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There’s a chewy chunk of truth in the perception that all-electric cars are expensive, because many of them are.  In June, 2019, the average cost for a new car stood at $36,600, compared to a $55,600 average for a battery-electric.  But averages conceal as well as reveal, so let’s keep on chewing.  For EVs, that average gets a substantial push skyward by plenty of high-end all-electric models.  Cases in point:  2021 BMW i3s:  $47,650; 2021 Mustang Mach-E Premium:  $52,000; 2021 Audi E-Tron:  $65,900; Tesla Model S Long Range:  $79,990; 2021 Porsche Taycan Turbo:  $150,900.  And so on.  Even the $7,500 federal tax credit, available for all these models except Tesla, isn’t going to make a big difference up there in the financial stratosphere – and most of us don’t live there anyway.

Back on earth, what about affordable new electric car options?  They’re out there.  Kelly Blue Book, reporting in September 2018, noted an average new car price of $35,742, and a total of 10 all-electric and 13 plug-in hybrid models with MSRP below that.  Less than three years later, choices have boomed.  As of April 2021 14 different makers offer 41 different all-electric models and trim levels; 21 OEMs have brought 45 different models and trims of plug-in hybrids to market.

Whatever the price, a new car is always a substantial expenditure.  At this point, Wentworth J. Stumblewhistle III – your inner CPA – should chime in with a reminder that an automobile is, in fact, a depreciating asset, not an investment.  With that in mind, what’s the best way to avoid some of the financial burden of a new car – the depreciation hit when you drive off the lot, sales and personal property tax, insurance? What about a used car?  Specifically, what about a used electric car?

When it comes to EVs, there are advantages to buying used that add up in an even bigger way than for a conventional model, and we’re happy to walk you through some of them.   For starters, depreciation has tended to be steeper with many all-electric models than it has been for conventional cars.  This isn’t true for some brands.  Used Teslas tend to hold their value longer than most EV brands – but that’s not really the market we’re looking at here anyway.

Some handy examples from CarGurus:  A 2020 Hyundai Ioniq SE EV, with 1,058 miles for $18,999.  MSRP for a new version of the same year, make and model – $34,295.  Even with the $7,500 federal tax credit that’s still nearly $8,000 cheaper with barely 1,000 miles on the odometer and an estimated range of 170 miles per charge.  A 2020 Chevy Bolt, with a starting new  MSRP of $36,620 and an estimated range per charge of 259 miles:  with just 3,030 miles, $22,519.  Older models are even more affordable:  A 2017 Nissan LEAF with 18,974 miles on the odometer and an estimated 107-mile range – $12,575.  (Disclaimer – These specific listings are only illustrations, and we’re not endorsing any specific brand, model or dealership.  And by the time this is published, these links may not work anyway, as the cars listed may have sold.)

So, what’s the catch?  After all, if it sounds too good to be true . . . Let’s just say it’s complicated.  For starters, all electric vehicles lose battery capacity over time.  This doesn’t mean they’re bad cars – that’s just the nature of batteries as they charge and discharge thousands of times.  A fairly extensive study of 6,300 electric cars, covering 64 different makes and model years came out in July 2020.  It found an average annual capacity loss of about 2.3% from time of purchase.  In other words, a new EV purchased today with a range of 150 miles should have a range of about 133 miles in 2026.  So, does the 2017 Nissan LEAF listed above still have a range of 107 miles 6 years after it was sold?  Probably not.

There are other variables in play when considering a used EV.  Beyond age and mileage, where was the car driven?  High temperatures can mean faster loss of EV battery capacity, so buying a used EV in Portland might be better than buying one in Phoenix.  How was it charged?  Some studies indicate that frequent use of high-speed charging can substantially cut into battery capacity, in some cases after a few dozen high-speed charging sessions.  Scientists are already working to find ways to work around this issue, through improved battery design and improved charging cycles.  But how much high-speed charging a pre-owned EV used isn’t the kind of information you’ll find in a Carfax.

Another issue is geographic, not technical.  Many manufacturers sell EVs only in certain areas of the country, particularly in California and the Northeast.  Accordingly, those are the areas where you’re most likely to find a used EV that fits your needs.  This means that you may have to travel to an out-of-state dealership and drive back or pay to have the car trucked to where you live.  Car shipping costs in April 2021 averaged between $800 and $1000 – not insurmountable, but still a substantial expense.

