Trillions For Oil, Millions For EVs: The Big Lie Of Ineffectual Government

Trillions For Oil, Millions For EVs: The Big Lie Of Ineffectual Government
Illustration: Elena Scotti/ G O Media Art Dept
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With a new more environment-friendly White House and wholesale improvement in the range of new electric cars, the American nation’s anti-EV forces are mustering again to slow progress down by embracing some of modern history’s most tiresome shibboleths – the first one being that the federal government shouldn’t be in the business of choosing winners and losers in the field of energy.

So it was that the oil industry’s trade association and chief lobbying group, the American Petroleum Institute, fired off a peevish blog post last month, spurred by a Biden administration executive order directing use of the federal government’s procurement powers’ to “achieve or facilitate ‘clean and zero-emission vehicles for Federal, State, local, and Tribal government fleets, including vehicles of the United States Postal Service.’” As Big Oil’s copiously funded think tank gasped, its “fundamental concern” was the very idea of “government, in a market-based economy, taking policy actions to push the market and consumers toward a specific policy outcome. Basically, it’s the government picking winners and losers for consumers.” Omigod!?! What? Wait, no.

Newsflash, API: the American government has been picking winners and losers, choosing between competing persons, corporate and otherwise, as well as their technologies, since the American experiment in self-government began. Indeed, a 2011 study for DBL Investors traced the first federal incentives for fossil fuels back to the beginning, 1789, when Washington (actually Philadelphia, the nation’s capital until the following year) placed a punitive tariff on British coal entering U.S. ports as ship ballast. From that day on, America’s extractive fuel industries — particularly producers of coal and petroleum — have easily been among our biggest all-time winners. And don’t forget the big winners they supported, like trains, planes, and automobiles.

And Washington continued in succeeding centuries to throw its support behind coal and oil, while latterly lending a considerably more than generous helping hand to nuclear power, practices that continue apace in the new millennium. Meanwhile the anti-gummint folk bitterly criticize with straight faces the government for what has been to date a decidedly more tepid level of support for renewable energy sources. (The first 15 years of a new energy source’s market present are critical and, according to the DBL analysis, subsidies to nuclear power were, for instance, 1,000 percent greater in inflation-adjusted dollars during that key interval than those accruing to modern renewables. In later years, government willingness to assume huge liability for accidents at nuclear plants further aided the fledgling industry with its near limitless possibilities for danger, as it does to this day.)

Complain all you like about electric car tax credits but don’t forget the countless billions in write offs for business vehicles powered by gasoline, which helped kill passenger rail, and all the money lavished on the oil-gargling airlines. And that’s before you consider the cost of all the credits, depletion and accelerated depreciation allowances, write downs, land giveaways and other subsidies that have been routinely showered upon the petroleum industry, here and abroad. The oily fingers on the scale remain apparent, even now when international policymakers claim to be working hard as they can to curb air pollution and global climate change.

Ignoring the fact that every dollar spent subsidizing oil diverts money away from other societally valuable enterprises – say public health, mass transit or feeding the hungry – the dollars are still staggering. Internationally, depending on the price of oil, governments provide up to $1 trillion in subsidies, each year. Add costs related to climate change and other despoiling of the environment, plus war and negative health impacts, and, according to a 2015 study by the International Monetary Fund, the unpaid costs of fossil fuels clock in each year at around $5.3 trillion annually – or a breathtaking $10 million a minute. Don’t hold us to it, but that’s more money even than Jeff Bezos makes.

For those counting, a later IMF study pegged the United States alone at $649 billion in subsidies and externalities in 2015, which exceeded the country’s defense budget and amounted to 1,000 percent of the federal education spend.

Still for those who would oppose the electrification of the automotive fleet, there’s another palpable but enduring falsehood to draw on – that government can’t get anything done, much less done right. The vexsome refrain of Ronald Reagan, he of sainted memory and countless other Grand Old Partyers who’ve followed, not to mention a disturbing number of neocon Democrats, it’s led to a stagnation in the national will, imprinted in the minds of many. Not just party leaders but among today’s youth, including those who are pro-technology and pro-environment, two areas where the government surely has the ability to change things for the better in ways that industry and capital markets, left to their own devices, infrequently do. Just look at all the long-lived car companies pledging today to go all-electric by [insert random date in future here] without any reference to a charging infrastructure that is already painfully lagging. What’s their plan? Wait for the oil companies? Who’s going to make sure that electricity generation is safe and clean as can be? Who’s going to get that charging station up fastest? If history is any guide, it won’t be ExxonMobil. Not without a government handout, at least.

Young folk, who overwhelmingly support cleaner energy solutions, may be brought up short by such claims or grow despondent about government’s ability to effect positive change, since defeatism and decay is all they’ve heard and seen their whole lives, largely courtesy of a Republican Party that’s still hopping mad about FDR’s New Deal in the 1930s. Sailing under the false banner that the market is the only answer to our hopes and dreams despite overwhelming evidence to the contrary, government for decades has systematically defunded investment in infrastructure, along with education, science and technology, having fallen prey to a particularly virulent sort of partisanship that favors reduced spending at all costs, unless it’s to cut taxes on business and the wealthy, or to write blank checks to the Pentagon to fight foreign wars and prop up friendly regimes that wouldn’t know democracy if it hit them in the head with a rifle butt. Which, come to think of it, is why these politicians are against spending in the first place: because it might raise or otherwise interfere with cutting taxes or the care and feeding of the military industrial complex. They ignore the plain fact that so much American wealth has been accrued thanks to government investment in the first place.

So it’s not hard to see why pessimism rules the day. Government is not perfect. Like industry, it is prone to corruption and incompetence; strong, impartial oversight is crucial. But at the very least there is no reason to fear the government any more than corporations or industry. So we shouldn’t be trying to help it fail, to kneecap it at every turn. Because these truths stand: government largesse conquered oceans and built the railroads that tied the nation together. It built the interstate highway system, sent Admiral Byrd to the Antarctic and humankind to the Moon, creating thousands of new technologies in the process. It has cured disease and toppled fascist dictators, fighting them down on every corner of the globe. Or, if you prefer, it has successfully supported generations of totalitarians and oppressive governments around the world. Never once was the expense too great, the absence of morality in our largesse too troubling. Never either was private industry ever cut out of the deal. Nor, snowflakes of Washington, need it be now, as the government makes electrifying the automotive landscape a priority.

There is an important difference between can’t do and won’t do. Government can dramatically accelerate the nation’s conversion to the electric future that scientists, the automobile industry and a majority of the public want. Let’s choose the winners, then, keep a close eye on them, and once again help America get its house in order.

Jamie Kitman is a NY-based lawyer, rock band manager, picture car wrangler and automotive journalist. Winner of the National Magazine Award for commentary and the IRE Medal for investigative magazine journalism, he has a penchant for Lancias and old British cars, and is a World Car of the Year juror. Follow him on Twitter @jamiekitman