Deepwater Horizon oil spill 10-year anniversary sends out reminders on safety and avoiding eco-disasters

Two days before the 40th anniversary of Earth Day, the oil drilling rig Deepwater Horizon exploded and sank. The explosion and subsequent fire on April 20, 2010, caused the sinking of BP’s oil rig, the deaths of 11 workers, injuries to 17 other workers, and the spilling of four million barrels of oil over an 87-day period. The catastrophe in the Guif of Mexico, approximately 41 miles off the coast of Louisiana, led to British oil major BP, the Swiss drilling contractor Transocean, and oil field services company Halliburton, struggling to bring the damage under control.

The spill cost BP over $65 billion in criminal penalties, civil claims, and clean-up costs. More than 47,000 people worked on the response effort in the summer of 2010. It became the biggest oil disaster ever in the US. Scientists estimated 184 million gallons were spilled — 18 times the amount spilled by the Exxon Valdez in 1989. Tourism was hit hard, along with the prime fishing grounds in Louisiana. For the oil industry, the Deepwater Horizon explosion represented the largest public relations crisis in its history. As the company said in a statement: “The accident and spill forever changed BP.”

What about the environmental and safety impact? Endangering marine wildlife and throwing local ecosystems out of balance came from it. For anyone viewing news coverage of the disaster, oil soaked birds and beaches slick with crude were typical to see.

PAH, or polycyclic aromatic hydrocarbons, was found up to eight miles from the Deepwater Horizon and was later found to be causing cardiac arrest in fish. Pockets of methane led to oxygen-starved zones, which caused marine life to smother. Large numbers of fish kills in the area were reported; and utero infections, fetal issues, and late-term pregnancy failures in dolphins. The Audubon Society reported that more than one million birds died as a result of the disaster.

The oil spill’s most lasting effects have been in deep-water zones, wetlands, and in the the population of larger marine animals like turtles, whales, and dolphins with long lifespans, according to Donald Boesch, a professor of marine science at the University of Maryland Center for Environmental Science. Boesch was appointed to the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling by President Barack Obama. Taking a look at a photo gallery from NPR will show you what it looked like and how the impact is still being felt.

The US is far from enacting fail-safes against a disaster like the Deepwater Horizon happening again; though the Obama administration did enforce rules coming from oversight agencies after the BP disaster. But it’s far from over. An even larger oil spill took place gradually over several years. The US Coast Guard was finally able to contain the Taylor Energy oil spill into the Gulf of Mexico last May that had gone on for more than 14 years. It started in 2004 after Hurricane Ivan triggered an underground mudslide that caused Taylor Energy’s oil platform to topple and sink. The leak is thought to have topped the 2010 BP disaster by more than 241 million gallons, potentially making it one of the largest – and slowest – oil disasters ever recorded.

The Trump administration has been supporting offshore oil drilling. The Department of the Interior will be allowing offshore exploratory drilling in about 90 percent of the outer continental shelf (OCS) acreage, under the National Outer Continental Shelf Oil and Gas Leasing Program for 2019-2024. The oil and gas sector in the region is expected to open up new opportunities to the market once challenges have been addressed and the program is belatedly approved and enacted.

Two other energy and environmental disasters had their share of impact over the past decade. Japan’s Fukushima Daiichi nuclear disaster on March 11, 2011; and the Volkswagen emissions scandal, also known as Dieselgate, that kicked off in September 2015, eventually overshadowed the Deepwater Horizon oil crisis. While Covid-19 has taken over this year, once its contained and vaccines become common, attention will inevitably go back to climate change, air pollution, and avoiding future energy disasters that bring heavy costs to human, marine, and animal life, the global economy, and clean transportation.

And in other news……….
Speaking of Earth Day, now it’s time for the 50th anniversary on April 22. An anniversary event started on Sunday, April 19 to kick off Earth Week with a virtual stage of high-profile speakers, including public officials, activists, scientists, and performers. Event participants include Al Gore, Senator Elizabeth Warren, Bill Nye (the Science Guy), NRDC president and CEO, and former EPA administrator, Gina McCarthy, and actors such as Joseph Gordon-Levitt. During April 22-24, millions of people around the world are going online for a three-day mobilization to stop the climate emergency.