Yet even with all these considerations in the mix, there are substantial long-term advantages to electric autos compared with conventional models.  Service costs are nominal.  Without gasoline, oil, coolant or transmission fluid, routine maintenance is reduced to software updates and tire rotation, plus the occasional brake check.  Beyond the complexities of software and battery control systems, EVs are remarkably simple machines, with fewer possible points of failure and lower total costs of ownership.

Data to date support this.  Consumer Reports published a study in fall of 2020 that tracked long-term costs of nine different models of electric cars.  “For all EVs analyzed, the lifetime ownership costs were many thousands of dollars lower than all comparable ICE (internal combustion engine) vehicles’ costs, with most EVs offering savings of between $6,000 and $10,000.  While new EVs were found to offer significant cost savings over comparable ICE vehicles, the cost savings of 5-to-7 year old used EVs was found to be two to three times larger on a percentage basis.”

Electric cars won’t work for everyone.  But for those interested in making the switch, yet leery of new car prices, an affordable used model may be a viable option.  And remember, whatever you’re looking to drive home, the sticker price isn’t the cost of a car – it’s only the first installment.  Total cost of ownership is, in the end, the best way to measure how long and how much you’ll be paying for personal transportation.

By the way, if you’re looking for a chance to investigate electric car options, MEC is participating in Drive Electric Earth Day 2021, with two events coming up fast.  It’s not just about the cars – there will also be giveaways and a chance to win a $250 Visa gift card.  To find out more, you’ll want to click on the buttons for the Kansas City area events or visit the Drive Electric Earth Day homepage for events all around the country.

Kansas City International Airport is no stranger to cleaner fuels.  It began deploying compressed natural gas (CNG) buses back in 1997providing natural gas on site with its own high-speed fueling station.  This made the Aviation Department something of a pioneer in alt-fuel adoption.  The next step, though, was a big jump in fuel efficiency, and in October of 2017, KCI became the first US airport to deploy all-electric shuttle buses.  It’s currently running 7 BYD K7 battery-electric shuttles along with older CNG units. 

There’s no getting around the fact that up-front costs for electric vehicles are going to be higher than for equivalent conventional buses.  In fact, when the airport rolled out data on the comparative costs of different fuels, the contrast was stark.  A brand-new diesel shuttle buses cost about $385,000; for CNG, add an additional 14% for a sticker price of $440,000.  All-electric models come in at a fairly eye-popping $540,000, more than 40% more expensive than the price for a baseline diesel.   

But as anybody who’s bought a car knows, the sticker price isn’t the only price.  The sticker price, in fact, is only the beginning of years of recurring costs.  Kenny Williams is the Fleet Asset Manager for the Aviation Department and one of the main proponents of the EV deployment back in 2016-17 as the project began to take shape.  He broke it down as follows: 

Costs Per Mile (Including fuel and maintenance) 
  • Diesel – variable/volatile fuel prices; approximate costs $1.50/mile 
  • CNG – more stable fuel prices; approximate costs $1.00/mile, $0.45-.50 w. alt-fuel tax credit 
  • Electric – fixed fuel prices; approximate costs $0.50/mile 

Maintenance costs add up quickly for the shuttle bus duty cycle.  Oil changes for CNG units are about $170 and have to happen every other month.  Annual tune-ups add an additional $3,800 to CNG bus operating costs.  So, even with fuel at an economical $0.50/gallon thanks to the clean fuel tax credit, CNG bus maintenance per year comes in between $4,800 and $5,000 per unit.  It’s not like EV buses float on air.  Like CNG units, they need new tires, and fluid changes every 18 months add annual costs of about $165 per year.  But no internal combustion engine means no tune-ups, avoiding the lion’s share of regular maintenance overhead. 

And yet, even with maintenance savings of around $50,000 per bus over ten years, there’s still a big price gap between diesel, CNG and electric buses.  That’s where federal clean-fuel funding comes in.  Thanks to support from the US Department of Energy, KCI was eligible for reimbursements of $72,000 per bus, dropping their costs to just $2,000 more than comparable CNG shuttles.   

The same grant, “Accelerating Alternative Fuel Adoption in Mid-America” provided funding for charging infrastructure, covering about $100,000 of $225,000 in construction and equipment costs for the new systems.  KCI’s electric bus charging lot has eight pedestals installed, with space for an additional four slots if more EV units are purchased  Charging time is about three hours, and this “fueling” process hasn’t had any negative impact on operations.   

Kenny Williams talks EV bus duty cycles at the airport’s charging lot.

