Energy Law 9 – Transportation Fall 2013 November 5, 2013 Alan Palmiter Brian Bowman Not for distribution- for study purposes only

Topic roadmap 1.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 – CAFÉ standards – Auto air pollution regulation – Restructuring of auto industry 4.Future of transportation – American decentralization and recentralization – Improving motor vehicle network

9 9 Energy Flow, 2011 (Quadrillion Btu) 1.U.S. Transportation EIA, Annual Energy Review (2011)Annual Energy Review

US transportation - timeline Railway travel - one million passengers NE to CA (1872) Duryea Brothers – first auto plant (1895) John Calhoun – proposes unified road/canal system (1816) Henry Ford – auto assembly line (1908) James Watt – steam engine (1781) Hoover/Roosevelt – highway construction (1930s) Eisenhower – NHS (1950s) Robert Fulton – steamship Albany to NYC (1807) US auto sales < 50% (2007)

Source: Wikipedia

(Click for video – 1.51 ) Highway Infrastructure

Overton Park v. Volpe (US 1971)

(Click for video – 1:33 ) Public transportation & technology

(Click for video – 3:35 ) 2. Powering U.S. transportation Model-T (internal combustion engine)

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

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

Click for video -1:49

Click for video -2:14 Who killed electric car?

Biofuels – interactive

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.

1.True or false? Henry Fords 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.The modern interstate system was conceived by FDR. d.The U.S. interstate 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 20 th century, cars with electric motors were more popular than cars with internal combustion engines. Pop Quiz Transportation Answers: 1-T / 2-a / 3-b / 4-T

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

Transportation regulation - timeline Federal Aid Road Act (1916) Clean Air Act (1970) Federal Aid Highway Act (1921) Federal Aid Highway Act (1956) Energy Policy Act (2005) Mass. v. EPA (2007) EISA (2007) Citizens to Preserve Overton Park v. Volpe (1971)

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 [EPAs] 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

Massachusetts v. EPA (US 2007) 2007 (Stevens): greenhouse gases fit well within the CAAs 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

CAFE Standards (Click for video – 4:46)

1.True or false? CAFE standards were introduced in Which is false – a.The NHTSA sets the CAFE standards b.The CAFE standards apply to cars and light trucks c.The CAFE standards measure auto makers sales-weighted fleets 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- 150 b.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 other 1 st -world countries, which have smaller vehicles Pop Quiz Transportation – CAFE standards Answers: 1-T / 2-d / 3-d / 4-F

Auto industry US auto manufacturing industry: Throughout 1990s, inefficient fuel regulations and dividend payouts reduce money for development of more efficient vehicles The Great Recession (2007); new vehicle sales plummet. Federal govt bailout (2008)

1.True or false? Biofuel production is heavily supported by federal mandates. 1.Which is false – a.The Energy Policy Act of 2005 establishes the Renewable Fuel Standard. b.The Energy Independence and Security Act of 2007 establishes the Renewable Fuel Standard. c.CAFÉ standards and dividend payouts in the 1990s may have discouraged innovation in the US auto industry. d.Vehicle fuel efficiency is regulated under Corporate Average Fuel Economy standards. 3.Which is true -- a.The EPA regulates car and light truck emission standards under its CAA authority. b.The EPA regulates heavy truck emission standards under its CAA authority. c.The EPA regulates car and light truck emission standards under its Energy Policy Act of 2005 authority. d.The EPA regulates heavy truck emission standards under its Energy Policy Act of 2005 authority. 4. In Mass. v. EPA, the court held that although GHGs are pollutants it is up to the EPA to decide whether regulation of such pollutants is required. Pop Quiz Transportation – regulation Answers: 1-T / 2-b / 3-a / 4-F

4.Future of transportation (Click for video – 2:55) Built To Last – US decentralization and recentralization

Improving the motor vehicle network (Click for video – 1:35)

(Click for video – 1:33)

Class Hypo Who is liable when an autonomous car crashes? Suppose Californias 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 groups view on this proposed legislation. Group 1: Google (self-driving car software provider). Group 2: CA Department of Transportation. Group 3: American Automobile Association.

Class Hypo The 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 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

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