The EPA Mandate and the Coming Energy Crisis
My mom remembers that I was obsessed with electric vehicles as a child. I probably picked up the interest in electrification from my father. I remember having to be very careful with the orange cord when cutting the grass with the electric-powered lawn mower he bought. My dad also purchased the first hybrid car on the market and the first electric vehicle on the market. My parents were also one of the first households in the area to install a solar panel on the roof. While I’m a fan of the push to electrify society, I have some hesitations about a recent EPA mandate.
According to newly announced rules, EVs will need to account for up to 56% of new passenger vehicles sold by 2032. Some are calling this new EPA rule a ban on gas-powered cars. While the EPA decision doesn’t technically ban gas-powered cars, there is no getting around the fact that it will force a big change for American consumers. (According to Kelley Blue Book, EVs made up just 7.6 percent of all vehicle sales in 2023.) The rule isn’t just about cars. Electric trucks will need to account for 60% of new urban delivery trucks and 25% of long-haul tractor sales by 2032.
My concern is that these mandates will require the electrical grid to handle a ton more energy demand when the grid isn’t prepared. The impending crisis isn’t just about electric cars and trucks. We will strain the grid because the artificial intelligence industry is driving a nationwide data center building boom. The challenge for the grid and the need for renewable energy is revealed in New York, where Micron, a computer chip manufacturer, is building a factory that will use enough electricity to power the current demand of New Hampshire and Vermont combined. A new electric vehicle battery factory in Kansas needs so much energy that the state is delaying the retirement of a local coal plant.
When thinking about government mandates to increase the number of electric cars and trucks on the road, it’s important to consider existing grid issues. For example, as Labor Day approached in 2022, California’s grid operator urged residents not to charge their electric vehicles between 4 and 9 p.m. This took place when there were only a small fraction of electric cars on the road. Now, consider that the California Air Resources Board approved a plan to phase out the sale of all gasoline-powered cars by 2035. As Megan McArdle writes, “If America wants people to run everything off electricity, the government can’t just decree it so. It needs to make it feasible, and attractive, so people will comply. That means power has to be extremely reliable and reasonably inexpensive. Which, in turn, means the state needs more than just high ideals and ambitious mandates; it needs to commit to building the generation and transmission capacity its vision will require.” Given this need, it is surprising that, as McArdle points out, environmental groups are trying to shut down the Diablo Canyon nuclear power plant in California. If the world is truly in an existential climate crisis, we need reliable clean energy— nuclear should be a no-brainer.
It isn’t just that life with an electric vehicle comes with more restrictions than a gasoline vehicle. Each half-ton battery, Mark Mills reports in City Journal, requires that we dig and process 50 to 250 tons of earth for copper, nickel, aluminum, graphite and lithium. In his book, The War Below: Lithium, Copper, and the Global Battle to Power Our Lives, Ernest Scheyder identifies some of the economic, environmental, and geopolitical costs to digging up lithium, cobalt, aluminum, and nickel. For instance, President Trump scrapped the Pebble Mine copper project in Alaska when his son Don Jr. and Tucker Carlson announced their opposition because they liked hunting and fishing in the area. Also, the Biden administration paused plans to erect a copper mine in Arizona because the site was sacred to the San Carlos Apache. In 2022, the Biden administration cancelled projects to mine copper, nickel and other valuable minerals in northern Minnesota. We should make it easier to mine in the United States because we have higher environmental standards than third world countries have. Plus, mining in America means a shorter supply chain, which means fewer fossil fuels are needed to transport the minerals.
This gets us to the issue of China, which I wrote about two years ago. While China’s leaders have committed to reducing emissions, the country continues to build coal-fired power plants at a faster rate than the rest of the world. Indeed, China is emitting more emissions than the rest of the developed world combined. Like OPEC with oil, it is a big problem that China dominates global production of crucial minerals.
The Wall Street Journal’s Jon Emont writes how, despite efforts of America and its allies to expand the production of key minerals in other countries, Chinese companies are becoming more dominant, not less. Emont reports that Chinese processing plants in the Indonesian archipelago are pumping out vast quantities of nickel, while the Switzerland-based mining giant Glencore is suspending operations in New Caledonia. The U.K.’s Horizonte Minerals, whose new Brazilian mine was expected to become a major Western source, said recently that investors had bailed, citing oversupply in the market. Four nickel mines in Western Australia are winding down and lithium projects in the U.S. and Australia have been postponed or suspended after a surge in Chinese production. As Emont writes, “China’s miners are deep-pocketed and aggressive, making bets in resource-rich countries that Western companies have long viewed as corrupt or unstable.”
Another unintended consequence of the push for electrification is that rogue actors will have an easier time committing a cyber attack. “As more electric cars are online, this risk grows,” the Energy Department warns. President Biden has warned that vehicles made in China would collect sensitive data about Americans and even mess with the grid.
I’m convinced by my dear friend, Dan, who has been working in the renewable energy industry for over a decade, that we need to transition away from fossil fuels. But if we are going to push for a future of electric cars, we need to add a whole lot more of energy to the grid. One hopeful approach could involve fusion, which could deliver limitless energy without any environmental cost. But, here too, we see that China is beating us to the finish line. China isn’t just outspending us. They are outsmarting us. The Asian superpower has ten times as many Ph.D.s in fusion science and engineering as the U.S., and crews in China work around the clock and only break for the Lunar New Year.
The issue of immigration propelled Trump to the forefront of American politics in 2016. But the anger about unchecked immigration will be nothing compared to the anger when it becomes prohibitively expensive for Americans to buy gas powered vehicles and when there won’t be enough electricity on the grid to power the things that Americans will be forced to buy. Moreover, there is a real danger if we mandate a move away from fossil fuels, while simultaneously handing the keys to China. In other words, it is crazy to mandate electric vehicles while also allowing China to control all the critical minerals that create the batteries for those cars.