What has the driver response been like?  Per Kenny Williams, “For most drivers, once they drive them, they really like them.”  The only minor hitch has been how drivers operate the bus HVAC systems – since they are battery-driven, power loss from cranking up AC or heating at full throttle can take a bite out of driving range when a gentler touch would work better. And KCI is planning on investing in additional EV units.  The economic toll of the pandemic has postponed acquisition of a few of the 12 units originally planned.  However, the Aviation Department is planning on ordering three more units in addition to the seven already in service.  These new buses will be slightly different.  They’ll have inductive charging systems, which will let them power up without cords or plugs, as they pick up passengers at the new terminal starting in early 2023.   

This material is based upon work supported by the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy (EERE) Vehicle Technologies Program under Award Number DE-EE0008262 . 

Metropolitan Energy Center (MEC) announces the first placements of all-electric zero-emission Class-8 yard trucks into service under a new grant project. The project, “Electrifying Terminal Trucks in Unincentivized Markets,” is the result of partnerships from Kansas City to Chicago, whose goal is to electrify terminal trucks in our regional market. The first placements of four planned have taken place at funding recipient Firefly Transportation Services. Based in Glenview, IL, Firefly provides zero-emission transportation options to freight yard, port and cargo sites, along with training and site preparation for all-electric operations.

The vehicles funded under this grant are manufactured by Orange EV. Based in Riverside, MO, Orange EV designs and manufacturers all-electric yard trucks right here in the heartland. They are also the first American company to commercially build, deploy and service 100% electric Class-8 electric vehicles. Before this year, Orange EV had yet to deploy one of their vehicles in the Kansas City area. Jason Dake, Vice President of Legal and Regulatory Affairs at Orange EV stated, “Not selling one of our trucks in our own backyard was a thorn in our side for a while,” he continued, “Seeing additional trucks deployed in the metro area through the project is a great feeling and most importantly, they are helping our community and improving the air quality for Kansas Citians.”

Additional funding recipients with all-electric truck placements planned in the near future are the Johnson County Wastewater Department in Leawood, KS and Hirschbach Motor Lines, a private long-haul carrier with emphasis on refrigerated and other specialized services. Hirschbach will deploy their truck at a client site in Wyandotte County, KS. Both Evergy and the Unified Government of Wyandotte County, Kansas City, Kansas Board of Public Utilities will provide technical assistance, as needed, on electrical service and electric rate guidance.

Orange EV will also take possession of a demonstration truck to provide potential customers across the U.S. up to a 2- to 4-month trial period. During the period, they can use the tractor free of charge, viscerally demonstrating air quality, noise-reduction and cost-savings benefits in their unique work environments.

Yard trucks (also known as hostlers, terminal tractors, goats or mules) are designed to pull cargo containers and semi trailers in freight or intermodal yards, or at large manufacturing sites. The workload for these trucks is intense, pulling heavy loads almost continuously. The power required means that most yard trucks are diesel, which results in a great deal of diesel exhaust, one of the worst pollutants and a major source of poor air quality. Diesel exhaust is not only a health risk for workers on site, but it also threatens communities surrounding industrial zones, typically low-income neighborhoods. Even worse, low speed, high-power operations emit much more soot and other particulates than diesel operations at highway speeds. Systematically replacing diesel yard trucks with electric models could substantially boost air quality in and around America’s busiest freight hubs. At the same time, the cost savings both from eliminating diesel fuel and from operating a much more efficient electric powertrain is an attractive advantage.

However, the project is not only about improving air quality and saving money. Another key goal is to gather data on electric truck operations to validate broader deployments of battery-powered yard trucks. Telematics and data, supported by fleet interviews and operational evaluation, will be analyzed by another project partner and nearby neighbor, Missouri University of Science and Technology. Ultimately, MEC will create a deployment guide based on the real-world experiences of our project partners in Chicago and Kansas City so fleet operators across the country can make the move to cleaner, more efficient freight handling.

To learn more about this project or to request the demo truck for your work site, please contact Emily Wolfe.

This material is based upon work supported by the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy (EERE) under the Award Number DE-EE0008887.

At MEC, our job is to keep tabs on energy use in the central Midwest, but why should that matter? Because the ways that people and businesses use energy can affect lives. Technology has yet to come up with a solution that moves people and goods without releasing some sort of air pollution, and air pollution affects human health.  The problem is that every power source that can power a vehicle will create emissions and will have a carbon footprinteven electric vehicles.  There are, however, many alternative fuel options that arefar cleaner than gasoline and diesel.  If you’re looking for a vehicle that produces less emissions, there are a lot of factors to consider when making your decision. 

