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FISCHER INTRODUCES ‘STOP EV FREELOADING ACT’: Sen. Deb Fischer introduced a new bill that would impose a fee on EV sales in the U.S. in an effort to replace lost gas tax revenue.
The “Stop EV Freeloading Act,” which was shared exclusively with the Washington Examiner, would impose a $1,000 fee on electric cars at the point of sale and an extra $550 on heavy batteries.
The amount is meant to roughly replace the gas taxes that would be paid into the highway trust fund by internal combustion engine vehicles over their lifetimes. That fund currently supports over 90% of federal highway aid to states.
“It’s not fair to force the millions of Americans who don’t drive EVs to foot the bill for those who do,” Fischer said in a statement.
The legislation is also sponsored by Sens. Pete Ricketts of Nebraska, John Cornyn of Texas, and Cynthia Lummis of Wyoming.
Federal and state officials have begun formulating ideas to replace or supplement the 18.4 cent-a-gallon gas tax in light of recent and predicted shortfalls in the highway trust fund.
A number of states have considered launching new tolls, implementing fees at public EV charging stations, and enacting vehicle-miles traveled tax to offset and eventually replace gas taxes. Read more on that effort here.
Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Breanne Deppisch (@breanne_dep) and Nancy Vu (@NancyVu99). Email [email protected] or [email protected] for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.
OIL PRICE HIKES ‘MANAGEABLE,’ GOLDMAN SACHS SAYS: Oil prices have jumped by $20 per barrel since June but are unlikely to cause a decline in U.S. consumer spending or GDP growth, Goldman Sachs analysts said in a new report.
That’s because the magnitude of the oil price increase is small, the GDP headwind from higher prices should be partially offset by lower electricity prices, and the Fed is unlikely to tighten its policy in response to the higher prices, the bank said.
The bank estimates that the increase in consumer energy burden is likely to be small, since the hikes are only roughly half of the $40-per-barrel gains seen in 2008 and less than half of $45 gains seen in the first half of 2022.
‘We assume the more frontloaded impact, reflecting a softening in ex-gas retail spending that we observe in credit card data in the first three weeks of September,” they said. “In a risk scenario where Brent prices rise another $20 to $115 per barrel, these consumption headwinds would roughly double.”
BIDEN AND TRUMP TO VISIT DETROIT: President Joe Biden and former President Donald Trump will each travel to Detroit this week, seeking to clinch support of voters with union ties ahead of the 2024 presidential election.
TOP RUSSIAN OIL AND GAS CHIEFS WILL ACCOMPANY PUTIN ON CHINA TRIP: The heads of Russian energy giants Gazprom and Rosneft are slated to accompany Russian President Vladimir Putin on his trip to China in October, Reuters reports.
Gazprom CEO Alexei Miller and Rosneft chief Igor Sechin will both travel to Beijing’s Belt and Road Forum next month following an invitation from Chinese President Xi Jinping, and are expected to be joined by other senior Russian energy officials.
It is unclear what the visit will entail, though a source told Reuters that Sechin is slated to hold his own energy event following Putin’s visit. The source declined to offer additional details on the event.
The trip comes as officials from Moscow and Beijing have sought to reach a deal on construction of the Power of Siberia-2 natural gas pipeline, which would allow Russia to ship an additional 50 billion bcm of natural gas to China per year.
Negotiations on the proposed pipeline are complex, however, and it is unclear if any deals will be reached during the October trip.
TOP OFFICIAL SAYS U.S. NATURAL GAS IS A NECESSITY FOR EU: Europe will have to rely on U.S. fossil fuels for years to come as it races to diversify from Russian natural gas and scale up its renewables sector to boost energy security, the EU’s top energy official told the Financial Times.
Ditte Juul Jørgensen said that the EU would be able to endure another winter as the Russia-Ukraine war wears on, pointing to more renewable energy and conservation methods. But she stated that the bloc’s reliance on exports of U.S. liquefied natural gas would persist.