How will clean car rules be affected by the Covid-19?  Climatewire’s feature (subscription required) doesn’t offer any real surprises. Global auto sales are gone for now, including electric vehicles. Tesla stock is doing alright with its China plant now open and running, and the Model Y coming out soon. Another interesting fact is that zero emission vehicles now make up 10 percent of new vehicle sales in Los Angeles County. Mayor Eric Garcetti wants to see that go up to 30 percent by 2028, by the the summer Olympics come back to the city. Overall, one quote in the article says it all on the state’s ZEV program: “California is aiming for 100 percent electrification of light-duty vehicles and most heavy-duty vehicles,” said Dan Sperling, director of the Institute of Transportation Studies at the University of California, Davis. “So this current lapse in the market is of great concern.”

Making improvements to EV battery supply chain:  Questions always come up about where electric vehicles are getting their batteries — and the environmental and economic costs of making it happen. UC Berkeley’s Center for Law, Energy & the Environment (CLEE) and the Natural Resource Governance Institute (NRGI) are conducting a stakeholder-led research initiative focused on identifying strategies to improve sustainability and governance across the EV battery supply chain. The massive global EV deployment has been raising concerns over the sustainability of the battery supply chain, from mining impacts to vehicle carbon emissions. CLEE and NRGI have prepared a background brief to address key questions.

Market analyst gives auto industry forecast during crisis: conducted an interview with Adam Jonas, the transportation industry analyst at Morgan Stanley Research, on the state of the auto industry and transportation since the Covid-19 pandemic became a global crisis. A few of the interesting findings include:

  • The “work from home” mindset that several employers have been attempting to develop for years is starting to work. The duration and global scale is having an impact that could push auto sales down, as private vehicle ownership accounts for an 86 percent market share of commutes to work.
  • A scrappage plan similar to the “cash-for-clunkers” program a decade ago could stimulate auto sales and bring in newer, cleaner and safer vehicles cars and trucks in operation on our roads.
  • Car rental may see a permanent change with air travel being hit heavily, and the likelihood of travel patterns changing going forward.
  • Heavy-duty truck manufacturing looks like it will fall by more than half this year. Low oil and gasoline prices will continue to make trucks and vans more appealing for buyers.
  • Americans are now becoming more dependent on online retailers, digital logistics operations, and e-commerce players such as Amazon, Instacart, and Fresh Direct for food and household goods. It could a massive shift sparking the need for even more regional, local, and last-mile services. Drone delivery may have to be pushed forward, Jonas said.
  • Vehicle maker consolidation will continue, and economic uncertainly will keep the pressure on that trend.
  • Jonas thinks that Tesla’s retailing model will have to be used by more dealers. Leading dealer chain AutoNation has been showing signs of the chaos facing dealers, with 7,000 of its workers laid off this month due to sales dropping 50 percent.

Looking at the numbers behind China and California’s zero emission vehicle mandates

Auto Shanghai 2017 has been full of “new energy vehicle” announcements for the Chinese market from major and startup automakers. General Motors has plans to launch 10 all-electric and plug-in hybrid models by 2020. Ford, Volkswagen, and Nissan, all have aggressive plans for the market. Chinese startup NextEV displayed 11 vehicle concepts from its all-electric NIO brand.

Behind all of it is the top global market for plug-in electrified vehicle sales and proposed government mandates for increasing those sales. China is interested in following California’s zero emission vehicle (ZEV) structure mandating an even higher percentage of sales to hit these targets with a credit trading scheme backing it up. But how realistic is it for China to meet its mandates – and for California?

China’s Ministry of Industry and Information Technology proposed last fall that ZEVs represent 8% of new vehicle sales as soon as 2018, and that would go up to 12% by 2020. Included in those numbers would be all-electric, plug-in hybrid, and fuel cell vehicles covering light, medium, and heavy duty vehicles. That includes all new cars, trucks, and buses sold in the country.

Companies that fail to meet the 8% requirement would face fines or have to buy credits from those that exceeded the minimum. That percentage score comes from weighted averages assigned to various zero- and low-emission vehicles. As in California, automakers that fail to meet the requirement face fines or have to buy credits from those that exceeded the minimum.

Average production of new energy vehicles last year may have contributed only about 3% of the score required, 5 percentage points short of the proposed 2018 target, according to the China Association of Automobile Manufacturers.

During 2016, there were about 507,000 new energy vehicles sold in China. As for total new vehicles sold in the country, there were about 28.03 million sold. As for the percentage of sales, NEVs accounted for about 1.8% of new vehicles sold; the government’s weighted averages brought it up to 3% in the scoring system.

China is considering blocking or delaying these proposed measures after industry feedback concluded that the targets are overly ambitious. It may be finalized by May or June, according to a government official.

