Benefits of electric cars in Colorado justify federal and state subsidies
This originally appeared in the Aug. 11, 2013, issue of The Denver Post. A version more focused on mountain towns was published in the May 5, 2013, issue of Mountain Town News. For a sample copy of Mountain Town News, a subscriptoin-based electronic magazine, please send me a request at email@example.com
By Allen Best
Exotic but expensive, electric cars remain extraneous to contemporary expectations of mobility. An EV (as electric vehicles are called) is fine for the average daily work commute of 27 miles in the United States.
But hop in to drive to Steamboat Springs, Santa Fe or Salt Lake City? You’d better find a hitching post along the way. The range of a Nissan Leaf is just 75 miles. A Tesla Model S can get you 265 miles, but at a cost: $80,000 before state and federal tax rebates.
Electric cars also remain scarce: Just 1,521 of them (not including hybrids) are in Colorado as of April, nearly two-thirds of them between Castle Rock and Fort Collins, their owners mostly economic elites or technological early adopters. The state has more than 5 million registered vehicles.
Yet from Denver to Durango, government jurisdictions are now rapidly installing charging stations. Some local efforts are being subsidized by $115 million in allocations from the federal government, which has set a goal of putting one million EVs on the roads by 2015.
Why the subsidies? They’re justified for several reasons:
Ground-level ozone can be reduced in Denver and the northern Front Range. This nine-county area violates the federal standard six to 10 days each summer, and the federal standard is likely to be reduced. Ozone — beneficial when in the outer atmosphere — can worsen the effects of asthma, bronchitis and emphysema, and trigger chest pains, coughing and congestion. It’s not good for young people, for old people, or people with marginalized lungs.
Ozone is created when nitrogen oxides and volatile organic compounds, both found in exhaust of cars, combine with other emissions in bright sunlight. In metro Denver, we currently drive 74 million miles per day, according to Rich McClintock of Transportation Solutions, an advocacy group. By 2035, as the population grows, that figure is projected to hit 100 million miles daily. That overshoots the sun, which is only 93 million miles away.
Electric cars can help reduce ozone. The Regional Air Quality Council (RAQC) is committed to spending $320,000 through 2015 to subsidize charging stations in metro Denver and the more northerly Front Range. It has already commissioned 80 charging stations with plans for 120 altogether.
“With all these alternative fuels, whether it’s electric, natural gas or propane, there’s the chicken-and-egg thing,” explains Ken Lloyd, executive director of RAQC. In other words, which comes first: the charging stations or the electric cars? “The answer is you need to do both. The number of vehicles will drive demands for charging stations, but you need a certain type of infrastructure to justify purchase of vehicles.”
A project in Fort Collins and Loveland hopes to provide an example for how to create the infrastructure that fosters adoption of electric cars. The state’s first high-speed charger, able to deliver 440 volts, will begin operation later this month. Donated by Nissan, it will allow a battery that is 80 percent depleted to be recharged in 20 to 30 minutes. Private businesses and the two city governments plan another 20 or so medium-speed or 220-volt chargers, identical to those planned in metro Denver, in coming months.
“Electric vehicles represent the best scalable alternative if we’re trying to reduce our dependency on oil. Right now, 70 percent of the oil we use in the Untied States goes to the transportation sector,” explained Ben Prochazka, director of strategic initiatives for the Electrification Coalition, a non-profit allied with the two cities and Colorado State University. The coalition, based in Washington, D.C., is financed by businesses in the electric-car supply chain as well as individuals, he says.
Why should we care about getting off oil? Aren’t North Dakota and Texas producing bounteous supplies? Yes, but the U.S. remains a net importer, while 98 percent of electricity is produced domestically. In other words, it’s like your local Chamber of Commerce shop-at-home promotion. Also, because most electric cars will be recharged at night when electrical demand is low, our existing electrical grid can integrate a larger number of the new vehicles.
Reducing Greenhouse gases
Greenhouse gases are another reason electric vehicles will serve us well. Transportation is responsible for 27 percent of U.S. greenhouse gases. “If you want to reduce greenhouse-gas emissions, you have to tackle transportation,” says Will Toor of the Boulder-based Southwest Energy Efficiency Project.