Let’s compare the different ways that the energy we use affects our health. In 2017 the emissions from vehicles on the road passed up the amount of emissions released from power stations.  That switch has shown up as health problems, such as the increase of child asthma cases for families living near highways and railroads.That’s simply because vehicle emissions get concentrated in the air around the places that people and goods get transported. Transportation emissions are now the #1 source of greenhouse gases too, making it globally important to choose our transportation wisely.  For the sake of our local and global health, we must decide to make transportation cleaner. The question now is how. 

For some, their ideal chosen solution is to walk or bike more places, and to only shop for things in stores within walking distance of their house.  But what if you need transportation?  Remember that COVID shutdowns produced sudden, startling air quality improvements the likes of which we haven’t seen in decades.  As residents of Los Angeles and New York saw with their own eyes, less vehicles on the road immediately improved their air quality, even in heavily polluted cities.  But the shutdown of society isn’t a realistic model for fighting climate change in the long run.  Movement of people and goods still must happen.  Are there cleaner solutions than what’s commonly used to move people and goods right now? The simple answer is yes.  For a more complete answer, here are options that make sense for our health, the economy and the environment. 

Electric vehicles (EVs), which plug in to an electrical supply to “fuel up, are creating a lot of buzz right now, and rightly so. All-electric vehicles have zero emissions coming out of their tailpipesso they appear to be the magic bullet for clean air around our roadways.  Plug-in hybrids are also great, in that they make use of electricity as a primary fuel, but are equipped with a fuel tank as a backup for longer trips.  EVs are great as urban or suburban family cars, transit buses, or local delivery trucks that rack up limited daily miles before returning to base to recharge.  Plus, long-range batteries, fast charging stations, and new heavy truck technologies are under rapid development, so the list of compatible uses is getting longer by the day.  

You may not realize that you can help your electrical grid become more efficient with the electricity being generated just by owning an EV and charging it at night.  The electrical grid is set up to estimate how much power is needed, and then generate slightly more than that amount to provide for our electricity needs.  Whatever electricity is generated at power plants either gets used, or it dissipates with non-use.  If you charge an EV overnight, it utilizes that energy that would otherwise be wasted. 

Biofuels are another cleaner transportation option available now.  They come from farm-produced food commodity byproductsthey emit substantially less air pollution when burnedand they’re surprisingly less expensive than the worst emission producers, gasoline and diesel.  Ethanol and biodiesel have been around for a while, and just like your cell phone, their design and our use of them has greatly improved over the last 20 years. 

In the 1990s, car manufacturers started figuring out how to protect the insides of vehicle fuel lines from the extra corrosiveness of ethanol blends, which is basically ethyl alcohol (moonshine!) mixed with gasoline.  By 2012, ethanol had busted into the mainstream, and most vehicle manufacturers now support up to 15% ethanol (E15).  To save money and get a cleaner burn in your vehicle, look for the E15 label on pumps at gas stations.  The added ethanol increases the octane, which is actually better for modern, more fuel-efficient engines.  Plus, the more ethanol mixed into gasoline, the fewer harmful, carcinogenic gases get released into the air around it All of this is why today most gasoline at the pump already has 10% ethanol in it.  You can choose higher blends if your vehicle is rated to use them.  Then it’s a matter of finding a local gas station where that blend is available to support your choice.  When you’re buying a family vehicle and want the option of using high blends of ethanol (E20-E85)ask to look at flex-fuel” options at your dealership Typically, a flex-fuel vehicle will have a yellow gas cap, indicating that you can safely use blends up to 85% ethanol, wherever you should find them. 

Biodiesel is another clean fuel option. It can be used in most diesel-fueled vehicles, and also supports the regional economy as a value-added farm product. It is a renewable fuel made from vegetable oils, primarily soybean and sometimes corn oil, but also from recycled cooking oil and waste fat. No, you can’t just pour the grease from your deep-fried turkey into your pickup. Just like petroleum, it has to be refined first, and biodiesel at the pump has excellent quality controlsMost diesel engines can use blends of biodiesel and petroleum diesel up to 20% (called “B20), which can be found at some area fuel stations. It’s also an easy drop-in fuel option for farming equipment, heavy-duty freight engines, and industrial work trucks. Fortunately for companies with large industrial fleets, fuel distributors are ready today to bring biodiesel or ethanol blends directly to industrial sites. 

