If you live in Texas and listen to our radio show, there's a good chance you or someone you know is a career employee of the energy industry. If you've made a career out of working in the oil and gas field, we don't blame you. Even at times when the industry has been at a low (which it recently was) it's still a highly profitable field filled with promising job opportunities. Plus, you get to play with cool machines and stuff!
According to most reports, almost a half a million Texans have jobs specifically in the oil and gas industry and even more work in the general energy industry or related fields. Since Houston, the biggest city in Texas, is considered the energy capitol of the world, that's a heck of a lotta employees who own at least one pair of cowboy boots! And considering how much money this state generates from petroleum, you'd think we'd want to do anything we can to help allow that industry to flourish.
But if you thought that, you'd be wrong.
From the news bin of information that doesn't make any sense, we've just learned Texas is currently taking applications for a $2,500 incentive to buy electric and hybrid vehicles. The Texas Commission on Environmental Quality has a new program (approved last year) which is intended to promote the use of cars that aren't gasoline fueled. If you own an electric or hybrid vehicle, the state will cut you a check up to $5000 for eligible candidates.
In 2001, the Texas Legislature created the Texas Emissions Reduction Plan, or TERP. The purpose of TERP was to reduce smog and other air pollution to improve health conditions for Texans. Under TERP, the State granted the Texas Commission on Environmental Quality (TCEQ) the ability to set speed limits on Texas highways, and toss out money to people to buy electric cars. This is why people in Houston can’t drive 75 between Mont Belvieu and Beaumont—it’s an area that needs to reduce emissions. And this is why, periodically, the TECQ will hand out $5000 to people to purchase that cool new Volt or Tesla.
Remember folks, these are electric cars that are already subsidized by federal tax dollars.
Since 2001, the State of Texas has disbursed over a billion (maybe closer to $2 billion) of your tax dollars to “encourage owners of construction equipment, marine vessels and locomotives, to replace their dirty, older heavy-duty diesel engines with new ones to cut down smog-creating pollution in 40-odd counties whose air quality is in danger of running afoul of federal standards.” This is the main reason the TERP program was created in the first place—Texas didn’t want the EPA mandating air quality standards, which would hurt the oil and gas business.
So now the state of Texas gives out incentives to not support our state's biggest industry? Smart.
In addition to replacing all the old diesel engines, other people are encouraged through incentives to give up their gasoline powered vehicles and explore the fun and excitement found in electric vehicles.
By fun and excitement, I mean higher electric bills, cars that don’t have a terribly long driving range, and the problems with disposing of those batteries. The fines for improper disposal would shock you. But don’t worry, even if you put the batteries in an approved disposal location, they’ll get shipped to places like China and the Philippines where kids will be employed to take them apart and get exposed to all the heavy metals.
Oh, and don’t forget the kids in the Congo who are the ones mining the lithium and cobalt to make all those fancy batteries.
Gosh, this sounds like a great plan! Even though it’s probably un-American, right?
Even still, some environmentalists will argue that cleaning the air is more important than helping the Texas economy (or not helping child labor advocates in China). They will tell you this policy is going to save the Earth and keep the oceans from rising and make unicorns fart out magical fairy dust that helps fix the hole in the ozone-layer. But are they right?
Short answer: no.
Longer answer: it's actually very possible that electric vehicles are worse for the environment than your gas-guzzling Ford F150. The U.S. Energy Information Administration’s recent long-term forecasts for the number of electric vehicles through 2050 estimates how much electricity they use when placed out on the roads. They also studied how much pollution the electricity from those vehicles would generate. If you look at three of the main pollutants regulated under the U.S. Clean Air Act (sulfur dioxide, oxides of nitrogen, and particulates including CO2 emissions), you get some pretty alarming news from your so-called green-vehicle. The widespread purchasing of new electric vehicles nationwide will more than likely increase air pollution when compared side-by-side with new gas-fueled vehicles. Folks, argue with me if you want, but the overwhelming amount of evidence suggests more electric cars and trucks will actually mean more pollution when compared with the emissions of internal-combustion vehicles (which means they're powered by gas). If you want to help the environment, the new gas-fueled cars are probably a better purchasing choice than the new hybrid and electric cars that are currently on the market.
Similarly, if you want to help the Texas economy, buying a gas-fueled vehicle is clearly a better choice.
So, we know that the air’s not going to get any cleaner with this program. But, it’s not a bad program, is it?
TERP has a couple of huge glaring problems. The first is fraud. One of the conditions of a TERP grant is that the owner of the old vehicle has to ensure that this vehicle is destroyed (sent to the crusher). Except, it seems that a lot of TERP grantees are taking the money, buying a new vehicle AND re-registering the old vehicle. Great. They used your tax dollars to buy a new car. This is better than Oprah!
However, if the state catches you doing this, you might get up to 5 years sitting in the pokey.
The second problem is that lack of popularity. Every so often, TCEQ has to remind Texans that they can get money for electric cars. And this is now becoming a welfare program for the affluent.
Do you know what the profile of the average electric/hybrid car buyer looks like? Let’s take a look at the Ford Focus and the Fiat 500 because those cars come in a conventional (gas powered) and electric version. Thanks to TrueCar.com for these figures.
The average gas-powered Ford Focus buyer is 46 years old and has a household income of $77,000. The average electric Ford Focus buyer is 43 years old and has a household income of $199,000. Yep. The average household income for an electric Ford Focus buyer is 2.5 times HIGHER than the gas-powered one.
The same holds true for a Fiat 500. The gas-powered 500 buyer has a household income of $73,000. The electric buyer brings home around $145,000.
Other studies have shown that the electric or hybrid car is generally the third car in peoples’ garages, sitting behind a Mercedes or a Lexus.
Guess what? Giving people incentives to buy electric vehicles does not make them give up their gas & diesel-powered ones!
And the people most likely to buy these things in the first place, are probably the ones who can afford them without incentives.
I guess what I'm saying is: paying people to drive electric vehicles is a crap idea orchestrated by lawmakers and bureaucrats who have no idea what they're saying. It's the sort of thing you'd expect from California or New York, but now Texas has been sucked up into this absurd way of thinking with a self-destructive policy that won't do anything to help our state or the air we breathe. Just say no to liberalism.
UPDATE (6/9/18): Since publishing this article we've had a handful of people point out that the incentives program also applies to cars or trucks running on compressed natural gas or liquefied petroleum gas (eligible for $5,000). Just so we're clear, we have no specific problem with using CNG or LPG vehicles. Like most reasonable people, we like LPG and CNG vehicles for long haul vehicles. Heck, we honestly don't even mind if you drive electric vehicles (it's your right to choose whatever car you prefer). But if the benefits of any of these options are so fantastic, why hasn’t the marketplace adapted EVEN with government incentives? Is it because economically it still doesn’t make sense? Using government resources won’t make it happen any faster. Case in point: solar power. The government has been subsidizing that for 40 years and it’s still less than 5% of the electric generation capacity. And big solar arrays kill birds, so why are environmentalists pushing for these things? Maybe they just hate birds? Or maybe they're motivated by an alternate agenda to redistribute wealth with help from the clumsy fist of government.