Electric cars do have a carbon footprint, owing especially to the manufacture of batteries. Natural gas vehicles currently have a lower carbon footprint in Colorado. But that will change as the electrical supply shifts from coal to natural gas and renewables, according to a study by Toor’s organization. The study projects 30 percent lower per-mile emissions of greenhouse gases as compared to the new and more efficient gasoline-powered vehicles in 2020, and 17 percent better than compressed natural gas.
Resource conservation is the final reason EVs serve our best interests. Electric motors are 30 percent more efficient than conventional internal combustion engines in converting energy into motion, according to Toor’s analysis. Others say that analysis is far too low: Electric motors are three times more efficient than gasoline engines, says
Not all of this new infrastructure is being subsidized. A bill adopted by the Colorado General Assembly this year levies an annual fee of $50 per vehicle on electric cars, of which $20 is to go into an EV infrastructure fund. The intent is that public money for EV charging stations in Colorado in coming years will largely come from EV users themselves.
Also, businesses such as Costco and Walgreens have been installing charging stations. Unlike government charging stations, which mostly charge for electricity, merchants hope that customers will stop by and spend $10 or $ 20. The electricity consumed will be just pennies and nickels.
How fast will we adopt electric vehicles? Sales of electric cars during their first two years in the market outpaced those of hybrids when they showed up a decade ago, according to a report last year by Pike Research, a Boulder-based firm that is now part of Navigant Consulting.
Looking ahead to 2025, the Colorado Electric Vehicle and Infrastructure Readiness Plan sees between 2.2 percent and 10.2 percent of all new light-duty vehicles being electric.
Lower operating costs is one advantage. The same energy that costs $3.50 at a gas pump can be had for just $1.10 in electricity. That should save a motorist $1,000 to $1,300 per year, says Toor.
Dropping prices for EVS should help drive demand. With federal and now state tax credits, some models are arguably competitive with conventional mid-line economy cars. The cost of a Nissan Leaf, which is listed for $30,000 to $31,000 at the Boulder Nissan dealership, will drop to $17,500 to $18,500 after federal and new state tax credits.
In addition, consumers have 20 all-electric or plug-in hybrids to choose from. More options will be likely as manufacturers see electric vehicles as a key way to meet the federal government’s mandate of fleetwide averages of 54.5 miles per gallon by 2025.
Electric cars do have range limits. “If you need to go to Denver occasionally, you’re not going to do it in a Nissan Leaf with a 75-mile charge,” says Mike Ogburn, who lives in Carbondale and must drive 170 miles over two mountain passes to get to Denver. He drives a C-Max Energi, which delivers the efficiency of an electric motor for around-town errands and a gas engine for longer trips.
Some envision a string of charging stations along Interstate 70 and I-25, similar to what is found in the I-5 corridor from California to Seattle. Toor estimates it would cost $1.5 million to deliver high-speed and medium-speed charging stations along the 750 miles of the two highways in Colorado.
But he expects the federal money will instead be allocated by state transportation officials to a natural gas fueling infrastructure.
Aside from interstate highways, not much has changed in automobile infrastructure in the last 75 years. Now, life looks to get far more complicated.
And also: Subsidies drive transportation
Governments have often used subsidies to drive change and innovation. The West has lingering checkerboard land patterns along the transcontinental rail lines that reflect federal carrots offered railroads in the 19th century. Amtrak, of course, still gets a subsidy.
Air travel, reserved for the economic elite and cultural innovators when I was growing up, is also subsidized. The Federal Aviation Administration budget for 2013 is $15.2 billion, which includes $2.4 billion for “safety” improvements at local airports. Almost all airport runways are built on the back of these 90 percent grants from the FAA.
Where does the money come from? User fees, is the common answer, but that’s only partly true, according to Harvard economist Edward L. Glaeser. In an essay in the Boston Globe, he said user fees cover just 70 percent of the FAA’s budget. That doesn’t include the cost of security. For that, $5.1 billion comes from the U.S. Treasury. In other words, a subsidy.
As for cars, that’s trickier to pin down. Federal and state gas and diesel taxes provide the bulk of funds collected for highway infrastructure, but several times in recent years that has been supplemented by the U.S. Treasury. Towns and cities more directly subsidize the outlay of streets through sales and property taxes.
No matter what the transportation type, subsidies seem to be the rule.
This story was revised slightly from The Denver Post iteration to acknowledge the difference between engines and motors, to correct the spelling of the Southwest Energy Efficiency Project, and clarify other points. The Denver Post story also drew 14 comments, some in disagreement with elements of this story. You can see the reader comments here.