Rumored Koch Brother Attacks Indicates that Electric Cars are Giving Big Oil a Run for its Money

If rumors of a Koch brothers-backed campaign are true, Big Oil must be desperate.

According to the Huffington Post, a shadowy group backed by the conservative billionaire Koch brothers appears to be planning a $10 million a year campaign to promote petroleum-based transportation fuels and attack government support for electric cars.

While this may sound like something out of Alice in Wonderland, it fits perfectly with the strategy of the crown jewel of the Koch Brothers' conservative network, Americans for Prosperity (AFP), to attack clean energy and perpetuate climate denial.

It also makes sense because Koch Industries is heavily invested in oil refineries and crude oil pipelines. A Koch Industries board member and energy lobbyist have reportedly already met with executives at Texas oil refining giants Tesoro Corp and Valero Energy.

Electric cars threatening Big Oil's monopoly

The oil industry has good reason to be worried: Battery prices are plummeting; affordable, longer-range electric cars are poised to enter the market; and global electric car markets are taking off.

According to a paper published last year in Nature Climate Change, the cost of producing battery packs for electric vehicles fell dramatically between 2007 and 2014, to lower price points than previous optimistic projections had expected. Bloomberg Energy Finance also confirmed this trend. Over the next five year, GM and Tesla are forecasting major cost reductions with mass economies of scale and improved cell chemistries, making mainstream electric cars a realistic, if not likely, prospect.

Perhaps Big Oil is nervous because, despite a 70 percent drop in oil prices, U.S. electric car sales in 2015 remained essentially flat. In 2016, industry expert Navigant Research predicts sales to rebound as newer, longer range models enter the market, including GM's new Volt with 50-mile electric range, Nissan's upgraded LEAF with 107-mile range, and Tesla's Model X crossover.

Time may be running out for Big Oil with GM, Tesla, and Nissan all poised to "crack the code" with affordable, 200-mile range electric cars. GM's Chevrolet Bolt, capable of traveling more than 200 miles on a charge and described by Wired as ``the electric car for the masses'', should arrive in late 2016, followed by Tesla's Model 3, and then the next generation Nissan LEAF.

And surely the oil industry must be sensing the writing is on the wall with almost 200 countries representing 97 percent of the world carbon emissions joining the historic Paris Agreement to cut carbon emissions, move away from fossil fuels, and accelerate clean energy technologies.

Practically overnight, China's electric car market tripled and now exceeds the U.S., thanks to support from the Chinese government. The powerful German auto industry is furiously trying to catch up. Audi announced that it expects 25 percent of its U.S. car sales to come from electric cars by 2025.

Fossil fuel industry is heavily subsidized

It is ironic - the height of hypocrisy - for the oil industry and its allies to attack federal support for electric cars when the fossil fuel industry enjoys more than $21 billion in annual production subsidies at the state and federal levels, according to Oil Change International.

The Congressional Research Service found that our energy tax code has been directly subsidizing the fossil fuel industry's ability to pollute for the past 100 years.

New York Times reported that "oil production is among the most heavily subsidized businesses, with tax breaks available at virtually every stage of the exploration and extraction process."

Unlike the electric car industry, the fossil fuel industry is an established industry that hardly needs government support and imposes hidden health and other costs on our economy.

According to the National Research Council, the hidden human health costs of fossil fuel energy production and use from air pollution amounted to $120 billion in the U.S. in 2005. The figure does not even include damages from climate change, harm to ecosystems, effects of some air are pollutants such as mercury, and risks to national security, which the report examined but does not monetize.

To reduce these costs, we must move beyond oil. A joint NRDC and Electric Power Research Institute report shows that fueling transportation through electricity instead of petroleum could reduce carbon pollution by 550 million metric tons annually in 2050--equivalent to the emissions from 100 million of today's passenger cars.

Polluters protecting their profits

The rumored campaign comes as low oil prices have been cutting into the industry's profits.

In describing the rumored campaign, Huffington Post notes how deeply invested the Koch brothers are in keeping America tied to the dirty energy sources of the past: ``For Koch and other large refiners, the impact of a growing electric vehicle market could be significant down the road. Koch Industries' refining, pipeline and exploration operations contribute a healthy chunk of its $115 billion in annual revenues.''

A Koch Brothers and Big Oil-fueled campaign to attack electric vehicles would hardly be a surprise. And the public, no doubt, will see such an industry campaign for what it is - a self-serving effort to protect its bottom line.

About the Authors

Roland Hwang

Director, Energy & Transportation program

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