Sunday, December 23, 2012

Government Assistance; It Aint Always About Money

2012 is coming to and end which means a flurry of "Year in Review"  or "Best of (Worst of) 2012) articles and the like.  EVs sales and acceptance is still disappointing with very low numbers in both production and sales. Aggregate Plug in numbers are way up but only because of several new entries.

The #1 EV, the Nissan LEAF just celebrated its two year anniversary and with nearly 20,000 units sold in the US alone, it has a decent start but 2nd year sales were far short of expectations.  There are several reasons likely contributing to the sluggishness.  It is still new and for the most part, a misunderstood technology.  In these cases, word of mouth advertising will help tremendously.

Another issue that is still present after two years is the lack of governmental support. The rollout of charging stations has been very late at best. In the Pacific Northwest, we are lucky enough to have two charging infrastructure programs being developed in conjunction with a handful of private companies who are taking the initiative to provide charging stations as a customer relation strategy.

But the project sponsored by the US government has met with constant delays which greatly hampers the EV user experience.  Now, we can blame the vendor chosen and there is no doubt they probably should shoulder some of the blame.  Might not have been the best idea to choose a small start up for such a massive task.

But the other thing to address is the lack of governmental support at every level.  The huge disparity from one area to the next is primarily due to the acceptance level from one governmental agency to the next.  Oregon was first to start and make significant progress on the West Coast Green Highway (WCGH) project that would electrified I-5 from Canada to Mexico.  Oregon is also a state that must import 100% of fossil fuels they burn. They have neither an oil field or refinery in the state which means every gallon of fuel not burned is money in their pocket. Throw very cheap and abundant natural power generation sources and it was not too hard for the State of Oregon to understand this and help pave the way for local governments and utilities to insure a rapid deployment of an effective quick charging network.

Next is WA State. We do have refineries and process a lot of Alaskan Oil here so there is some vested interest in continuing to make EV Owners Struggle .  Our WCGH project is nearly complete but the national Electric Vehicle Highway Project which promised 40 quick charge stations thru out the Seattle Metro Area has been very slow to develop. To date, less than a handful of these critical stations are up and running. There is a dim light at the end of the tunnel with a station in Fife recently breaking ground. This station bridges a huge gap between the two projects South of Seattle. Before it was a 60+ mile jump from the Seattle area to the Tumwater Station that was a difficult (but doable) challenge for the very heavily traveled Seattle to Portland corridor.

California with the largest electric vehicle market in the world has struggled with both projects.  With both oil wells and refineries, powerful forces have almost completely stalled the progress. Right now, only a handful of quick charging stations exist for the entire state and most of them are due to private companies and not either the state or federal government programs in the area.

Right now, funding ANYTHING is a pretty touchy subject. As the deadline for the "Fiscal Cliff" approaches, the only thing more disheartening is the deteriorating terms of the compromised solution. Even programs previously considered "untouchable" are being used as bargaining chips.  Both of the electric vehicle government programs were started in hopes that private entities would pitch in to help the movement but that contribution has been disappointing so far.

So we need the money but we have to provide a way of getting the money. What I propose is a raise to the national gas tax. It has not been raised in 20 years and right now when gas prices are low would be the perfect time to do it.  Use the money to help build the charging infrastructure which will create jobs and build a bigger tax base.

Use the additional taxes to fix the roads. That will add jobs and a larger taxable income base. Although raising taxes is generally a pro/con argument, there is no downside to the proposal as long as you dont run an oil company.

People will argue that raising gas taxes will raise the cost of gasoline and put a crimp into the pocket book of small business, commuters, delivery companies, etc.  I contend that a significant jump in the gas tax would only add a few pennies to the price of gas.  Should prices go back up again; the reduced consumption caused by the higher prices will simply lower the price of gasoline due to lower demand.

It should be plainly obvious that there is only one real thing that affects the price of gas and that is demand.  Why does gas go up just before Memorial Day every year but drops back down every Winter?  Does gas get more expensive to make in Summer? No... It goes up because the weather is nice. Great for camping, taking road trips, etc. So we drive more and are willing to pay more for gas because its not the "normal bill paying" its the "Vacation Fund"  that pays for the gas. It is the "I worked hard all year for this and I deserve it so I am ok with paying a little more to get what I want" syndrome.

So, in effect; raising the price of gas has the end result of lowering oil company profits to "obscene" levels from the much higher levels the oil companies currently enjoy.

More importantly, but much farther down the road which means it impossible to get anything down at the governmental level due to its real benefits being beyond the term length of sitting Congressional Member,  is the building of the EV infrastructure that will HAVE TO BE DONE sooner or later.  Right now, we need the jobs.  Our infrastructure DEFINITELY needs some TLC.

So, tell me, since there always is supposed to be one...

What is the drawback to increased gas taxes??

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