whether it be severe weather,
whether it be cyber concerns, renewables or energy efficiency,
utilities are constantly looking at the electric grid to
upgrade or make it more resilient for all these reasons.
But a couple specific activities that we are working on,
automated line devices so that we can isolate the source of an
outage and make it a smaller impact to the grid itself. It
could be maintenance at a substation or rebuilding the entire
substation, if needed, to increase reliability. It could be
even for our transmission system, even rebuilding the
structures if those are needed. It could be adding alternate
circuits--go ahead. I see you have a question.
The Chairman. Yes. I have a minute left, and I have another
important question. However, we will make sure we get in touch
with you to get your full answer. All right.
Mr. Wood. Of course.
The Chairman. It is very important for us to have the UAW
here, this distinguished member of that very distinguished
union. They provide the workers. They are the ones that put it
together.
So, Mr. Nassar, what will be the impact in terms of jobs
for your union members?
Mr. Nassar. Well, that really depends on how successful the
EV transition is and how many people are buying them, and how
that is going to work out as far as the marketplace. It is also
dependent on what we are going to do as far as the battery
manufacturing. Are we going to do the manufacturing here in the
U.S.? So, there are quite a few open questions about what kind
of jobs will be produced by this changeover to EVs.
And a lot of it has to do also with our economic policy. I
want to point out that we have had big problems throughout
manufacturing, many industries, because of a semiconductor
shortage, which was, in our opinion, a real self-inflicted
wound because we really didn't have policies to make sure that
production was here.
So, we encourage the House to pass portions of USICA (S.
1260, United States Innovation and Competition Act of 2021)
that has--for the semiconductors, but overall job impact, it is
really going to be dependent on if workers have a voice, and
what kind of policies we have to support the transition.
The Chairman. Thank you very much.
The gentleman from Georgia, Mr. Austin Scott, is recognized
for 5 minutes.
Mr. Austin Scott of Georgia. Thank you, Mr. Chairman, and
my first question is for you, Mr. Strickland.
The vehicle behind you will be available in late 2023, is
that correct, fall of 2023?
Mr. Strickland. Yes, sir, it is. Yes, sir.
Mr. Austin Scott of Georgia. For most of us in rural
America, we don't just use our vehicles to move from place to
place. They are tools, I mean, for us, and if we weigh them
down towing trailers and other things, certainly that impacts
the fuel economy that we get in a normal pickup truck. What
does that do to the range of the vehicle? I would assume it
would reduce it, so if I am hauling a trailer, do I go from 400
to 300 miles? What is the impact on the range?
Mr. Strickland. Well, sir, it certainly can't defy the laws
of physics, but just like it impacts the fuel economy of the
internal combustion engine vehicle. We are working very hard on
new battery technology. Our old TM platform is one of the
foundational things that we are doing to--not only are we very
excited about the performance long-term, but it is going to get
better. And I think when you think iteratively about the
technology, we are going to have to recognize the fact that
these are working vehicles. We supply America's work truck, and
so yes, absolutely. We have to sort of think through those
things, but that is very much in our engineering planning and
we are very bullish on the opportunity to be able to provide a
vehicle that is a true working vehicle for farmers and
everybody else.
Mr. Austin Scott of Georgia. And if I use a super charger
to charge the vehicle, what does it cost me to charge it,
approximately?
Mr. Strickland. I have to get to you on that answer. Yes,
sir, I don't know the exact answer to how much for a super
charger, but I will certainly get back to you on the record.
[The information referred to is located on p. 109.]
Mr. Austin Scott of Georgia. Well, thank you for that. That
is one of the questions I have is what does it cost to
recharge, especially if we are using a super charger.
I can see where electric vehicles would be very valuable
for people who just need a daily vehicle to commute. They start
and stop at the same place every time. For some of us who are
on the road significantly more, I think that we will probably
stick with the internal combustion engines for the foreseeable
future.
I am concerned, as Mr. Wood talked about becoming more and
more dependent on China with regard to natural resources. Mr.
Wood--I am sorry, it was not Mr. Wood that said that. It was
Mr. Mills who was talking about that. So, Mr. Mills, the rare
earth elements, a lot of them were mined from the Middle East
and from Africa, if I am not mistaken, but the mines are
controlled by China. Could you expand on where the raw
materials are mined and how China has embedded themselves in
the supply chain?
Mr. Mills. Certainly, thanks for the question.
First, the rare earth minerals, specifically China has
about a 90 percent global market dominance on the critical
minerals that are not called rare earths, this would be nickel,
cobalt, and so forth. So, China has a market dominance in
refining those materials, like carbon and graphite and cobalt.
Russia is a big player in nickel. South American firms are,
African firms. China is one of the largest investors globally,
particularly in Africa in mines, and in the processing
industries that are associated with taking the raw ore and
turning it into useful minerals. So, it is a completely
focused--they are an OPEC of battery minerals. Instead of a big
portfolio of countries, you would have just three countries.
Fortunately, a couple of them included are France and Canada--
being a Canadian, I am happy to say that--and of course,
Australia, but their market share is very small compared to the
rest of the world.
Mr. Austin Scott of Georgia. So, Mr. Laughridge, you drove
from Atlanta to D.C. in an electric vehicle, is that correct?
Mr. Laughridge. I believe that was----
Mr. Wood. No, that was me, Lincoln Wood.
Mr. Austin Scott of Georgia. And so, how many times did you
have to recharge on the way?
Mr. Wood. Four.
Mr. Austin Scott of Georgia. Four, okay, and how long did
it take you each time to recharge?
Mr. Wood. Half an hour.
Mr. Austin Scott of Georgia. Half an hour, and what did it
cost for a recharge?
Mr. Wood. In this particular model, it was free.
Mr. Austin Scott of Georgia. It was free to recharge. You
expect that would be the trend, going forward?
Mr. Wood. I cannot say, but it was offered in this
particular model for free.
Mr. Austin Scott of Georgia. To recharge. Where did you
recharge?
Mr. Wood. Two of them were actually at Sheetz stations, and
then two were just in the community based on--one was in Glen
Allen, Virginia at a Target.
The Chairman. Mr. Scott, your time----
Mr. Austin Scott of Georgia. My time has expired. Thank
you, Mr. Chairman.
The Chairman. Yes.
And now, I recognize the gentlewoman from North Carolina,
Ms. Adams, who is also the Vice Chair of our Committee, 5
minutes.
Ms. Adams. Thank you, Mr. Chairman. Ranking Member, thank
you as well for hosting today's hearing, and my thanks as well
to the witnesses for their testimony.
The climate crisis presents a significant challenge to
everyone, not just a select few. And so, as we continue to
transition towards clean energy and transportation, we must
focus on equitable distribution of the charging infrastructure
and not forget our rural and traditionally underserved
communities. Which is why I applaud my colleagues and the Biden
Administration for enacting the bipartisan Infrastructure
Investment and Jobs Act (Pub. L. 117-58). This bill will fight
the climate crisis and advance equality, while also creating
high quality U.S. manufacturing jobs.
My question, first of all, Mr. Strickland. Rural drivers
often have different driving needs than their urban
counterparts. They need heavy duty vehicles such as utility
vans or trucks with hauling capacity, and they drive longer
distances.
So, Mr. Strickland, how is GM taking that into account as
it transitions to electric vehicles?
Mr. Strickland. Ms. Adams, again, we have focused on being
a full line manufacturer across the range of vehicles that we
currently provide, including medium-duty and heavy-duty
vehicles in the pickup line, and we also have a partnership
with BrightDrop, which provides commercial vehicles as well.
The goal once again--and as you alluded to for the IIJA, is
being able to have the money for the infrastructure bill that
will be very, very important to being able to have the
resources to be able to provide consumer incentives. And being
able to think thoughtfully about how we implement charging
strategies for rural communities, and those are all incredibly
important. And we are looking forward to working with you and
the rest of the Committee Members on hopefully getting that
money distributed, and then, once again, being able to port
rural communities to not only the vehicles that they need, but
also the ability to charge them in a thoughtful way.
Ms. Adams. Okay. Well, thank you.
I will follow up with what can we do as Congress to ensure
socially disadvantaged farmers and ranchers have the access to
electric vehicles and charging stations? Did you want to
expound on that anymore?
Mr. Strickland. Oh, yes, ma'am. Absolutely. One of the
things that we are working on, and we have a climate equity
fund, which is providing $25 million to actually support the
ability to deal with--to disadvantaged communities and
communities that are frankly electric deserts. So, it isn't
just simply working with our partners and providing charging
stations, but it is making that investment in communities to
make sure that that $25 million--and I am sure it will be more
as the years go on for us--to be able to address those social
gaps and those disparate impacts for folks that don't have
those opportunities. We are very committed, as we said, to make
sure that everybody comes along for this journey.
Ms. Adams. Right.
Mr. Strickland. And we have to pay attention to those
communities especially.
Ms. Adams. Okay.
Mr. Laughridge, my State, North Carolina, currently falls
behind other parts of the country when it come to the adoption
of electric vehicles. Drivers are concerned with charging
barriers and limited range of the vehicles. Have you seen a
shift in the knowledge of or added toward electric vehicles
when interacting with consumers at your dealerships, and what
are the most common misperceptions, and what do you foresee as
the biggest barrier for consumers to switch to electric
vehicles?
Mr. Laughridge. Thank you, Representative Adams, for the
question.
To go to the last part of your question, the barriers. The
biggest barrier we see is education. So, part of what I believe
is the essential part of dealerships being involved in
distributing the EVs is educating the customer about their
needs and assessments of what type of vehicle that they would
want to buy, whether EV is the proper vehicle or internal
combustion engines is the proper vehicle.
But we are all in, in making sure that the customer gets
the availability, the affordable pricing, and make sure that we
are able to give them the correct information that fits them
and their family's needs.
Ms. Adams. Well, thank you.
Very quickly, Mr. Mills, what do you suggest we do to lower
carbon dioxide emissions?
Mr. Mills. Thank you, Madam Congressman.
I think if we are serious about lowering the emissions, the
cheapest, fastest way, if we want to spend Congressional money
on subsidies, would be to incentivize the purchase of far more
efficient internal combustion engines. It is much cheaper, much
faster, and easy to document. And we know that all the
automakers make pickup trucks, full size trucks that are close
to 50 percent more fuel efficient than their sort of low
average.
So, it would be a very fast way to do it, much, much
cheaper, and easy to document, frankly.
Ms. Adams. Great, thank you.
The Chairman. The gentlelady's time has expired.
Ms. Adams. Mr. Chairman, I am out of time and I am going to
yield back. Yes, sir. Thank you.
The Chairman. I now recognize the gentleman from Arkansas,
Mr. Crawford, for 5 minutes.
Mr. Crawford. Thank you, Mr. Chairman. I appreciate it.
Mr. Strickland, as you well know, Democrats continue to try
to pick winners and losers by subsidizing EV purchases using
taxpayer dollars. The current proposal would give up to $12,500
for individuals making less than $800,000. Now, to me, someone
making that kind of money doesn't really need any free money to
purchase a new vehicle. What is more, these credits threaten
the economic livelihood of small businesses in Arkansas and
elsewhere in the country who rely on distributing and selling
traditional motor fuels.
I also wonder why we subsidize EVs when they don't
contribute to the Highway Trust Fund? All vehicle owners and
operators, no matter what fuel type they choose, including
electric vehicles, should pay their fair share for road
maintenance and repair.
So, my question is, how will subsidizing EV purchases
impose economic hardships on small business fuel and energy
marketers across the country?
Mr. Strickland. I think that the perspective of a number of
folks in dealing with climate transition sees that there is,
frankly, more opportunities and more opportunities for jobs and
job creation with a green agenda, and including the evolution
and transition into electric vehicles.
The issue in terms of providing support from a consumer
demand to be able to get the EV consumer demand up actually
will drive down the cost of battery production. It will
actually provide a broader ability to be able to support these
vehicles long-term, and we think that the overall economic
prospects of making that transition is positive.
With that being said, we do understand that road
maintenance and road issues are certainly very important, and
we are certainly willing to work with Congress to figure out
ways to be able to make sure that we figure out those equities
and making sure that the roads continue to be maintained, since
this is going to be impacted by moving off of a possible fuel
support system.
Mr. Crawford. Yes, I want to make sure that we ensure that
EVs are paying their fair share for the wear and tear that they
impart on our highways.
I don't know if you are open to suggestions or not, but I
am wondering why the industry hasn't developed some sort of a
more efficient sort of a battery exchange type model where you
could--like for example, when you exchange your propane tanks
at a local retailer for your gas grill or whatever. It just
seems to expedite the process. Those retailers are already
prepared to collect the associated taxes. How hard would that
be to--I know we are making progress in the electric vehicle
space, but there just doesn't seem to be much consideration
about how we address this collection of taxes with regard to
the Highway Trust Fund. I am just wondering if maybe a battery
exchange type approach might be more effective. What are your
thoughts? Is that even a viable consideration for EVs?
Mr. Strickland. There are a number of prospective ways to
think about collecting the user fees in order to be able to
support the highway system. We would be happy to engage with
you and your office in that particular idea. Clearly thinking
about battery exchanges or changing batteries definitely has
some pluses and minuses in terms of vehicle design and rigidity
and things of that nature, but we are all in for trying to
figure out the most equitable way to make sure that we continue
to support our road system.
Mr. Crawford. Thank you. I also think it probably expedites
the process as opposed to pulling into a charging station and
being forced to wait 30, 40 minutes for your batteries to
charge, where you could do a quick change and be on your way.
That maybe helps expedite the process in addition to creating a
better collection model.
So, I appreciate your comments, and Mr. Chairman, I
appreciate the hearing, and to all the witnesses, thank you.
I will yield back.
The Chairman. Thank you.
The gentlewoman from Virginia, Ms. Spanberger, who is also
the chair of the Subcommittee on Conservation and Forestry, is
recognized for 5 minutes.
Ms. Spanberger. Thank you so very much, Mr. Chairman, and
to our guests who are here today, thank you so much.
Mr. Wood, I would just note that when you stopped to charge
your vehicle in Glen Allen, Virginia, you were doing so in the
wonderful 7th District of Virginia. So, I hope you enjoyed the
stop and perhaps even added to our local economy.
Mr. Strickland, I am very pleased to hear about the many
steps that General Motors is taking to help deploy EV charging
infrastructure to rural communities. But I also strongly agree
that the U.S. must really step up to the plate through some
targeted public investments.
In your testimony, you welcome the opportunity to, as you
put it, to leverage existing USDA programs to further support
EV charging stations and charging infrastructure. Could you
elaborate a little on why that might be especially helpful in
rural areas, and how legislation like the Electric Vehicle
Charging Infrastructure for Farmers Act (H.R. 6390), could
really help build momentum and build on the momentum that
General Motors has generated in addressing rural EV charging
deserts?
Mr. Strickland. Well, Ms. Spanberger, bottom line being is
the USDA recognizes the needs of rural America. That is the
agency that serves that entire population of those communities.
So, being able to leverage existing resources, and frankly, the
expertise of the USDA in terms of thinking about ways to
support and ways to deploy would be essential in trying to make
sure of a successful rural development program in terms of the
expansion of charging stations.
So, we are happy to work with you and your office and the
other Members on this important legislation, and we think it is
a very thoughtful approach on how we really address the
specific needs for rural communities.
Ms. Spanberger. Thank you so very much for those answers. I
really do appreciate, when we are thinking about how we can
compete with other nations in the EV market and we think about
the role of manufacturing, can you explain a bit more how the
investments in the deployment of domestic charging
infrastructures are, in fact, really essential towards
competing internationally in the EV space, again, from your
perspective?
Mr. Strickland. It is foundational. When we think about our
international competition dealing with our competitors, whether
it is China, whether it is Europe, to be able to build it out
and have a successful charging infrastructure, which supports
the ability for people to buy and use these vehicles. That is
how we maintain our competitiveness long-term as, frankly, the
world's best automotive manufacturer.
We need to have all those elements in there to have that
success and to compete, and having that opportunity to be able
to build that out is foundational.
Ms. Spanberger. Thank you.
Well, I am really proud of the fact that I will be
introducing legislation, bipartisan legislation today to expand
the USDA's Rural Energy for America Program to include electric
vehicle supply equipment as an eligible expense for farmers and
agribusinesses that apply for that support. So, certainly,
Congresswoman Adams, I will be in touch with your office
because it might get it, some of the questions that, ma'am, you
asked in your 5 minutes. I do firmly believe that this change
will help ensure that our farmers and agribusinesses, and by
extension, our rural communities have greater access to EV
charging infrastructure while leveraging the existing
relationships of USDA's Office of Rural Development and the on-
the-ground relationships that they have.
Mr. Strickland, you were kind to comment on the bill that
my legislation, Electric Charging Infrastructure for Farmers
Act, it is really starting to gain support across a range of
stakeholders, because its supporters include other car
manufacturers such as Ford Motor Company, the National
Resources Defense Council, Environmental Working Group, and the
Zero Emissions Transportation Association. I would also really
like to thank my colleague, Republican Tom Rice of South
Carolina, for recognizing the value of this legislation to our
communities, to industries in our districts, and certainly to
our farmers and producers across the country.
I am coming up on time, but Mr. Strickland, if I could just
ask one more general question. From the perspective of car
manufacturers, certainly many of the things that you all have
mentioned, the investments that General Motors is making in
electric vehicles also in the equity priorities that the
company maintains. Looking down the line, many of the decisions
presumably that you as a company are making are based on where
the market is going, being responsive to what consumers want.
And so, could you just comment a little bit on really what made
it so that that beautiful vehicle, the Silverado behind you, is
one of the top priorities, is a vehicle that you are going to
be producing, and why for those of us in Congress who are
trying to be responsive, might hear from you as to how you
reached that place?
Mr. Strickland. The future of--oh, I am un-muted.
The future around transportation is electrification,
period. The world has recognized it, too. It isn't just us. It
is Europe, it is China, it is Asia. And bottom line being is
that people who are exposed to electric vehicles, the power----
The Chairman. The gentlelady's time has expired. We have
many that want to ask questions.
Ms. Spanberger. Thank you, Mr. Chairman, and thank you to
our witnesses. I yield back.
The Chairman. Yes. The gentleman from California, Mr.
LaMalfa, is recognized for 5 minutes.
Mr. LaMalfa. Thank you, Mr. Chairman. I appreciate it.
I just wanted to--let's just go with Mr. Wood here, please.
I wanted to ask a question on looking at the grid realities I
have in northern California and all of our State of California
really, we have some pretty big challenges. Just for example,
this winter--now, this is after a summer of fire and 1 million
acres in just one fire, and several hundred thousand in others
affecting the grid and generation, et cetera. Now we have had
recently some kind of unprecedented level of snow at lower
elevations. It has knocked out a lot of our power grid to
constituents like Nevada County and Sierra County, and others
in the Sierras in general. So, many people were left without
power for weeks, and so, with what we are looking at, combined
with in the summer months, for example, the public safety power
shutoffs. If people on the Committee don't know what that
means, they intentionally shut the power off in the summertime
when there is going to be high winds because of the fear that
tree branches and trees might blow into power lines and do
blackouts and cause fires, which keeps happening, right? The
Dixie Fire, almost 1 million acres. In this case, it was a tree
that fell into a power line that had a bad root system that was
undetected, but in other times, it is the same thing.
So, what you are looking at is a grid that is already in
question, and even without the shutoffs from a public safety
aspect, when it gets really hot in California, they ask people
to shut off manufacturing plants and others that are already
prepositioned to shut off in order to make the grid carry
through the hottest days, as well as an edict right after these
electric cars are getting so popular supposedly, they had an
edict asking people not to charge their electric cars between
3:00 and 9:00 p.m. So, I would really tend to wonder, is the
market driving this thing with new electric cars, or is it
really government and a lot of hype by media? Because I don't
know people that are just that hot to get electric cars as--in
their areas, especially those on limited incomes.
So, Mr. Wood, they are looking at charging--so, as I
mentioned, charging EVs during the non-peak period in order to
avoid rolling power outages. With the condition of the grid as
I have mentioned in California, they are pulling--they want to
pull hydroelectric plants off. They want to tear down at least
five dams and make hydropower. We have lost a nuclear power
plant in the San Diego area, which is about nine percent of the
grid. They are going to take down the San Luis Obispo Juan
Diablo Canyon within a couple years. That is another nine
percent of the grid. Where the hell is the power supposed to
come from to run all this?
Mr. Wood. Thank you so much for the question, and I will
acknowledge that California is not an area where Southern
Company serves electricity, so I am happy to make connections
offline with utilities in the area for further follow up. I
will also add in general that electric vehicles won't all
charge at the same time. That is generally incremental, charged
off peak or at different times of the day, and that if the same
thing happens if we--for hurricanes in the Southeast, for
example. If people are getting gas to evacuate, sometimes we
have issues with stations running out of gas. Catastrophes
happen for sure, and I am happy to connect you with my
colleagues in California that can give you more information.
Mr. LaMalfa. Okay.
Let me shift over to Mr. Mills here. You had a recent piece
that was published on carbon accounting. So, what are the
assumptions that if we are idling combustion vehicles and
switching to an electrical grid? What is the whole accounting
of this and supposedly saving CO2 and other forms of
pollutants that are the concern in converting over to a grid
like that, especially when the alternatives to power being
generated are being limited?
Mr. Mills. Thank you, Congressman.
I will just summarize quickly that in the technical
literature, not so much in the popularized literature, there is
lot of working going on looking at the so-called fuel cycle,
where the minerals are mined, how they are processed and
transported. And what we know is that to build a battery,
counting everything up-stream, we don't know precisely how much
carbon dioxide emissions occur in the process of mining
minerals, moving and processing them, but we know the range.
So, people who say they know that it will--what the exact
emissions reductions are, it is actually--truth is, it is a
guess. It is a number somewhere between 8 and 20 tons of
CO2 to fabricate a battery for one car. For a pickup
truck it is--you can double that. And that is the lifetime
emissions of carbon dioxide from driving a regular automobile--
--
The Chairman. The time of the gentleman has expired. The
witness may provide an answer in writing. Thank you.
The gentlewoman from Connecticut, Mrs. Hayes, who is also
the Chairwoman of our Subcommittee on Nutrition, Oversight, and
Department Operations, is recognized for 5 minutes.
Mrs. Hayes. Thank you, Mr. Chairman, and thank you for
having this very important hearing today.
Outside of this Committee, I have worked tirelessly to
expand access to electric vehicles. In my first year in
Congress, I co-led the Clean School Bus Act of 2019 (H.R. 3973)
with now Vice President Kamala Harris, which would allocate $1
billion over 5 years to replace diesel school buses with
electric ones. Since then, I have worked to ensure robust
investments in electric vehicles have been included in any
infrastructure legislation that has come to the House floor.
With Representative Cardenas, I co-led the Clean Commute for
Kids Act (H.R. 2721), which laid the blueprint for clean school
bus provisions of the Infrastructure Investments and Jobs Act.
Ultimately, we were able to secure about $5 billion for the
replacement of diesel school buses with electric ones across
this country.
A key component for any plan for electric vehicle expansion
is the grid. Expanding our national grid will not only benefit
individual consumers, but communities at large. As you can
tell, this issue is very important to me, having had a career
for 15 years as a public school teacher and stood in many bus
lines and taught many kids who were affected by the harmful
impacts of breathing in diesel fumes.
So, my questions today are for--well, my first question is
for Mr. Wood. One problem I have heard in conversations about
electric vehicles is their applicability in rural areas:
enormous, mountainous rural areas where there must be special
consideration for larger charger placement and range. What can
the Federal Government do to incentivize utilities to build
charging infrastructure in rural communities, and is there any
technical expertise you think would be helpful for Federal
agencies to provide in that process?
Mr. Wood. Thank you so much for the question. I will first
say, utilities have an obligation to serve all customers, in
urban and rural areas, and that is part of our public service
mission. So, to your point, electric school buses are already
an important aspect of our electrification plan. It is
something we are already looking at. Some of my contacts
throughout the industry when I have talked to in transit
agencies, and when they switched to electric buses have told me
about their testing procedures, which might be loading the bus
down, running it in very cold temperatures, very hot
temperatures with a lot of weight in it. So, some of those
research methods are already in flight.
I think additional assistance from DOE for modeling for
what the batteries would look like, for the amount of energy
consumed, any of that could be helpful. But I would say, as I
said earlier in my opening comments, the infrastructure, EV
infrastructure that has already been passed is of great help.
If you want to carve out for electric school buses, especially
get the first cost problem down, is more of the issue for the
school bus problem of if the school district needs five school
buses but they can only afford three because electric may cost
more, that, to me, is where I see more of the challenge versus
the infrastructure itself.
Mrs. Hayes. Thank you, and I know that expanding our
electric grid not only provides opportunities for zero carbon
transportation, but an array of other zero carbon
infrastructure and resources.