Natural gas, or methane, the same fuel that cooks your food and heats your home, can be used in specialized “Near-Zero” engines that are made to burn it Natural gas is a clean burning fuel with much lower emissions than plain petroleum diesel.  It comes in two possible transportation fuel products: compressed natural gas (CNG) and liquid natural gas (LNG).  Both are available in renewable options.  More on that later. Natural gas is widely available through existing pipelines, and fuel costs are lower and more stable than diesel. It’s a great option for heavy vehicles such as freight trucks, transit buses, and refuse trucks. And, because the engines are quieter than diesel engines, that 6 am trash pickup won’t disturb your sleep.  CNG engines eliminate nearly all smog-forming pollutantshence the trade name “Near-Zero” engines While CNG is available to the general public at some area fueling stations and you can convert some cars and trucks to use CNGit usually only makes financial sense for high-mileage vehicles or fuel-hungry service providers to use it.  A number of our regional governments and service providers are already using CNG today. 

Making natural gas more climate-friendly is a priority for many people and government agencies.  The ultimate low-hanging fruit in reducing climate emissions is renewable natural gas (RNG) which involves collecting and then using methane, a greenhouse gas far more potent than carbon dioxide. Methane comes from sources other than just underground and a whopping 39% of natural gas vehicle fuel comes from renewable sources like landfill gas, which comes out of landfills whether it’s used or not.  Other sources of RNG include wastewater treatment plants, food waste and agricultural byproducts Available in both liquid and compressed forms, RNG is rapidly gaining market share because of its ecologically friendly procurement methods Done right, RNG can even have a negative carbon footprint! 

Which fuel heats your grill AND gets your kids to school?  Propane (also called autogas for transportation uses) It’s yet another cleaner burning, low-emission fuel with notably quieter operation than diesel fuel.  That makes for a much quieter ride, which drivers appreciate.  Because of that stealthy qualitypropane is a popular option for fleets of larger vehicles, especially school bus fleets.  Propane on aautogas transportation contract costs much less than diesel, so school districts can save substantially on fuel costs.  Switching to propane also means that students don’t have to breathe diesel exhaust while waiting for their busesPropane is widely available, with distribution networks already in place nationwide.  Like with CNG, you can convert some personal vehicles to run on propaneand though a bit harder to find than gasoline, it is available at some retail fuel stations. Not to be outdone by its gaseous counterpart RNG, renewable propane is an emerging product As icing on the cake, propane engine manufacturers are actively developing their own version of a “near-zero” engine, expected to be available in coming years. 

Though none of these options are ‘perfect’, they each offer substantial benefits compared to conventional fuelslower cost, longer engine life, quieter operationslower emissions, and economic benefits to the farm economy.  Though no single alternative fuel captures all these benefitsthere’s likely an option that’s almost perfect for your needs When more people, businesses and government fleets embrace alternative-fuel options, the owners/operators enjoy lower costs, softer road noise and less air pollution.  And with more investment in alternative fuels, research and development efforts continue to make every available option even better Big picture: petroleum diesel is far and away the worst culprit in making our air harder to breathe.  In order to cut down on the emissions released into the air by our transportation practices, it’s necessary for all of us to recognize and support any and all options. We can’t yet eliminate vehicle emissions, but moving in that direction ifar easier than you might think.  

For more information on alternative fuels and vehicles, check out the Alternative Fuels Data Center.

To the casual observer, battery-electric vehicles (BEVs) appear nestled comfortably on the upslope of a growth curve that would turn other industries green – with envy, in this case.  From a global grand total of about 20,000 EVs of all makes on the road in 2010, by 2019, the total number of plug-in hybrid (PHEV) and full electric autos on the road worldwide rose to 7.2 million.  That’s an almost a 360-fold increase in less than a decade.

The biggest surprise to date has been the number of surprises to date.  Who imagined that an automotive startup – the first such large-scale attempt since Kaiser-Frazier back in 1947 – would flat-out pound legacy OEMs in the US in any market segment?  In 2019, Tesla’s three all-electric models outsold GM’s EV/PHEV Bolt and Volt combined by nearly nine to one.  Also in 2019, the California upstart commanded more than 78% of US BEV market share.

Who imagined that battery costs would continue to collapse at the rate we’ve seen through 2019?  In 2010, battery costs per kwh averaged about $1,100 – in 2019, they hit a new low of $156.  Who imagined that price parity between EVs and conventional ICE models could arrive in some market segments by as soon as 2022, 2023, or 2025?  What year, of course, depends on whether the crystal ball you’re consulting belongs to Deloitte, Roskill or Carnegie Mellon University.

It’s this last bit – predicting the crossover– that we want to take a look at today.  Not surprisingly, it’s complicated.  Total cost of ownership for an EV can be substantially lower than for an ICE car.  With simple drive trains, EVs have fewer points of failure, and electricity is cheaper than gasoline in most industrialized nations.  Tax incentives and rebates can substantially sweeten the pot.  But in the words of a recent Automotive News article, mass EV adoption is “inevitable, yet elusive.”