“We will need some fossil molecules in the system over the coming couple of decades. And in that context, there will be a need for American energy,” Jørgensen said.
The statement is one of the strongest signs from Brussels that the EU will continue utilizing U.S. liquified natural gas well past the decade, despite opposition from environmental groups and politicians that it could inhibit the bloc’s ambitious climate goals. And Brussels is walking a tightrope between needing to boost energy security by relying less on Russian gas, while aiming for net zero carbon emissions by 2050 and cutting emissions by more than half by 2030 compared with 1990 levels. Read more on that here.
A NEW EU VEHICLE EMISSIONS PLAN: EU leaders also agreed to adopt a watered-down version of the bloc’s originally proposed vehicle emissions plan today, after eight member countries said the changes to the “Euro 7” plan threaten to divert investments from the EV industry, Reuters reports.
The EU has been progressively tightening road vehicle emission limits since 1992, and the Commission’s latest proposed rules would introduce new regulations on particle emissions from brakes and tires.
However, Italy, the Czech Republic, France and five other countries pushed for weaker rules, due to concerns that the proposed regulations would divert development and investment away from EVs.
Spain, which holds the rotating presidency of the European Union, presented the legislative text of a compromise that the Council of the European Union agreed on. The Council, the European Parliament, and the European Commission must now negotiate a final agreement on the new plan.
What they agreed on: The countries agreed not to change the existing “Euro 6” test conditions and emissions limits for cars and vans, although they will be lower for buses and heavy vehicles. They also accepted new particle emission limits for breaks and tires. More on that here.
CALLS FOR A CHINA-U.S. CLIMATE DEAL AT COP28: There’s growing pressure on the U.S. and China from multilateral institutions to forge an agreement on combating global warming ahead of the annual Climate Change Conference, the Washington Post reports.
With just two months left before COP28, the International Energy Agency and the climate summit itself are pushing for the U.S. and China to strike a deal.
“Such a signal from COP28 would (add) major momentum to our fight against climate change,” IEA Executive Director Fatih Birol said in an interview with the Washington Post Friday. “I don’t know how likely it is to see an agreement between China and the United States. … But I know that it is very unlikely we reach our climate targets in the absence of that.”
China and the U.S. are the world’s largest emitters of carbon dioxide. But relations between Beijing and Washington remain frosty over a number of issues – tensions that have undermined climate talks between the two countries. More on that here.
UK’S FOSSIL FUEL BAN GETS PUSHED: Britain’s decision to delay a ban on fossil fuel car sales drew anger from automakers worried about supply chains and investment uncertainty – but may make little impact in the shift to EVs, Reuters reports.
UK Prime Minister Rishi Sunak – who’s facing a tough reelection bid in 2024 – said the five-year delay to 2035 was not political, but rather was about “doing what’s right for the country.”
Following a contentious debate over emission charges on older, pollution-heavy vehicles, Sunak said he was seeking to help those affected by the cost of living crisis, and unable to afford expensive EVs. Industry analysts, however, said Sunak’s move undermined investment certainty while British companies were fighting to attract investors to a relatively small market that was cut from the EU following Brexit.
But the 2030 deadline already had some flexibility. In the government’s original proposal, the zero emission vehicle mandate would require 80% of new cars sold in the UK to be fully electric by 2030 – with low emission hybrids allowed until 2035. With the new mandate, which could go public as early as this week, the 80% 2030 electric target should remain. The other 20%, which would regulate a mixture of fossil fuel models and hybrids, would have to be fully electric by 2035.
Britain’s delay “won’t make much of a difference,” said Andy Leyland, managing director of Supply Chain Insights. “Legacy automotive needs to go full electric to be able to compete on cost with Tesla and Chinese producers.”
ON OUR RADAR: The 7th Annual National Clean Energy Week from Citizens for Responsible Energy Solutions kicks off today. Register for the Policymakers Symposium here.
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