Mr. Wood, can you expand on what the agricultural industry
specifically stands to gain from a national expansion of our
electric grid?
Mr. Wood. When you think about electrification and
agriculture, the electrification typically knows that piece of
equipment is very, very precise. So, if you drive an EV, for
example, and you barely press the accelerator, the vehicle
barely moves forward. You don't have the idle that pulls you
forward. So, if you are thinking about planting a certain
number of crops or you need to see a certain number of crops in
a certain area to make a particular harvest, having more
precise, more precision, or if you have that equipment that
becomes autonomous and being able to control it, those are all
benefits of how the agriculture industry can gain from
electrification. We just have to be able to get there and
understand what those implications are.
Mrs. Hayes. Thank you so much, and I don't really have time
for my last question, but I am sure I will hear the answer at
some point. I am just interested to know what investments and
resources can Congress provide to address the increased demand
for EVs, and how can we help to build out the pipeline for
manufacturers who produce these electric vehicles?
There is not really enough time to answer, but hopefully
throughout the rest of this hearing that will be incorporated
in answers as we go along.
Mr. Chairman, I yield back. Thank you.
The Chairman. Thank you, Mrs. Hayes.
And now, the gentleman from Illinois, Mr. Davis, recognized
for 5 minutes.
Mr. Davis. Thank you, Chairman Scott, and also Ranking
Member Thompson for holding this hearing on electric vehicles.
I am also the Ranking Member of the Transportation and
Infrastructure Committee, Highways and Transit Subcommittee. It
happens to be the largest subcommittee in Congress. I am glad
that other committees are also discussing the Biden
Administration's Build Back Broke scheme to further bankrupt
American families.
With inflation over seven percent and President Biden's
anti-work policies, the average family in my district would
struggle to afford a new car, let alone a more costly electric
vehicle. Not to mention the CDC's fluctuating whims that
restrict the average working-class family's ability to go to
work and earn a living. It kind of makes you wonder why the
Biden Administration is making such a push for EVs when they
would rather have every American locked inside their house.
For those that can afford a new car, due to supply chain
constraints, begs the question of whether anyone looking to buy
a car could even find one on the lot if they wanted, let alone
an EV. Reducing emissions is not synonymous to electrifying the
entire fleet. We have the tools and technology to reduce
emissions right now. For example, Clear Flame, a company in
Illinois, is already producing the technology to retrofit
engines to run on cleaner conventional fuels, like ethanol.
They are working with companies like John Deere to ramp up this
technology and bring it to the marketplace. We don't have to
wait until 2050, bankrupt our constituents by taking away
consumer choice when shopping for vehicles, or break the law by
undercutting the Renewable Fuel Standard.
So, when you look at a rough estimate, a rough estimate
suggests that it costs the average American to buy an electric
vehicle versus the most affordable conventional vehicle on the
market, cost difference is around $38,000.
So, I want to get to my questions and I want to start with
Mr. Cooper.
Mr. Cooper, did you see the report that Reuters issued this
morning stating that the Biden Administration is considering
lowering the 2022 ethanol blending mandate below the proposed
$15 billion that was set to be increased over the cut levels
from 2020 to 2021?
Mr. Cooper. Well, thank you for the question, Congressman
Davis, and I did happen to see that article actually as I was
sitting here. I saw that come across the wire.
Certainly, it is of great concern if those rumors are true.
We do have plenty of experience with rumors being reported in
the news, sometimes not quite accurately. But we would be
greatly concerned if EPA is backtracking on its very recent
proposal to make sure that we return to that 15 billion gallon
statutory requirement for conventional fuels, renewable fuels
in 2022. So, we are going to try to get to the bottom of those
rumors, and we will be absolutely insisting that EPA and this
Administration follow through on their commitment to restore
that 15 billion gallon commitment for 2022 and beyond.
Mr. Davis. Mr. Chairman, I ask unanimous consent to
actually insert this report into the record today.
The Chairman. Without objection.
[The article referred to is located on p. 105.]
Mr. Davis. Thank you.
Mr. Cooper, if the Biden Administration is intent on
reducing emissions and using cleaner fuels like ethanol and
biodiesel, and using those fuels get us there immediately, why
do you think they broke the law and cut the RFS, jeopardizing
the demand for biofuels for our farmers in rural America?
Mr. Cooper. Well, we certainly hope that doesn't happen,
because again, we believe the Renewable Fuel Standard is the
best near-term opportunity we have for reducing carbon
emissions from the transportation sector. It is law that has
been on the books for more than 15 years now. We have seen
significant greenhouse gas emissions reductions result from the
Renewable Fuel Standard. In fact, one study estimates we have
seen nearly 1 billion tons of greenhouse gas emissions avoided
because of the Renewable Fuel Standard and the use of biofuels
under that program.
So, we agree that a strong RFS that is consistent with the
statutory intent of the program is fundamental to decarbonizing
transportation, and that is why we support a strong RFS in
2022, but well beyond as EPA begins the process to determine
those volumes as well.
Mr. Davis. Great. One quick question for Mr. Strickland.
How many vehicles that will be internal combustion engine
vehicles does GM expect to produce between now and 2035?
Mr. Strickland. We expect to produce 30 to 40 million.
Mr. Davis. Well, if you putting 30 to 40 million internal
combustion vehicles on the roadways, I mean, that is where this
disconnect seems to be we need cleaner fuels, I yield back.
The Chairman. The gentleman's time has expired.
The witness, please, you have the opportunity to provide
him with an answer in writing. Thank you.
Mr. Strickland. Yes, Mr. Chairman.
The Chairman. And now, we recognize the gentlewoman from
Ohio, Ms. Brown, for 5 minutes.
Ms. Brown. Thank you, Chairman Scott and Ranking Member
Thompson for holding this hearing, and thank you to all the
witnesses for joining us today.
We are currently at a great inflection point. How we
approach the next 10, 20 years will determine how we will be in
the next 50. The existential threat of climate change to
humankind is clearer than ever. People in Ohio and around the
country are experiencing the dire consequences of climate
change. Devastating hurricanes in Louisiana, raging wildfires
in California, harmful algae blooms in Lake Erie, and rising
sea levels in south Florida, to name a few.
The generally accepted agreement that greenhouse gas
emissions contribute to the threats has led many to electric
vehicles, which are likely to have lower emissions than
internal combustion engine vehicles. While the U.S. auto sales
declined 23 percent in 2020, the sales share of EVs increased
two percent. My home State of Ohio has also seen a steady
increase in EV registration in recent years. The EV market is
only going to continue to grow as consumer demands for
technology increases. It is prudent to begin examining this
technology so we adequately address the needs of all
stakeholders in America: urban, suburban, and rural.
As we work to transition to a clean energy economy, we owe
it to our farmers and auto workers to ensure that they are not
left behind. Many of them have spent generations feeding and
powering our country, and their work has every bit as much
dignity as the work of an EV battery manufacturer. I am
confident that the investment in EVs is a step in the right
direction. It will supercharge America's efforts to lead the
electric future that will allow us to remain competitive and
strong in the days to come.
I would like to acknowledge that Chairman Scott and
Congresswoman Adams asked and answered one of the questions
that I have, so I would like to acknowledge Mr. Josh Nassar
from the UAW.
In your testimony, you spoke to the environmental benefits
of an EV transition and the importance of also ensuring this
transition benefits American workers. What policies should be
in place to ensure those benefits?
Mr. Nassar. Well first, thank you for the question,
Congresswoman.
First of all, we should make sure taxpayer dollars are used
to support good jobs and responsible employers, and that should
be done across the board with public dollars. The second thing
is that we need to focus--we are talking about the battery
supply chain. It is very true that China dominates, but they
dominate from getting a lot of rare earth minerals from other
countries. And what we need to do is we really need to get way
more involved and engage in that, plus we need to do the actual
battery manufacturing here, not just the packing of the
batteries, the last step in the process, because that is not
too many jobs at all. The real jobs have to do with the other
processing.
So, we are just--we are seriously behind. The truth is that
China and the European Union were focused on this well before,
but it is not too late, and we can't give up on fighting to be
part of this transition. Because if we do, what is going to
ultimately happen is as EVs become a larger share of the
market, fewer and fewer of them will be make--fewer car
manufacturing jobs will be in the U.S. So, I think really
engaging fully in the entire supply chain is incredibly
important, and making sure that there are conditions on
taxpayer dollars.
Ms. Brown. Thank you so much.
Mr. Wood, Lincoln Wood. What type of coordination among
utilities do you think will be necessary to ensure that rural
communities are not left behind in the transition towards
transportation electrification, and the other as a follow up,
how can communities work best with their utility partners to
educate customers about charging during off peak period and
public charging opportunities?
Mr. Wood. Thank you for the questions.
So, you may have seen a couple weeks ago the Edison
Electric Institute announced the National Electric Highway
Coalition, and that is a group of utilities from across the
U.S. that all focused on really--think of it as the EV brain
trust from each utility in a room trying to figure out how we
roll out charging infrastructure in an equitable way across the
U.S. I think that is a good first step. I think a best practice
is to always involve your utility early and often, and
utilities typically have really good relationships with their
communities all across their service territory, and so, we have
relationships with dealers and with local governments and
others to help communicate the benefits of electric vehicles as
well as other electric technologies, and those efforts are
ongoing. But certainly, we are always open to more engagement.
I think a meeting just like this one of all stakeholders to
have a discussion is a great first step.
Ms. Brown. Thank you so much, and my time is expiring, so I
yield back. Thank you.
The Chairman. Thank you.
The gentleman from Pennsylvania, our distinguished Ranking
Member Thompson, is recognized for 5 minutes.
Mr. Thompson. Mr. Chairman, thank you very much. Thanks
again to all the witnesses for your testimony, it is very
informative.
My first question is for Mr. Mills. Mr. Mills, as you
mentioned in your testimony, it seems like our analysis of EV
supply chains' environmental footprint is often incomplete. Why
is it so hard to account for these activities when measuring
the greenness of an activity, and why does an accurate
accounting matter?
Mr. Mills. Well, thank you, Ranking Member.
The greenness is determined entirely--and by that portion,
I mean carbon dioxide emissions--by where and how materials are
mined and processed. And as a consequence, we are talking about
a vast global industry, thousands of businesses around the
world, not in the United States. So, we have some knowledge of
it, but it is very hard to track down what a propriety process
is among proprietary industries, and frankly, a lot of secret,
we will call them--not secret illegal, just secret transactions
that go on. It matters because the data shows and the research
shows that the total emissions from accessing the minerals and
producing materials can easily equal all of the savings from
not using gasoline, from not burning the gasoline. So, the idea
that we are dealing with zero emissions vehicles is just flat
wrong.
The only question is how much the emissions are reduced?
Even Volvo and Volkswagen recently issued studies on their own
websites showing that the emissions reductions based on
assumptions about the supply chain are rather modest, very
small. So, they are sort of warning everybody to be careful
about these assumptions.
Mr. Thompson. I want to follow up to maybe one example. I
know there is a study you are familiar with from the
International Energy Agency. The study is the role of critical
minerals and clean energy transition, which examines the
changing mining patterns for critical minerals resulting from
increased electrification. The question is, how will the
predictions made by the IEA with respect to declining ore
quality and increased resource demand impact the carbon
accounting, and with this new calculus change the case for EVs,
whether in rural America or elsewhere?
Mr. Mills. That is a very good question, Congressman.
The fact is, the IEA pointed out, as have other analysts,
that as you increase demand for minerals like cooper and
nickel, the common ones, you have to chose lower ore grades.
That is the technical way of talking about there is less copper
as a percentage of the actual ore, means you have to dig up
more rock, use more energy, and cause more emissions. As they
have pointed out, the expectation is that the carbon dioxide
emissions associated with, for example, accessing lithium will
increase several hundred percent. So, as we chase more and more
lithium to put into lithium batteries, the emissions from
producing the lithium are rising in the future as we chase more
of these minerals not going down.
And this is an indisputable sort of geophysical fact that
no one, bizarrely, is including in any of their forecasts about
carbon dioxide emissions from making batteries.
Mr. Thompson. Very good. My next question is for Mr.
Walter.
First of all, Mr. Walter, I can't tell you how happy I and
pleased I am to have a fellow Bald Eagle Area alumni testifying
today, and also, congratulations on your career. I want to
thank you for your testimony.
You closed your written testimony by noting something I
think is important. ``Any alternative, including electricity,
should be offered in an open competitive market that gives
American consumers the fullest economic benefits of robust
price competition. This has worked well for consumers for
nearly 100 years with liquid fuels, because the markets had a
business case to invest to meet consumer needs.'' So, why is it
so important that any new motor vehicle fuel, and indeed, any
engine technology, was subject to the pressures of an open and
competitive market?
Mr. Walter. Thank you, Ranking Member Thompson.
An open market provides the lowest cost to consumers. Any
time markets operate with opaqueness, it typically creates
higher costs for consumers across the board, and the
traditional fuel market today is an open, highly competitive
marketplace with many competing factors, not only from the sale
at retail for physical fuels, but also in various geographic
pockets there is high competition amongst wholesalers of
traditional fuels.
In today's world, there is a tremendous amount of
opaqueness that exists around EV charging costs. Some will
highlight, like Mr. Wood highlighted, that he paid zero for
charging and first, I just want to say thank you to Lincoln for
stopping at Sheetz on his path. But I mean, that cost in the
future will be higher for EV vehicles, and I think a lot of
people today are not working on----
The Chairman. The gentleman's time has expired. The witness
may provide an answer in writing. Thank you.
[The information referred to is located on p. 117.]
And now, the gentleman from Illinois, Mr. Rush, is
recognized for 5 minutes.
Mr. Rush. I certainly want to thank you, Mr. Chairman, for
holding this important hearing, and I really want to let you
know that I sincerely appreciate your kind remarks that you had
for me at the beginning of the hearing.
As the Chairman of the Energy and Commerce Committee's
Subcommittee on Energy, I have been proud to champion electric
vehicle infrastructure modeling, and specifically
infrastructure for urban and rural underserved areas. I was
proud, Mr. Chairman, to negotiate provisions to advance
electric vehicle infrastructure and adoption which was
ultimately included in the House-passed Build Back Better Act,
and I am very, very hopeful and optimistic that these
provisions will be signed into law soon.
Mr. Strickland, so good to see you again, and once again, I
just want to thank you so much for your sincere and heartfelt
remarks. I am so proud of you, man, of all of your
multitudinous accomplishments over your relatively young years.
So, man, you make my heart glad and warm just to see you and
knowing that you are such an amazing individual and amazing
success.
Mr. Strickland. Thank you, sir.
Mr. Rush. I have a few questions for you.
I have spent much of my professional career fighting for
the health and the wealth of Black and Brown Americans. As you
know, disproportionally we live in an area where there is a
higher level of harmful emissions, and I am absolutely worried
that once again, these needs of these same communities will be
overlooked as they were catering to a more affluent White
consumer base. My question to you is, what policies should the
Federal Government implement to ensure that minority consumers
are incentivized to purchase electric vehicles, and what
specific plans do you see on the horizon that would ensure that
these electric charging stations will also be amply supplied in
these disadvantaged communities?
Mr. Strickland. Mr. Rush, I know your passion for this
subject, and in our conversations so long ago, you know my
passion for the very same subject across a number of things
that impact our community.
I think foundationally we need to get the money from the
IIJA distributed to support overall infrastructure investment,
charging investment, and also providing consumer demand.
General Motors is committed to having affordable vehicles
across our chain. In addition to the Chevy Volt, which was our
first and most successful, and widest deployed affordable long-
range vehicle, we also announced the Chevrolet Equinox, which
will be a $30,000 vehicle, which we will be also introducing
into the market in a couple of years.
I want to talk about the Climate Equity Fund that GM has
made in obligations. We have $25 million to support, frankly,
equity issues in the distribution of charging stations to
support communities to be able to make sure that we leave no
one behind. That is in addition to the $10 million that we have
invested in racial justice and equity funds to help close gaps
addressing communities that are adversely impacted by climate
change, and in addition to supporting the 357 U.S.-based
nonprofits for that goal. So, we need to make that investment
because that not only helps every community, but it especially
helps our community, and General Motors has an immense focus on
making sure that diversity and equity issues are full and
foremost made available to every community, rural, urban,
Black, and Brown. We want to make sure that everybody is along
for this ride, and nobody gets left behind.
Mr. Rush. I believe in you. I believe in you. I believe in
you, man.
All right. Mr. Nassar, what percentage of electric vehicles
are currently being manufactured by union workers?
Mr. Nassar. I don't know the exact percentage of, but I can
tell you, in addition to the vetting models that were talked
about by Mr. Strickland, Ford and----
The Chairman. Unfortunately, the gentleman's time has
expired. We have many that want to ask their questions. The
witness may provide an answer in writing. Thank you.
[The information referred to is located on p. 118.]
The Chairman. And now, the gentleman from Georgia, Mr.
Allen, you are recognized for 5 minutes.
Mr. Allen. Thank you, Mr. Chairman, and thank you. I think
this has been very informative, but I am a little troubled by
the fact that we are sitting here talking about things in the
future and what it looks like.
Let me tell you what is going on, on main street right now.
How many of my colleagues have been into a grocery store in the
last 2 or 3 days here in Washington, D.C.? I mean, the shelves
are empty. I mean, this is a real problem. When you talk about
energy policy, over the holidays we get together with family,
and of course, a lot of questions are asked. Where is this
thing going? And frankly, I said, based on the fact that when
you pull into a service station today, you don't know if that
service station--the energy policy of this Administration is so
incompetent. You don't know if this service station has any
gasoline to put in your automobile. I mean, we have all seen
it. We have seen the plastic covers over the dispensers. And
so, I said, we probably all need to have at least one of our
automobiles electric to ensure that we can get from point A to
point B. I mean, this is main street, folks.
The other thing I mentioned to my friend from General
Motors, Mr. Strickland, we have a three-generation Cadillac
dealer in my hometown of Augusta, Georgia. Cadillac just came
to them and said you are going all electric, and this is what
you are going to have to invest or we are going to buy you out.
They ran the numbers and there was no way economically they
could do that. I understand there are over 400 Cadillac dealers
across this nation that have closed because of this policy of
General Motors Corporation. Just in my community that is 32
very high paying jobs gone. This is what is going on, on main
street, and here we are talking about the future.
So, Mr. Mills, my first question is this. This new religion
of climate change, if we do everything that the Biden
Administration says that we need to do to fix this, how much
are we going to lower the temperature of this planet? Does
anybody have any idea?
Mr. Mills. Congressman, I would just say that based on the
published data, what we do know is that if the United States
dramatically continues to reduce its carbon dioxide emissions,
the world carbon dioxide emissions are going to continue to
rise. That is because of what is going on in China, India, the
rest of the Asian countries and Africa. And that is just the
IEA and IPCC forecast. So, we know that is what is actually
happening on main streets all over the world. Emmissions are
going up, not down. So, and that will happen without regard to
what the United States does, frankly. So, even if we
impoverished ourselves by not existing, there would still be
rising carbon dioxide emissions. That is an elliptical way of
saying that would mean essentially no measurable impact on the
forecast temperature of the planet.
Mr. Allen. So, what you are saying is we are putting our
entire economy in jeopardy over this new religion, and we have
absolutely no idea of the consequences?
Mr. Mills. We are obviously guessing about consequences
about what the future will be with respect to the climate. The
climate--as any climate scientist will tell you, the climate is
obviously changing. It is indisputable that the planet is
warmer, and by the way, it is also indisputable that human
activities have something to do with it. The dispute is over
two things: how much warmer, how fast, what effects that has,
and so, that is a science there, and the other that an area
that is independent of climate science. What can one do about
energy? What is possible with batteries, for example, is
anchored in the physical chemistry, the physics of batteries.
It is not amenable to government policy. We know the limits. We
know what batteries can and can't do. They can do a lot, but
they aren't going to replace all combustion engines anytime in
the foreseeable future. So, this is--I mean, this is not a
knock against what GM has done. GM is making a great truck. I
have owned lots of Suburbans. I love them. I am ready to buy an
electric truck to commute in on the farm. But an electric truck
has a 1 ton battery by definition that reduces by 1 ton what
you could have done with an identical vehicle with a gasoline
tank.
Mr. Allen. Well, I am out of time and I am going to have to
yield back. But the audacity to believe that we actually have
control of this, this is mind boggling to me, and I thank you
for, Mr. Chairman----
The Chairman. The time of the gentleman has expired.
Mr. Allen. Thank you, sir.
The Chairman. The gentlewoman from Illinois, Mrs. Bustos,
who is Chair of the Subcommittee on General Farm Commodities
and Risk Management, is recognized now for 5 minutes.
Mrs. Bustos. Thank you very much, Mr. Scott, and I also
want to thank our Ranking Member Thompson for putting this
together today.
Obviously, the future of electric transportation is bright,
and certainly we appreciate all the witnesses for their input
today, and especially how we can make sure that rural America
is not left behind as we continue this conversation.
So, let me look at it this way, and I know we have talked
about it a little bit. But obviously, we have electric
vehicles, as I see it, as many of us see it, a major positive
step toward decarbonization in the transportation sector. And
really, we, as has been acknowledged, there is going to be a
little bit of time before we get to this, full EV and every
vehicle that is coming off the lot is an electric vehicle.
So, the climate is calling for us to bring down carbon
emissions now. That is not something that we can continue to
just put off, and I appreciate our witnesses, a couple of who
mentioned a bill that we have written out of my office, the
Next Generation Fuels Act (H.R. 5089). I am really happy that
we have bipartisan support for that, so thank you for our
Republicans and Democrats who have signed on to this.
And just very briefly, this is a bill that has support of
many of our witnesses today, but it would require automakers to
optimize their vehicles' engines to run on high octane, low-
carbon fuel, so like E20 and E30. There has been a recent
analysis out of the University of Illinois in my home state,
University of Illinois at Chicago, that says that the Next
Generation Fuels Act would reduce greenhouse gas emissions by 2
billion--2 billion--metric tons by the year 2040, and that
would save nearly $100 billion in climate-related property
damage and public health issues.
So, this question can be answered by Mr. Strickland, Mr.
Nassar, Mr. Cooper, Mr. Walter, and if one has something to add
before or after the next, please do. But can you talk about how
a new era of low-carbon, high octane liquid fuels in the Next
Generation Fuels Act specifically would impact your businesses
and your members as we continue to transition to electric
vehicles? And why don't we start with Mr. Strickland, and then
go to Nassar, Cooper, Walter, whatever you have to add on that,
please.
Mr. Strickland. Well, Mrs. Bustos, clearly before we get to
our all-electric future in 2035, we are going to be selling
internal combustion engines. So, as I noted earlier, we will be
selling 30 to 40 million of those vehicles, and the ability and
the opportunity of being able to use lower carbon fuels such as
higher octane is incredibly important. There are advantages
there where you can get three to nine percent better fuel
efficiency with higher compression and higher octane fuels and
biofuels. And we believe that the path to zero is going to be
inclusive of that particular pathway. We are looking forward to
working with you and the Members on your important legislation.
Mrs. Bustos. Thank you very much.
Mr. Nassar. Thank you for the question. Well, first of all,
it is going to be very helpful for the agricultural implement
sector, because it is really going to help increase demand for
farming equipment. So, it will certainly be helpful on that
score.
It would also be helpful, in meeting the CAFE standards,
which we are supportive of the moderate standards that were put
forward, finalized by the Biden Administration with support
from automakers. But this will help comply with those
standards.
So, this is kind of an overlooked area is the fuels when it
comes to having--how that could really improve reduced carbon
emissions and improve manufacturing employment. So, that is
important.
Mrs. Bustos. Very good. Thank you, Josh.
Mr. Cooper. May I add?
Mrs. Bustos. Yes, please.
Mr. Cooper. Yes. Thanks, Congresswoman, for the question.
This is certainly a piece of legislation that we strongly
support in the ethanol industry. We do think it marks a huge
step toward decarbonizing our liquid fuels. You are right. It
is going to take a long time for the fleet to turn over to
electric vehicles. We ought to be doing something in the
interim, and your bill would move us a long way down that road
toward decarbonizing those fuels.
And the other thing we like about it is not only is it
requiring higher octane in our motor fuels, but it is requiring
lower carbon as well. It is really marrying those two aspects
together, and it just so happens that ethanol is the highest
octane, lowest carbon fuel source available on the market
today. So, we do see the bill as a significant opportunity for
our industry, and frankly, a significant opportunity for
consumers because it would make a meaningful dent in emissions
from the transportation sector.
Mrs. Bustos. All right. Mr. Walter, I would love to have
chime in, but I think we are out of time, and we will hear from
you. We will hear from you at another time.
Thank you very much, Mr. Chairman, and I yield back.
[The information referred to is located on p. 117.]
The Chairman. Thank you.
