CVIndependent

Mon08032020

Last updateMon, 20 Apr 2020 1pm

Starting immediately, California state agencies will no longer buy gas-powered sedans, officials said Friday—and starting in January, the state will stop purchasing vehicles from carmakers that haven’t agreed to follow California’s clean-car rules.

The decision affects General Motors, Fiat Chrysler, Toyota and multiple other automakers that sided with the Trump administration in the ongoing battle over tailpipe-pollution rules. The policy will hit General Motors particularly hard; California spent more than $27 million on passenger vehicles from GM-owned Chevrolet in 2018.

California’s Department of General Services, the state’s business manager that oversees vehicle purchases for California’s fleet, announced the bans on Friday afternoon. The immediate ban on state purchases of cars powered only by gas will include exceptions for public-safety vehicles. 

“The state is finally making the smart move away from internal-combustion engine sedans,” California Gov. Gavin Newsom said in a statement emailed to CalMatters. The new policies align with Newsom’s September executive order urging the state government to reduce greenhouse gases. “Carmakers that have chosen to be on the wrong side of history will be on the losing end of California’s buying power,” Newsom said.

It’s the latest volley in the fight over climate-changing pollution from cars and trucks. “It certainly sends a strong message to the automakers that have come out on the other side of California in this litigation,” said Julia Stein, supervising attorney at UCLA’s Frank G. Wells Environmental Law Clinic. “It’s taking steps to encourage automakers to be on what it views as the right side of that dispute.”

The Trump administration has long proposed rolling back Obama-era standards curbing greenhouse gases and increasing fuel economy of passenger vehicles. Those rollbacks have yet to be finalized, but in September, the Environmental Protection Agency and the National Highway Traffic Safety Administration stripped California’s authority to make its own greenhouse gas rules—rules that 13 other states and the District of Columbia follow.

The move kicked off what’s likely to become a lengthy court battle—and, indeed, California and 22 states sued the EPA this month, after suing the National Highway Traffic Safety Administration in September.

To fend off the uncertainty of a long fight in court, four major automakers—Ford, Honda, BMW, and Volkswagen—cut a deal with California. California agreed to relax the Obama-era greenhouse-gas targets somewhat, and the carmakers agreed to follow the state’s rules.

Earlier this year, California officials indicated they were optimistic that more carmakers would sign on. But amid growing pressure from the White House, two auto-industry trade groups representing more than a dozen auto manufacturers including General Motors, Fiat Chrysler, and Toyota aligned themselves with the Trump administration by calling for a single set of clean-car standards nationwide.

Now California’s Department of General Services is crafting policy that will prohibit state purchases from carmakers that haven’t signed on to its clean-car deal—and manufacturers could stand to lose millions in sales to the state. In addition to the $27 million in purchases from Chevrolet, the state also spent more than $11 million on Fiat Chrysler brands, and more than $3.6 million on Toyota. Toyota, well-known for its environmentally friendly Prius, is also facing public backlash for its alliance with the Trump administration. 

The move might deepen the divide in an already fracturing auto industry, Stein speculates. “There’s already been a little bit of a wedge driven,” she said. “You could see something like this driving the wedge even further.”

Gloria Bergquist, vice president of the Auto Alliance trade group that represents both automakers that signed on with California’s clean-car deal and companies that sided with the Trump administration, said automakers have invested heavily in electrified vehicles. “So we support efforts by fleet managers to buy more of these vehicles,” she said in an email. “As consumers see more electrified vehicles on the roadways, we hope to see a tipping point where they become more mainstream.”

This isn’t the first time that California has hinted it would use its power as the world’s fifth largest economy to reward carmakers that followed its rules, and punish those that didn’t. In remarks written for a May workshop, California Air Resources Board Chair Mary Nichols warned that federal tailpipe emissions rollbacks could force “an outright ban on internal-combustion engines.”

More recently, CalMatters discovered that legislation written in September would weaponize the state’s clean-car rebates by restricting them to only the carmakers that signed on to California’s deal. The bill didn’t receive a vote, but its language urging the state to spurn “companies that are not helping to achieve the state’s public health and climate goals” foreshadowed Newsom’s comments today: “In court, and in the marketplace, California is standing up to those who put short-term profits ahead of our health and our future.”

CalMatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.

Published in Environment

On the day after Election Day, the biggest newspaper in the oil and gas patch in northwestern New Mexico ran a story headlined: “Trump win has energy industry leaders hopeful.”

Most of the local industry folks quoted by the Farmington Daily Times said that President-elect Donald Trump would relax regulations on drilling on public land. Meanwhile, over on Facebook, energy workers were ecstatic, convinced that a President Trump would put them back to work almost immediately.

They should know better.

The San Juan Basin’s energy-reliant communities have been hit especially hard in recent years. The first blow came in 2008, after horizontal drilling and multi-stage hydraulic fracturing opened up huge shale formations in the East.

Shortly thereafter, oil prices skyrocketed to as high as $150 per barrel, prompting drill rigs to pop up again all over North Dakota’s Bakken formation and, a little later, in the San Juan Basin’s Gallup shale. The fossil fuel mojo was back … until it wasn’t. As global supply increased faster than demand, prices started dropping, and OPEC declined to cut production. In 2014, prices crashed, and the oil boom was busted.

It’s a simple equation: When demand outpaces supply, prices increase. When prices get high enough to make drilling profitable, companies invest in development and put people to work. When all that drilling increases supply, prices crash, as do the drill rigs. Today, oil prices are stubbornly stuck below $50 per barrel.

Just one rig is working in the San Juan Basin, and the vast equipment yards in Farmington and Aztec, N.M., are crammed full of idle rigs. Thousands of workers have lost their jobs.

President-elect Trump promised to “lift restrictions on … energy reserves” and to dismantle environmental regulations. But will the drill rigs go back up as a result? No. Will laid-off energy workers get their jobs back? No. Regulations have nothing to do with this bust. Commodity booms and busts are driven by supply and demand, not regulations.

The only way to kick-start the faltering industry would be to increase oil and natural gas prices. And the only way to do that is to curtail supply or increase demand—no easy task with a global commodity.

Natural gas supply and demand, and therefore prices, would be somewhat easier to manipulate, since the commodity is regional, not global, meaning we export and import very little of the stuff. A president could boost demand by subsidizing a nationwide fleet of natural gas-burning long-haul trucks, which might make gas drillers happy, but not the oil drillers (since it would displace gasoline-burning trucks). He could ram through liquefied natural gas export-terminal permits, opening up foreign markets to domestic natural gas. If foreign demand was high enough, that might do the trick, but Trump’s promise to kill the Trans-Pacific Partnership would damage, not help, efforts to sell natural gas overseas.

A president could regulate power plant emissions in such a way that encourages utilities to replace coal with natural gas in the electricity generation mix. Oh, wait, that one’s already in the works. It’s called the Clean Power Plan, which Trump has pledged to repeal.

The San Juan Basin is also coal country, so at least the workers at the mines and two massive power plants will get to go back to work, right? Wrong. Coal-burning units at both plants have been shut down. The curtailments came from settlements with the Environmental Protection Agency over Clean Air Act violations, and because California didn’t want to buy coal power anymore. Killing the Clean Power Plan—even eliminating the EPA—won’t restore these plants to their former smog-spewing, coal-burning glory.

While the environment and the people who live near the rigs are getting a break during this bust, the economic pain in the oil patch these days is real, and deep. Individuals who just a few years ago were raking in $80,000 or more per year are struggling to hang on. City, county and state governments have watched revenues plummet. It’s the sort of malaise that breeds resentment and that spurs people to vote for the likes of Trump.

It is maddening and tragic to see these people put so much hope in one person, particularly when that person is clearly so unequipped to deliver on his promises, and so likely, in the long run, to make their lives more miserable by removing what few social safety nets exist.

What will they do after Trump has finished rolling back all the regulations, dismantling the rules that keep us safe and our environment healthy—and they still don’t have a job? Who will they blame then?

Jonathan Thompson is a contributing editor at High Country News, where this piece first appeared.

Published in Community Voices