You can lead a horse to water, but a pencil must be lead. ~ Stan Laurel
There’s now next to no water
available in much of the western US, especially California. Little water is sluicing
down rivers to help salmon spawn and produce dams’ clean hydroelectricity, or
sloshing along irrigation canals that create a bounty of produce, or providing liquid
sustenance to millions of parched customers throughout the region. We again
face a serious lack of water.
The supply of electric vehicles
(EVs) has shrunk because of supply-side snafus. More folks are thinking of
purchasing an EV, largely due to huge increases in gasoline prices – in
Berkeley, gas prices well above $6/gal. are common. But far more substantial EV
purchases are needed, along with greater numbers of public charging stations.
Thus, water and EV wheels each
have problematic challenges at this point. Water wheels are barely turning
despite politicians’ grandiose pledges.
Let’s first look at water
before shifting to wheels. California’s
39 million inhabitants depend on sufficient, clean water for their daily livelihoods,
just like everyone does no matter where they live. But as Marc Reisner
presciently stated 36 years ago in his landmark Cadillac Desert, much of
California is a semidesert. Climatologists have shown that periodic droughts in
California and the West are a long-time, recurring feature. Residents of the
Golden State (perhaps better labelled now the burnt brown state) are in the
midst of a multi-year regional drought that may be the worst in 1200 years. Other
notable droughts include the 5-year event in 2012-2016, as well as in 2007-09,
1987-92 and 1976-77. “Dust bowl” dry conditions have periodically harmed Californians,
just like they did for more than a decade in the 1920s and 1930s for folks in
Oklahoma. Despite all these droughts and history, we haven’t yet fully
understood that fresh water in the Western US is a finite resource that’s
traditionally been priced way below its value, especially for non-residential
customers.
The bulk of the state’s precipitation
falls in the Sierra Nevada as winter snow and rain hundreds of miles from the
nearest population centers. Seventy-five percent (75%) of California’s supply
of water is in the northern third of the state roughly north of Sacramento, but
80% of urban and agricultural (ag) demands are in the southern two-thirds of
the state.
Because of this geographic
misalignment of water supply and demand, during the past 90 years the federal
government and the state of California have constructed a huge system of water
infrastructure including dams and aqueducts/canals to bring water from distant
mountains and rivers to farm acreage and masses of urban end-users, businesses
and individuals like you and me.
How is our state’s precious water
used? Nine million acres of California farmland is irrigated, which represents
about 77% of the state’s total end-user water demand. Agriculture is by far the
single largest user of California water. In the proverbial average year, agriculture
uses 4x as much water as urban end-users.
The abundance of California’s ag production
is the most valuable of any state, everything from artichokes and almonds to garlic
and walnuts. However, our enormous ag harvests paradoxically account only for a
slender 1.5% of California’s gross state product. A gallon of water doesn’t offer
much fiscal bang per bushel of California produce.
Unlike most previous droughts, both
state and federal water authorities – the California State Water Board and the
Bureau of Reclamation, respectively – already have significantly curtailed
their water allocations to ag and other end-users. In March, the State Water
Board slashed its water allocation from the State Water Project (SWP) to just
5% of normal for the SWP’s ag and urban customers.
In April, the federal California
Water Project cut its water allocation to irrigation contractors to 0% of
normal. For the second consecutive year ag irrigators supplied by the CWP will receive
no federal water. Farmers will need to turn to groundwater or storage, if they
have it, or else forgo planting and production entirely. The Central Valley’s
land subsidence will intensify. If this drought continues as expected,
California growers and our land will suffer greatly, and the prices of their
food products will swell.
The East Bay Municipal Utility
District (EBMUD) supplies our home’s water, along with another 1.4 million
customers. Last month, EBMUD reported its Mokelumne River storage reservoir was
71% full which is less than normal for this time of the water-year, but
fortunately much fuller than either the California state or federal systems’
reservoirs that are now hovering around being 25-30% full.
Like many other water distributors,
EBMUD has recently mandated an immediate usage reduction by its customers: a district-wide
10% water use decrease together with an 8% price “surcharge” beginning on July
1. In addition, EBMUD instituted restrictions on outdoor water use and a
sizable “excessive use penalty” for households who use more than 1,636 gpd
(gallons per day). No worries there; our usage is less than 13% of that large threshold.
We’ve cut back on our landscape watering. Landscape watering accounts for
roughly 50% of homeowners’ typical usage, so that’s a fine place to start
despite gardeners’ understandable lamentations.
“Nonfunctional” grass lawns are
becoming so yesterday. Significant sod is being removed in desert-dry Las Vegas
where such lawns have been outlawed and made illegal to water. Here’s hoping
such water conservation efforts by a so far reluctant public water-users can
soon make a sizeable difference. Otherwise, every Californian will learn how they
must use even less water than they have been.
Let’s now turn to
electrically-powered wheels. A substantial
part of US environmental improvement policy rests on significantly increased
sales of EVs. In 2021, EVs accounted for 3.3% of total US car sales. Meaning
there’s lots of room in the vehicle market for EVs to capture, if people
decide to buy them and shed their generations-old routine of purchasing
fossil-fueled vehicles.
As you have already noticed,
inflation has spread its ugly, non-transitory budget-sapping cloak across many
markets. As a result, macroeconomists have been uttering a word, that hasn’t
been spoken in 40 years, stagflation. Stagflation is the nasty, simultaneous
combination of economic stagnation (diminished macro growth) together
with inflation (elevated general price increases). Stagflation
may be in our future; inflation is here already.
Giant upsurges in the price of
gasoline – 43.6% over the past year – have spurred more people to consider EVs.
