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Energy Law
9 – Transportation
Fall 2014November 11, 2014
Alan Palmiter
Not for distribution- for study purposes only
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Topic roadmap1. U.S. transportation
– History of transportation– Highway infrastructure
2. Powering transportation sector– Internal combustion engine– Electric cars– Natural gas vehicles– Hydrogen fuel cells– Biofuels
3. Regulation of fuels / auto industry– CAFE standards – Auto air pollution regulation– Restructuring auto industry
4. Future of transportation– American decentralization & recentralization– Improving motor vehicle network
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http://www.eia.gov/totalenergy/
1. U.S. Transportation in Perspective
97.09(2011)
27.03(2011)
9
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http://www.eia.gov/totalenergy/data/annual/pecss_diagram.cfm
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1700 19501900 20001850
US transportation - timeline
Railway t
ravel -
one milli
on passengers
NE to CA (1
872)
Duryea Brothers
– first auto plant (1
895)
John Calhoun – proposes unified ro
ad/canal sy
stem (1
816)
Henry Fo
rd – auto assembly l
ine (1908)
James Watt – st
eam engine (1781)
Hoover/R
oosevelt –
highway constr
uction (1
930s)
Eisenhower –
NHS (1950s)
Robert Fulto
n – steamship Albany t
o NYC (1
807)
US auto sales <
50%
(2007)
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Source: Wikipedia
US Interstate Highway System
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(Click for video – 1.51 )
Highway Infrastructure
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Overton Park v. Volpe (US 1971)
Justice Marshall:
The growing public concern about the quality of our natural environment has prompted Congress in recent years to enact legislation designed to curb the accelerating destruction of our country's natural beauty. We are concerned in this case with § 4(f) of the Department of Transportation Act of 1966:
Secretary of State shall not approve [highway construction] project over [specified public lands] ....unless (1) there is no feasible and prudent alternative to the use of such
land, and (2) such program includes all possible planning to minimize harm
to such park, recreational area, wildlife and waterfowl refuge, or historic site resulting from such use."
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(Click for video – 1:33 )
Public transportation & technology
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(Click for video – 3:35 )
2. Powering U.S. transportation
Model-T (internal combustion engine)
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Alternatives to gasoline-powered ICE
Electric cars• Electric battery as fuel source• 1900: outsold every other type• Downfall: New roads / longer
distances / cheap oil• Recent popularity (since 1990s)
Compressed natural gas• Natural gas input for internal
combustion engine• Relatively safe and reliable• Lack of infrastructure
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Hydrogen fuel cells• Hydrogen gas: separates into
protons and electrons – to generate power
• Only bi-product is water• Technology: expensive, derived
from natural gas, and safety perceptions
Biofuels• Produced from organic material• Common: ethanol /biodiesel• Debate: trade-off between
supply security / impact on food
Alternatives to gasoline-powered ICE
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Click for video -1:49
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Click for video -2:14
Who killed electric car?
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Biofuels – interactive
Biofuels
According to the U.S. Department of Energy, the cost of producing small volumes of ethanol from cellulosic materials has dropped from about $9 per gallon in 2001 to about $2 per gallon today. This compares to the $2.80 cost of wholesale gasoline today.
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Biofuels
Pros: Integrates well with
existing technology. Renewable resource. Greater security of
supply. Cleaner emissions.
Cons: Production may result
in net energy loss. Could impact food
supply. Discourages
conservation. Requires ‘flex-fuel’
equipment.
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1. True or false? Henry Ford’s Model T was first powered by alcohol, not gasoline.
2. Which is true – a. The U.S. interstate is the
largest in the world.b. The U.S. interstate is 10x the
circumference of the earth.c. FDR conceived the modern
interstate system. d. The U.S. interstate systems
is the second largest public works project behind TVA.
3. Which is false -a. Lack of infrastructure hinders the
deployment of natural gas powered cars.
b. Only emission from hydrogen fueled cars is carbon monoxide.
c. Biofuels are produced from organic material.
d. Some biofuel production may result in a net loss of energy.
4. True or False? At the beginning of the 20th century, cars with electric motors were more popular than cars with internal combustion engines.
Pop QuizTransportation
Answers: 1-T / 2-a / 3-b / 4-T
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Automotive air pollution regulation• Car + light truck emissions: EPA under the CAA• Massachusetts v. EPA (US 2007): under CAA
authority, EPA must regulate GHGs
Corporate Average Fuel Economy (CAFE)• Since 1975, vehicle fuel efficiency regulated• EISA of 2007 (and Obama agreements) raise
CAFE minimums• CAFE standards: 54.5 miles per by 2025
Biofuels mandates• Biofuels (i.e. ethanol) mandated• EPA of 2005: Renewable Fuel Standard (RFS) • By 2022, 36 billion gallons of blended ethanol
3. Regulation of fuels & the auto industry
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1900 19901960 20201930
Transportation regulation - timeline
Federal A
id Road Act (1916)
Clean Air Act
(1970)
Federal A
id Highway Act
(1921)
Federal A
id Highway Act
(1956)
Energy Policy
Act (2005)
Mass. v.
