Wednesday, August 14, 2024

States to EV owners: Pay up

Presented by Equinor: Your guide to the political forces shaping the energy transformation
Aug 14, 2024 View in browser
 
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By Adam Aton

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Equinor

Cars, trucks and buses navigate traffic near the Hugh L. Carey tunnel that links Brooklyn to Manhattan.

Cars, trucks and buses navigate traffic near the Hugh L. Carey tunnel that links Brooklyn to Manhattan. | Bebeto Matthews/AP

Roadwork funding is running out of gas.

The gasoline tax — which is how most states pay for roads and bridges — has seen its revenue dwindle after automakers spent decades improving vehicle mileage. Electric vehicles promise to send that trend into overdrive.

As I report today, many states have responded to the revenue shortfall by charging new fees on EVs. The idea is to make EVs “pay their fair share” because right now “the rest of us subsidize their use of our roads,” said Pennsylvania state Rep. Ed Neilson, the Democratic chair of the state’s House Transportation Committee.

Thirty-nine states now charge some kind of yearly fee for hybrids or EVs. They range from West Virginia and Mississippi, where plug-in vehicles are sparse, to California and Oregon, where strong climate policies otherwise encourage EV adoption.

The push-and-pull between climate and budget goals has left 13 states with policies that offer drivers rebates to buy an EV, before charging them extra for that purchase.

The effect, some warn, could be like pressing the accelerator and the brakes at the same time: lots of sound and friction, only to stay in the same place.

Charging EV owners a fee is “more of an anti-electric vehicle policy than a road funding policy,” said Minnesota state Rep. Frank Hornstein, the Democratic chair of the state House Transportation Finance and Policy Committee.

One alternative policy could replace the size and reach of the gas tax, my colleague Alexander Nieves reports today. But it’s proven to be a political nightmare.

Charging drivers by the mile — sometimes called a road user fee — could raise enough money to replace gas taxes. The problem is how to administer it.

“It's hard for me to envision a smooth transition to a system where Californians get a bill in the mail that says, 'You drove 1,400 miles last month, you owe 140 bucks,'” said state Sen. Josh Newman, a Democrat who reclaimed his seat in 2020 after a recall campaign ousted him for voting to raise the gas tax. “People would lose their minds.”

A diverse mix of states has experimented with that policy, with voluntary pilot programs starting in Utah, Oregon, Virginia and elsewhere. But concerns over privacy, along with the complexity of calculating and collecting the tax, have held back states from expanding them.

Hawaiian lawmakers think they may have cracked the code. The state became the first to mandate a road user fee after a massive education campaign, which included mailing 360,000 drivers a postcard explaining how much they would pay under the future system. That feat was possible only because Hawaii records odometer readings annually.

But other states are still struggling with how to graft such a program onto their existing registration or taxation systems. California is launching its fourth pilot program this month.

“It is certainly the third-rail issue here,” said Democratic state Sen. Dave Cortese, chair of the California Senate’s Transportation Committee.

 

It's Wednesday — thank you for tuning in to POLITICO's Power Switch. I'm your host, Adam Aton, with help from Nicole Norman. Power Switch is brought to you by the journalists behind E&E News and POLITICO Energy. Send your tips, comments, questions to jkirkland@eenews.net.

 

A YEAR OF CALIFORNIA CLIMATE: A year ago, the California Climate newsletter was created with a goal in mind — to be your go-to source for cutting-edge climate policy reporting in the Golden State. From covering Gov. Newsom's crucial China trip to leading the coverage on California's efforts to Trump-proof its climate policies, we've been at the forefront of the climate conversation. Join us for year two if you haven’t already, subscribe now.

 
 
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Today in POLITICO Energy’s podcast: James Bikales breaks down the technology bringing battery passports to some EVs.

 

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At Equinor, we never stop searching for better. We’re producing the energy the world needs today while developing innovative solutions for a lower carbon tomorrow. The work we’re doing to harness American energy resources, from oil and gas to offshore wind to and low carbon fuels like hydrogen, can help us deliver a safe, reliable, and sustainable energy future. Discover more about Equinor at www.equinor.com/USA.

 
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Photo collage of Trump viewed from behind overlooking a golf course with a EV parking sign

Illustration by Claudine Hellmuth/POLITICO (source images via AP and iStock)

Trump properties are charging up

Though former President Donald Trump scoffs at President Joe Biden’s EV agenda, several of his properties have installed charging stations in order to service his traveling customers, David Ferris writes.

Trump regularly criticizes EVs and exaggerates their weaknesses, though his rhetoric has softened somewhat following Tesla CEO Elon Musk's endorsement. Meanwhile, the Trump Organization has quietly made charging stations available at properties in Las Vegas; Chicago; and Doral, Florida.

Tom Pyle, head of the conservative-leaning American Energy Alliance and a former member of Trump’s 2016 transition team, said the former president is trying to "show the folly of this agenda to force EVs into the market place through subsidies, through regulations, through mandates."

But, he added, “If you’re in the luxury resort business and you’re not being responsive to your customers, then you’re not a very good businessman.”

Trump allies float names for EPA administrator

Trump may call on Andrew Wheeler to again head the Environmental Protection Agency if he wins a second term, writes Kevin Bogardus.

Ten former Trump officials and conservative allies spoke with POLITICO's E&E News to discuss whom Trump might tap as his EPA administrator. Wheeler, who served atop the agency during Trump's first term, has indicated he is open to returning to EPA if asked.

Sources also floated former Fish and Wildlife Service Director Aurelia Skipwith Giacometto and North Dakota Gov. Doug Burgum (R) as possible contenders.

Trump is not shy about the fact that he intends to gut environmental regulations and EPA staff. The next administrator would be in charge of getting that job done in four years under intense scrutiny from media and Congress.

War tensions spark talks of more oil sanctions for Iran

The U.S. State Department is considering further restrictions on Iran's oil exports after the country vowed to take revenge against Israel for the killing of a top Hamas leader, Gabriel Gavin writes.

The country's oil sales have been steadily rising in recent years despite increased sanctions. But the State Department maintains that those restrictions are hurting Iran.

“Sanctions evasion is very costly — paying middlemen, laundering money, and so on. We assess that the Iranian regime receives only a fraction of the revenue from its oil sales as a result,” an agency spokesperson said.

Hamas leader Ismail Haniyeh was killed during a visit to Tehran two weeks ago, and Iran has accused Israel of orchestrating the assassination. Democrats and Republicans in Congress have pushed the Biden administration to strengthen enforcement of sanctions as hostilities flare.

 

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In Other News

Heat help: Heat deaths are likely undercounted in Texas, and experts say that makes fixing the issue harder as temperatures continue to climb.

Money matters: A bipartisan majority of Pennsylvanians say they approve of federal tax credits for green energy projects, according to a recent survey.

 

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Our world needs energy to keep moving forward, and we all have a role to play. At Equinor, we never stop searching for better, producing the energy the world needs today while developing innovative solutions for a lower carbon tomorrow. We’re using our competence, skills, and innovative spirit to continually search for better solutions. Our ambition is to break through barriers, create lasting value for all our stakeholders, and supply energy to a thriving world while achieving net zero emissions by 2050. The work we’re doing to harness American energy resources, from oil and gas to offshore wind and low carbon fuels like hydrogen, can help us deliver a safe, reliable, and sustainable energy future. But this is only the beginning. Discover more about Equinor at www.equinor.com/USA

 
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That's it for today, folks! Thanks for reading.

 

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