The Biden administration is about to climb down from its previously aggressive EV targets for US automakers—an admission the policy was bound to fail. Using the EPA as an enforcement mechanism, the administration last year proposed a fast-paced schedule for US automakers to lower emissions by introducing production targets for both EV and ICE, to start in 2027. The problem: US automakers are simply not on track, even a little, to produce EV in such volumes by that time. The policy proposal held that if EV targets were not met, then curbs would kick in on ICE production. The industry was unhappy about the proposition at the time of course, but a year later it’s capacity, not attitude, that’s guiding the outcome. The New York Times has the story.
The failure of the US legacy automakers to meet even their own EV production targets has, at the same time, been misunderstood as a slowdown in the EV market. But outside of normal year-to-year fluctuations, no such slowdown is yet established. Here in the US, plug-in sales reached 1.43 million units out of 15.49 million total vehicle sales last year, for a market share of 9.25%. That is a rapid advance for plug-in share compared to 2020, just three years prior, at 2.00%. Globally meanwhile, EV are literally storming the ramparts. Last year, roughly 17% of global car sales had a plug, according to BNEF which expects market share to advance again this year, to 21%.
The Biden-EPA plan was not particularly well designed in the first place, and, would not have resulted in much of a hit to US transport emissions, until later next decade. As Cold Eye Earth relentlessly points out, other than EV adoption the US really has no policy to tackle emissions in transport, and this results from a longstanding but informal bipartisan agreement to never touch the existing cars. As we are now learning in the global power sector, you can adopt all the new, clean technology you desire. But, unless you retire existing, incumbent capacity, emissions declines will be very hard to realize.
Last year’s global oil demand reached a level about 1.2% higher than the peak year of 2019, well within the Cold Eye Earth forecast. Readers will recall the longstanding outlook offered here: oil demand will fluctuate 1.00% - 1.50% from the 2019 level, never reaching actual decline, until much later this decade. In its latest Oil Market Report, the IEA pays considerable attention to the global slowdown in demand, especially emanating from China. Yet, the IEA still sees the world tacking on an extra 1 million barrels a day in 2024. We shall see. (This is also a good time to recall British Petroleum’s longer term forecast, first released in 2019, that saw virtually no demand growth at all after 2025). The global oil market has pretty much run out of time to mount a new oil cycle of higher prices, and higher demand.
A stellar year for wind, solar, and storage is on the way here in the United States. While we must adjust capacity measures for the respective capacity-factor of each energy source, the EIA growth forecast is so dominated by clean energy that we can confidently write off the small contribution coming from one fossil fuel, natural gas.
On the topic of natural gas, this is probably a good time to reflect (again) on the evolution of power sector emissions in the US. We have done a great job killing coal, and that has produced enormous declines in coal emissions. However, the bargain we made with natural gas has its own implications.
As you can see in the chart below, power sector emissions from natural gas are now crossing above coal emissions. That’s a good-news—but not such great-news—story. And, it’s one that hand-waving advocates of global natural gas growth should ponder.
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