Energy Law
9 – Transportation
Fall 2014
November 11, 2014
Alan Palmiter
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
– CAFE standards
– Auto air pollution regulation
– Restructuring auto industry
4. Future of transportation
– American decentralization & recentralization
– Improving motor vehicle network
1. U.S. Transportation in Perspective
97.09
(2011)
27.03
(2011)
9
http://www.eia.gov/totalenergy/
http://www.eia.gov/totalenergy/data/annual/pecss_diagram.cfm
US transportation - timeline
1700
1850
1900
1950
2000
US Interstate Highway System
Source: Wikipedia
Highway Infrastructure
(Click for video – 1.51 )
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."
Public transportation & technology
(Click for video – 1:33 )
2. Powering U.S. transportation
Model-T (internal
combustion engine)
(Click for video – 3:35 )
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
Alternatives to gasoline-powered ICE
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
Click for video -1:49
Who killed electric car?
Click for video -2:14
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.
Biofuels – interactive
Biofuels
Pros:
Cons:
 Integrates well with
existing technology.
 Renewable resource.
 Greater security of
supply.
 Cleaner emissions.
 Production may result
in net energy loss.
 Could impact food
supply.
 Discourages
conservation.
 Requires ‘flex-fuel’
equipment.
Pop Quiz
Transportation
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.
Answers: 1-T / 2-a / 3-b / 4-T
3. Regulation of fuels & the auto industry
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
Transportation regulation - timeline
1900
1930
1960
1990
2020
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
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
CAFE Standards
(Click for video – 4:46)
Pop Quiz
Transportation – CAFE standards
1.
True or false? CAFE standards
were introduced in 1975.
1.
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
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 F150
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 vehicles in other 1stworld countries, which have smaller
vehicles
Answers: 1-T / 2-d / 3-d / 4-F
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)
Pop Quiz
Transportation – regulation
1.
True or false? The Energy
Independence and Security Act of
2007 requires corn-based ethanol
production level off by 2015.
1.
Beginning in the 1920s, the
federal-state cooperation in
highway construction gave the
federal government a leading role
in -a. Research
b. Oversight / siting of projects
c. Funding
d. Construction
Answers: 1-T / 2-abc / 3-c / 4-F
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 Quiz
Transportation – regulation
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 increased
b. Price of used cars decreased
c. Domestic auto-maker market
share increased
d. Asian auto-maker market
share increased
Answers: 5-F / 6-ad / 7-abcd / 8-F
7.
The EPA is authorized under the
Clean Air Act to do which of the
following -a. Regulate fuel composition
b. Regulate fuel additives
c. Set emission standards for
vehicles
d. 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.
4.Future of transportation
‘Built To Last’ – US decentralization
and recentralization
(Click for video – 2:55)
Improving the motor
vehicle network
(Click for video – 1:35)
(Click for video – 1:33)
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
Who 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
Class Hypo
The end
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 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
Class Hypo