And now, we recognize the gentleman from South Dakota, Mr.
Johnson, for 5 minutes.
Mr. Johnson. Thank you, Mr. Chairman, and it is pretty
clear to me that EVs will play a role, obviously, in the
transportation sector of the future. But there are other
technologies that have been proven ways to offset carbon or to
minimize the carbon footprint, and of course, biofuels is a
huge one. And although I am still not sure why we haven't had a
committee hearing on biofuels yet in the 117th, I do want to
thank the Chairman and his team for having Mr. Cooper, because
I think his testimony helps to round out the record a little
bit. And when I talk about proven technology, I mean, that is
no joke. Between 2008 and 2020, biofuels offset 1 billion tons
of carbon. I will just mention that again. That is a billion
metric tons of carbon, and I think that is obviously worth
noting at the committee level.
So, I do have a question for Mr. Cooper. You talked a
little bit about E15, sir, in your testimony. I want you to put
a little more meat on that bone, if you will. What does the
path forward look like for E15? What should it look like, as
well as for E20 and higher blends for non-flex-fuel vehicles?
Mr. Cooper. Sure. Thank you for the question, Congressman,
and I am happy to answer it.
We absolutely believe that E15 is one of the best near-term
opportunities we have for really jump-starting decarbonization
in the transportation fuels marketplace. Analyses we have done
and others have done shows that simply moving from the current
gasoline blend, which is ten percent ethanol, to E15 nationwide
would reduce carbon emissions by about 18 to 20 million metric
tons per year, just that simple switch. And virtually every car
on the road today is legally approved to use E15. We have a
number of retailers already offering the fuel. My friend, from
Sheetz, who is also a witness today, is among the leaders in
offering E15 to consumers. So, we do see that as the next
logical step in this transition.
However, we have some key barriers in place that need to be
resolved. The most prominent of those is this ridiculous
volatility regulation that prevents retailers from offering E15
during the summer months in about \2/3\ of the country. We felt
like we had that problem resolved when EPA adopted regulations
to fix it a few years ago. The refiners didn't like it. They
sued EPA. That regulation was recently overturned. The Supreme
Court declined to review it, so we are right back where we
started where we have this summertime ban on E15. So, that has
to be fixed. We know there has been legislation introduced in
both chambers to rectify that situation. We strongly support
that, but there are other things EPA can do administratively to
fix that problem as well.
Mr. Johnson. Yes, of course, and Mr. Cooper, the Reid vapor
pressure for E15 is actually lower than it is for E10, so there
is no technical reason the E15 wouldn't be made available year-
round.
And just quickly, because I do have another line of
questioning. It is not just about E15, right? I mean, I do
think we also want to think about what is the sweet spot for
non-flex fuel vehicles E20 or some other blend, right?
Mr. Cooper. It absolutely is, and that really gets to the
Next Generation Fuels Act and the need for those mid-level
blends. That is the sweet spot. The E25, E30 range is where
ethanol's properties are really leveraged, that high octane
content, that low carbon attribute. And so, if we have high
octane fuels like an E25----
Mr. Johnson. Mr. Cooper, I have to reclaim. I am sorry, I
just have a minute and I do want to get a sense from Mr.
Strickland.
Mr. Strickland, I am from South Dakota and I appreciate the
incredible technological advances batteries have made, but of
course, all batteries still substantially under-perform in cold
weather. And I don't want everyone to think that South Dakota
is always a tundra. Three of the seasons are wonderful, but
winter is terrible. It might be 50 there today, but last week
there were a few days where it was 40 below freezing.
So, Mr. Strickland, that is clearly a real technical
limitation to widespread EV use during the winter months. Tell
me about how General Motors views that.
Mr. Strickland. We don't actually--long-term, we do not see
that as a long-term technical barrier. We are working through
and doing our testing in extreme climates. Our Altium battery
chemistry addresses a number of these things long-term, and
yes, we recognize the fact that what we have seen in past years
in terms of reduced performance, we recognize that as a company
and our engineers are working to make sure we address that.
Actually, I had a conversation with Senator Thune before I left
the Commerce Committee about this very similar thing, and yes,
you are right. South Dakota isn't always a frozen tundra.
Mr. Johnson. Well, let's follow up, because I am interested
in learning more, but I am out of time, and I want to thank the
Chairman for his indulgence. Mr. Strickland, let's follow up
because I want to learn more.
I yield back.
Mr. Strickland. Yes, sir. Thank you.
The Chairman. The gentleman from Arizona, Mr. O'Halleran,
is recognized for 5 minutes.
Mr. O'Halleran. Thank you, Chairman Scott, Ranking Member
Thompson. I appreciate the opportunity. This is a very good
hearing today.
As excited as we should be by the increase in EVs, it is
important to emphasize the importance of EVs in rural
communities as we have talked about today. Like much of
Arizona, in my Arizona district oftentimes discussions about
electric vehicles center around consumers and businesses in
urban, suburban, or exurban settings. However, the move to
electric and clean energy vehicles can provide profound
economic opportunity for rural communities, and we are already
seeing these benefits in Arizona.
My district is the proud home to the manufacturing centers
of two major clean energy startups. Lucid Motors, which began
delivering electric vehicles to consumers in October 2021, was
built--has a massive factory in Casa Grande in southern
Arizona, and plans on continuing investing in the community.
Another clean energy vehicle startup, Nikola Motors, builds its
zero emissions heavy-duty trucks in Coolidge, Arizona,
utilizing hydrogen fuel cells to deliver vehicles that will
help further reduce emissions from vehicles on the roads. These
two companies will bring much needed American manufacturing to
Arizona and provide good-paying jobs with sustainable economic
growth for the region, as well as the development of the
electric grid and the other clean energy sources that will be
built throughout America and rural America.
Most recently, Congress passed the Infrastructure
Investment and Jobs Act legislation that included $7.5 billion
for electric vehicle charging. The text includes some of the
language that I helped develop to determine where these
electric vehicle charging stations should be located,
specifically ensuring that the needs of communities like Native
American communities and rural communities are incorporated.
While the Infrastructure Investment Act includes funds to
modernize and upgrade transmission and other electrical grid,
more needs to be done to ensure that these charging stations,
particularly those in rural and Tribal communities, have the
power to meet their specific electric vehicle needs and the
needs of our economy.
Mr. Strickland, thank you so much for being here. What
sorts of infrastructure is needed to ensure that rural and
underserved communities like Native American communities can
purchase and effectively utilize EVs, not just in their day-to-
day life, but in their industries and the ability to be able to
have the economies that they need so dearly?
Mr. Strickland. Well, Representative, the IIJA
implementation is incredibly important to get those resources
out to support charging stations, but also, the Build Back
Better Act, which also includes the EV tax credit and the
consumer side pull to make those vehicles affordable for,
frankly, everybody in rural communities and other communities
of color, including Native American communities, is especially
important.
GM has made a commitment for the production and the sale of
affordable electric vehicles, whether we talk about the Volt or
the Equinox, but foundationally speaking, we need a commitment
from Federal, state, and local to partner with all of us in
terms of implementing charging infrastructure everywhere that
it is needed, and getting that support. We are willing to make
those investments in partnership with our 4,000 dealers, and
frankly, it is going to be making sure we get, not only the
IIJA implemented and all the things that are there, but also
getting Build Back Better done, which has also those other
consumer pulls and those other supports that we need to make
sure that electric vehicles are available to all.
Mr. O'Halleran. Thank you.
When I am pulling my horse trailer or somebody is doing
their RV for tourism across my district and across America, and
trucks are long hauling it across our country, it is going to
be critical that we really understand completely what this grid
is going to have to look like and what the charging stations
are going to have to be, and how this all works together.
Mr. Strickland. Yes, sir.
Mr. O'Halleran. As of right now, I don't know that. I think
we are moving in a direction that is going to bring about a
tremendous amount of technological change to get us where we
need to be, but we do have to be careful as we move forward.
With that, Mr. Chairman, I yield back.
The Chairman. Thank you, Mr. O'Halleran. Well stated.
Now, the gentleman from Indiana, Mr. Baird, is recognized
for 5 minutes.
Mr. Baird. Thank you, Mr. Chairman, and I appreciate all
the witnesses being here today talking about this important
issue.
As you all know, it is important to agriculture and a
district like I represent from Indiana. And, we hear a lot
about the vast decrease in the carbon output because of
electric vehicles, but rarely about the total lifecycle and the
carbon footprint of these vehicles when we compare to
combustion engines. So, our nation, in our latest attempt to
rise to the vehicle electrification often seems forced,
especially given the viable and practical middle step of
biofuel adoption.
So, Mr. Cooper, how do the biofuels play into this
transition and the broader decarbonization of American
transportation, and how does this carbon footprint compare, and
how do crop yield improvements and the conversion of
conservation practices of farmers impact the carbon intensity
of biofuels? Mr. Cooper?
Mr. Cooper. Well, thank you for the question, Congressman,
and we agree completely that the carbon footprint and the way
it is measured matters very much to the decision making around
where we go with the future of our transportation sector. The
IEA study that was mentioned earlier by the Ranking Member
actually shows that yes, on average, when you consider the
source of minerals and the source of electricity generation,
electric vehicles are about 50 percent cleaner than a
petroleum-fueled internal combustion engine. That can range a
lot from a seven percent reduction to a 77 percent reduction.
With biofuels and corn ethanol specifically, we are also
already at a 50 percent reduction compared to gasoline, and we
have some member companies that are producing ethanol that is
70 percent, 75 percent better than gasoline.
So, again, if the goal here is to reduce emissions from the
transportation sector, there is more than one way to do it.
Ethanol is here. It is available today. It is available now to
immediately jumpstart decarbonization efforts, and the first
step is getting more ethanol into the blend, E15, E20, E30.
So, again, I just can't say enough about the importance
about using the same measuring stick when we look at the carbon
footprint of these various fuels in vehicles.
Mr. Baird. Especially when considering the tremendous
impact that sudden change can have on our agricultural
industry.
So, Mr. Mills, do you have any comments in this same
regard?
Mr. Mills. I think I will just reinforce the fact that the
IEA study does show the estimated 50 percent reduction counting
all the emissions from fabricating the batteries, chemicals,
and mining. But the IEA also points out that the trajectory for
the future is for the reduction in emissions to go down, but as
the emissions from producing the materials are rising, not
declining, that is sort of locked into the geophysics of
materials.
The International Clean Car Transportation Council has also
looked at this fuel cycle issue, looked at it from country to
country, and they find that to the point that Mr. Cooper made,
that the emissions reductions can range from as little as seven
percent to as much as 70 percent. But this is all based on
today's practices. We are talking about increasing the demand
for minerals to make batteries by over 1,000 percent. That will
put so much pressure on the rural mining. I would just be happy
to predict--not happy, but willing to predict that we are going
to see a kind of road block--no pun intended--to expanding
battery production globally, long before any of the aspirations
for the level of EV penetration happens. That will lead to
higher prices, not just for batteries, but higher prices for
all the commodities that are made from copper and nickel and
cobalt, the same minerals. So, it is a very serious
inflationary pressure on the broader economy, which is being
underestimated and completely ignored.
Mr. Baird. Well, thank you very much.
Mr. Walter, would you care to elaborate in terms of the
company you work for, as well as the association you work for,
and how the biofuels impact your industry?
Mr. Walter. Yes. So, the c-store industry operates 120,000
locations offering motor fuels, but specifically, the
environmental savings have been highlighted by Mr. Cooper. But
in terms of Sheetz, since 2019, E15 sales have grown 92
percent, and since 2017, they have grown 300 percent. And that
is really off the backdrop that ethanol is able to be procured
cheaper than gasoline, and we are able----
The Chairman. The time of the gentleman has expired, but
you may provide an answer in writing. Thank you.
[The information referred to is located on p. 118.]
Mr. Baird. Thank you, Mr. Chairman. I yield back.
The Chairman. Yes, sir.
The gentleman from Florida, Mr. Lawson, 5 minutes.
Mr. Lawson. Thank you, Mr. Chairman, and to you and the
Ranking Member, this is a great hearing that we are having
today. And also, I would just like to give a shout-out to
Congressman Austin Scott from Georgia, winning in the national
championship. They don't want to talk about it last time, but
this time around is a proud alumnus of the University of
Georgia. They finally were able to beat Alabama.
As billions of dollars in investments have been made in
EVs, and the required infrastructure needed to sustain them,
the U.S. must invest in workforce to meet the demands of an
electrified future. The first question--this question is for
all panelists. What type of academic programs and training are
necessary to prepare for future workforce, and how can the
industry prepare HBCUs to meet this demand?
Mr. Strickland. No, Josh, go ahead. No, go ahead, Josh.
Mr. Nassar. Oh, sorry.
Well, first of all, we need to in general have more of a
focus on trade schools and those kind of jobs regarding
manufacturing and really supporting those as a career option.
As far as auto workers being able to work--existing auto
workers on electric vehicles, that is not something that is of
major concern. Workers are used to transitioning from vehicle
to vehicle, platform to platform. But really, we need a lot
more when it comes to encouraging people to work in
manufacturing, and making them good jobs really helps.
Thanks.
Mr. Lawson. Anyone else on the panel?
Mr. Strickland. Yes, sir. We at GM are definitely making
that same investment in terms of training and protecting our
workforce. We have about 1.3 million years--1.4 million years
of collective experience, and not only sort of dealing with the
entire vehicle that we have an essential workforce. And looking
at our initiatives long-term for training, we definitely have
that same focus as Josh mentioned in his response, and it is a
partnership that is best served for us to be able to bring our
workforce along and make those opportunities available.
And just another note of personal privilege, also go Dogs.
I am from Atlanta.
Mr. Lawson. Okay. Anyone else before I ask the next
question?
Mr. Wood. I have one more thing to add, if I may?
Mr. Lawson. Go ahead.
Mr. Wood. So, some of the work that Southern Company has
done particularly with the University of Georgia is developing
e-Mobility certificate that will be housed in the College of
Engineering, but it is cross-functional with aspects of public
policy from the business school, from public health, with the
idea that electric transportation itself is a budding industry
and it is growing, and you may need to know aspects of it in
other jobs that you get.
So, that is in flight now, but also with in conversations
with university systems of Georgia, with our technical colleges
system, I tend to break this out into three kind of big
buckets: the infrastructure itself and understanding how that
needs to be installed; vehicles and autonomy, and what that
means for the second piece; and the third piece will be on the
corporate side. For example, if you work in a fleet
electrification capacity for a large package delivery company,
you still need to understand how electric vehicles work and how
those are different than maybe traditional fleet vehicles. So,
that is a big focus for us.
Mr. Lawson. Okay, and I know that this next question I will
try to get in is that as we look across America and we see all
of the hurricanes, tornadoes, and stuff that have caused so
much damage, and it is always sometimes weeks and so forth for
electric utilities to get back up. What type of relationship
would this have on vehicles, especially in rural areas, when
electrification is down and at the same time, people won't have
transportation if we have more electric vehicles and not using
any fossil fuel for them to get around? Has that been taken
into consideration when you all are looking at getting more
charging stations and so forth?
Look at the recent tornado that we had and the devastation
that it caused in Kentucky and other places.
Mr. Wood. Yes, that is actually a great question. I have a
couple points on that. One being if the power is out, yes,
electric vehicles will be at a bit of a disadvantage, but also,
gasoline vehicles will too because pumps won't operate without
electricity. However, one of the main thrusts of states is that
they are planning for the Infrastructure Investment and Jobs
Act formula funding that is coming is putting together a
statewide plan. Some states, such as Florida, have already
published a statewide plan with hurricane evacuations and
whatnot already in that plan as it relates to electric
vehicles, and more and more states are doing that. Utilities
are also doing that.
The Chairman. Thank you. The time of the gentleman has
expired.
The gentleman from Iowa, Mr. Feenstra, is recognized now
for 5 minutes.
Mr. Feenstra. Thank you, Chairman Scott and Ranking Member
Thompson.
Supporting innovation that will create jobs at home and
lower our emissions in the transportation sector is obviously
all our goal, and in efforts to reach this vision, there are
many steps that we need to take. However, I do want everyone to
remember--and this is so critical--that the consumer dictates
the demand for vehicle purchases, not government, and I think
so often we put that cart before the horse. Electronic vehicles
obviously represent one potential opportunity, but we should
not let biofuels, carbon capture, and other technologies get
swept under during this discussion.
I believe accurate information is always necessary, factual
information, to provide industry with the tools needed to
innovate in this space. It is one the reasons that I introduced
the COST Act (H.R. 5621, Comparison of Sustainable
Transportation Act), which would examine the cost of the
lifecycle of emissions of fully electrifying the Federal fleet
versus transitioning it to a flex-fuel vehicle fleet.
Mr. Mills, I appreciate your insight from the research
challenges related to electric vehicles, carbon accounting. In
your testimony, you noted that there are no reporting
mechanisms or standards equivalent to the transparency with
which petroleum is obtained, refined, and used. How may we
establish reporting mechanisms or standards to perform this
research, leading to more accurate information and a lifecycle
of carbon emissions?
Mr. Mills. Well, thank you, Congressman. That is a
challenge. I think the model we have might be in the mineral
space. You recall some years ago concern about so-called
conflict diamonds, knowing where diamonds came from and not
from abusive labor practices. It is a very difficult issue,
because the industries, businesses, and the people who are
engaged in mining, virtually all the minerals are not under the
jurisdiction of American firms, American legislators,
regulators. So, we can ask, and I think we should ask
manufacturers to be more transparent in the supply chain. Many
of them are trying. Let me just give credit to companies like
GM and Mercedes Benz and others. They are making the attempt to
document the supply chain where practices are abusive. It is
very difficult. I think we just have to demand more.
But the same thing would be applying to where these things
are being produced, the labor to the point we heard earlier,
the labor in the mining and the processing is all overseas.
Assembling electric cars here is no different than assembling
internal combustion engines here and having all the fuel and
all the labor to make the fuel for gasoline overseas. That is
exactly where we are with electric vehicles.
Mr. Feenstra. Thank you. Thank you so much for that answer,
and I agree with you.
My next question, many of the convenience stores in my
district serve communities with populations of only a few
hundred people. Most communities, it is the main area. It is
the one store they have, and it is so important to me that
these convenience stores continue their operations for years to
come. Mr. Walter, do you have concerns for the viability of
these local stores, and how can we ensure that these businesses
continue to operate without undue burdens?
Mr. Walter. Yes, thank you for the question, Congressman.
I think, the c-store industry as a whole wants just a level
playing field that is open, that is highly competitive, and as
you know, we serve many customers every single day, millions
across the country, and what we really want is an open level
playing field with price discovery that is apparent across the
board.
As I mentioned earlier, the fuel market is highly
competitive, and today the EV market or the charging--for
charging is very much opaque. And so, at the end of the day, we
are here for our rural communities. We want to serve them, and
we want to serve them at the lowest cost possible.
Mr. Feenstra. Thank you, and you are exactly right. I mean,
every one of my communities, the convenience stores are a vital
part and vital economic engine for our main streets, so thank
you for those things.
As we continue to discuss investments and cleaner
transportation, we must avoid putting all our eggs in one
basket. As I said before, this current Administration put out a
report projecting that four out of every five vehicles
purchased by 2050 will still run on liquid fuels, and taxes of
liquid fuels are paramount when you talk about maintaining our
rural roads, and that is a whole other discussion. To achieve
our vision and reduce greenhouse gas emissions in the
transportation sector, we must also be looking at supporting
biofuels by allowing year-round E15, supporting the deployment
of carbon capture technologies, and considering a nationwide
Low Carbon Fuel Standard.
And with that, I yield back.
The Chairman. The gentlewoman from Iowa, Mrs. Axne, is
recognized for 5 minutes.
Mrs. Axne. Thank you, Chairman Scott, and thank you to all
of our witnesses for being here today and lending your
expertise to another biofuels discussion.
I just wanted to correct the record here. We did have a
CEEC biofuels subcommittee hearing last November, so we have
been addressing biofuels, and for me, it is a key priority. So,
I am glad we are here again.
A little less than a year ago, this Committee held its
first hearing of the new Congress on the topic of climate
change, and the potentially devastating impact on agriculture
and rural communities. And from, of course, increased
uncertainty to unpredictability of weather patterns to more
powerful storms like we have seen in Iowa with the derecho and
floods, et cetera, of course, many of our farmers are on the
front lines dealing with the issues related to climate change.
So, within the transportation sector, which contributes the
largest share of our nation's greenhouse gas emissions, we have
a couple of key tools here to reduce those emissions, electric
vehicles and biofuels. And gosh darn it, if I didn't just find
out today that the first electric vehicle was made by a Des
Moines guy in Iowa a long, long time ago. I did a little bit of
history there. So, we have some--a history in that,
Representative Feenstra, that I wasn't aware of.
But as a new and promising technology, we know that
electric vehicles have received a heck of a lot of attention
lately, including significant funding in the bipartisan
infrastructure law. So, I am looking forward to seeing how
those investments build out necessary infrastructure for
greater electric vehicle use, benefitting both urban and rural
communities.
However, the dire need for carbon reduction can't wait and
be achieved when we have electric vehicles alone as the only
option, and we can't wait for this to get to scale. We have to
capitalize on the carbon benefits possible today through the
use of biofuels. And as was pointed out through Mr. Cooper's
testimony, Americans will continue to consume hundreds of
billions of gallons of liquid fuel for years to come. So, if we
are taking the climate crisis seriously, we have to replace as
much of those gallons as possible with higher blends of
biofuels.
And thankfully, our farmers and biofuel producers are doing
their jobs and providing billions of gallons of clean-burning
biofuels. In fact, your members have even committed to being
net-zero carbon footprint by 2050, so this is exciting.
So, my first question goes to you, Mr. Cooper. As you noted
in your testimony, it is going to take some time, decades, for
the vehicle fleet to convert to electric technologies, and some
heavy-duty uses may never find an electric solution. So, that
is another reason to look at biofuels. So, could you please
expand on how biofuels will be able to make significant
contributions to lower the carbon transportation sooner than
electric vehicles?
Mr. Cooper. I am happy to, and thanks for the question,
Congresswoman.
We agree completely. If the goal here is decarbonization,
we have to get started now. We cannot afford to wait decades
for more electric vehicles to penetrate the light duty vehicle
fleet. And so, we need a few things in order for that to
transition to really kick start with biofuels, and one of those
is more infrastructure. We can't allow consumers to capture the
full benefits of low-carbon biofuels unless retailers are
offering those fuels, and so, we need to see more
infrastructure in place that would allow for dispensers and
storage tanks and other equipment compatible with these fuels,
and that is why we strongly supported your work to include some
funding in the House-passed Build Back Better bill for biofuel
infrastructure, nearly $1 billion. That is quite significant
and would really help in this transition.
But you are absolutely right. Corn ethanol today already
offers a 50 percent greenhouse gas reduction. We have a lot of
ethanol in the marketplace. In fact, the California Air
Resources Board has certified that some ethanol is already 70
percent better than gasoline, and we are well on our way to
net-zero emissions for corn ethanol. So, that transition is
well underway, and we just need continued support to make sure
that happens.
Mrs. Axne. Thank you for that, and speaking of continued
support, I want to move to another policy I am working on.
Earlier this week, the Supreme Court denied to review a
district court decision last year that jeopardizes the ability
for fuel retailers to provide year-round E15 for consumers. And
so, if we don't pass the bill that I have done along with
Representative Angie Craig, the Year-Round Fuel Choice Act
(H.R. 4410), and allow the sale of year-round E15, what are the
consequences of this decision, both in terms of rural
communities and carbon output?
Mr. Cooper. Well, it would have a significant impact. We
have already noted that transitioning to E15 would reduce
emissions by about 20 million metric tons nationwide, and we
have heard from retailers that say if they can't sell the fuel
year-round, they are unlikely to offer it. So, it is a huge
barrier that needs to be resolved.
Mrs. Axne. Thank you.
The Chairman. The time of the gentlelady has expired. Of
course, feel free to respond in writing.
Mr. Cooper. Thank you.
The Chairman. The gentleman from New York, Mr. Jacobs, is
now recognized for 5 minutes.
Mr. Jacobs. Thank you, Mr. Chairman.
My question is for Mr. Strickland and Mr. Nassar: there is
an issue that has been raised here in my community. I represent
the outskirts of Buffalo, New York. We have, in my district, a
Ford stamping plant and just outside my district, a GM
powertrain plant. Between the two of them, they employ well
over 2,000 people, very good paying jobs. It has been a staple
of our industrial base for a long time, plus many, many
suppliers, the old Harrison Radiator plant, which is in
Lockport, also has about 1,000 employees which supplies a lot
of GM products.
But in our area, due to the fact that I look across the
Niagara River to Canada, we have had a really robust and
successful binational automotive manufacturing sector for
years. NAFTA played a role in that. That was a very good part
of the NAFTA, even though it was an imperfect trade deal, and
both those plants rely very much on their proximity to Canada.