EPA (2
007)
EISA (2
007)
Citizens to Preserve
Overto
n Park v. V
olpe (1971)
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Massachusetts v. EPA (US 2007)
1973: CAA S 202(a)(1) requires EPA to set emission standards for "any air pollutant" from motor vehicles "which in [EPA’s] judgment causes, or contributes to, air pollution which may reasonably be anticipated to endanger public health or welfare.”
2003: EPA says lacks CAA authority to regulate GHGs for climate change purposes / and would decline to regulate, if did
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Massachusetts v. EPA (US 2007)
2007 (Stevens): greenhouse gases fit well within the CAA’s capacious definition of air pollutant / remand to EPA on whether agency has discretion
2009: EPA concludes 6 GHGs in atmosphere may reasonably be anticipated both to endanger public health and to endanger public welfare / broad regulatory agenda
2012: DC Circuit dismisses challenges to EPA's endangerment finding and GHG regulations / accepts GHG such as CO2 endanger public health and likely responsible for global warming
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CAFE Standards
(Click for video – 4:46)
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1. True or false? CAFE standards were introduced in 1975.
2. Which is false – a. The NHTSA sets the CAFE
standardsb. The CAFE standards apply to
cars and light trucksc. The CAFE standards measure
auto makers’ sales-weighted fleet’s average fuel economy
d. An auto maker that fails to meet the CAFE standards must pay a penalty for only non-complying vehicles
3. Which is true --a. The CAFE standards for a Honda Fit
are the same as for a Ford F-150b. Under new CAFE standards medium-
duty and heavy-duty trucks are not covered
c. By 2016 auto makers are to meet a CAFE standard target of 28.5 mpg
d. The 2011 CAFE standards vary according to vehicle size
4. True or false? US vehicles by being bigger (though less fuel-efficient) are safer than vehicles in other 1st-world countries, which have smaller vehicles
Pop QuizTransportation – CAFE standards
Answers: 1-T / 2-d / 3-d / 4-F
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Auto industry
US auto manufacturing industry:
• Throughout 1990s, lower R&D on efficient vehicles
• In Great Recession (2007), new vehicle sales plummet.
• Federal gov’t bailout (2008)
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1. True or false? The Energy Independence and Security Act of 2007 requires corn-based ethanol production level off by 2015.
2. Beginning in the 1920s, the federal-state cooperation in highway construction gave the federal government a leading role in --a. Researchb. Oversight / siting of projectsc. Funding d. Construction
3. According to Overton Park Citizens v. Volpe, important considerations in siting highway projects are …a. Economic impact (jobs,
development, etc)b. Local input (town meetings,
referenda)c. Environmental considerations
(beauty, recreation, wildlife)d. Community disruption (slicing
cities in two)
4. True or false? In Mass. v. EPA, the Supreme Court held that although GHGs are “pollutants” the EPA can decide whether GHG regulation is required.
Pop QuizTransportation – regulation
Answers: 1-T / 2-abc / 3-c / 4-F
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5. True or false? Germany recognized the future of biodiesel and increased tax exemptions for its production in 2009.
6. “Cash for Clunkers” produced which effects? a. Price of used cars increasedb. Price of used cars decreasedc. Domestic auto-maker market
share increasedd. Asian auto-maker market
share increased
7. The EPA is authorized under the Clean Air Act to do which of the following --a. Regulate fuel compositionb. Regulate fuel additivesc. Set emission standards for
vehiclesd. Regulate gas stations
8. True or false? High-speed rail took off after Congress passed the Passenger Rail Investment and Improvement Act of 2008 and the American Recovery and Reinvestment Act of 2009.
Pop QuizTransportation – regulation
Answers: 5-F / 6-ad / 7-abcd / 8-F
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4.Future of transportation
(Click for video – 2:55)
‘Built To Last’ – US decentralization and recentralization
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Improving the motor vehicle network
(Click for video – 1:35)
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(Click for video – 1:33)
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Energy federalism
Transportation Federal State
Highways Research / oversight / funding
Construction / maintenance
Gasoline EPA None
Alternative fuels Renewable Fuel Standards None
Autonomous cars None Tort law (products liability)/ insurance law
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Class HypoWho is liable when an autonomous car crashes?
California’s legislature is considering a bill to shield self-driving car manufacturers, software providers and state roadway agencies from liability stemming from an “autonomous car” crash. Instead, the driver of a self-driving car will be liable for any damage or injuries caused by the crash -- just as if operating a traditional automobile.
Please provide talking points for your group’s view on this proposed legislation.
• Group 1: Google (self-driving car software provider)
• Group 2: CA Department of Transportation
• Group 3: National Association of Auto Insurance Companies
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The end
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Class HypoThe Obama Administration has recently concluded agreements with the major American automakers that would require such manufacturers to produce automobiles that exceed the Corporate Average Fuel Economy standards required by the Energy Independence and Security Act of 2007.
In a simulation of the talks that preceded the signing of these agreements, please produce talking points from each of the three groups below that discusses why, from your perspective, agreeing to more stringent CAFE standards is in your best interest and that of your constituents.
Group 1: American Automobile Association
Group 2: Obama Administration
Group 3: United Automobile Workers