Automakers are backing China’s goals, but are feeling a lot of anxiety about getting anywhere near close to selling 8% of total sales as ZEVs by 2018 – even if credit trading and a flexible point system helps ease the burden.

For those consumers and fleets making vehicle purchases in China, large sedans and SUVs are quite attractive. Many of these consumers are experiencing their first-ever high incomes, and are supporting China’s economic growth by spending a lot of it on vehicles, housing, mobile devices, entertainment, travel, and personal investments.

For now, buying vehicles that consume a lot of fossil fuel is just fine with car shoppers. A clear example of this is that first quarter 2017 SUV sales soared 21% from a year earlier to 2.4 million in China, while electric vehicle purchases declined 4.4% to just 55,929, reports Associated Press. Incentives were down on NEVs after the first of the year, which was thought to have an impact on NEV sales. If the current rate continues, it could finish the year below last year’s 507,000 plug-in vehicles sold.

Last year, California saw 62,166 plug-in electrified vehicles sold. Overall, the state had 2.1 million in new vehicle sales, with PEVs making up about 2.96% of total sales.

California Governor Jerry Brown’s ZEV goal is for the state to have 1.5 million ZEVs on its roads by 2025. That means about 15% of new vehicle purchases will need by to be ZEVs by 2025, or about 12% of sales higher than where it is now.

Commercial vehicles, such as medium- and heavy duty trucks, vans, and buses, are included in California’s ZEV sales data, similar to China. Both governments also include hydrogen fuel cell vehicles in those totals. Those sales volumes are quite small, but California is still leading the way on fuel cell vehicles and fueling stations. China has yet to see any fuel cell vehicle sales, though Toyota and other automakers plan to enter that fuel cell market.

China’s national government has been cracking down on vehicle manufacturers committing fraud in their NEV production and sales numbers to tap into generous government subsidies. That’s always been a concern for advocates of emission reduction targets around the world – that subsidies could be a scam and that credit trading can water down the end goals of the mandates.

China and the European Union are expected to keep strict mandates in place for the sale of ZEVs in those markets. The U.S. is expected to soften fuel economy and emissions rules under the Trump administration, though some analysts expect that consumers and fleets will increase demand in fuel efficient vehicles and that the nation’s current level of about 1% of new vehicle sales going to PEVs will be seeing an increase soon.

Most of the studies on ZEV goals being met point to a few recommendations:

  • Staying with subsidies including low-interest loans and rebates to vehicle manufacturers, and rebates and tax incentives available to consumers and fleets. These will need to be supported by cash-back incentives and finance programs from OEMs sometimes tied to dealer programs.
  • Continuing to bring down acquisition cost by making the battery packs and electric drives more affordable and cost competitive.
  • Increasing the range of all-electric, plug-in hybrid, and fuel cell vehicles.
  • Speeding up charging time through faster charges and an infrastructure spreading through workplaces, public chargers, homes, and multi-unit dwellings.
  • Wireless charging is also raising hopes for wide adoption of PEVs.
  • Adding more hydrogen fueling stations.
  • Seeing more diversified and attractive offerings in plug-in and fuel cell vehicle launches for both passenger and commercial vehicles.
  • Globalizing new vehicle launches for efficiency and sales growth – with variations built in by automakers based on government regulations, left- or right-side steering wheels and pedals, types of electric outlets in each country, and consumer and fleet expectations.
  • Public awareness and education programs tied to larger greenhouse gas emissions reduction targets including ride and drive events, public chargers and hydrogen stations, and powering PEVs and fuel cell vehicles through renewable energy sources.

OEMs aren’t backing away from non-fossil fuel vehicles

ZEVsGasoline prices may stay down for a while, but OEMs don’t seem to be backing away from producing zero, or near-zero, emissions vehicles. Industry forecasters tend to agree that green cars will make up a sizable percentage of global new vehicle sales in the fairly near future.