The stamping plant stamps and then they ship that up to
Oakfield up in Ontario where they add to that and it comes back
down, and actually multiple trips back and forth in the
production process.
What I am raising is a concern that has been highlighted in
the Build Back Better plan, Build Back Better Act that would
provide the 12,500 electric incentive credit, in that it is
only for American-made cars. And there is a concern that this
would be harmful to these manufacturers up here which rely so
strongly on a binational model. And there has also been
concerns raised that this may be a violation of the new USMCA,
which I am very concerned by, because of the fact that we are
trying to remedy some of the problems that we have had with
Canada not adhering to reducing the dairy tariffs that are in
the USMCA.
Anyway, we all support green energy. We all support the
movement to have an added mix of electric cars, but it is very
important to do that in a way that is not harmful to our
employees and the significant employers that have really been a
part of it, the automotive manufacturing fabric in this
community for so long.
If there is any comment on how we can do this to make sure
that policies are not harmful to the employees and employers in
a region like ours, which is a real binational region?
Mr. Nassar. I am happy to answer that. Thank you for that
question.
A few things. First of all, the provision that you are
talking about, it would be in 5 years, not allowing imported
EVs to get tax credits. We very much agree that the supply
chain work between Canada and the U.S. in your region and other
areas is really important to maintain, and we are so, I agree
with you on that.
I think the whole thing, though, is that, first of all, as
we have talked about EVs, they are four percent of sales. They
are about two percent or less of the cars on the road. So, I
think we need to take a deep breath and put things in
perspective a little bit.
Second of all, it is in 5 years, so there is time if it
were to become law to try to work on some of these trade
issues. But I think the other thing that--to look at is do we
want to subsidize floods of EVs coming from China, from Mexico,
from all over the place with U.S. taxpayer dollars? Our
position at UAW is we don't think that is prudent. We think
that we should focus U.S. taxpayer dollars on promoting U.S.
manufacturing.
So, one last thing. The EV tax credit stuff that doesn't--
there is an extra bonus for batteries made in the U.S., but
besides that, it is not a content-related provision. So, the
supply chain impacts should--we need to keep that in mind when
we are analyzing it. Thank you.
Mr. Jacobs. Okay.
The Chairman. Does the gentleman yield back?
Mr. Jacobs. Just to conclude, I just wanted to say that I
understand and agree completely about flooding from China. A
product I would say that differentiate a bit between Canada and
Mexico were part of the USMCA, and that part of that agreement
was to make sure that the wages are significantly raised if
they are to participate----
The Chairman. The time of the gentleman has expired, and
the witness may respond in writing. Thank you very much.
And now, I recognize the gentlewoman from Washington. Ms.
Schrier is recognized for 5 minutes.
Ms. Schrier. Thank you, Mr. Chairman, and thank you to all
of our witnesses. I have listened carefully to all of your
comments and find this a very interesting discussion. I am
really happy that we are discussing electric vehicles and that
role in rural America, because this topic has come up several
times in recent weeks as I have been out and about in my
district.
The first discussion was a bit of an eye-roll by a farmer
explaining that the economics of running a farm are so tight
right now between labor and feeling squeezed by buyers that the
notion of investing in an electric tractor or electric semi was
just not a realistic one. The second was a discussion with
wheat farmers who told me that because of economics, they
generally buy used trucks. They have their own semis and would
be in no position to buy an electric semi. The third was
interesting. It was actually a fruit farmer in my district who
has made the investment and ordered a Tesla semi, and he sees
that the country is headed in this direction. He made some
calculations and determined that he will save enough in diesel
costs and truck maintenance to make up some of the expense, and
he also expects that he will be able to do something previously
unheard of, which is back the truck right into the warehouse
for loading, which will streamline the process, save a step,
save time, and money. And you can't do that with a diesel
truck.
And then the last conversation was actually with Puget
Sound Energy, and we were talking about what it takes to site
electric vehicle charging stations. And we think from paying
rent on parking spaces to siting transmission lines and
installing transformers and payment systems, and it is really
complex. And as one of our witnesses pointed out, really
expensive. In fact, Mr. Mills, you noted that.
I would also like to acknowledge Mr. Mills' comments about
personal electric vehicles in rural America, and some potential
challenges, including power outages. And so today, I would like
to focus more on the electrification of semis and medium- and
heavy-duty trucks, which make up just five percent of vehicles
in the country, but contribute 25 percent of vehicle greenhouse
gas emissions, and I believe 70 percent of particulate
pollution. So, this in rural America is really where we get the
most bang for the buck.
So, Mr. Strickland and Mr. Wood, I want to get to you with
questions about charging infrastructure. In the City of
Wenatchee that is in my district, apple capital of the world,
they invested in an electric bus system with an inductive
charging system, which is amazing. The bus can come by, drive
over this thing, charge up in 5 minutes, and get going again,
and I would imagine that is the kind of thing we are going to
need for electric semis.
So, Mr. Wood, do you have an opinion based on your
experience about what the smartest way is to develop charging
infrastructure for buses and these semis and medium-, heavy-
duty trucks?
Mr. Wood. Thank you for the question.
So, what we have done at Southern Company thus far,
especially to your question around electrification of medium-
and heavy-duty vehicles, the first thing we did was look at our
footprint across Georgia, Alabama, and Mississippi, and mapped
out, for example, in the case of fleet electrification, where
our warehouses are and--which are often in rural areas with
access to interstates. But if you think of a warehouse, it may
have air conditioning and lighting for a small office space,
for example, but not for the amount of energy that 50 trucks
can just show up outside and charge, for example. So, our first
action really was looking at our electric grid and seeing where
we have excess capacity, where we have maybe some constraints
where we may need to do additional upgrading to figure out how
we can assist customers, step one.
Beyond that, there are challenges at each depot depending
on the amount of vehicles, how it needs to electrify, what the
end result or end goals of that customer are.
So, to my earlier comment of involving the utility early,
that is how, I guess, the smartest way to start is to make sure
that you engage that conversation up front so the utilities can
start to respond and understand what the implications are in
that particular area for the grid.
Beyond that, there are some interesting technologies. We
have the Ray down in southwest Georgia. Allie Kelly is the
Executive Director where she is investigating inductive charge
and that exact thing, so it is definitely a technology that is
up and coming. While more work is needed, it is definitely an
interesting concept and I will be happy to connect you with
Allie if you like.
Ms. Schrier. Topic with my limited time, Mr. Strickland. I
am wondering since you are dealing with fleets of electric
vehicles with FedEx, for example, is there a way to have the
same kind of charging infrastructure that would apply to fleets
of delivery vehicles and semi-trucks and buses?
Mr. Strickland. Representative, I will certainly get back
with my group of very talented engineers and planners. They are
probably better positioned to answer that than I, but our work
group--on our commercial vehicle side, thinking about how we
can provide----
The Chairman. The time of the gentlelady has expired, but
please do respond in writing to her inquiry.
[The information referred to is located on p. 109.]
The Chairman. And now, the gentlelady from Minnesota, Mrs.
Fischbach, is recognized for 5 minutes.
Mrs. Fischbach. Thank you, Mr. Chairman, and Mr. Chairman,
I do appreciate a lot of the discussion or the comments that
have been made regarding the biofuels, but I am still not sure
quite what to make about the hearing.
The hearing comes after the Majority's push through the
partisan $2 billion--$2 trillion, excuse me--package that picks
the winners in EVs at the expense of my district's farmers and
biofuels producers. Now, we are here today and we are exploring
whether this investment would work for rural America, and
despite my colleagues already have picked a side.
And Mr. Chairman, I would like to insert for the record the
article from Wanda Patsche, a farmer in southern Minnesota,
about what an EV mandate would mean for their livelihoods and
the economic lifeblood of my state.
The Chairman. Without objection.
[The article referred to is located on p. 108.]
Mrs. Fischbach. Thank you, Mr. Chairman.
I agree with Mr. Cooper that liquid fuels are still here to
stay, but because of that, biofuels will play an important role
in reducing carbon emissions. Unfortunately, President Biden's
Build Back Better Act doesn't agree, providing more than 15
times the amount of EV incentives than for biofuels.
Even further, I also saw the reports this morning that
President Biden may be considering going back on his promise to
producers in my district for annual biofuels volumes in Fiscal
Year 2022. I can't help but see a trend of what the future
holds for the biofuels industry that is so important in my
State of Minnesota.
There have been some comments about the credits that were
included in the Build Back Better, but I would like to ask Mr.
Strickland and Mr. Laughridge about the recently passed Build
Back Better, which all of my colleagues on the other side voted
for. It did provide several credits for the purchase of
electric vehicles and plug-in or hybrid vehicles. Are you aware
of any similar credits for flex-fuel vehicles that were
included in the BBB that we passed recently?
Mr. Strickland. Well, Representative, I am aware currently
of the electric vehicle credits, but I am not as closely tied
to BBB. I will get back to you on that, but I am not aware of
it at this point.
Mr. Laughridge. Thank you, Congresswoman. I am not strictly
aware of the exact credits, but I do know we consider that
everything should be a level playing field, and to achieve that
widespread EV adoption, we really need to be looking at how
that affects everyone equally.
So, to me, I think it goes to the broad application of EV
tax credits, but it should be a level playing field.
Mrs. Fischbach. Well, 15 times more the investment doesn't
seem like a level playing field.
Mr. Cooper, could you respond to that same question?
Mr. Cooper. I would be happy to, Congresswoman, and again,
I am going to sound like a broken record here. But if the goal
is to reduce carbon emissions from transportation, we ought not
be picking technology winners and losers, and we really should
be incentivizing the behavior to reduce emissions without
regard to what fuels and vehicles are doing that. And then step
back out of the way and let the market determine what the
lowest cost, most economic way of reducing emissions is.
We believe it is through flex-fuel vehicles in the near-
term. When you put corn ethanol, 85 percent ethanol blend into
an FFV, you are getting a significant reduction in greenhouse
gas emissions. You are correct. There was no incentive included
in the Build Back Better plan for flex-fuel vehicles. We were
optimistic when a bill was introduced in the Senate last year
by Senators Klobuchar and Ernst that would have created a flex-
fuel vehicle credit. Unfortunately, that was not included in
either the infrastructure plan or Build Back Better. So, we are
hoping that can be picked back up this year.
Mrs. Fischbach. And Mr. Cooper, just finally, I just have a
few more seconds, but are you aware of any statements or
inclinations from the Biden Administration that they would
support these same incentives be extended to vehicles that use
higher blends of biofuels?
Mr. Cooper. I am not aware of really the Administration's
position on FFVs at this point. We know there are also things
EPA can do through its fuel economy or actually its tailpipe
emissions standards to help incentivize FFV production. That is
what led to the 22 million FFVs we have on the road today was
the EPA and NHTSA standards. Those credits are no longer
available to automakers, and so yes, EPA plays a role in this
as well and would love to see those CAFE credits restored for
flex fuel vehicles.
Mrs. Fischbach. Thank you, Mr. Cooper, and with that, I
yield back, Mr. Chairman.
The Chairman. The gentleman from Georgia, Mr. Bishop, is
recognized for 5 minutes.
Mr. Bishop. Thank you very much, Mr. Chairman. I want to
certainly thank you for holding this hearing, and for your
leadership on these pivotal issues that are so timely. And I
want to just thank you also for the breadth and the broad scope
of the witnesses that are here to talk about it, because there
are definitely pros and cons on this issue. I think this is
important for the Committee to hear all sides of this, because
it is so very, very important.
Let me go to an area--many of the questions that I had have
been asked over the past couple of hours, but I want to deal
with the utility company rate structure issue. Because energy
demand--let me direct this to Mr. Wood from the Southern
Company. Since energy demand is much lower at night, some of
the utility companies reduce their electricity rates at that
time. But transition to electric vehicles will lead to a
significant long-term increase in the demand for electricity.
How do you anticipate that this load growth will impact
electricity rates? Should rural customers, especially those who
don't own electric vehicles, should they be concerned that
their utility rates will go up higher, even though they are not
utilizing the electric vehicles to the same extent? And does
the Southern Company, or do you think others similarly situated
to the Southern Company will support the creation of a new rate
structure, such as real time pricing or time of use rates to
impact customer behavior?
Mr. Wood. Thank you, Congressman, for the question.
So, Georgia Power actually offers a time of use EV charging
rate for 1 per kilowatt hour from 11:00 p.m. to 7:00 a.m.
incentive for EV charging, and that is a whole house rate. So,
it is not sub-metered. So, theoretically, wash your clothes and
run your dishwasher at the same time. And it is a time of use
rate, so the rest of the time is off peak except for 2:00 p.m.
to 7:00 p.m. in the afternoon.
Similarly, Alabama Power also offers an EV charging rate
for residential and also for public fast charging, business
electric vehicle rates that eliminates demand charges that we
think will be helpful for the convenience store industry as we
have continuing dialogue with them. And those are happening
already today.
So, I guess in answer to your question, I don't look at it
as a future issue. I think it is a today issue, and utilities
are already navigating through that, especially considering
this will be an incremental adoption of electric vehicles. I
think we have plenty of time to have a dialogue and to see what
the impacts will be. But to date, we haven't seen that.
Mr. Bishop. Thank you very much for that.
Let me go to Mr. Walter regarding some of the fuel retailer
incentives. I think you indicated in your testimony that one of
the major factors deterring consumers from transitioning to
electric vehicles is concern about where they will or won't be
able to refuel. It seems that people will continue to get their
car's energy, whether it is diesel or biofuel or electricity,
from refilling stations, and especially so if they don't have
access to a charging station at their residence.
With fuel retailers being such an essential piece of the
puzzle to help increase the adoption of electric vehicles, let
me ask you if you can give us a sense of the size of your
industry, how many charging stations your industry might have
the capacity to provide if the right incentives were there, and
could you just touch a little bit more on how we can
incentivize the fuel retailers and the convenience stores to
invest in new technology, and how we ensure that those
incentives are flowing to our rural communities?
Mr. Walter. Thank you, Congressman.
As I mentioned before, we have 150,000 constituents and
120,000 of them selling motor fuels today. I don't have the
exact count of how many offer EV chargers to date, but I can
tell you at Sheetz specifically, we have 78 locations that
offer EV charging, which represents around 12 percent of our
overall store portfolio. And what we really need is a clear
economics around what it takes to provide energy to consumers
through their ability to charge and them to have a guaranteed
rate of what they will be charged at a convenience store like
ours.
If you look across the platform for our industry, there are
widespread prices on the pylon that clearly tell you and state
what the price of fuel is on any given day. That does not exist
today for EV charging, and while we note that the growth of----
The Chairman. The time of the gentleman has expired,
unfortunately, but please respond in writing to Mr. Bishop.
Thank you.
[The information referred to is located on p. 118.]
Mr. Bishop. Thank you, Mr. Chairman.
The Chairman. The gentlewoman from Maine, Ms. Pingree, is
recognized now for 5 minutes.
Ms. Pingree. Thank you very much, Mr. Chairman, and thank
you so much to all of our witnesses. You have been here with us
for a long time, and I appreciate the time you have taken with
us and your ability to describe this from your perspective.
I want to say a couple of things before I ask my questions.
I come from Maine. I come from one of the most rural districts.
Even though we tend to think about rural districts being
somewhere else in the country, I represent a lot of farmers and
fishermen, and I have many conversations with people who drive
Ford, GMC, Chevrolet trucks, virtually everybody does in my
community, who can't wait to have the opportunity to have an
electric truck. They can't wait to be done with the
maintenance. They can't wait to have these changes and
opportunities and see some of the new trucks coming off the
line as having all the power they need, whether it is pulling a
trailer or putting a big load on, or using it at a job site for
a generator. I mean, we keep talking about these in a negative
way as if people are running in the opposite direction. I know
there are affordability issues. I know we want to make sure
that our electricity comes from renewable fuel, but these are
going to be a great opportunity in rural America.
I also know that to the extent that people have the
opportunity to put solar panels on their houses because of the
reduced cost of solar power and the credits available, people
are anxious to stop having to pay their utility bills and be
able to pull their truck in, use their solar power, and power
their trucks that way and be independent in that way.
So, we keep talking about this in a negative way, but I
think it is important to think about the great opportunities
this offers up, the opportunities for agricultural equipment as
we discussed a little bit, precision agriculture, some of those
opportunities. And also even on the convenience store side, I
was glad to hear Mr. Bishop's questions and appreciate your
response on those.
But frankly, when you have to plug in your electric car at
a convenience store down the road, you have just that much more
time to stop in, get some food, do a little shopping. I think
it is a great market opportunity for them as well, and I
understand some of the challenges about understanding what the
pricing will be and getting some uniformity in what is a very
new technology, really, of these plug-in stations. And I know
they need to be, there needs to be some different standards,
but that is why we are making these investments now so there
can be uniformity and availability. And frankly, I am just very
excited about what we have in front of us, and really, thank
you all for lending your thoughts to that.
Mr. Nassar, you have spoken about this a little bit, and in
your testimony, you talked about the three-pronged approach to
ensure competitiveness in electric vehicles and the
infrastructure, and you sort of talked about the importance of
the fact that we have already passed the bipartisan
infrastructure bill, but also how it fits in with the Build
Back Better bill, and why that will make a big difference. Do
you mind just talking a little bit more about that?
Mr. Nassar. Sure.
So, the new law, it does have the funds for
infrastructure--some funding for EV infrastructure and also for
incentivizing electric buses, and it also includes some funds
for helping--for DOE funds helping plants upgrade and change to
be able to have more efficient products, basically. But, it
didn't address anything about consumer incentives and consumer
price, and that is going to be a big part of it. And also, more
needs to be done on the what I would say the supply side. So,
basically those things to really make sure that the battery
production is here. So, we don't have all three prongs in play,
to put it bluntly.
Ms. Pingree. Great, and I appreciate that because we do
want all of that--those jobs to be in America and that
manufacturing capacity to be here.
Mr. Strickland, thank you so much, and we love seeing the
beautiful pickup truck behind you there. I hope that is on the
road soon.
You talked a little bit about--or I guess it was in your
testimony about GM being interested in leveraging some of the
USDA programs to support EV charging structure, and I know
there has already been a question or two about that. But do you
have any specific programs in mind, and can you talk about how
that might help to fill the gaps since that is some of the work
of our Committee?
Mr. Strickland. I can definitely make sure that my team
[inaudible] by USDA, but I know the Rural Electrification
Program grants I don't know which part of USDA could be some of
that helps leveraging. But more importantly, I think having the
advice and the expertise of the USDA in sort of dealing with
rural communities and being able to help identify parts and
places where we can think about laying out infrastructure is
very important. But I will certainly get back to you in writing
in terms of where we see those opportunities within USDA to be
leveraged.
Ms. Pingree. Perfect timing. I yield back the rest of my
time, as I am out of time. Thank you, Mr. Chairman.
The Chairman. The gentleman from California, Mr. Carbajal,
is recognized for 5 minutes.
Mr. Carbajal. Thank you, Mr. Chairman. I appreciate the
opportunity, and thank you to all the witnesses here today.
Climate change certainly poses an immense threat, and we
must invest in renewable energy infrastructure, obviously, to
protect our planet. Electric vehicles are an important part of
modernizing our transportation sector. EVs--not only does this
transformation benefit the environment, but it also
significantly benefits the economy.
Mr. Wood, the bipartisan infrastructure law will fund
500,000 EV charging stations across the country to reduce
emissions. Can you discuss how EVs and EV infrastructure will
translate into jobs and workforce development in different
parts of the country?
Mr. Wood. Thank you for the question.
So, as we think about the entire supply chain around EV
infrastructure, and even the vehicles themselves of the
components that it takes to make each of the pieces of the
infrastructure or the vehicles, all--if you think about
manufacturing plants, there is a supply chain that rolls into
those, and there is a distributive supply chain beyond the
product that you see. So, as we gain momentum, as we roll out
more infrastructure, as we have a demand for increased
charging, for increased materials, like wire conduit that will
supply the electricity, for example, for vehicles that need to
use that charging. There will naturally be a rising tide lifts
all boats in that regard of more jobs, but it is also around
workforce development, specialized training, people that
understand this technology, how it works. For example, battery
chemistry, what the next generation of batteries looks like.
All of that will come as this charging gets rolled out and
demand increases.
Mr. Carbajal. Thank you.
In addition to the possibilities that EVs present,
renewable natural gas, RNG, is a naturally occurring biomethane
that can be captured during production at dairies, poultry
operations, and hog farms. When cleaned up, it can be put into
existing natural gas infrastructure and used as a carbon
neutral or carbon negative transportation fuel. In 2020,
California fleets fueled with California-produced RNG were
carbon negative.
Capturing RNG can address a couple of different issues. It
captures harmful emissions from farms while providing a clean
transportation fuel available to rural America today. What role
do you see for RNG in providing clean fuels for rural America?
Mr. Wood. So, as part of my work with Georgia Clean Cities,
we talk a lot about carbon intensity and the alternatives. So,
as we think about electrification--and yes, I know that is
where our focus is today--sometimes there is not an electric
alternative for a particular duty cycle or piece of equipment.
In that case, sometimes it may make more sense to convert from
gasoline or diesel to natural gas, for example, if there is
equipment available. And that is a switch that can be made
today versus waiting for a new piece of equipment 2, 3, 4, 5
years out. So, I think there is definitely a role for RNG to
play. That is a role that can be played today as we move
forward with the public policy goal in mind of reducing carbon
emissions.
Mr. Carbajal. Thank you very much. Madam Chair, I yield
back. Mr. Chairman, I yield back.
The Chairman. Thank you.
The gentlelady from Illinois, Mrs. Miller, is recognized
for 5 minutes. Mrs. Miller, you may need to un-mute.
Mrs. Miller. Thank you. Thank you, Mr. Chairman and
witnesses.
I cannot embrace President Biden's radical Green New Deal
agenda that forces American taxpayers to pay for electric
vehicle infrastructure at a time when our farm families are
struggling to heat their homes. High electricity demand breeds
high stress on our power grid, as Californians and Texans have
found out with rolling blackouts and calls to reduce energy
consumption. I cannot embrace this agenda which is a taxpayer-
funded handout to China.
A typical electric vehicle needs six times the mineral
inputs as manufacturing a conventional car, according to the
International Energy Agency. The vast majority of these
minerals are mined in China with very low standards in labor
and environmental protections. The Biden Administration's
environmental agenda also ignores the global context of climate
change. China emits twice as much as America. It is unfair to
force American taxpayers to subsidize electric vehicle
infrastructure for what seems to be President Biden's top two
priorities: punishing rural America, and helping China. We have
to hold China accountable, which is why I am introducing my
bill today to ban Chinese purchases of our agricultural land.
And with that, I have a question for Mr. Mills. Mr. Mills,
rare earth elements are considered critical to modern batteries
and electronics, yet United States is almost wholly dependent
on China to supply our factories with these critical minerals.
Just a few years ago, there was a real palpable concern that
China would use its control of rare earth element production to
further its geopolitical aims by restricting the export to the
United States. If that happens, how would we build batteries,
solar cells, wind turbines, and all the other tools of modern
life? So, is rare earth mining more environmentally damaging
than mining for other materials?
The Chairman. Does the gentlelady yield back?
Mrs. Miller. Well, did Mr. Mills--could he answer my
question?
The Chairman. Oh, Mr. Mills, did you hear the question?
Mrs. Miller. Maybe I ran into it too fast.
The Clerk. Mr. Mills is no longer on camera.
The Chairman. Mr. Mills, you may want to un-mute.
The Clerk. Ask if there is anybody on the panel that would
like to address the question.
The Chairman. Is there anybody on the panel that might want
to pitch in?
Well, thank you, gentlelady. You have 2 minutes remaining.
Do you yield back?
Mrs. Miller. Does Mr. Mills not want to answer that
question?
The Chairman. We have not been able to locate him on the
panel.
[The information referred to is located on p. 119.]
Mrs. Miller. Oh, okay. Well, then I yield back. Thank you.
The Chairman. Perhaps he has stepped off. Thank you.
And now, we recognize the gentleman from California, Mr.
Costa, who is also the Chairman of the Subcommittee on
Livestock and Foreign Agriculture, for 5 minutes.
Mr. Costa. Well, thank you very much, Mr. Chairman, for
this good hearing that we are having today and the diversity of
witnesses. I must, once again, congratulate you on national
championship. It certainly has been a good year for Georgia,
not only with the Braves, but also with the Bulldogs. Since we
have Bulldogs out in California at Fresno State, I am happy to
cheer you folks on.
I want to try to focus on the big picture here. Mr.
Strickland, I was at a meeting with one of your primary
competitors, another major automotive company there in Detroit.
It sets goals for 2030 of over the majority of their automotive
production would be electrical vehicles. What similar goals do
you have beyond the Volt and some of the other vehicles you are
producing now as General Motors looks at the next 10, 15 years
of automobile production?
