Been Caught Stealing

  John Eichberger |  October 2019

Not all good ideas have to be unique or original. In fact, some of the best ideas I have ever shared definitely came from somewhere else. When I stumble across stories and concepts that strike me as relevant to the future of the transportation sector, I want to help spread those stories to as many as possible. Each story of this nature helps inform my own perspective of the market and helps guide the Fuels Institute’s research and commentary – and I hope it does for you as well.

I’ve been caught stealing
Once when I was 5
I enjoy stealing
It’s just as simple as that

Unlike this Jane’s Addiction song, “Been Caught Stealing,” we try not to “steal” ideas and concepts – the Fuels Institute believes in giving credit where credit is due. This month, there are a few stories which, when taken together, had an influence over my view of the future of the market and I thought it was worth sharing with you as we bounce to this anthem from 1990.

Darkness Everywhere?

I was born and raised in California and I look back at my home state sometimes and just shake my head in wonder. My entire family still lives there, and while I understand why they do, I still question their judgment.  Years ago, the state had to deal with rolling brownouts and blackouts as the power generation and transmission industry struggled to keep pace with the growing demand for electricity. Then the state puts in place multiple policies to accelerate the electrification of the transportation sector.

Now, in the aftermath of last year’s devastating fires that have been linked to damaged power lines, one of the state’s largest utilities is implementing what it calls “Public Safety Power Shutoff” events which are initiated during periods of high winds that could lead to power line damage and spark wildfires.  In a recent article, the CEO of PG&E is reported as saying that these types of blackouts could be expected for the next ten years until safety could be reasonably assured during such weather events.

If we become more dependent on electricity for everything, including our mobility, how might we endure a susceptible transmission market? I found it interesting in one Wall Street Journal article when the first blackout was expected, a public official was quoted as saying:  “We are encouraging people to keep their cellphones charged, have gas in their cars, cash in hand and nonperishable food.”

Will the situation with transmission line security have any impact on electric vehicle adoption?  I don’t know. I am confident the utility sector is doing everything they can to prepare for increased demand, but with this type of story in the background it is a factor that must be taken into consideration when we think about the evolution of the market.

Chargers Everywhere?

On the flip side, numerous surveys have demonstrated that one of the major limiting factors for consumer adoption of electric vehicles is the lack of recharging options. There are many companies working to alleviate this situation, and in mid-October Ford Motor Company announced that it will be launching the largest EV charging network in North America.

The company’s announcement claims the goal of establishing “more than 12,000 places to charge, including fast charging, and more than 35,000 charge plugs.” The focus on fast charging is critical because consumers are going to demand rapid replenishment of driven miles and, to date, a lot of the infrastructure that has been built is equipped with Level 2 charging, which is great when drivers have a few hours to kill but not so good for the driver on the go. In fact, according to the Department of Energy, there are 27,764 charging station locations in the United States, but only 3,869 offer DC Fast Chargers.  Kudos to Ford because the market will demand more fast charging options.

I thought these two stories were interesting from a comparative standpoint. California is struggling to deliver uninterrupted electricity service to its residents because the transmission system could become dangerously compromised during certain weather conditions. Yet, according to Edmunds.com, more than 50% of the EVs sold in the United States are sold into California. And I have been told that accessing public chargers in California is a challenge because the demand is outstripping the supply of stations. So, the Ford initiative would come as welcome relief to those seeking a high-powered plug. But if most of these sites will be fast chargers, the additional demands on the transmission system to deliver the requisite power to these stations might become an issue. And if the best advice public officials can give to consumers in preparation for a blackout is to fill your gas tank, in addition to bolstering the reliability of the grid we have some educating to do.

Oil Everywhere?

I have been in the transportation energy sector for a long time, and if you had told me as few as 5 years ago that we would be facing a glut of global oil supplies I would have thought you were crazy. But as it turns out, there are many factors that have created a market in which the amount of global oil supplies is expected to outpace demand for the next several years, if not longer.

For the past month or two, I have been reading articles noting that oil prices are likely not going to go up much because supply and demand argues against it. The recent attack on the Saudi oil infrastructure would have sent the market reeling a few years ago, but after a momentary blip in the market it turned out to be no big whoop. 

When you layer on top of the healthy condition of oil supplies the continued global disruption coming from the prolonged trade dispute between the U.S. and China, a slowdown in the pace of economic growth in China, signs of global economic slowdown, OPEC production cuts being extended without moving the needle on prices – the prospects for a surge in oil prices seems far from feasible.

For the consumer, this is fantastic news. Lower oil prices typically translate into lower prices at the pump. But when we put this into the context of the evolution of the transportation sector, I have to bring up the issue of the teeter-totter again.  Low oil prices create a disincentive for consumers to shop for more efficient or alternative vehicles.  At a time when a major focus is to deliver lower-emissions vehicles, low oil prices are a counter weight to progress despite the benefit they deliver to families.

Big Picture

Taken individually, stories like those referenced above are interesting. But when you begin to link the stories together you can create a narrative that paints a much broader picture and can deliver better perspective into what is really driving the transportation market and what our priority needs might be. (Btw, all puns in this piece are intentional.)

For those of us involved in the transportation market, we need to take advantage of all the resources available to us to better understand what is happening out there. There are too many angles and influences for any one entity to have all of the answers – so let’s spread the word when we see something of interest, let’s help broaden our understanding so that we can work together to create the best array of options for consumers to get from Point A to Point B.

But let’s remember, just because we read it, redistribute it, quote it and rely on it, does not make it ours. Let’s strive to broaden our circles and give proper credit. The more we can share what others are doing, the better off we all will be.

My girl, she’s one too
She’ll go and get her a shirt
Stick it up her skirt
She grabbed a razor for me
And she did it just like that
When she wants something
And she don’t want to pay for it
She walk right through the door
Walk right through the door
Hey all right!
If I get by, it’s mine
Mine all mine.