Episode 45 of Cleantech Talk is here! This episode covers Ferrari’s electric envy, California’s climate leadership, a “Dear Elon” letter, and Norway’s oil & gas expansion.
If you’re feeling garrulous, Nicolas is @ElectricExaminr and Matthew’s @ElectronComm; if you’re feeling generous, CleanTechnica’s Patreon account is at https://www.patreon.com/CleanTechnica! Moral and monetary support are both welcome!
Jump into the show notes below for more goodies!
Ferrari’s Electric Envy
In the “better late than never” category, Ferrari has announced an electric roadster of its own. Which will beat the Tesla Roadster 2.0 to market, in much the way the Chevy Bolt lapped the Tesla Model 3. Props to Tesla for pushing into supercar territory with the Roadster 2.0 announcement, forcing Ferrari’s response.
California’s Climate Leadership
After Nicolas recapped California’s ambitious climate goals, we discussed how the Trump administration’s polluter-friendly policy agenda may have backfired by galvanizing the cleantech and environmental communities to act at the state level. Whether you call these unintended consequences “second-order effects” or “blowback,” they can completely change the complexion of a situation. Features like anti-lock brakes don’t improve safety nearly as much as expected, because when people know they have extra safety features in their car, they tend to drive more aggressively.
We’re not immune from these phenomena ourselves, of course. Many CleanTechnica readers dislike nuclear — but closing nuclear reactors generally has the near-term effect of boosting the use of fossil fuels for dispatchable power! It takes time to build all the wind farms and solar arrays that would be needed to replace that nuclear power plant. [Editor’s note: I spend a lot of time in the reader comments. I don’t recall seeing a push from readers to retire existing, functional nuclear power plants. The readers typically are arguing against new, expensive nuclear power, and point out that solar and wind are cheaper, quicker, and more economically sound than nuclear power. Of course, some countries have chosen to more quickly retire nuclear power instead of coal, but I don’t recall seeing our readers pushing for that sort of policy.]
The Base Is Not The Coalition
This segment discusses the article I wrote recently for Naked Capitalism, which can be found here. For years, Tesla and Elon Musk have enjoyed the support of his techie base (Tesla early adopters, generally white-collar types who can afford luxury vehicles) and a progressive coalition (environmentally-inclined people who are more likely to be Leaf or Volt early adopters).
Hillary Clinton, 2016; Elon Musk, 2017; Barack Obama, 2008.
Unfortunately, because he hasn’t learned how to disagree politely with others, Musk is in real danger of alienating progressives. Joe Romm at the climate desk of ThinkProgress.com might still be a fan, but after Musk’s treatment of a female engineer who alleged gender discrimination, Romm’s colleagues who report on women’s issues can’t be. You can believe the facts back Tesla’s side of the story, while still thinking Musk went way too far: if your wife, sister, daughter, or friend had been treated that way, you’d be livid. (Even with the engineer being a total stranger, my own inner “social justice warrior” is outraged.)
As outlined in the article, Tesla can’t win if it loses the progressives from its coalition — there’s truth to the expression credited to Ali Ibn Abi Talib that “he who has a thousand friends has not a friend to spare, and he who has an enemy will meet him everywhere.”
All the more reason for any CleanTechnica readers who know anyone who has Musk’s ear to plead with him to change his approach. Vicious takedowns of Big Oil are probably okay because that’s “punching up” at a more powerful group, but the recent targets of his temper have included people less wealthy and powerful than him, and “punching down” is about the surest way of alienating progressives. Just as Donald Trump…
Norway’s O&G Expansion
We closed the episode with a reference to James Ayre’s story on Norway’s plans to increase its oil and gas production. There isn’t much of a bright side to this story, though I guess they can plough the extra revenue into further electrifying their transportation sector, and using the revenues going to their sovereign wealth fund to invest in more non-fossil fuel businesses and projects.
On a more macro level, it’s possible-to-probable that the price of oil will continue rising, as it’s done in the past few years. And indeed, the increased production plans in Norway may reflect oil companies’ expectations of higher prices and higher demand. The move up in price is probably partly due to oil companies having discovered less oil in the past 4 years (2017 turned out even lower than 2016) than they have in any 4 year stretch in the last 6 decades … and the fact that oil consumption continues to rise. For all the traction electric vehicles have gained, the overwhelming majority of China’s 25 million (and rising) new cars sold each year still burn gasoline, and that’s new demand.
10 year chart of Brent (European) crude oil price. Source: NASDAQ.
Whenever it is that oil rises, oil companies’ stocks are going to soar. That could cause fossil fuel-free investment strategies to underperform the overall market for a little while. We should steel ourselves for this outcome, and it would be smart to send out the message while we’re winning that fossil investments might outperform divested portfolios over short time periods.
Because commodity prices fluctuate so much in the resource sector, companies with exactly the same leadership can look like geniuses (if their commodity happens to go on a tear, like cobalt) or fools (if the price of their commodity collapses, like oil did a few years ago).
Windfall taxes have been used to ensure that if oil companies report rich profits simply because the oil price has spiked, a large proportion of those profits go to public accounts. Norway taxes oil company net profits at 78% (that’s not a typo, it’s 78%) to ensure that the public gets a fair share of the benefits. (Isn’t it nice when the public’s “fair share” is 78%?) In return, companies get a 78% tax credit on losses, reimbursable in cash if they leave Norway. Companies choose to invest in Norway because they know that while they might not make crazy profits, they’ll never take crazy losses either.
While Norway’s policy might not qualify as a windfall tax, according to an EY (formerly Ernst and Young) report from 2015, windfall taxes were in place in Algeria, China, Israel, Kenya, Pakistan, Trinidad and Tobago, and Venezuela.
Where is Kenya, you ask? Well, we’ll close with our map of the week!
Kenya features in this edition of the “CleanTech Talk map of the week.”
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