Mr. Strickland. Yes, sir. We have 20 electric vehicles
across our entire sales line, and we are going to be
introducing over the window of when we are going to be fully
electric by 2035. We are planning on selling one million
electric vehicles by 2025, so we are very much fully invested.
We are very much all in, and we align with the President's----
Mr. Costa. I think it is important to put that in
perspective, because General Motors, Ford Motor Company, the
major automotive manufacturers not only here but in Europe all
have similar targeted goals, it appears to me, as we are trying
to look at how we go through this transition.
Mr. Cooper, because we are talking here about electrical
vehicles, but you talked in a comment earlier about being
neutral as it relates to reducing carbon footprints in terms of
choice of fuels. Would you care to comment in terms of what
role hydrogen and there was a mention earlier by my colleague
in California about what we are doing in dairy and we have
turnkey operations on methane production today that are very
successful economically. But what role other fuels may have as
we make this transition?
Mr. Cooper. Absolutely, and thank you for the question,
Congressman.
We think right there in California you have an excellent
example of what can happen when you put a policy signal out to
reduce carbon emissions, and with the Low Carbon Fuel Standard
in California, the response you have seen from the marketplace
is a combination of low-carbon fuels that have increased their
presence in the market to achieve the reduction goals of the
program. The same thing could happen at the national level with
a similar type program, and you are right. Renewable natural
gas has made a significant contribution to meeting the
objectives of the LCFS in California, not only as a
transportation fuel itself, as was mentioned earlier, but also
as a process fuel to make ethanol and other biofuels. There are
some ethanol plants in California that have invested in taking,
capturing methane from dairies, digesting it, and using it to
replace natural gas----
Mr. Costa. What do you think about hydrogen?
Mr. Cooper. We think hydrogen is another phenomenal
opportunity for ethanol. Ethanol is a hydrogen-rich molecule.
It is an excellent carrier of hydrogen, and we think ethanol
could be a major source for fuel cell electric vehicles further
down the road.
Mr. Costa. My time is running out here, but I want to get a
perspective here with the $7\1/2\ billion for the bipartisan
infrastructure package on EV charging stations. And we look at
rural America that I have grown up in, and I think back to our
family's farming operation. When we talked about EV
connections, members of my family and friends already have EV
vehicles. They charge them at home. Our farming operation, we
had two gas pumps, regular and premium, and we had a separate
diesel tank.
For a lot of our ag producers in my area, they are going to
set up their own separate refueling methods for tractors and
for other equipment that they are going to need to use. My time
is running out, but I would like to see how we break this down
in terms of American agriculture doing its part.
The Chairman. The gentleman's time has expired.
And now, I recognize the gentlelady from Louisiana, Ms.
Letlow, for 5 minutes.
Ms. Letlow. Thank you, Chairman Scott, and thank you to all
the witnesses for your participation today in discussing the
implications of electric vehicle investments on agriculture and
rural America.
The 5th District of Louisiana is the definition of rural
America. Agriculture and small businesses play an essential
role in the local economies that serve the residents of our
rural communities. In addition, the oil and natural gas
industry is one of the leading industries in the State of
Louisiana in terms of economic impact, taxes paid, and people
employed. According to a 2020 report, the industry provided $73
billion to the state GDP, and supported 249,800 jobs in 2019.
However, the Louisiana Department of Natural Resources recently
estimated that the state lost 12,256 oil and gas industry jobs
between March 1, 2020 and November 15, 2021. In my opinion,
that is a substantial reduction to a sector that is so vital to
our state's economy.
Mr. Mills, as Members of the House Agriculture Committee,
we often remind the public that the United States is the global
leader in producing affordable and abundant food, fiber, and
energy in a sustainable way. How could this Administration's
top-down approach on policies up end our manufacturing, energy,
and agriculture industries? Specifically, do you see premature
investment in electric vehicles increasing costs and impacting
jobs for our rural residents and lower income households?
Mr. Mills. Well, thank you, Congresswoman. I think the
problems we have amounts to almost unserious examination of the
whole fuel cycle, and I will come back sounding like a broken
record on this, but the--America's mining industry is rural.
America's oil and gas industry is rural. Its food industry is
rural. These are rural industries. We have provided for several
decades massive disincentives to the mining industry, so all
the mining jobs and all the chemical processing jobs, which
would otherwise be rural, that would be needed to make the
battery cells to assemble vehicles here are going to be
overseas. They are already overseas. We are going to increase
them overseas. We are a net exporter of food, as you know in
America, we are also a net exporter of hydrocarbon fuels. So,
that goes away as we provide disincentives for that industry.
It would be almost like disincentivizing the entire
agriculture industry, and providing incentives to bankers, but
importing all our wheat and banning wheat production in
America. This is the path we are on with EVs.
I think EVs are great. There is phenomenal technology. GM's
products are wonderful. Ford's products are wonderful. They
still don't have the functionality of a gasoline-powered
vehicle for most of the uses that they are put to in rural
America. So, it is a very odd asymmetry and a lack of
recognition of the profound advantaging of other countries'
industries over ours with these mandates that are being created
here.
Ms. Letlow. Thank you so much, Mr. Mills.
Mr. Walter, one of the principles in your testimony is to
ensure fair treatment so all households are not forced to
subsidize alternative energy users. Can you expand on this
principle? Who pays for charging stations in rural communities,
and why does it matter?
Mr. Walter. In today's world, I mean, charging stations can
be subsidized through utilities and the like. I mean, we in the
convenience store industry, we are really focused on pricing
our products at a fair market price. We sell commodities across
the board, and that is really--if I could just speak to E15
briefly. We have undercut or priced E15 versus 87, a regular
grade gasoline by 20 to 25 across the industry, and we do so
at a time while that brings on cost savings to the consumer.
But in today's world, EV charging, per se, is being
subsidized at a state level and at a national level, and we
have not found EV charging implementation as an organization to
be profitable at this time. And so, really, there is a lot more
work that needs to be done until you can find an adequate
return on invested capital in this space.
Ms. Letlow. Thank you so much to the witnesses.
Mr. Chairman, I yield back.
The Chairman. Thank you.
The gentlewoman from New Hampshire, Ms. Kuster, is now
recognized for 5 minutes.
Ms. Kuster. Thank you, Mr. Chairman, and thank you again
for hosting this important hearing.
The transportation sector is the number one source of
carbon emissions in the United States, and as we decarbonize
our electric grid, transitioning to electric vehicles will help
our country reduce carbon emissions and harmful pollutants, and
thereby save our planet.
To support electric vehicles, we need to build out a robust
network of charging stations around the country, including in
rural areas. These charging stations can be isolated. Urban
areas need to adopt these charging stations so that people who
live there can experiences the benefits of electric vehicles in
my district to be important for our poor constituents and lower
class. And visitors can feel confident traveling to and
spending their dollars in rural communities.
So, in short, we must ensure that rural Americans have just
as much incentive to buy EVs as Americans living in cities and
suburbs. But one of the main challenges to building out public
electric vehicle charging infrastructure are demand charges.
Demand charges are a monthly fee you pay to the electric
utility in order to maintain the infrastructure needed for the
power to reach your house or building. These demand charges are
one way for utilities to recoup the costs they incur to
maintain an electric system necessary to meet peak demand.
However, many utilities have yet to adjust electric rates
to ensure that demand charges levied against electric vehicle
charging infrastructure accurately reflect the costs chargers
impose on the electric system, and this means electric vehicle
charging service providers pay more for electricity than they
should. As a result, high costs must either be passed along to
consumers, or eaten by charging service operation. Gas stations
that include electric vehicle charging infrastructure. Can you
explain to the Committee how high demand charges impact this
space for having electric chargers, especially in rural
communities?
The Chairman. Ms. Kuster, you may want to repeat the person
who you are referring----
Ms. Kuster. I am sorry. My apologies. I am having trouble
with my connection. Can you hear me, Mr. Chairman?
The Chairman. Yes. Who did you direct your question
towards?
Ms. Kuster. Mr. Walter. Mr. Walter from Sheetz.
The Chairman. Thank you.
Ms. Kuster. Thank you.
Mr. Walter. Thank you, Congresswoman.
I mean, first and foremost, Americans are not going to put
up with surprise fluctuations in the cost of energy at a retail
location like ourselves unless there is clear price discovery
that exists.
You know, essentially price gouging or peak demand charges
could negatively affect the consumer in many ways, and also
potentially attract the authorities for passing on elevated
costs. So, we are really not in a position to be able to pass
on direct costs to consumers in today's environment. And I
would liken it back to events where we have hurricanes whereby
we are not able to raise the price of retail fuel, even though
the physical product might be increasing at price in the
physical markets. There are many laws on state of emergencies
that are put forth that prohibit us from doing so.
And then one last thing, in terms of some of these
environmental concerns around national disasters, our industry
is one of the first to come back online. We have backup
generators in place with fuel to bring our industry back if and
when possible.
The Chairman. Thank you, Ms. Kuster. We hear Ms. Kuster is
having difficulty, and so, now we will hear from the gentleman
from Texas, Mr. Cloud, for 5 minutes.
Mr. Cloud. Thank you, Mr. Chairman, I appreciate it.
Just one quick question right off the top. Mr. Nassar, you
mentioned that people should be free to choose to join a union,
and I appreciate that. Would you agree that membership to a
union should not be mandated?
Mr. Nassar. No. I think that if you are benefitting from a
collective bargaining contract, you should be part of the
organization just like most other systems and organizations.
Mr. Cloud. So, when you said people should be free to
choose, you didn't really mean people should be free to choose?
Mr. Nassar. No, I did mean that. What I meant was in the
beginning about whether to decide--whether joining a union or
not. In 90 percent of organizing--these captive audience
meetings where employers daily lecture workers about the fact
of dangers of joining unions----
Mr. Cloud. It is a yes or no question. I got a lot of
ground to cover.
But do you know how much the price of automobiles has gone
up in the last year?
Mr. Nassar. I don't know precisely, no.
Mr. Cloud. It is about 11 percent for new cars, 38 for used
cars. Food has gone up about six percent as the official stat.
When I talk to people, they will say it is more like 30 or 40
percent what they are experiencing at the grocery store. Energy
costs have gone up 30 percent, and frankly, I am a techie kind
of guy. I appreciate this discussion on electric cars, but the
discussion seems a little bit like we are putting the cart
before the horse, to use an agricultural reference for the
moment that we are in.
Just to kind of bring this discussion into a little bit of
context, I want to read this from the 2005, the Director of
National Intelligence published a report, and it said this.
``In terms of size, speed, and directional flow, the transfer
of global wealth and economic power now underway--roughly from
West to East--is without precedent in modern history. This
shift derives from two sources. First, increases in oil and
commodity prices have generated windfall profits for the Gulf
states and Russia. Second, lower costs combined with government
policies have shifted the locus of manufacturing and some
services to Asia.''* And so, right now, we are in an
unprecedented shift where everything that the American worker
is working for has been shifting overseas in terms of economic
influence and in terms of wealth and prosperity, and we are
having this discussion.
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* Editor's note: the quotation is from Global Trends 2025: A
Transformed World, (emphasis as in original) available online at:
https://www.dni.gov/files/documents/Newsroom/Reports%20and%20Pubs/
2025_Global_Trends_Final_Report.pdf.
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It is notable that when we have produced energy exports
here in the United States, what we don't see is other nations
going green. What we see them doing is buying oil and gas from
people who produce it much less responsibly. And so, one thing
you mentioned is that China is ahead of us in electric vehicle
technology, and that we are not going to be able to export our
way into it. We are certainly not going to be able to import
our way out of it as well when it comes to us being reliant on
their rare earth minerals. They are also ahead of us in
hypersonic missiles at the moment. They are also ahead of us
when it comes to producing coal. And so, a lot of what we are
talking about has to do with us being reliant on China.
Meanwhile, they are producing more coal plants each and every
year to make us have to meet the stated goals of the policy
that we are talking about today.
I also find it interesting that right now, California is
asking people not to charge their electrical cars just to keep
up with the electric shortage. Meanwhile, we are talking about
putting much more of a tax upon that.
A couple more points. I would point out that we used to
produce ag products emissions free, and I see technology that
we brought to scale with each successive generation that has
allowed us to come to this point in history where we are, for
the first time actually producing more food than the world
needs. Now, we have some infrastructure issues in getting that
food where it needs to go, obviously, and some geopolitical
barriers and such, but it is the technology that has been
brought to bear that is helping us to meet that need and to
bring food to an affordable level. And right now, we see such a
demand on the American household right now, and then what is
proposed right now is this $12,500 credit for electrical cars.
So, we are saying we are going to take money from the American
people so that we can give it back to them after a modest
Federal bureaucracy handling fee to purchase electric vehicles.
And so, I am all for the free market. I think they are
cool. I hope to one day have one, but it is important that we
look at these discussions in the proper context, and certainly
that we don't play into China's hands when it comes to this
messaging that they are trying to get us to buy into it.
Mr. Mills----
The Chairman. The gentleman's time has expired,
unfortunately. However, please, you can respond in writing.
Mr. Cloud. Thank you.
The Chairman. And now, we recognize the gentlelady from
Florida, Mrs. Cammack, is recognized for 5 minutes.
Mrs. Cammack. Well, thank you, Chairman Scott, Ranking
Member Thompson, and first, I would like to associate myself
with the comments and remarks from my colleagues,
Representative Cloud, as well as earlier from Representative
Allen.
We are dealing with very serious supply chain crises all
around the country, and Representative Allen hit the nail on
the head earlier talking about how here in Washington, D.C., we
have empty grocery store shelves. And so, while this is an
important topic, I think there are far more pressing items in
the face of what we are experiencing with historic record-
breaking inflation.
But I will jump right into it. I know several of these
topics have already been covered, and I am going to direct this
to Mr. Mills to bring it back to the farmer for a minute.
Our farm equipment needs to function in all weather
conditions, which can be a challenge in Florida's climate. EV
batteries experience difficulties in extreme cold and heat,
drastically reducing range and serving as a fire hazard in
inclement weather and flood water. Florida, on average, we get
about 56" of rain a year and that is without a hurricane, and
we know we are prone to those. We are seeing that EV vehicles
such as transit buses often rely on auxiliary heat and power
systems, resulting in unintended emissions.
So, Mr. Mills, rather than hoping that a battery works in
warm or cold temperatures or relying on polluting auxiliary
systems, doesn't it make sense or more sense to explore other
forms of energy like the capture of farm emissions and use them
in renewable natural gas-powered vehicles?
Mr. Mills. Well, Congresswoman, thank you.
I think the short answer is yes. I will elaborate slightly
by pointing out that I am actually very optimistic about the
progress we made in solving some of the problems you described
for batteries. I was an interim CEO of a large format lithium
battery factory and I am fairly familiar where their technology
is going.
I will just repeat a point I made in my original testimony.
The real challenge, especially for big vehicles, trucks and
farm vehicles, is the charging, the time it takes to charge,
and the cost of the charging systems. A super charger, the kind
that Sheetz would like to install, they are about $50,000 each,
more than double the cost of a gasoline pump. Those aren't good
enough for charging quickly a Deere-sized combine. There will
be $100,000 kind of costs for the charger to charge these
multi-megawatt level of systems that are required to do
reasonably fast charging.
So, it is fundamentally--and I hate to use the word--
convenience problem. Convenience is more than convenience when
it comes to rural America. It is operational lifestyle. So,
these are non-trivial barriers. It will take a very long time
to solve, and cost a lot of money.
Mrs. Cammack. Well, I appreciate that, and you just
mentioned, in your experience as CEO in dealing with lithium
batteries, we take a little bit of a broader geo-strategic look
at things.
This all relies heavily on foreign suppliers to make this
initiative work, and so, we know in the United States,
especially under this Administration, mining has become an
extraordinarily over-regulated industry and has created some
very, very tough situations for folks as we try to reassert our
independence on multiple fronts. Now, especially in places with
lax regulations, like China, for example, that can cause severe
environmental degradation, and I would argue that no one does
this safer, better, more efficiently than the United States,
yet it seems that we are exporting our dirty work to places
like China in the name of green energy. Would you agree?
Mr. Mills. Well, that is exactly what we are doing. We are
exporting the carbon dioxide emissions. We are exporting the
jobs, and we are exporting the revenues. And we are subject to
the vicissitudes of the commodity market prices from other
players. Just to repeat a fact that I put in my testimony, that
60 to 70 percent of the cost to make a battery for a car or a
truck is the cost of the commodities. We don't control that
because it is all foreign markets, foreign revenues, and
foreign politics, frankly.
Mrs. Cammack. Thank you, Mr. Mills.
Now, Mr. Strickland, I am going to redirect to you, and
very quickly.
As a growing purchaser of many of these foreign-sourced
commodities, what steps is GM taking to ensure America's desire
to make it like better here doesn't result in environmental
catastrophe over there? What steps are you all taking?
Mr. Strickland. Well, we are working on our battery
chemistry so that we have 70 percent reduction in cobalt, as
one example. We are members of the Institute for Responsible
Mining Assurance, which is another element to make sure that
our partners in our supply chain basically align to act with
integrity and with safety. And also, we are working right now
in California with Salt and Sea to be able to access supplies
of lithium.
So, we recognize the fact that we have to have great jobs
here. We have to make sure that we are not dependent on these
foreign sources, and we are working very hard to achieve that
goal.
Mrs. Cammack. Thank you.
My time is expired. I yield back.
The Chairman. Thank you very much.
And now, ladies and gentlemen, we are approaching the end
of this fantastic hearing. Let me just say how much we all
appreciate this. Each of you have opened our eyes and our minds
to much of what we were only dimly aware when it comes to this
issue of making sure that we have electric vehicles for
everyone, especially in our rural communities, which have for
so many situations been unfortunately left behind. We will not,
we must not, and we cannot do with them the way we have been
doing in bringing rural broadband. But thank God, we have about
$68 billion on the way to finally get rural broadband. Thank
you.
But before I get my closing statements, I would like to
recognize our Ranking Member for any comments he would like to
make.
Mr. Thompson. Well, thank you very much, Mr. Chairman.
Thank you to you for this hearing. I look forward to lots more
hearings. On our side of the aisle, we will clear our schedule
for hearings. We really, as you heard a little bit of
frustration seep through because of the supply chain issues,
the agriculture issues, the oversight on the farm bill, and so,
I appreciate today, but really, we really got to put our
shoulder to the plow. I will describe it that way, and get to
work on really ag-centric issues.
I appreciate the nature of this, looking at the impact of
rural America, the impact on agriculture. I want to thank our
witnesses. I thought we got great witnesses, very balanced, and
great experience that they brought to the task. And thanks to
our Members, because participation was excellent, and that is
always important, right? We need our farm team to show up, and
they did today.
You know, this really was, in the end, a climate-driven
discussion because it is a climate-driven issue, and we all
know that our goal should be in everything that we do, we work
to decrease CO2 emissions. There is no industry that
does that better anywhere in the world, certainly anywhere in
this nation, than agriculture. The U.S. farmer is a climate
champion, a climate hero--our U.S. farmers and ranchers and
foresters. But, we know that we can't have a healthier climate
or a healthier environment without a healthier economy. It is
counterintuitive, doesn't work. If you compromise one for the
other, it is going to fail, and I think this unilateral
electric vehicle push, not to impose electric vehicles, but
doing that at the cost of everything else, it compromises that
principle.
Today, we heard a balanced discussion on the topic of
electric vehicles. Lots of questions have been raised and I
think these questions and the information that was shared
should instruct the Federal Government proceeding with any
additional investments with electric vehicles. I think the
American people deserve to have answers to the questions that
were raised here by some of our witnesses, and certainly some
of our Members.
Now, I am pleased with the information that was shed on the
role of agriculture, and specifically renewable fuels, in
making America the world leader in reducing greenhouse gases. I
thought that was nicely showcased and highlighted today, and
that is a story we need to keep telling and bragging about.
Top-down Washington dictates on to consumers is a flawed
strategy. Science, technology, and innovation is critical to
addressing the challenges, I think all of the challenges our
nation is facing.
Today, we are in the context of transportation, but we also
know that science, technology, and innovation is critical for
agriculture. It is because of science, technology, and
innovation that America is leading the world in reduction of
greenhouse gases.
So, I do think in the end on this issue of electric
vehicles, government can do what government will do, but
consumers will be the deciding factor. They are going to make
the decisions in the end.
So, thanks again for the hearing, and I yield back.
The Chairman. Thank you so much, and I want to thank you,
Ranking Member, for our bipartisanship work that we have done
together. We have moved to make sure that we got rural
broadband now moving to finally get into rural America, and now
we are dedicating ourselves to this.
But first of all, in my closing comments, I want to just
thank each of you. You have brought great wisdom to us, and you
can see from the interchange and the discussions and the
caliber of questions that our Committee Members asked that we
are determined to provide the necessary leadership in making
sure that our rural communities, our agriculture industry have
a seat at the table when it comes to this. Billions and
billions of dollars are being allocated for this effort, and
you all with your excellent testimonies have helped us to make
sure that we will not and we cannot leave rural America behind
here. We are committed to that.
So, to you, Mr. David Strickland with the General Motors
Company, thank you. To you, Mr. Lincoln Wood, Electrification
Policy Manager with the Southern Company, Georgia Power
Company, thank you. And for you, Mr. Matthew Laughridge, owner
and Managing Director of the Terry Reid Automotive Group in
Cartersville, Georgia, on behalf of all of our national
automobile dealers. And to you, Mr. Trevor Walter, Vice
President of Petroleum Supply Management, the Sheetz company,
on behalf of our National Association of Convenience Stores. As
you so eloquently mentioned, our convenience stores play a
critical role in making sure we have the charging stations
adequately and effectively placed in rural America, as well as
urban America. And to you, Mr. Geoff Cooper, thank you. You
offer some tremendous points that needed to be discussed, and
we are going to take those into consideration. Thank you so
much. And to you, Mr. Josh Nassar, Legislative Director of our
very great International Union, the UAW. I say that with
heartfelt feelings, because I worked closely with the UAW for
20 years in the Georgia legislature, as well as here in
Congress. And to you, Mr. Mark Mills, Senior Fellow of the
Manhattan Institute, thank you, and thank each of you for this
extraordinary and very helpful hearing. Thank you.
And now, I think I have a bit of housekeeping to take.
Under the Rules of the Committee, the record of today's hearing
will remain open for 10 calendar days to receive additional
information, supplementary written responses from our witnesses
to any questions posed by a Member. And of course, I want to
thank our staff. Didn't they do a wonderful job in bringing
together this excellent hearing? Thank you, staff, and thank
you, Anne, who is the director of our staff. Thank you. She
works awfully hard.
And now, this hearing of this Committee of Agriculture is
adjourned.
[Whereupon, at 1:57 p.m., the Committee was adjourned.]
[Material submitted for inclusion in the record follows:]
Submitted Article by Hon. David Scott, a Representative in Congress
from Georgia
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
[https://www.ajc.com/news/georgia-tries-to-become-leader-in-an-
industry-thats-no-sure-thing/F6WTUWIEBJHDTL66J7SNJSJDC4/]
Georgia tries to become leader in an industry that's no sure thing
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Credit: Ben Gray.
News \1\
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\1\ https://www.ajc.com/news/.
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By Andy Peters, The Atlanta Journal-Constitution
Dec. 23, 2021
Electric vehicles may be future but EVs, charging stations still rare
Georgia officials want the state to be a leader in manufacturing
electric vehicles, which could very well be the next big thing.
When it comes to seeing EVs on the state's highways and backroads,
though, Georgia's got a long way to go.
EV manufacturers flocking to Georgia? Check. A surge in consumer
sales of EVs and charging stations blanketing the state? Nope.
Rivian will start building a $5 billion factory \2\ next summer in
Atlanta's eastern exurbs to manufacture electric trucks and SUVs, in
what Gov. Brian Kemp has called the largest economic development
project in state history. SK Battery America is nearing completion of a
$2.6 billion EV battery plant \3\ northeast of the city. Many EV
suppliers are expected to follow close behind.
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\2\ https://www.ajc.com/news/rivian-confirms-ev-factory-thousands-
of-jobs-coming-to-georgia/CUH7ZNS5URGODNQG7CEUU2FCVY/.
\3\ https://www.ajc.com/news/battery-maker-sk-eyes-faster-hiring-
potential-growth-in-georgia/YB47RMLA6RDUHGZQEJZIPURWKQ/.
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But only about one in 50 cars sold in the U.S. these days is an EV,
and Georgia is no different. An EV also is more expensive to buy than
gasoline-fueled cars. And if you want to buy a new one, it might not
arrive for weeks or months. Rivian's R1T truck starts at around
$70,000--and if you order it now, you won't get it until 2023.\4\
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\4\ https://www.ajc.com/news/rivian-losing-money-as-it-struggles-
to-meet-fast-rising-ev-orders/JTQE6KYDQZGZHFWAIEW7I7XDNE/.