Multiple factors are in play.  Infrastructure buildout is slower than it could be.  Manufacturers may increase their margins once EVs hit a tipping point, given the substantial sunk costs they’ve already incurred.  Moving the needle on consumer acceptance is still difficult.  Though we’re expecting the arrival of multiple EV models by multiple OEMs by 2023, 14 different brands didn’t offer a single EV option as recently as the end of 2018.  And there’s still a rough $6,000 – $9,000 gap between EV models and their ICE counterparts in non-luxury categories.  In the end, it may be mandates that do the heavy lifting.  For all of the reasons above, and given Americans’ aversion to mandates, IHS Markit projects 40% of EU cars will be hybrid or pure EV by 2031, compared with 20% of the American passenger fleet.

Above and beyond the usual suspects, there’s one you might not have suspected – reliability.  At least in the US, drivers are holding onto their cars longer than ever, thanks in part to better quality.  By this July, the average age of an American car was a record 11.9 years, and per IHS, one in four cars on the road in the United States are more than 16 years old.  This is something of a tribute to improved automotive quality:  as noted in the article linked above, “Back in the ’90s, one-quarter of cars parked at the grocery store were not Ford Mavericks and Chevy Vegas. Nowadays, that beige 2002 Corolla is still ubiquitous.”

With COVID driving economic worries for consumers, auto purchases may be viewed as more discretionary than ever, particularly when it comes to buying a new car.   At the same time, until the pandemic is under control, road trips (vs. flying) and commuting by car (not public transit) may keep long-term auto demand simmering, even as our wheels continue to gray.  How all of the preceding will drive EV acceptance in the next few years is hard to forecast, but we’ll be watching closely.

So, when we talk about someone employed in “clean energy”, what does that cover?  Like “manufacturing”, many things. The Bureau of Labor Statistics (BLS) defines and tracks employment by sector, but it’s not the most user-friendly resource.  So, while BLS notes that there were nearly 6,000 wind turbine service techs employed in May of 2020, it divides them among five different industries, ranging from utility construction to consulting to local government.  Sadly, a BLS plan to categorize and track clean energy jobs begun in 2010 was abandoned in 2013 during a federal budget shutdown, and has never resumed.

More generally, clean energy jobs fall into four broad categories – energy efficiency (home upgrades or commercial building retrofits); renewables (solar, wind, biogas, or geothermal energy); grid and storage (electrical engineering, battery tech, and charging stations); and cleaner vehicles and fuels (hybrid and electric vehicle manufacturing or biofuel production).  Altogether, more than 3.3 million Americans work in one of these fields, and it’s worth noting that energy efficiency alone employed more than twice as many people as all fossil energy sectors combined.

Like nearly everybody else, clean energy workers have taken a hit in this economy.  About 147,000 jobs were eliminated in March, and April totals nearly tripled that.  More than 590,000 jobs in the sector evaporated by April 30th, two months ahead of projections by BW Research.  The same analysts now expect around ¼ of all green energy jobs to be gone by June 30th, some 850,000 in all.

Under the circumstances, this isn’t surprising.  Homeowners are unlikely to invite insulation crews into their homes in the midst of a pandemic.  Financial chaos means that banks are less likely to lend on large-scale clean energy deployments.  Cities facing budgets collapsing under tax shortfalls are going to emphasize essential services before clean energy buildouts.  And utilities are facing tumbling energy demand.  IEA estimates that from February through April, global demand for energy dropped 6%, the equivalent of all of India.  American energy demand is set to drop 9%, according to the same report.

Whatever the course of economic contraction and recovery, there are certain irreducible advantages to jobs in these industries.  To begin with, they tend to be site-specific.  Many renewable energy jobs are unlikely to be outsourced – those building and maintaining a thermal solar plant in Arizona, for example, are going to build and maintain it in that location for its useful life.  The same holds true for energy efficiency professionals – the homes and buildings in the United States aren’t going to offshore themselves.