But EVs’ availability has been constrained by the lack of key components needed
by manufacturers. The increased interest in EVs together with their limited
supply has driven too many dealers to add substantial markups on their EV
prices that were already higher than gas-fueled cars. Customers have complained
these markups can sometimes add thousands of dollars to an EV’s MSRP. One
industry publication states that some EVs’ prices have jumped 25% in the last
year, and wait-times have lengthened. If they persist, such grumbles will confound
attainment of the ambitiously-set EV market advancement.
President Biden has addressed
several federal efforts to increase EVs. First, he signed his Infrastructure
bill into action last November. This $1.2 trillion legislation will eventually
provide $7.5 billion over 10 years to expand the nation’s meager EV charging
station network. In addition, Mr. Biden signed an Executive Order last August
calling for the federal government to ensure that 50% of all vehicles sold in
the US will be electric by 2030. This Order was a political statement, not an
actual plan because it included no funding to accomplish the aggressive objective.
The Build Back Better (BBB) plan would have provided needed funding. But he and
the Dems struck out with his vaunted, much larger BBB that remains a fading disappointment.
It never was voted on in the Senate after passing the House. Among other
efforts, it would have nearly doubled the federal EV purchase subsidy to
$12,500 if the vehicle was made in a factory that has a unionized work force.
Forty-five states plus Washington
DC have implemented policies and procedures that support EVs’ advancement. Only
Kentucky, Kansas and North Dakota apparently don’t have any EV policies in
place according to the National Conference of State Legislatures.
California is the single state
that has set a specified goal mandating a stipulated percentage of EV sales to
be purchased by a specific year, in addition to other EV incentives. Gov. Gavin
Newsom signed the enabling Executive Order in September 2020.
California’s specific EV goals
were formalized last month. The goals require 35% of new passenger
vehicles sold in the state by 2026 to be zero-emission vehicles (ZEVs), powered
by batteries or hydrogen. Less than a decade later in 2035, the state mandates
that 100% of all new car sales will be free of the fossil fuel emissions.
To portray these goals as aggressive is to notably understate the challenges
that must be met for success. In a mere 4 years from now California EVs sales
will need to almost triple. Total US vehicle sales increased 3.4% in 2021.
The state’s EV goals will be
administered by its principal environmental organization, the California Air
Resources Board (CARB) within the California EPA. The CARB has disproportionately
large influence on US environmental policy because 15 other states and the
District of Columbia have adopted California's stringent emissions and vehicle
mileage standards as their own. The CARB set its first auto fuel efficiency
standards in 1990, others followed. They were and remain very strict, have
never been actualized on schedule and thus have been postponed many times. I
expect the 2026 EV market goals likely will be postponed, as well. The CARB EV
standard states what type of vehicles can be sold and operated in the state.
Assuming that annual California
vehicle sales increase at 3.24%[1]
between 2022 and 2026, over 759,000 EVs will need to be purchased in 2026 to
satisfy Gov. Newsom’s EV mandate. Admittedly, this growth rate is much lower annual
vehicle sales growth rate than recent history, due to Covid and supply constraints.
But 759,000 EV sales in 2026 would represent a colossal 3 times as many as EV
sales than happened in 2020.
Simply creating an official ukase
that 35% of 2026 vehicle sales will be EVs is as naïve as it is insufficient for
making it actually happen. Politicians cannot mandate that private individuals
must buy a lot more EVs by 2026, only that EVs will be available. How is
Governor Newsom along with Liane Randolph, the Chair of the CARB, going to
convince California consumers to buy more EVs. To save our environment, someone
will need to motivate most Californians to stop buying fossil-fueled vehicles
like they have been for over a century. Changing our car-buying habits will
take a lot of motivating that so far is utterly lacking. Federal and state
incentives are solely financial – rebates for EV purchases – which is necessary
now but wholly insufficient to quickly modify long-term public behavior.
Recent history provides little
solace for the Governor’s, Ms. Randolph’s or others’ potential EV marketing
efforts. The majority of California’s car buyers have consistently refused to
consider the CARB’s previous EV vehicle mandates and incentives when contemplating
a new car purchase.
Most EVs remain expensive despite
offered incentives. Potential EV buyers still contend with range anxiety issues.
The state’s public EV infrastructure, aka charging stations, remains spotty,
insufficient and unmaintained. California now has one of the country’s worst
availability records of charging stations for EV drivers, just one station for
every 31.2 ZEVs. This ratio is almost ten
times inferior than North Dakota’s (3.18 ZEVs). Who would have guessed the
Peace Garden state is the nation’s leader? A survey of 181 Bay Area charging
stations revealed that 23% had either non-operable screens, payment system
failures or broken connector cables. Non-functioning charging stations will not
ameliorate range anxiety.
If politicians want cleaner air
via EVs, they better do several things: start building multitudes of additional,
fully-maintained EV charging stations before more EVs are sold, and
mandate standardized construction of far quicker charging level-3 public stations.
California is planning to increase the number of public charging stations. It’s
unknown if they will include standardized level-3 charging ports or how well
they will be maintained.
California deserves praise for
leading the US in its quest towards a cleaner, healthier future for
transportation and the environment. The likelihood of significantly higher
federal investment in EV incentives and infrastructure is low, given the BBB’s demise.
California and other states will need to up their ante if EV sales are to
substantially increase. This will entail sustained public investments that will
effect colossal changes in the public’s vehicle purchase behavior. Such
investments should include persuasive marketing campaigns that focus on the general
car-buying public, not wealthy purchasers of Porsche Taycans or Tesla Model Xs.
Improved public management of an
expanding EV system is essential. Hopefully, challenges will be addressed and quickly
surmounted. Otherwise EV sales will remain far below policy-makers’ aggressive goals.
[1]
California vehicle sales will increase 3.24% between 2021 and 2022, according
to California Auto Outlook.