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Georgia has 1,500 EV charging stations, seventh out of 50 states
and the District of Columbia. Metro Atlanta has about 1,110 of them,
the third-highest among U.S. metro areas, according to real estate data
provider Yardi Matrix.
Outside Atlanta, good luck. On I-16 between Macon and Savannah, a
170-mile stretch, drivers pass only four charging stations just off the
interstate, according to the website PlugShare.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Vanessa Miller, an attorney in Detroit who advises automotive
companies on supply chain issues, said a chicken-or-egg situation is
holding things back.
``It's hard to get the momentum you need because a driver isn't
going to buy an EV until they know they can keep it running,'' she
said. Companies won't install more charging stations ``because you
don't know how many EVs there are going to be.''
State, Federal Governments make electric push
Kemp has made EV a priority, forming an EV task force \5\ in July
to ``ensure that our state is positioned to continue leading the nation
in the rapidly growing electric mobility industry.'' The group's report
may be released in early 2022.
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\5\ https://gov.georgia.gov/press-releases/2021-07-20/gov-kemp-
announces-statewide-initiative-accelerate-georgias-electric.
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Georgia gave SK Battery $300 million in grants, tax breaks and free
land.\6\ The state has probably offered \7\ a larger bounty to Rivian,
though details haven't been disclosed. Georgia has only one combustion-
engine auto plant, Kia, after rivals chose neighboring states to build
traditional auto plants.
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\6\ https://www.ajc.com/news/local-govt--politics/what-did-georgia-
promise-win-korean-battery-plant/VOFQc9fmGXvvjzIX7Ocm2M/.
\7\ https://www.ajc.com/politics/georgia-would-offer-a-bounty-of-
perks-for-rivian-project/OMRLP3ZLRVGWDE66BSJTQQLDOA/.
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Wall Street investors and automotive industry analysts predict the
EV market will soon be red hot. Industry tracker IHS Markit projects
that EVs on U.S. roads \8\ will rise from 1.5 million vehicles now to
9.3 million by 2026.
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\8\ https://cleanenergynews.ihsmarkit.com/research-analysis/US-
infrastructure-bill-will-support-400000-new-EV-chargers.html.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
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Credit: Steve Schaefer.
At Tesla, the largest EV maker, yearly revenue grew from less than
half a billion dollars in 2012 to more than $30 billion last year. It
reported its first quarterly profit this summer. Rivian's November IPO
valued the company at more than $100 billion, more than either Ford or
General Motors.
Governments have set lofty goals for converting to EVs in a push to
combat climate change. President Joe Biden wants to cut greenhouse gas
emissions\9\ by half from 2005 levels by 2030, in part by cutting the
price of EVs by $12,500.
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\9\ https://www.whitehouse.gov/briefing-room/statements-releases/
2021/11/01/fact-sheet-president-biden-renews-u-s-leadership-on-world-
stage-at-u-n-climate-conference-cop26/.
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Corporations want to oblige. Amazon has ordered 100,000 electric
vans from Rivian. UPS will buy 10,000 electric vans from British
company Arrival. Hertz and Enterprise Rent-a-Car have said they'll add
more EVs to their fleets.
A Federal infrastructure program will provide $7.5 billion to
install hundreds of thousands of EV charging stations nationwide. Funds
will likely be available first-come, first-serve, though details
haven't been released, said Brandon Jacobs, regional vice president of
sales at charging station provider Blink.
But there's no guarantee EVs will become the dominant mode of
vehicle transportation in the U.S., or at least not as quickly as some
predict, Jeremy Michalek, head of the Vehicle Electrification Group at
Carnegie Mellon University, wrote in a recent column for
MarketWatch.\10\
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\10\ https://www.marketwatch.com/story/im-an-ev-expert-and-im-
skeptical-about-how-quickly-electric-cars-will-go-mainstream-in-the-u-
s-11623770187.
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Ford, GM, Mercedes-Benz and other automakers with big EV plans may
run into production problems that delay product launches or force
recalls. Volkswagen delayed the release of its ID.Buzz \11\ electric
microbus from 2022 to 2023. Chevrolet in August recalled all 141,00
Chevy Bolt EVs due to fire risks. Rivian warned in December \12\ it
would fall short of its 2021 production target, sending its stock price
lower.
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\11\ http://id.buzz/.
\12\ https://www.ajc.com/news/rivians-evs-get-plaudits-but-tesla-
others-pose-tough-competition/52L7Y2BFAFA2RBSE6U6B4HNZRI/.
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EV sales have already captured the low-hanging fruit of consumers
who are early adopters of new technology, Michalek said. Other
customers may put up more resistance, especially if the price remains
high. The gas-powered Hyundai Kona SUV starts at $20,950. The electric
version starts at $34,000.
Mainstream consumers ``aren't as driven by environmental and
technology-oriented lifestyles and have other priorities and
constraints,'' Michalek wrote.
EV drivers face plenty of speed bumps
Today's market for EV sedans and trucks is so tiny that it barely
registers. In Georgia, EVs are 1% of all vehicles, and the nationwide
state average is 1.5%, according to the U.S. Department of Energy. New
EV sales account for 2% of all vehicles, according to Automotive News.
California is tops with about 5.2% of all vehicles powered by
electricity. In Georgia's neighboring states, it's exceedingly rare to
see an EV on the road. In South Carolina, 0.5% of vehicles are EVs, and
in Alabama it's 0.4%.
EV companies say it's mandatory that charging stations become more
accessible and not just inside wealthy consumers' home garages.
Charging stations ``must be conveniently located where drivers live,
work and play,'' EVBox, a Dutch maker of charging stations, said in a
recent regulatory filing.
The average range for all EVs is about 194 miles, according to
EVBox. That's not too far behind gas-powered cars, which can travel 300
miles or more before running on empty. And EV range is expected to keep
climbing. Tesla models top 300 miles and Rivian vehicles are expected
to have a range of at least 300 miles.
But unlike gas stations, many parts of Georgia are EV charging
deserts. No charging stations are located along four-lane U.S. Highway
441 from McRae to the Florida state line, a 116-mile drive. That's one
mile more than the range for an electric Mini Cooper SE that is fully
charged.
The dearth of charging stations has given rise to range anxiety.
Marshall Norseng drives his 2021 Tesla Model Y Long Range 50 miles
a day commuting from his Midtown home to his Duluth office at Banyan
Hills Technologies. His home charger provides enough juice to last two
or three days and he's never run out of power on the road.
Interstate travel offers a much-bumpier ride. On a recent trip to
the Midwest, Norseng carefully planned his stops for recharges. Those
stops turned out to be unlike a quick trip to a gas station.
``If you're driving to the Midwest and you stop in Chattanooga at a
charging station and they're all full, you have to sit and wait,'' he
said. ``You don't have a choice.''
Some waits at EV charging stations can be royal time sucks.
A gas-powered vehicle typically takes fewer than 10 minutes to
refuel. An EV plugged into a high-speed charger takes about 50 minutes.
So-called Level 2 chargers, the most common type, can take six to 10
hours to recharge an EV.
``You're not going to have people who are going to want to hang out
at a rest stop for two hours waiting for their car to be recharged,''
said Miller, the attorney.
Experts say that charge times will become less of an issue if there
are more charging stations. An army of startup companies are competing
to capture that market by selling to homeowners, local governments,
retail establishments, hospitals, apartment complex owners and others.
SemaConnect has focused on placing Level 2 chargers in
disadvantaged communities since they're cheaper than fast-charging
models, said Stephen Carroll, vice president of marketing. ``Level 2
charging stations will be key to making EVs available'' to those
communities, he said.
The Bowie, Maryland, company declined to disclose the price of its
Level 2 charging station, but said its at-home charger is priced at
$699.
Cox Automotive, a unit of Cox Enterprises, last year installed 32
charging stations \13\ at the Metropolitan Parkway location of fleet
management provider Pivet. It's one of the biggest charging stations on
Atlanta's southside.
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\13\ https://www.ajc.com/news/business/electric-vehicle-charging-
station-opens-on-southside/36WK3QSNF5G6TGFZMH2UAKXN7U/.
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Cox Enterprises, owner of The Atlanta Journal-Constitution, owns a
4.7% stake in Rivian and supplies services to Rivian. Sandy Schwartz, a
Cox executive who oversees the AJC, is on Rivian's board of directors
and holds stock personally. He does not take part in the AJC's coverage
of Rivian.
More charging stations are coming, said Rich Simmons, a research
engineer at Georgia Tech's Strategic Energy Institute. The recently
approved federal infrastructure bill has earmarked $135 million to
Georgia for installations.
Other incentives are available. Georgia Power and Cobb EMC offer
$250 rebates for the purchase of at-home EV charging stations and offer
discounted rates to residential customers for overnight power if used
to recharge EVs.
------------------------------------------------------------------------
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Georgia's mixed messages on electric vehicles
The state has encouraged the electric vehicle market on some
occasions and has introduced impediments at other times:
Georgia incentives
10% state tax credit for a business that buys an EV charging
station and makes it available to public
$250 rebate from Georgia Power and Cobb EMC for residential
customers who install an EV charging station
Discounted rate for Georgia Power customers who charge EVs
overnight
Free power for Cobb EMC customers who charge EVs overnight
Georgia disincentives
EVs charged an extra $213.70 for yearly vehicle registration
In 2015, the state ended a $5,000 tax credit for EV purchases
------------------------------------------------------------------------
Sources: U.S. Dept of Energy and Georgia Power.
But Georgia doesn't make it easy for consumers to purchase EVs.
State lawmakers blocked legislation \14\ that would allow EV makers to
sell locally without going through a franchise dealer. Politically
powerful auto dealers lobbied to kill the proposal. State lawmakers
granted Tesla a waiver in 2015 letting it sell cars directly to
consumers. In exchange, Tesla agreed to open no more than five stores
in Georgia.
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\14\ https://www.ajc.com/politics/georgia-would-offer-a-bounty-of-
perks-for-rivian-project/OMRLP3ZLRVGWDE66BSJTQQLDOA/.
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In 2015, Georgia lawmakers declined to renew a $5,000 tax incentive
for EV purchases and added a new $214 yearly registration fee on top of
the $20 yearly fee assessed on gas vehicles. Lawmakers added the EV fee
to make up for owners not paying gasoline fuel taxes.
Buying a new EV is a case study in delayed gratification. Used
Teslas and Nissan Leafs are being offered for sale around metro
Atlanta. But if you want a fresh one from the factory, the wait for the
cheapest Tesla sedan can be up to 10 months. Consumers must wait weeks
or months for other EVs, too.
U[l]timately, if the potential Rivian manufacturing facility near
Covington is to be successful, Georgia and the nation need to get
things up to speed, said Miller, the automotive attorney.
``I don't know which comes first, more charging stations or more EV
sales,'' she said. ``But they both need to be moving forward and they
need to be moving forward more quickly than they are.''
About the Author
Andy Peters \15\
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\15\ https://www.ajc.com/staff/andy-peters/.
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Andy Peters covers commercial real estate, economic
development, banking and financial services.
______
Submitted Statement by Hon. Antonio Delgado, a Representative in
Congress from New York; on Behalf of American Public Power
Association, Et Al.*
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* American Public Power Association, Edison Electric Institute,
National Rural Electric Cooperative Association.
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Introduction
This statement is submitted on behalf of the American Public Power
Association, the Edison Electric Institute, and the National Rural
Electric Cooperative Association. Together, we represent the nation's
investor-owned electric companies, public power utilities, and electric
cooperatives.
Our members provide safe, reliable, and affordable energy to more
than 300 million Americans. The electric power industry supports more
than seven million American jobs and contributes $880 billion annually
to U.S. gross domestic product, about five percent of the total. Each
year, our industry invests more than $110 billion, on average, to make
the energy grid stronger, smarter, cleaner, more dynamic, and more
secure. These investments enable us to integrate more clean energy and
new technologies into our electric systems, including electric vehicles
(EVs), to benefit customers.
Federal Investment in Electric Vehicle Charging Infrastructure and
Supply Equipment Is Needed
We write in support of Federal investment in EV charging
infrastructure, which includes everything from installing the supply
equipment (charging station) to performing any energy grid upgrades or
modifications that may be needed. To help incorporate increased EV
penetration on U.S. roads, it is important that we invest in and deploy
more charging infrastructure. Building this infrastructure will require
public-private partnerships, and our members are critical to that
effort, in part because they employ a highly skilled workforce that
builds and maintains the energy grid. A collaboration between the
Federal Government and our sector will help to create additional jobs
and will help spur economic growth.
Our members already are partnering with their customers to overcome
barriers to deploying charging infrastructure. Some of our members own
and operate EV charging stations in a variety of locations and for all
types of EV customers, which is particularly beneficial to consumers
who prefer not to procure and maintain charging infrastructure and seek
a turnkey solution. Some of our members install the ``make-ready''
infrastructure that connects to the charging station, leaving it to the
customer to own and maintain the charging station. And other members
offer rebate programs to offset the costs to install charging
infrastructure or partner with third parties to provide charging
services. Regardless of the approach, each of these solutions is
critical to building charging infrastructure that helps to spur the EV
market and benefit communities.
Our members continue to work with local stakeholders and are best
positioned to understand and maximize the value of different
technologies and systems that can help optimize the operation of the
grid, integrate EVs, and recover more quickly from natural disasters.
This is particularly true in areas, including many rural communities,
where private investment in EV charging stations historically has been
lacking. It is important that all communities have access to the
benefits of EVs, and our members are investing in underserved
communities, in electrifying car-sharing and public transportation
systems that serve those who do not own vehicles, in electrifying
commercial vehicles such as delivery trucks that operate within
neighborhoods, and assuring that Americans can charge their vehicles
coast-to-coast in urban, suburban, and rural communities. Any Federal
policy for EV infrastructure must maintain flexibility for states and
localities to determine the most effective public-private partnership
structure that meets their needs. We do not support efforts to restrict
Federal program flexibilities and limit stakeholder participation.
Federal Investment Can Complement and Leverage Public-Private
Partnerships
Federal investment in charging infrastructure can leverage and
amplify the progress that the nation's investor-owned electric
companies, public power utilities, and electric cooperatives are
already making in deploying charging infrastructure. For example, some
of our members launched a nationwide collaborative to help ensure the
availability of EV charging for travel along major corridors by the end
of 2023.\1\ The Federal Government is a key partner in the development
of a nationwide EV charging network and technical and financial
assistance can help accelerate EV deployment by filling in gaps or
providing cost-share to complement the efforts already underway. We
support efforts that would include financial assistance for EV supply
equipment, including grid upgrades and modifications, as part of a
larger effort to support EV infrastructure.
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\1\ https://www.eei.org/issuesandpolicy/Pages/NEHC.aspx.
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In addition, electric transportation options are extending beyond
light-duty vehicles, with many fleet operators looking to diversify
their medium- and heavy-duty vehicle mix to include zero-emission
options. Our members will be crucial partners in the building and
maintaining of infrastructure--including charging depots--needed for an
increasingly clean medium- and heavy-duty fleet market. We support
Federal efforts to help address up-front costs for the deployment of
these vehicles and necessary infrastructure as it nears commercial
viability.
While our members are investing in electric vehicle infrastructure,
additional information regarding when and where public charging
stations will be needed, particularly in areas that have not yet seen
significant saturation or rural areas that may serve to connect
communities. Mapping this demand, based on data such as regional
commute and travel patterns, can improve upon the investment decisions
our members are making in charging infrastructure. We support technical
and financial assistance to help public and private entities, including
utilities, map the demand for EV charging.
Conclusion
Thank you for your consideration of these proposals. We look
forward to working with you and to our continued partnership in
advancing electric vehicle infrastructure.
Organizations
The American Public Power Association
The American Public Power Association is the voice of not-for-
profit, community-owned utilities that power 2,000 towns and cities
nationwide. We represent public power before the Federal Government to
protect the interests of the more than 49 million people that public
power utilities serve, and the 96,000 people they employ. Our
association advocates and advises on electricity policy, technology,
trends, training, and operations. Our members strengthen their
communities by providing superior service, engaging citizens, and
instilling pride in community-owned power.
Edison Electric Institute
The Edison Electric Institute (EEI) is the association that
represents all U.S. investor-owned electric companies. Our members
provide electricity for 220 million Americans and operate in all 50
states and the District of Columbia. As a whole, the electric power
industry supports more than seven million jobs in communities across
the United States. In addition to our U.S. members, EEI has more than
65 international electric companies as International Members, and
hundreds of industry suppliers and related organizations as Associate
Members.
National Rural Electric Cooperative Association
The National Rural Electric Cooperative Association (NRECA)
represents more than 900 electric cooperatives. America's electric
cooperatives are energy providers and engines of economic development
for more than 20 million American homes, businesses, farms and schools
across 48 states. Electric cooperatives play a vital role in
transforming local communities.
______
Submitted Article by Hon. Rodney Davis, a Representative in Congress
from Illinois
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
[https://www.reuters.com/business/energy/exclusive-biden-weighing-cuts-
2022-ethanol-blending-mandate-proposal-sources-2022-01-12/]
January 12, 2022 11:44 p.m. EST
Last Updated 7 days ago
Energy \1\
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\1\ https://www.reuters.com/business/energy.
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Exclusive: Biden weighing cuts to 2022 ethanol blending mandate
proposal
By Jarrett Renshaw and Stephanie Kelly
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
An ethanol plant with its giant corn silos next to a
cornfield in Windsor, Colorado July 7, 2006./File Photo.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Ethanol fuel is shown being pumped into a vehicle at a gas
station selling alternative fuels in the town of Nevada, Iowa,
December 6, 2007. Reuters/Jason Reed/File Photo.
Jan. 12 (Reuters)--The Biden Administration is considering lowering
the 2022 ethanol blending mandate below the proposed 15 billion gallons
amid backlash from the oil refining lobby and unions arguing the
shrinking U.S. ethanol industry can no longer support the target,
according to two sources familiar with the Administration's thinking.
U.S. President Joe Biden vowed to bring some normalcy back to laws
requiring refiners to blend biofuels like corn-based ethanol into the
nation's gasoline pool after his predecessor, Donald Trump, took
unprecedented steps to relieve refiners from the requirement.
But Biden is finding it difficult to live up to his promise. The
COVID-19 pandemic has dampened fuel consumption and triggered a handful
of ethanol plant shutdowns. Higher regulatory costs have refiners
threatening to close refineries and shed high-paying union jobs.
In December, the Environmental Protection Agency issued a long-
awaited biofuel blending mandate proposal that cut ethanol requirements
for 2020 and 2021 but restored them to 15 billion gallons for 2022.
Farmers and biofuel producers criticized the rollbacks but welcomed the
restoration this year.
But, in recent weeks, Administration officials have considered
rolling back the 15 billion gallon mandate when the final rule is
issued later this year, the two sources told Reuters.
``EPA remains committed to the growth of biofuels in America,''
said Nick Conger, an EPA spokesperson. ``We look forward to reviewing
the robust comments that we receive from all stakeholders before
finalizing our rulemaking later this year.''
The Administration had initially planned to set the 2022 ethanol
mandate at 14.1 billion gallons, Reuters previously reported,\2\ but
went with 15 billion gallons under pressure from Farm-Belt Democrats
like Senator Tammy Duckworth of Illinois.
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\2\ https://www.reuters.com/business/energy/exclusive-us-epa-
considering-cuts-biofuel-blending-obligations-2020-2021-2022-2021-09-
22.
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``The White House is caught between a rock and a hard place. On one
hand, they want to support the agricultural and biofuel industry, but
they have been bombarded by unions and refiners who say there's not
enough ethanol and they are listening,'' said one of the sources
familiar with the discussions.
Under the Renewable Fuel Standard, refiners must blend biofuels
like ethanol into their fuel pool or buy tradable credits, known as
RINs, from refiners who do. Merchant refiners like PBF Energy (PBF.N)
\3\ and Monroe Energy have long complained that the cost of purchasing
RINs threatens their plants.
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\3\ https://www.reuters.com/companies/PBF.N.
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While cuts to the 2020 and 2021 ethanol mandate briefly lowered RIN
costs, they have since rebounded. RINs are trading about 50% higher
from the around 80 after the mandates were announced in December.
After Reuters reported the news on Wednesday, RIN prices fell about
6% to $1.20 each. Margins to produce gasoline fell to an intraday low
of $17 per barrel, before recovering.
Mike Burnside, Policy Analyst at the American Fuel & Petrochemical
Manufacturers, a leading refining trade group, told the EPA during a
hearing on the blending mandate proposal that its 2022 targets are out
of step with demand.
``EIA (the Energy Information Administration) projects that
gasoline consumption in 2022 will be below 2019 demand, so it is
unreasonable to propose 15 billion gallons for conventional biofuel in
2022 as if the pandemic never happened and we are back to normal,''
Burnside said.
Ethanol Plants Shut
The U.S. ethanol industry has seen a number of facilities shut down
in the last few years, and the industry had to deal with reduced fuel
demand because of the coronavirus pandemic. There were 197 U.S. ethanol
plants at the beginning of 2021, down from 201 a year earlier, EIA data
showed.
Some ethanol companies have strayed from production of the corn-
based fuel.
For instance, a company formerly known as Pacific Ethanol Inc said
in 2020 it would change its name to reflect its focus on specialty
alcohols used in beverages and sanitizers instead of fuel. It is now
Alto Ingredients Inc. (ALTO.O).\4\
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\4\ https://www.reuters.com/companies/ALTO.O.
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``I don't see anyone running to invest more,'' said Ed Hirs, who
teaches energy economics at the University of Houston.
Still, the ethanol industry enjoyed higher margins and increased
production in the later half of 2021.
In November, margins to produce ethanol in the Corn Belt increased
to $1.82 per gallon, the highest since 2014, Refinitiv Eikon data
showed. They have since fallen to about 37 per gallon.
U.S. ethanol production in October rose to the most since 2017,
according to the EIA.
``The Administration has indicated blending requirements will
remain strong and at 15 billion gallons for 2022, and we have every
expectation that they will deliver on that promise,'' said Growth
Energy Chief Executive Emily Skor, in response to the news on
Wednesday.
Reporting By Jarrett Renshaw and Stephanie Kelly, Editing by
Chizu Nomiyama and Marguerita Choy
______
Submitted Blog by Hon. Michelle Fischbach, a Representative in Congress
from Minnesota
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
[https://www.mnfarmliving.com/2021/08/electric-vehicles-mandate.html]
Electric Vehicle Mandates Crafted in California Weren't Made for
Minnesota's Farmers
August 14, 2021 By Wanda Patsche \1\
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\1\ https://www.mnfarmliving.com/author/wpatschegmail-com.
As a rooster and a bull have completely different needs, so do the
constituents of states across our country. Here in Minnesota, a place
far different than California, we are fighting against a ``one-size-
fits-all'' policy that will serve, when implemented, as a detriment to
our agricultural community for decades to come. Electric vehicle
mandates adversely affect the farming communities in Minnesota and I,
as a lifelong Minnesota farmer, urge the state to reconsider this
harmful mandate. At the upcoming annual Minnesota FarmFest in Redwood
Falls, fellow farmers should raise awareness about this electric car
mandate's negative consequences on our community.
Government leaders at all levels have put an emphasis on our
nation's transition to electric vehicles. These politicians are
positioning these policies as crucial, immediate steps that need to be
taken to reduce carbon emissions from the transportation sector. From
President Biden's $170 billion dollar earmark \2\ in his infrastructure
bill, to states like Minnesota and others across the country proposing
mandates and additional subsidies for these vehicles and their
infrastructure, the momentum is building. And while we all can agree a
clean environment and less greenhouse gas emissions should be
prioritized, government electric vehicle mandates are not the best path
forward. The push to fully transition to EVs comes with serious
drawbacks that would inherently limit consumer choice and burden
consumers with higher costs--especially here in Minnesota.
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\2\ https://www.whitehouse.gov/briefing-room/legislation/2021/01/
20/president-biden-announces-american-rescue-plan/.
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If Governor Tim Walz's Administration gets its way, unelected
officials in California will control the future of automotive emissions
policies in our state--not Minnesota's elected leaders. The result? A
stringent electric vehicle mandate that will harm our state's farmers,
automakers and dealers, consumers, energy suppliers, among other
constituencies. Starting in 2024, Minnesota would be forced to require
an ever-growing percentage of EVs and vehicle retailers would have to
stock an arbitrary number of non-combustion vehicles whether consumers
want them or not. This would not only raise the cost of vehicles for
Minnesota families and businesses, it would hamstring farmers and rural
populations by forcing vehicle choices that make little sense for them.
As written, the proposal falls far short of sound policy and common
sense.