Many skilled green energy jobs pay relatively well, can boost stressed economies and don’t require four-year degrees.  Wind turbine techs, for example, exemplify this beneficial clustering.  Wind turbines require regular service and maintenance, and wind farms are located largely in rural areas in the Midwest and southern Plains.  Technicians tend to live in smaller cities or towns near these sites, supporting the local tax base.  Median income for a turbine technician in 2019 was $52,910, which could go a long way in Russell County, Kansas or Alliance, Nebraska.  And training for the field takes one or two years, depending on program and specialization. Median income for solar installers was lower, but in 2019 stood at $44,890 per year, and for insulation crews, median income in 2019 was $44,180,

The issue, at least for now, is that the three specific categories mentioned above don’t employ very many Americans – about 75,000 in all in 2018 and 2019, according to BLS.  But broaden the focus, and green energy’s economic becomes clearer – and bigger.  Wind energy’s total economic footprint alone is already substantial.  In 2018, 530 plants in 43 states produced components – blades, nacelles, turbines, gearing and digital control systems. Outsourcing of some of this manufacturing is possible, but given the size and weight of components as turbines grow taller, is likely to remain largely here at home.  Moreover, the Department of Energy estimates as many as 600,000 jobs in all subsectors of wind energy in less than 30 years.

This kind of job generation potential is what makes remaking America’s energy system so important to inclusive economic recovery.  Utilities, states and cities are already beginning to implement plans to change how we generate and distribute energy in a carbon-constrained world.  These efforts have been patchy and slow, and to date unlikely to meet even minimal Paris Agreement standards.  But under the right circumstances, policy changes, like technological changes, can happen quickly.  Emphasizing the very real benefits of more clean energy jobs may help speed that vital process.

So where, as COVID redefines economies and politics, is the renewable energy sector?  What happens over the next few years – to technologies, investments, deployments and incentives – will determine multiple trajectories.  These include the jobs of millions of people, how quickly carbon accumulates in the atmosphere and oceans, and the possibility of stranded assets hampering any rapid, substantive switch from old to new.

If you’re thinking purely in terms of dollars and cents, the latest issue of Forbes has a fascinating article.  A joint study by the International Energy Agency (IEA) and Imperial College London reviewed returns on energy investments starting in 2009.  Combining German and French stock market data, the past five years showed returns of 178% for renewables and -20.7% for fossil energy.  UK renewable stocks returned over 75%, legacy energy 8.8%.  Here at home, where utility-scale renewable buildouts began later than in Europe, renewable returns were north of 200%, while oil, gas and coal stocks didn’t quite double.  Renewable investments proved more stable over the same periods measured.  But the same article notes that the biggest fossil energy shareholders – pension funds – are reluctant to disinvest from dividend-rich stocks.

Beyond that, an ostensible renewable energy transition is up against multiple countervailing factors – for starters $900 billion or more in potential “stranded assets” of global fossil energy companies.  The oil majors have talked a good game for years now, but the numbers don’t bear out their proclaimed commitments to renewables.  Exxon is now in court for, among other things, bragging on its green energy tech while spending less than ½ of 1% of revenues on renewable energy.  In 2019, BP projected spending between 3% and 8% (at best) of capex on renewables, and in February the company dumped an advertising campaign highlighting renewables.  And so on.

American utilities face the same kinds of stranded asset risks, though only 18% of utility employees view sunk costs in infrastructure as a top worry.  But power plants can be ferociously expensive to build.  Evergy’s Iatan 2 project, which went online nearly 10 years ago, came in at nearly $2 billion, with state-of-the-art environmental retrofits of the Iatan 1 plant adding to costs.  It can take large projects like this decades to pay for themselves; securitizing early retirement of fossil fuel plants can blunt risks to utilities, but so far has only been tried in three states.

Even bigger picture – there’s a substantial inertia built into an energy economy created more than 100 years ago – a vast, complex system that works remarkably well to meet the needs of its customers.  To date, renewables are still a small slice of total US electricity output.  In 2018, natural gas generated about 35% of our electricity, coal about 27%, nuclear a bit over 19% and all renewables, including hydroelectric, not quite 17%, with niche sources making up the rest.

To be clear, renewable energy’s recent eclipse of coal in the US has been remarkable.  In fact, the US Energy Information Administration (EIA) announced the very day this was written that in 2019 consumption of energy produced from renewables passed that produced by coal, the first time per EIA that this has happened since before 1885.  But a decarbonized energy economy is still decades away.  The International Renewable Energy Agency (IRENA) estimates that to even approach climate goals, renewables must increase to around 65% of global Total Primary Energy Supply by 2050 – and we’re nowhere close to that yet.  More on all of the above, COVID impacts and the state of play in our next renewable installment.

Carnage in the conventional energy sector has drawn a lot of attention in the past few weeks.  But the collapse of recent months was presaged by mediocre performance stretching back literally years.  Total returns for the Standard & Poor Energy Sector for 2019, including dividends, were a paltry 6%.  And for the entire decade of 2010-2019, the same sector was up 34%, by far the worst performance of the 11 sectors S&P tracks.  The fracking revolution, it turns out, created a world awash in oil and gas, but didn’t do much to help the industry that created it.