Here’s a snapshot of the latest news developments on this topic:

  • Honda is striving to produce two thirds of its new vehicles that will be electrified in some way by around 2030, according to Honda president and CEO Takahiro Hachigo. That will include hybrids, plug-in hybrids, battery-electric, and hydrogen fuel-cell vehicles. In 2015, Honda produced about 4.5 million vehicles worldwide; if Honda were to stay at that current production schedule, it would mean that nearly three million of its new vehicles would be electrified in some form. This will tie into the company’s plans to better allocate manufacturing around the world and reorganize its management structure, Hachigo said. It would also fit well into its corporate sustainability targets.
  • Toyota is moving in that direction, most likely without too many plug-in vehicles. Last October, the company announced in a report that it plans to sell 1.5 million hybrids globally by 2020 and more than 30,000 fuel-cell vehicles by that same year. It’s one part of a grander scheme to reduce its corporate carbon emissions 90% by 2050 from where it stood in 2010. Ramping up factories with renewable energy and hydrogen-based production methods will help the automaker hit that target. The plans so far don’t include any commitments to support battery-electric vehicles; but there’s always plug-in hybrids such as its Toyota Prius Plug-in. The company does want to get away from selling combustion-engine cars.
  • Bloomberg New Energy Finance released a study forecasting that 35% of new vehicles sold worldwide will have a plug by 2040. Pricing will be coming down as lithium batteries become more affordable. Long-range electric cars will cost less than $22,000 (in today’s dollars), according to the Bloomberg projections. Government policies in the U.S., China, and Europe will continue to be a big incentive for consumers and fleets to buy electric cars. Falling oil prices won’t play as big a role in the future as they do today as sticker prices on EVs start dropping, according to the report.
  • Lux Research still thinks we’re a few years out of the “EV Inflection Point” when plug-in cars (both battery electric and plug-in hybrid) make up more than 50% of new car sales. In the 2016 edition of the EV Inflection Tracker, Lux estimates that the EV Inflection Point is in the 2035-2040 time-frame. Lux is using EVs with greater than 200 miles of driving range at a price point of $35,000 or less as a benchmark for a significant acceleration of adoption. “Given the lack of any vehicles, let alone a wide variety, that meets these criteria, we’re far from the EV Inflection Point,” a Lux Research e-newsletter article says.
  • Volkswagen has been indicating for several months that electric vehicles (EVs) will be a solution to its current diesel vehicle reporting scandal. The U.S. Environmental Protection Agency seems to agree. EPA has asked Volkswagen to produce EVs in the U.S. as a way of making up for its rigging of emission tests, the German newspaper Welt am Sonntag reported. The article said EPA has asked VW to produce electric vehicles at its plant in Chattanooga, Tenn., and to help build a network of charging stations for EVs in the U.S.
  • Europe is a growing market for EV sales. Europe has seen substantial growth in EV sales; at about 75,000 new vehicles registered, it was nearly 50% higher last year in sales than was seen in the 2014 numbers. Seven of these European nations made a top 10 EV global sales list for last year with Norway, France, the U.K., and Germany accounting for about 75% of all registrations/sales for the year.
  • Navigant Research’s John Gartner anticipates that sales volume will go back up in the next couple of years. By 2017, there will be several new EVs for consumers to test drive from Audi, BMW, Ford, GM, and Tesla. Expansion of the charging infrastructure is likely to increase EV adoption, as well. Survey results from Navigant have shown that U.S. consumers see the availability and inconvenience of charging EVs as the main reasons not to switch from gasoline to electric-powered cars.
  • In its “Cars 2025” study, Goldman Sachs predicted that a quarter of new vehicles sold will be hybrid or electric. “Regulations on fuel economy and CO2 emissions are forcing carmakers to make engines more efficient. By 2025, 25% of cars sold will have electric engines, up from 5% today. But most of those will be hybrids, and 95% of cars will still rely on fossil fuels for at least part of their power,” according to the report.
  • Daimler is playing a reticent role in supporting clean vehicle technologies. Daimler CEO Dieter Zetsche said the company has ruled out investing in battery cell production for EVs with other German premium brands for at least another few years. He thinks that massive overcapacity in the market that has turned cells into a commodity. German automakers have not been creating as supportive a market for EV sales growth within that country as have other European markets. Daimler has also been behind on fuel cell vehicle support – not selling that many of them even though it has been producing and marketing its own fuel cell car. It’s also been interesting that Daimler has been a large investor in Tesla Motors but is not doing very much with Tesla’s technologies. Daimler is using the Tesla drivetrain in its electric Mercedes-Benz B 250 e model. It’s become a more sensitive issue in Germany since November when Tesla CEO Elon Musk said that the German government had approached Tesla to discuss state subsidies for building a battery plant in the country. Japan has been a much larger producer of EV battery packs. Battery cells used in plug-in hybrid models made by German automakers including the Audi A3 e-tron and BMW i3 battery-electric car come primarily from Asia; in these two cases from Panasonic and Samsung SDI, respectively.