As for the agricultural community and the biofuels industry in
Minnesota, instituting California's combustion engine vehicle ban would
disproportionately harm these sectors. Minnesota is currently the
fourth largest ethanol producer in the United States with over 1.3
billion gallons of ethanol produced annually from 18 ethanol plants. In
Minnesota, here are roughly 19,000 full-time jobs, and millions in tax
revenue that is supported by the ethanol industry alone. An
Agricultural Retailers Association study \3\ found that if Minnesota
puts a ban on combustion-powered vehicles, total U.S. net farm income
could decrease up to $27 billion, and both corn and soybean prices
would be nearly cut in half. These numbers speak louder than any
environmental opinion; Minnesota's agricultural community must be
prioritized for the sake of our entire nation.
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\3\ https://www.aradc.org/news/ag-biofuels-study.
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Beyond the economic harm, this bill could cause in the future,
there have been further injurious effects that have already come from
this issue. Governor Walz bypassed the State Senate by forcing through
the mandate administrative sanction. Governor Walz neglected his own
state legislature's input and is holding Minnesotans to standards set
by the legislators of other, vastly different states. The democratic
rights of Minnesota constituents have been not only ignored but
completely circumvented in what is supposed to be a well-represented,
legislative system.
While electric vehicles are more popular than ever, they still only
makeup roughly 1.8% of the market \4\ and are far less cost-effective
than traditional, gas-powered vehicles. The mandate would force
automakers to ship more zero-emissions vehicles to Minnesota,
regardless of actual demand. Minnesota currently sees 2,000 electric
vehicles sold per year, and under the new mandate, dealers would have
more than 18,000 electric vehicles dropped annually onto their lots.
Demand and infrastructure limitations in Minnesota currently cannot
support such an artificially high supply. While the mandate's benefit
to the environment is not clear, the harm caused to everyday
Minnesotans will be heavily consequential.
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\4\ https://news.ihsmarkit.com/prviewer/release_only/slug/bizwire-
2021-2-19-electric-vehicle-share-in-the-us-reaches-record-levels-in-
2020-according-to-ihs-markit.
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The electricity used to power electric vehicles is a source for
increased carbon emissions. In Minnesota about 31% \5\ of utility-scale
electricity generation still came from coal-fired electric power plants
in 2019. Additionally, until batteries can be recycled, battery
disposal will remain an issue similar to nuclear waste storage. This
fact underscores the larger concerns surrounding electric vehicles and
how they are not a silver bullet for addressing environmental
challenges.
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\5\ https://www.eia.gov/state/?sid=MN.
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I have spent my entire life in southern Minnesota. If this mandate
were to culminate in full effect, I would see our state undergo a
change that will hurt my fellow farmers for decades to come. Government
policies should work for all Minnesotans, while supporting consumer
choice, instead of picking winners and losers. This mandate is not the
answer to becoming more climate-friendly. Please rethink this mandate
and its impact on the farming community. The Minnesota legislature
should repeal the rule. To put it simply: please don't impose
California values on my Minnesota.
Note: Blog post was published in Redwood Falls Gazette on
August 2.
______
Supplementary Material Submitted by Hon. David Strickland, J.D., Vice
President for Global Regulatory Affairs and Transportation Technology
Policy, General Motors
Insert 1
Mr. Austin Scott of Georgia. And if I use a super charger to
charge the vehicle, what does it cost me to charge it,
approximately?
Mr. Strickland. I have to get to you on that answer. Yes,
sir, I don't know the exact answer to how much for a super
charger, but I will certainly get back to you on the record.
Thank you for that question, Representative Scott. The cost of
charging for an EV driver will vary depending on several factors,
including the amount of charge (kilowatt-hours), speed of the charge
(kilowatt), and the charging network setting the pricing. Fast charging
a Bolt EV (from near 0 to 100% capacity) at a typical station today is
estimated at approximately in the range of $20-$30, though pricing will
vary by site and by state, as is true with gas stations. There are
several key cost drivers behind the scenes affecting customer pricing
and the overall charging business model, including but not limited to
electricity rates. We are working with utilities and regulators to keep
the cost of public charging low through better electricity rates as
well as ``vehicle-grid integration'' programs that minimize grid
impacts and maximize savings for all. We are also working with
policymakers and industry leaders to improve the customer experience
for fast charging, including more transparency on pricing and power
levels.
Insert 2
Ms. Schrier. Topic with my limited time, Mr. Strickland. I am
wondering since you are dealing with fleets of electric
vehicles with FedEx, for example, is there a way to have the
same kind of charging infrastructure that would apply to fleets
of delivery vehicles and semi-trucks and buses?
Mr. Strickland. Representative, I will certainly get back
with my group of very talented engineers and planners. They are
probably better positioned to answer that than I, but our work
group-on our commercial vehicle side, thinking about how we can
provide----
The Chairman. The time of the gentlelady has expired, but
please do respond in writing to her inquiry.
Representative Schrier, thank you for that question. One of the
objectives for charging infrastructure should be to develop a set of
common standards that can meet the needs for all classes of vehicles.
In the light duty space, the Society of Automotive Engineers (SAE)
Standard J1772 already applies to Level 1 and Level 2 charging, and the
SAE Combo Charging System (CCS) is the industry standard used by almost
all manufacturers for fast charging in the U.S. We also use these
standard interfaces currently for our medium-duty BrightDrop delivery
vehicles which launched late last year.
The largest commercial trucks and buses (with larger battery
capacities) may need access to higher power charging technologies
depending on their routes and charging needs. There is an existing
overhead pantograph charging system used by some buses today, and there
are also efforts underway to develop a Megawatt Charging System to
accommodate ultra-high power charging applications. Industry
stakeholders continue to work on standardization to minimize the number
of ``plugs'' and maximize interoperability.
______
Supplementary Material Submitted by Lincoln E. Wood, Electrification
Policy Manager, Southern Company
January 21, 2022
Hon. David Scott,
Chairman,
Committee on Agriculture,
U.S. House of Representatives,
Washington, D.C.
Dear Chairman Scott:
On behalf of Southern Company, thanks to you, Ranking Member
Thompson, and Members of the Committee for the opportunity to testify
regarding electric vehicles (EVs) and their implications for rural and
agriculture applications.
Following up from discussion during the hearing, I wanted to expand
my remarks on grid readiness for electric vehicles. EV charging is not
the only reason to upgrade the electric grid and expand capacity. As a
vertically integrated utility, Southern Company's electric subsidiaries
regularly upgrade the transmission and distribution grid infrastructure
to ensure we meet the commitment to our customers to provide clean,
safe, reliable, and affordable electricity. Some examples of other grid
upgrades include generation resources such as renewables, and upgrades
to ensure the reliability and sufficient capacity to meet customer
demand. For example, Georgia Power is beginning a $1.3 billion grid
investment plan to upgrade the Company's electric grid in the following
areas:
(1) Adding automated line devices that isolate power outages to a
smaller portion of the grid
(2) Adding connections to nearby power lines, so there is an
alternative source of power available
(3) Relocating lines that are hard to access
(4) Line strengthening where needed
(5) Placing wires underground
(6) Replacing wires and/or structures
(7) Substation maintenance, including replacing equipment or
completely rebuilding the substation as needed
Additionally, although the U.S. population is more familiar with
our current petroleum fueling system, it is not without challenges
during power outages. In fact, some of the same concerns expressed
about electric vehicles are present in today's fueling industry. When
natural disasters cause power outages, all fueling infrastructure that
has an electric component, such as gasoline pumps or compressed natural
gas, will also be unavailable. Similarly, natural disasters often
create fuel shortages during mass evacuations and when pipeline flows
are interrupted.
Switching from petroleum-based fuels to electricity is an industry
disruption. Tremendous teamwork from all sides is necessary for a
successful transition. Considering the central role utilities play in
providing electricity to customers, it is critical to include them
early in the conversation. Southern Company welcomes the opportunity to
partner with all players in the transportation ecosystem in providing
EV charging wherever it is needed.
The cost of EV charging is another key element of the transition to
an electrified transportation future. According to energy.gov,\1\ the
U.S. average price per gallon of gas is $2.85 as of January 18, 2022.
Similarly, the average equivalent of EV charging, the `eGallon', is
$1.16. In general, driving an EV costs half as much as a similar
gasoline-fueled vehicle. Coupled with reduced maintenance needs--no oil
changes or tune ups, and reduced frequency of brake service due to
electric regenerative braking, electric vehicles represent a compelling
value proposition for drivers of all types.
---------------------------------------------------------------------------
\1\ eGallon: What It Is and Why It's Important, (https://
www.energy.gov/articles/egallon-what-it-and-why-it-s-important)
Department of Energy.
---------------------------------------------------------------------------
Finally, I have included additional information on eMobility
efforts at the University of Georgia and the University of Alabama.
Southern Company is committed to preparing the next generation of
workers for electrification technologies and is sponsoring eMobility
activities at both institutions.
Should the Committee have further questions, or if Southern Company
can be a resource to the Committee, it would be our pleasure to serve.
Sincerely,
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Lincoln E. Wood.
attachment 1
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
[https://news.uga.edu/electric-mobility-initiative-taps-into-evolving-
tech-field/]
Campus News \1\ Science & Technology \2\
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\1\ https://news.uga.edu/topics/campus/.
\2\ https://news.uga.edu/topics/science-technology/.
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Electric Mobility Initiative taps into evolving tech field
6 days ago [January 19, 2022]
By Rod Guajardo \3\
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\3\ https://news.uga.edu/author/rg16532/.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Campus-wide effort will develop applications within electric
transportation
With the goal of enhancing research, education and outreach
opportunities in a rapidly developing technological field, the
University of Georgia has established a campus-wide Electric Mobility
Initiative that will provide seed funding for new projects and bring
together thought leaders to discuss innovative approaches to electric
mobility across Georgia and the region.
Electric mobility refers to vehicles like cars, trucks, bicycles,
boats and aircraft that use electric powertrain technologies for
propulsion. The field of electric mobility has grown significantly in
recent years with the development of smart infrastructure, wireless
communications, and most importantly, efficient energy storage
technology such as high-capacity batteries. These developments have
converged to make electric mobility competitive with vehicles powered
by internal combustion engines.
``We're pleased to announce that the University of Georgia will be
leading this comprehensive Electric Mobility Initiative in an effort to
understand the wide range of impacts associated with the
electrification of transportation infrastructure,'' said S. Jack Hu,
the university's senior vice president for academic affairs and
provost. ``This initiative will span our entire campus and allow for
all academic units to contribute to this exciting, developing tech
space.''
Initial partners in the UGA Electric Mobility Initiative include
faculty, staff and students from the College of Engineering, the School
of Public and International Affairs, the Carl Vinson Institute of
Government and the Terry College of Business.
The College of Engineering will assess the opportunities and
challenges associated with advanced electric energy technology,
smart infrastructure and interconnected communications on the
integrated transportation network.
The School of Public and International Affairs will explore
energy security, regulatory and public financing facets of
electric mobility.
The Terry College of Business will examine the economic,
human and natural capital impact of scaling electric mobility
and its effects on sustainable development goals.
The Vinson Institute will use its extensive statewide
network to understand how electric vehicle technology will
impact communities in Georgia and enhance the economic
competitiveness of the state.
These initiatives will seed other efforts on campus that leverage
the comprehensive land-grant mission of UGA, while also seeking to
partner with industry throughout the state.
``The potential applications of this developing technology are
endless and could greatly impact communities across the state of
Georgia in so many ways,'' said Jennifer Frum, vice president for UGA
Public Service and Outreach. ``Electric mobility technology will play
an important role in the state and nation going forward, and UGA's
involvement is a testament toward our ongoing goal to connect the
university's expertise with communities and partners across the
state.''
UGA will invest $1 million in seed funding over the next 5 years to
initiate new projects, including the development of educational
programs such as the E-Mobility Certificate and research activities in
battery re-use and recycling, including the creation of a laboratory
that will be housed in the new Interdisciplinary STEM Research Complex.
Private support has already been obtained for faculty development,
student projects and efforts to enhance the health and resilience of
vulnerable communities.
An Electric Mobility Summit is planned April 28-29 on the UGA
campus in Athens to bring together industry, educational institutions
and government agencies to assess the state of electric mobility in
Georgia and the region. Participants will discuss existing and future
education programs to support workforce development and assess the
economic impact of future electric transportation technologies in
communities across Georgia.
attachment 2
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
[Press Release]
University of Alabama Teams with Alabama Power, Mercedes-Benz U.S.
International for Mobility and Power Center
Press Information
Contact Telephone
Felyicia Jerald (MBUSI) +1 205 507 3507
Adam Jones (UA) +1 205 348 4328
Date: November 9, 2021
Tuscaloosa, Ala.--A strong partnership between The University of
Alabama, Alabama Power Company and Mercedes-Benz U.S. International,
Inc. fuels a newly-formed research and workforce development center
designed to meet the needs of the booming electric vehicle market.
The Board of Trustees of The University of Alabama recently
approved forming the Alabama Mobility and Power Center to be a world-
class research and development hub for creating and sustaining modern
mobility and power technologies, developing charging infrastructure and
managing power delivery to support large-scale growth in electric
vehicles.
``This partnership in the areas of mobility and power technologies
is a chance for the talented researchers at the University to support
prominent industries in our state while growing opportunities for our
students to apply their skills here after graduation,'' said UA
President Stuart R. Bell. ``We are grateful for how both these
companies support the University's mission.''
There is a substantial automotive industry ecosystem within the
state with a corresponding commitment to electrification. Alabama is
third in the nation for auto exports, with $7.5 billion in Alabama-made
vehicles and parts exported in 2018. MBUSI is undergoing a $1 billion
expansion to support electric vehicle production, and other auto
manufacturers in the state are embracing this technology, as well.
``Mercedes-Benz is getting ready to go all electric by the end of
the decade, where market conditions allow and we are moving swiftly
toward an emissions-free and software-driven future,'' said Michael
Goebel, President and CEO of Mercedes-Benz U.S. International, Inc.
``Our location here in Alabama is among the Mercedes-Benz locations on
three continents that next year will build electric vehicles and highly
efficient battery systems. Our partnership with the University of
Alabama and Alabama Power through the AMP Center is a collaboration
that will help position Alabama to be a leader in electric vehicle
innovation.''
A critical mass of faculty and staff experts will be built at UA to
support both private and government investment on new battery
technologies and secure an efficient infrastructure to charge electric
vehicles. The AMP Center will be organized under the Alabama
Transportation Institute at UA and housed in the recently approved
Smart Communities and Innovation Building.\1\
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\1\ https://news.ua.edu/2021/07/transformative-ua-alabama-power-
mercedes-initiative-moving-forward-with-state-support/.
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``High-quality jobs are the key to helping Alabamians live better
lives, and this targeted research center, focused on solving challenges
and capitalizing on the opportunities facing our state's automotive
industry, is essential to driving our state's economic growth,'' said
Tony Smoke, senior vice president for marketing and economic
development for Alabama Power.
MBUSI and Alabama Power are each supporting the AMP Center with in-
kind support as well as personnel support and employee consultation to
enhance projects.
The partnership will benefit students through expanded mentoring,
intern and career possibilities while providing opportunities for these
students to participate in world-class research that is on the cutting
edge of industry. These activities will lead to the development of the
mobility and power workforce and create future leaders in the
electrification of the transportation network.
``This partnership will be a nationwide leader in mobility and
powered research that aims to tackle relevant challenges faced by
industry and infuse a highly skilled and educated workforce into the
state as a boost to Alabama's economy,'' said Dr. Russell J. Mumper, UA
vice president for research and economic development.
Four themes of the AMP Center at UA include:
Preparing the electric vehicle workforce
Driving collaborations between industry and UA
Creating innovations in battery manufacturing and use
Developing effective and sustainable vehicle charge
infrastructure
Partnerships will be developed between UA and other auto
manufacturers in the state that could benefit from the expertise and
workforce developed at UA. As part of the agreement, UA will establish
a national training center for students, state and local officials, and
the electric vehicle workforce.
``Alabama has the potential to be among the nation's leaders in
transportation electrification--if we have adequate skilled workforce
and a commitment to leadership in electric vehicle and supporting power
grid technologies,'' said Dan Blakley, associate vice president for
economic and business engagement. ``The AMP provides a great
opportunity for a strong coalition of partners to address innovation,
workforce development and commercialization in mobility and power
research.''
For more details about Alabama Mobility and Power Center,
visit: Amp.ua.edu.
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[https://www.energy.gov/articles/egallon-what-it-and-why-it-s-
important]
eGallon: What It Is and Why It's Important
June 11, 2013
Energy.gov
eGallon: Compare the costs of driving with electricity
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Editor's note: this is an interactive graphic with a drop-
down selection menu. The graphic's Data and Methodology was
updated March 20, 2021. An animation capturing the comparisons
is retained in Committee file.
The eGallon price is calculated using the most recently available
state by state residential electricity prices. The state gasoline price
above is either the statewide average retail price or a multi-state
regional average price reported by EIA. The latest gasoline pricing
data is available on EIA's webpage. Find out more at www.energy.gov/
eGallon.
For most drivers, a trip to the fuel pump is an easy reminder of
the day-to-day cost of gasoline or diesel. But for electric vehicle
(EV) drivers, who typically charge their car at home, there isn't a
similar measurement to determine the cost of driving on electricity. To
help both current and potential EV drivers better understand the cost
of driving an EV, the Energy Department created the eGallon.\1\
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\1\ https://www.energy.gov/articles/egallon-how-much-cheaper-it-
drive-electricity.
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What is the eGallon?
The eGallon represents the cost of fueling a vehicle with
electricity compared to a similar vehicle that runs on gasoline. For
example, if gasoline costs $3.60 a gallon in your state and the eGallon
price for your state is $1.20, that means that for $1.20 worth of
electricity you can drive the same distance as you would for $3.60
worth of gasoline.
How is eGallon calculated?
To determine the eGallon price for each state, the Department of
Energy calculates how much electricity the most popular electric
vehicles would require to travel the same distance as similar models of
gasoline-fueled vehicles would travel on a gallon of gasoline. That
amount of electricity is then multiplied by the average cost of
electricity for the state. This gives consumers a clear comparison of
the cost of driving on electricity vs. a similar sized car that uses
gasoline.
For more on how eGallon is calculated, download the eGallon
methodology.
Why do gasoline prices swing so wildly? Does the same thing happen with
eGallon prices?
Gasoline prices are tied to the global oil market, which is driven
by international events that are difficult to predict, control or
prepare for. Unrest in an oil producing country on the other side of
the world can drive up the price of gasoline in your neighborhood,
seemingly overnight.
In contrast, the price of electricity is determined by local
markets or state utility commissions. This means that electricity
prices tend to be very stable over time-creating a lot less uncertainty
about fuel costs for an electric vehicle. The chart below shows how the
prices of gasoline (the green line) and electricity (the blue line)
have fluctuated over the past 10 years.
Gasoline vs. eGallon Prices, 2001-Present
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Editor's note: the chart is not present on the DOE's website
as there is a html coding error. The chart is posted on the EV
News Report site: https://evnewsreport.com/ev-fuel-savings-by-
state-doe/.
Why does the price of an eGallon vary by state?
Just like the price of gasoline, the average electricity price is
different for each state. Electricity is generally produced close to
its customer base, and different regions have different regulations and
resources (e.g., coal, natural gas, wind, etc.) that affect the cost of
electricity production. Traditionally, the cheapest way to produce
electricity is through ``mass production''--at a large scale. So each
region may have only one electricity company. Local governments work
with this company to set a price for electricity that is reasonable for
consumers. In many places across the U.S., electricity prices are set
by regulators, not the market.
How does ``off-peak'' charging affect the eGallon price?
In some places consumers are charged ``off-peak'' rates for fueling
their electric vehicles at night when electricity demand is low. This
``off-peak'' electricity rate leads to even bigger cost savings for
driving on electricity. The eGallon is based on the average cost of
electricity for residential consumers.
Why do we need eGallon?
The cost of driving an EV depends on the cost of electricity, which
is measured in kilowatt hours. Yet, when consumers think of the cost of
driving, it is usually determined by the price of a gallon of fuel. The
eGallon provides a metric that is easily comparable to the traditional
gallon of unleaded fuel--the dominant fuel choice for vehicles in the
U.S.
How is eGallon related to the EPA's MPGe rating?
eGallon and MPGe are not related. eGallon is a measurement of the
cost to drive a comparable vehicle the same distance you could go on a
gallon of gasoline. MPGe is a measurement of how efficiently a vehicle
uses energy based on the number of British Thermal Units (BTUs) in the
fuel.
How often is the eGallon price updated? What about the gasoline prices
listed with eGallon?
Energy.gov will release the state and national averages for eGallon
in coordination with the Energy Information Administration's (EIA)
monthly reports on electricity prices. The eGallon price is calculated
using the most recently available state-by-state residential
electricity prices. The state gasoline price above is either the
statewide average retail price or a multi-state regional average price
reported by EIA. The latest gasoline pricing data \2\ is available on
EIA's webpage.
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\2\ http://www.eia.gov/dnav/pet/pet_pri_gnd_a_epmr_pte_dpgal_w.htm.
More on eGallon: Read the eGallon blog post.\3\
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\3\ https://www.energy.gov/articles/egallon-how-much-cheaper-it-
drive-electricity.
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Download the eGallon Methodology \4\ to learn how it is
calculated.
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\4\ https://www.energy.gov/downloads/egallon-methodology.
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______
Supplementary Material Submitted by Trevor Walter, Vice President of
Petroleum Supply Management, Sheetz, Inc., Altoona, PA; on behalf of
National Association of Convenience Stores
Insert 1
Mr. Thompson. Very good. My next question is for Mr. Walter.
First of all, Mr. Walter, I can't tell you how happy I and
pleased I am to have a fellow Bellefonte area alumnus
testifying today, and also, congratulations on your career. I
want to thank you for your testimony.
You closed your written testimony by noting something I think
is important. ``Any alternative, including electricity, should
be offered in an open competitive market that gives American
consumers the fullest economic benefits or robust price
competition. This has worked well for consumers for nearly 100
years with liquid fuels, because the markets had a business
case to invest to meet consumer needs.'' So, why is it so
important that any new motor vehicle fuel, and indeed, any
engine technology, was subject to the pressures of an open and
competitive market?
Mr. Walter. Thank you, Ranking Member Thompson.
And open market provides the lowest cost to consumers. Any
time markets operate with opaqueness, it typically creates
higher costs for consumers across the board, and the
traditional fuel market today is an open, highly competitive
marketplace with many competing factors, not only from the sale
at retail for physical fuels, but also in various geographic
pockets there is high competition amongst wholesalers of
traditional fuels.
In today's world, there is a tremendous amount of opaqueness
that exists around EV charging costs. Some will highlight, like
Mr. Wood highlighted, that he paid zero for charging and first,
I just want to say thank you to Lincoln for stopping at Sheetz
on his path. But I mean, that cost in the future will be higher
for EV vehicles, and I think a lot of people today are not
working on----
The Chairman. The gentleman's time has expired. The witness
may provide an answer in writing. Thank you.
Producing energy costs money. And, all of it, even renewable
energy, results in carbon emissions. That is certainly true for the
production of electricity. To incentivize the behaviors we want, we
need to keep those things in mind. We need free market mechanisms to
allow businesses to recover the costs of producing and delivering all
forms of energy and to have the chance to make a profit doing it. If
that doesn't happen, we will never be able to make and sustain the
investments we need to give people access to that energy. That is why
we need to ensure there is an open and competitive market. Without it,
the supply of and demand for the energy we need will never match. We
need to ensure peoples' energy needs are met--both for the health of
our economy and for the health of our environment.
Insert 2
Mrs. Bustos. . . .
But can you talk about how a new era of low carbon, high
octane liquid fuels in the Next Generation Fuels Act
specifically would impact your businesses and your members as
we continue to transition to electric vehicles? And why don't
we start with Mr. Strickland, and then go to Nassar, Cooper,
Walter, whatever you have to add on that, please.
* * * * *
Mrs. Bustos. All right. Mr. Walter, I would love to have
chime in, but I think we are out of time, and we will hear from
you. We will hear from you at another time.
Thank you very much, Mr. Chairman, and I yield back
We see promise in the idea that advances in liquid fuels can
improve the emissions of internal combustion engines. Of course, we
need to be sure that policy does not send a market signal that those
engines and liquid fuels will be regulated out of existence. If we do
that, we remove any incentives for new innovations in those products
that could improve emissions. That will hurt, not help, emissions and
climate change. We need to push for continued innovation across all
energy sources and engine types rather than picking technology winners
and losers.
Insert 3
Mr. Baird. Well, thank you very much.
Mr. Walter, would you care to elaborate in terms of the
company you work for, as well as the association you work for,
and how the biofuels impact your industry?