Which brings us to a related question – if oil & gas are in trouble from COVID-19 and from a decade of overproduction and low prices, what has the ongoing turmoil done to alternative fuels?  In particular, since KC Clean Cities operates in the biofueled, beating heart of the Midwest, what’s happened to biodiesel and (particularly) ethanol?

A bit of backstory:   more than 95% of vehicle gasoline sold in the US is a 10% ethanol blend.  There are several reasons for this.  Until about 15 years ago, a compound known as MTBE (methyl tertiary-butyl ether) was blended with gasoline to add oxygen.  As a result, gasoline burned cleaner, and cut smog-forming chemicals and toxins like benzene in exhaust.  But there were problems – MTBE leaked into groundwater from gas station tanks, creating water quality problems.  Moreover, it’s listed as a potential carcinogen.  Enter ethanol, exit MTBE with the Energy Policy Act of 2005.

Like MTBE, ethanol adds oxygen to gasoline and cuts smog-forming emissions.  Unlike MTBE, it’s also a way for America to deal with its massive agricultural surpluses by distilling a value-added product from corn. (It’s worth noting that ethanol now accounts for 40% of all the corn we grow.)

With the Energy Independence & Security Act of 2007, Congress created a mandate that steadily increasing amounts of renewables would be blended into America’s fuel supply – 36 billion gallons by 2022.  This is the Renewable Fuels Standard, which has been hotly debated over the last few years in Washington and elsewhere.

So far so good.  Refineries and fuel importers had a choice – they could blend steadily increasing amounts of renewable fuels.  Or, if they didn’t want to, they could use RINs – Renewable Inventory Numbers – attached to each gallon of renewable fuel produced.  Pecos Pete’s refinery has already hit their required volume of ethanol blended with gasoline for the year, but they keep on blending.  Why?  Because Brownsville Bob’s refinery hasn’t blended any ethanol into their gasoline.  However, Bob can stay in compliance by buying RINs from Pecos Pete, with the price set by the RIN market.

There’s also been a safety valve built into the system, called the Small Refinery Exemption or SRE.  “Small” is relative, but refineries with less than 75,000 barrels per day as of 2006 qualify, and can petition EPA to be excused from renewable fuel blending.  And this is where the fur begins to fly.  Between 2016 and 2018, the EPA granted a total of 85 small refinery exemptions, a big jump that removed a total of 4 billion gallons of mandated demand from the market.  This has been a sore spot with farmers, but hardly the only one.  The ongoing trade war with China has dried up what was a major market for ethanol, corn and distiller’s grain, a byproduct of the ethanol production process used as animal feed.  Allowing year-round sales of E-15 – that is, gasoline that is 15% ethanol by volume hasn’t made much of a dent, since relatively few gas stations sell it even though all light-duty gasoline vehicles 2001 or newer are approved to use E15.

And now, COVID.  Just as Texas and Oklahoma oil producers and refineries don’t have any place left to store their crude and refined products as consumer demand collapses, ethanol producers are running out of storage.  Federal Reserve research shows US ethanol production down nearly 50% since the beginning of 2020.  73 out of 200 total plants nationwide are shut down, while another 71 are on reduced production schedules.  At least two dozen ethanol plants are now producing alcohol for hand sanitizer, but at low volume, much of which will be donated anyway.

For the time being, the sector seems to be shaking its way into stasis.  Whatever shape the ethanol industry takes in 2021 and beyond will depend for now on what the virus does– and how we respond – in 2020.

For additional details on why this matters, please check out our guest blog posting by David VanderGriend of the Urban Air Institute.  Fuel blending standards can sound arcane, and the details of ethanol and corn and agriculture seem like something taking place in distant, rural counties.  They’re not.  They impact the lives of residents of metro Kansas City every day, and at the fundamental level of our own health.

Events

Come and join us to learn about Electric Vehicles and enjoy some delicious wine at a one-of-a-kind earth-friendly winery in our area. There will be live music and free wine tastings for those who show an EV key. Jowler Creek is the first certified sustainable vineyard and winery in the state. The winery has a Tesla destination charger and a Level 2 charger.

Learn about Electric Vehicles and see how you can save the Earth and your wallet! Numerous EVs will be on display by their owners and info will be available along with some cool freebies and a possible raffle.

Social distancing and masks are required.

Visit the Drive Electric Earth Day event page to register to attend, share your experience and/or show your EV, or find out more on this event and other Drive Electric Earth Day events around the country.