Mr. Walter. Yes. So, the c-store industry operates 120,000
locations offering motor fuels, but specifically, the
environmental savings have been highlighted by Mr. Cooper. But
in terms of Sheetz, since 2019, E15 sales have grown 92
percent, and since 2017, they have grown 300 percent. And that
is really off the backdrop that ethanol is able to be procured
cheaper than gasoline, and we are able----
The Chairman. The time of the gentleman has expired, but you
may provide an answer in writing. Thank you.
I would just add that biofuels are an essential part of the fuels
market and provide benefits not only to that market but to the
emissions picture relating to fuels. We need to consider that when
looking at policy choices relating to the internal combustion engine
and electric vehicles. Specifically, we should be sure to provide room
in the policy equation for continued advances that improve the
emissions picture for engines that use biofuels and other liquid fuels.
Insert 4
Mr. Bishop. . . .
With fuel retailers being such an essential piece of the
puzzle to help increase the adoption of electric vehicles, let
me ask you if you can give us a sense of the size of your
industry, how many charging stations your industry might have
the capacity to provide if the right incentives were there, and
could you just touch a little bit more on how we can
incentivize the fuel retailers and the convenience stores to
invest in new technology, and how we ensure that those
incentives are flow to our rural communities?
Mr. Walter. Thank you, Congressman.
As I mentioned before, we have 150,000 constituents and
120,000 of them selling motor fuels today. I don't have the
exact count of how many offer EV chargers to date, but I can
tell you at Sheetz specifically, we have 78 locations that
offer EV charging, which represents around 12 percent of our
overall store portfolio. And what we really need is a clear
economics around what it takes to provide energy to consumers
through their ability to charge and them to have a guaranteed
rate of what they will be charged at a convenience store like
ours.
If you look across the platform for our industry, there are
widespread prices on the pylon that clearly tell you and state
what the price of fuel is on any given day. That does not exist
today for EV charging, and while we note that the growth of----
The Chairman. The time of the gentleman has expired,
unfortunately, but please respond in writing to Mr. Bishop.
Thank you.
The bottom line is that, if there is a business case for providing
EV charging, our industry can supply all of the needs that we have--now
and in the future--for that charging. The key is ensuring there is a
free market and making sure that anachronisms of the local regulated
monopolies on the sale of electricity, including things like demand
charges, do not undercut that free market.
______
Supplementary Material Submitted by Josh Nassar, Legislative Director,
International Union, United Automobile, Aerospace and Agricultural
Implement Workers of America
Insert
Mr. Rush. . . .
All right. Mr. Nassar, what percentage of electric vehicles
are currently being manufactured by union workers?
Mr. Nassar. I don't know the exact percentage of, but I can
tell you, in addition to the vetting models that were talked
about by Mr. Strickland, Ford and----
The Chairman. Unfortunately, the gentleman's time has
expired. We have many that want to ask their questions. The
witness may provide an answer in writing. Thank you.
Thank you for the question. We are proud to already be building the
vehicles of the future. UAW members are building advanced technology
vehicles and their components for a variety of applications and
powertrain types--including hybrids, plug-in hybrids, battery electric
vehicles, and increasingly efficient gasoline vehicles.
UAW-made plug-in hybrids (PHEV) and full electric vehicles (BEV)
include the BEV CUV Chevy Bolt, Chevy Bolt EUV, and Cruise Autonomous
Vehicle (Orion, MI), BEV GMC Hummer pickup (Detroit, MI), PHEV Jeep
Wrangler SUV (Toledo, OH), PHEV Lincoln Aviator SUV (Chicago, IL) and
PHEV Ford Escape & Lincoln Corsair CUVs (Louisville, KY). In addition
to passenger vehicles, UAW members are building electric and plug-in
hybrid vehicles for commercial and heavy-duty applications, such as the
BEV Ford E-Transit commercial van (Kansas City, MO), BEV Thomas Built
Saf-T-Liner C2 Jouley school bus (High Point, NC), BEV Volvo VNR Class
8 truck (Dublin, VA), and the BEV Mack LR refuse truck (Macungie, PA).
In addition to current vehicles, UAW employers have announced
ambitious product plans for plug-in vehicles across various segment.
Publicly announced production plans include the BEV F-150 Lightning
pickup (Dearborn, MI),\1\ * BEV Cadillac Lyriq CUV (Spring Hill,
TN),\2\ BEV GMC Hummer SUV (Detroit, MI),\3\ BEV Chevy Silverado pickup
(Detroit & Orion, MI),\4\ BEV GMC Sierra pickup (Orion, MI),\5\ BEV
Cruise Origin autonomous shuttle (Detroit, MI),\6\ and the PHEV Grand
Cherokee SUV (Detroit, MI).\7\
---------------------------------------------------------------------------
\1\ https://media.ford.com/content/fordmedia/fna/us/en/news/2022/
01/04/ford-planning-to-nearly-double-all-electric-f-150-lightning-
production-150000-units.html.
* Editor's note: footnotes annotated with are retained in
Committee file.
\2\ https://media.gm.com/media/us/en/gm/news.detail.html/content/
Pages/news/us/en/2020/oct/1020-event.html.
\3\ https://www.gm.com/stories/factory-zero-supertruck-hummer-
detroit.
\4\ https://media.gm.com/media/us/en/gm/news.detail.html/content/
Pages/news/us/en/2021/apr/0406-factory0.html, https://investor.gm.com/
news-releases/news-release-details/gm-accelerates-its-drive-lead-ev-
industry-7-billion-investment.
\5\ https://investor.gm.com/news-releases/news-release-details/gm-
accelerates-its-drive-lead-ev-industry-7-billion-investment.
\6\ https://www.gm.com/stories/factory-zero-first-dedicated-ev-
plant.
\7\ https://media.stellantisnorthamerica.com/
newsrelease.do?id=23497&mid=1.
---------------------------------------------------------------------------
UAW members continue to work on cutting edge technology. Besides
publicly announced production plans, automakers and heavy-duty truck
manufacturers have a deep pipeline of BEV and PHEV vehicles under
development, with production locations yet to be announced. With major
future investments at stake, it is crucial that we have policies that
promote the domestic production of advanced technology vehicles. The
UAW will continue to work with policymakers and major manufacturers to
secure future quality jobs for American workers.
______
Supplementary Material Submitted by Mark P. Mills, Senior Fellow,
Manhattan Institute
Insert
Mrs. Miller. . . .
And with that, I have a question for Mr. Mills. Mr. Mills,
rare earth elements are considered critical to modern batteries
and electronics, yet United States is almost wholly dependent
on China to supply our factories with these critical minerals.
Just a few years ago, there was a real palpable concern that
China would use its control of rare earth element production to
further its geopolitical aims by restricting the export to the
United States. If that happens, how would we build batteries,
solar cells, wind turbines, and all the other tools of modern
life? So, is rare earth mining more environmentally damaging
than mining for other materials?
The Chairman. Does the gentlelady yield back?
Mrs. Miller. Well, did Mr. Mills--could he answer my
question?
The Chairman. Oh, Mr. Mills, did you hear the question?
Mrs. Miller. Maybe I ran into it too fast.
The Clerk. Mr. Mills is no longer on camera.
The Chairman. Mr. Mills, you may want to un-mute.
The Clerk. Ask if there is anybody on the panel that would
like to address the question.
The Chairman. Is there anybody on the panel that might want
to pitch in?
Well, thank you, gentlelady. You have 2 minutes remaining. Do
you yield back?
Mrs. Miller. Does Mr. Mills not want to answer that question?
The Chairman. We have not been able to locate him on the
panel.
The United States is profoundly dependent on imports for not only
rare earths, but all manner of minerals. As the USGS reports, the
United States today is dependent on imports \1\ * for 100% of some 17
critical minerals, and for 28 others net imports account for more than
half of existing domestic demand. For many tech (and military) products
that require those minerals, whether the products are purchased, or
even assembled, in the United States--from smartphones to electric car
batteries--the fact is the critical supply chains entail off-shoring of
most mining, and in particular most of the related mineral processing.
China, for example, refines the majority of the worlds' cobalt that is,
mainly, mined elsewhere. While Congress, and many Administrations, have
over many decades episodically studied mineral dependencies, relatively
little action has been taken to encourage--rather than discourage--
domestic mining and processing. In fact, in February this year, the
Biden Administration canceled a long-sought permit to open a new copper
and nickel mine in Minnesota. While neither of those are ``rare''
elements, both are essential for building electric vehicles and much
else. Rare earths are, for the record, not physically ``rare,'' rather
those elements possess ``rare'' properties that are very valuable for
high-tech products. The United States as extensive rare earth
resources. And the mining of rare earths is itself is not more
environmentally challenging than mining for other minerals. However,
the environmental challenges (which modern industry can easily meet)
are associated with the subsequent, essential, chemical processes
needed to separate and [refine] the rare earths from the ore.
---------------------------------------------------------------------------
\1\ https://pubs.usgs.gov/periodicals/mcs2020/mcs2020.pdf.
* Editor's note: the report entitled, Mineral Commodity Summaries
2020, is retained in Committee file.
---------------------------------------------------------------------------
______
Submitted Letter by Kurt Kovarik, Vice President, Federal Affairs,
National Biodiesel Board
Dear Chairman Scott, Ranking Member Thompson, and Honorable
Committee Members,
Thank you for considering the testimony of America's clean fuel
producers, who play a pivotal role in supporting the rural economy and
meeting the nation's environmental goals in many of the hardest-to-
decarbonize transportation and industrial sectors.
The National Biodiesel Board (NBB)--soon to become Clean Fuels
Alliance America--represents the cleanest, lowest carbon fuels
available for use today at a commercial scale. Our members include
biodiesel, renewable diesel, Bioheat' fuel, and sustainable
aviation fuel (SAF) producers as well as soybean growers and waste fats
and oil processors. NBB is the industry's central coordinating entity
for technical, environmental, and quality assurance programs and the
strongest voice for its advocacy, communications, and market
development.
These fuels are better, cleaner and widely available now to achieve
reductions in the nation's carbon emissions--which showed a 6% increase
in 2021. Reducing carbon emissions today is crucial to turn the
trajectory of global climate change. Reductions today are far more
valuable even than greater reductions in the future. America can rely
on the clean fuels industry now and in the future to achieve these
reductions. Congress should ensure that there are equivalent, stable
and forward-looking investments in clean fuels development,
infrastructure and market expansion alongside EVs.
Jobs and Economic Growth
The U.S. transportation market today uses more than 3 billion
gallons of these clean fuels--which supports more than 65,000 jobs
across the country and generates more than $17 billion in economic
opportunity. Our industry includes many small biodiesel producers in
addition to large, integrated companies. In many rural areas of the
country, small biodiesel plants are a driving force of the local
economy, supporting the employment of plant operators, technicians and
engineers as well as local construction workers, truck drivers and
farmers.
According to a November 2021 report, Union Jobs in Ethanol &
Biodiesel Industries: An American Success Story, more than 30,000 union
members are working directly for, and in supplier industries to, the
ethanol and biodiesel industries. ``Perhaps most striking is that union
gains are found in farm country and among agricultural workers, both
areas where union membership has historically lagged,'' the authors
state. The Energy Futures Initiative found a union density rate of
seven percent in the ethanol and biodiesel industries in 2019, above
the estimated national workforce average of six percent.
Our industry is on a path to sustainably grow domestic production
to 6 billion gallons annually by the end of this decade. Every 100
million gallon increase in U.S. production supports an additional 3,200
jobs and $780 million in economic activity--not just in rural
communities, but across the country--and can eliminate an additional
metric ton of greenhouse gas emissions each year.
The economic opportunities demonstrate biodiesel's, farmers', and
rural communities' potential to contribute to meeting the nation's
climate goals. With advancements in feedstock, the market can reach 15
billion gallons by 2050. The United States will need these fuels in the
future to meet the nation's clean air, energy, and agriculture goals.
The House Climate Crisis Select Committee's report, Solving the
Climate Crisis, found, ``For heavy-duty freight trucks, technology
options like electrification may not be available in the short or
medium term, given the need to carry weight and travel longer
distances.''
Value Added to the Ag Economy
Our industry's clean fuels are made from an increasingly diverse
mix of resources, including recycled cooking oil and animal fats as
well as surplus soybean, canola and distillers corn oils. Our fuels add
value to fats, oils and greases that might otherwise be treated as
waste or as a cost for other industries.
For example, soybean oil is separated from soybean meal through
oilseed crushing. Demand for the meal as a high protein animal feed has
been the traditional driver of soybean production, which reached 4.4
billion bushels in the 2020-21 marketing year. This growth created an
ever-increasing surplus of oil.
About 60 percent of the separated oil is currently used in U.S.
food production, with some additional exports. However, the volume of
oil for food and exports has been stable over the past decade without
any growth. Growth in biodiesel and renewable diesel production has
always absorbed the surplus of soybean oil and is now providing market
signals to increase domestic production and capture more value.
Approximately half of the biodiesel produced in the U.S. comes from
soybean oil.
Traditionally, roughly half of all U.S.-grown soybeans have been
exported each year--and crushed overseas--to meet animal feed demand.
Instability in these markets--including trade wars--combined with
growing markets for renewable fuels in the United States are
encouraging investment in more U.S. crush capacity to keep the value of
soybean oil here at home. Domestic soybean crushing is projected to
expand by 13%--increasing processing by 350 million bushels--in the
next few years to match growth in the clean fuels sector. The increased
production will support food and animal feed demand along with 500
million additional gallons of clean fuels.
StoneX estimates that without biodiesel and renewable diesel
production, the value of every bushel of soybeans grown in the United
States could fall as much as 13 percent. The bottom line is that
farmers receive better value for their soybeans thanks to their
partnerships with biodiesel and renewable diesel producers.
Rural livestock producers also benefit from increased biodiesel
production. By boosting the value of surplus soybean oil--which would
otherwise represent a loss to crushers--biodiesel production provides a
counterweight to the price of soybean meal and the cost of raising
poultry and livestock. As more surplus soybean oil is processed for
biodiesel production, farmers can grow and crushers can process more
soybean meal for animal feed at a lower price. Informa Economics has
estimated livestock producers pay $21 per ton less for soybean meal due
to increased biodiesel production and use.
Approximately \1/4\ of all animal fats produced in the U.S. now go
into biodiesel. Higher demand has led to increased value for those
fats.
Environmental Health Contributions
Clean fuel use lowers the impacts and costs of carbon and
particulate emissions. Biodiesel and renewable diesel reduce greenhouse
gas emissions on average by 74% compared to petroleum diesel, according
to the newest Argonne National Labs data. In difficult-to-decarbonize
transportation applications--the majority of diesel end uses--these
clean fuels immediately and substantially reduce greenhouse gas
emissions. Additionally, they significantly reduce criteria pollutants
from diesel transportation and other end uses, which can have direct
benefits for both rural and urban communities.
Biodiesel and renewable diesel have reduced U.S. emissions by 143.8
million metric tons since 2010, when the Renewable Fuel Standard first
included biomass-based diesel obligations. These fuels have also made
significant contributions to the carbon reduction goals of many states.
For instance, California's total biodiesel and renewable diesel volume
grew to 855 million gallons in 2020, meeting nearly 24% of the state's
total diesel demand for the year. These fuels have reduced the state's
greenhouse gas emissions by 32.3 million metric tons since 2011.
In the Northeast, biodiesel and Bioheat' fuel will be
required to meet the states' carbon reduction goals. Currently, one in
five existing homes in the Northeast (around 4.5 million) rely on
oilheat, using more than 2.3 billion gallons yearly. The region's
biodiesel and Bioheat' fuel use annually avoids more than
1.5 million tons of CO2 emissions, equivalent to removing
320,000 vehicles from the road or the emissions from annual energy use
by 180,000 homes. New York, Connecticut and Rhode Island this year
adopted goals to increase use of Bioheat' fuel.
In addition to having one of the lowest carbon intensities of any
liquid fuel, biodiesel also significantly reduces criteria pollutants
from diesel transportation and other end-uses. Major trucking
corridors, warehouse distribution centers and other diesel hot spots
close to population centers can inflict serious harms to human health
and often highlight disparities in the impacts of transportation
pollution burdens as a result of emissions from petroleum fuel. Since
biodiesel and renewable diesel cut these harmful emissions by half,
their use can generate immediate health benefits for disadvantaged
communities.
A recent study, conducted by Trinity Consultants on behalf of our
trade association, shows that converting from petroleum-based diesel to
100 percent biodiesel (B100) results in a multitude of health benefits
at the Census-tract level, including lowering cancer risk, reducing
premature deaths, and decreasing asthma attacks.
The study found that switching to B100 in the home heating oil and
transportation sectors would provide immediate community health
improvements that can be measured in reduced medical costs and health
care benefits, including approximately 50,000 fewer sick days in the
study demographics.
In the transportation sector, benefits included a potential 44
percent reduction in cancer risk when heavy-duty trucks use B100,
resulting in 203,000 fewer or lessened asthma attacks for the
communities studied. When biodiesel is used for home heating oil, the
study found an 86 percent reduced cancer risk and 17,000 fewer lung
problems for the communities studied.
These are benefits that can be achieved today with available
production of biodiesel, renewable diesel and Bioheat' fuel.
Since the study focused on only 13 communities, it represents the tip
of the iceberg in what can be accomplished this decade through growth
of the clean fuels industry.
Supportive Federal Policies
As Congress considers legislation to address the nation's
infrastructure, climate and economic priorities, we ask that you ensure
a level playing field for the continued growth of the biodiesel and
renewable diesel industry. The Renewable Fuel Standard and biodiesel
tax incentive have supported the growth of our industry to 3 billion
gallons. Extension and optimization of these policies is crucial to our
industry.
Our industry grows and creates jobs when the biodiesel tax
incentive is stable and forward-looking. For example, in 2020 and 2021
the U.S. market for biodiesel and renewable diesel increased even while
the coronavirus pandemic reduced overall demand for transportation
fuel. This was largely due to the biodiesel tax incentive.
NBB and its members appreciate the leadership of Rep. Cindy Axne
(D-IA) and many others for advocating a long-term extension of the
biodiesel tax incentive in the Build Back Better Act. This provision
grew out of bipartisan legislation--H.R. 3472--that she cosponsored
with Rep. Mike Kelly (R-PA) and 41 other Members of the House. The
policy enjoys bicameral support with companion legislation, introduced
by Senators Grassley and Cantwell and cosponsored by 12 other Senators.
We ask that Congress maintain an equitable balance in duration and
value for the policy in relation to other renewable energy incentives.
NBB and its members also applaud efforts to continue the Federal
matching grant program supporting higher blends of biodiesel. USDA's
Higher Blends Infrastructure Incentive Program continues to be a huge
success, providing a tremendous return at a very low cost. To date, \1/
3\ of the program's announced grants have been awarded to 24 biodiesel
projects, which received a combined $25 million. Completion of these
projects will increase consumer access to nearly 1 billion gallons of
biodiesel while eliminating 9.4 million metric tons of greenhouse gas
emissions every year at a 1 year cost of only $2.67 per ton. Continuing
the program will help the industry build or retrofit terminals,
storage, and rail capacity to extend access to these clean, low-carbon
fuels.
We thank Reps. Angie Craig (D-MN) and Axne for championing a 10
year authorization and funding of this grant program and support its
inclusion in the Build Back Better Act. The proposal evolved from
bipartisan, bicameral legislation cosponsored by Reps. Rodney Davis (R-
IL) and Dusty Johnson (R-SD) as well as Sens. Amy Klobuchar (D-MN) and
Joni Ernst (R-IA). It promises to be an effective way to expand
consumer access to cleaner, low-carbon transportation options.
Additionally, Congress can work with the Environmental Protection
Agency to optimize the Renewable Fuel Standard to achieve carbon
emission reductions. While we appreciate the rule that EPA recently
proposed, it can only have a retroactive impact. The agency continues
to fall behind its statutory annual deadlines to set volumes.
EPA's delays in rulemaking create uncertainty for the biodiesel and
renewable diesel industry, which hampers growth and opportunities
within the rural economy. The delays allow refiners to manipulate the
RFS rules and create uncertainty for renewable fuel producers. And
uncertainty among biodiesel producers could impact jobs and economic
growth opportunities throughout America.
Congress must encourage EPA and the Administration to support
sustainable, achievable growth in RFS volumes, issue annual rules in a
timely manner, and increase the transparency of the small refinery
exemption process.
Conclusion
NBB and its members thank the Committee for holding this hearing
and considering this written testimony. The clean fuels industry
creates jobs and value-added markets for agricultural partners.
Biodiesel and renewable diesel use can improve environmental health and
reduce associated costs for disadvantaged communities.
Cleaner, better fuels highlight the contribution that the
agricultural sector can make to the nation's overall climate and carbon
reduction goals. They are here, commercially available and in use
today, achieving significant reductions in carbon emissions. Their
increasing use today will do more to avoid climate change impacts than
incentives that electrify transportation and other sectors down the
road.
We look forward to working with Congress on policies that maximize
these benefits.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Kurt Kovarik,
VP Federal Affairs,
National Biodiesel Board.
______
Submitted Letter by Praveen Penmetsa, Chief Executive Officer and Co-
Founder, Zimeno Inc. d/b/a Monarch Tractor
01/21/22
House Agriculture Committee
Washington, D.C.
Monarch Tractor appreciates the opportunity to submit comments
regarding the January 12th, 2022 House Agriculture Committee Hearing on
the Implications of Electric Vehicle Investments for Agriculture and
Rural America. We strongly support initiatives to expand
electrification and EV infrastructure, especially in high impact areas
like the agricultural sector.
About Monarch Tractor
Monarch Tractor is an innovative, mission-driven company,
headquartered in Livermore, California developing driver-optional
electric tractors. We are committed to enabling clean, efficient, and
sustainable farming practices by making them economically viable. The
Monarch Tractor brings together the benefits of electrification,
automation, and insightful data to enable farmers to transition to more
productive, precise, and sustainable farming practices. Providing a
superior platform for farmers, Monarch Tractor is focused on delivering
meaningful change for today's farmers and the generations of farmers to
come.
The Monarch Tractor MK5 is the world's first fully electric, driver
optional, smart tractor. It enhances farmer's existing operations,
alleviating labor shortages and maximizing yields. The award-winning
Monarch Tractor combines electrification, automation, machine learning,
and data analysis to set a new standard in tractor technology and
capabilities.
Providing 40 horsepower continuously and peaks up to 70 horsepower,
a category 1 three-point hitch, 6 Spline 540 rpm PTO, and 16 gpm
standard hydraulic hookups, the Monarch Tractor can accomplish
everything a traditional diesel tractor can and more. This power is
packed into a compact footprint resulting in best in class plow, till,
and hauling capabilities. Optional four-wheel drive and front implement
compatibility extend the Monarch Tractor's functionality even further.
Monarch's Compact Tractor is an attractive platform for
significantly reducing criteria and greenhouse gas emissions in the
agricultural sector. The compact tractor segment offers the opportunity
for some of the most significant and cost-effective diesel emissions
reductions due to its high volume, high utilization, and significant
annual growth.
Throughout the company's home state of California, Monarch has been
working with both local and state government agencies and programs to
accurately incentivize and deploy fully electric farm equipment.
Various California State Legislators and officials have toured
Monarch's California Headquarters and experienced a demonstration of
the technology in a local vineyard. Monarch has already partnered with
air districts to complete a variety of zero emission tractor
deployments in North Central California.
Farm Electrification is Primed for Federal Support
Farm EV technology isn't in development, it's already here. Thanks
to significant public and private investment in on-road
electrification, high voltage battery technology has improved vastly in
the last decade. Now, farm EV's provide a zero-compromise solution for
farmers looking to replace aging or high-polluting equipment.
Agriculture is responsible for a significant amount of overall
greenhouse gas emissions which makes the industry an ideal candidate
for sustainability initiatives and one of the most effective on a cost
of emission reduction basis.
Electrification is quickly expanding in the farming sector;
government participation can ensure the benefits of this technological
shift are both swift and equitable. Farmers looking to adopt ZEVs
currently face expensive upgrades to existing electrical
infrastructure, poor or no financial incentives to replace their
equipment with ZEVs, and other transitory challenges. This is
compounded in rural communities that have not had the need, nor the
opportunity, to install the necessary infrastructure to support
electric vehicle usage and charging. As both equipment and implement
manufacturers are moving toward an electric future, rural areas are at
risk of being left behind without appropriate support to aid in
adopting these new technologies. Infrastructure investments to
facilitate rural electrification need to be made urgently so farmers
have the ability to choose an Electric Farm Vehicle as their next
equipment purchase.
Monarch Tractor is dedicated to facilitating the future of our food
ecosystem; one that is electrified and sustainable. We are looking
forward to collaborating with the House Agriculture Committee on
initiatives that help further sustainability in the agricultural
sector.
Sincerely,
Praveen Penmetsa,
CEO and Co-Founder.
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