Stephen Lacey: From Greentech Media, this is the Energy Gang, a weekly digest on energy, cleantech and the environment. I'm Stephen Lacey, welcome.
In our first installment for 2017, we're going autonomous. For years, researchers have been working behind the scenes to improve autonomous vehicles, and all of a sudden, that work is playing out in a very public way. Top tech companies and automakers are testing new models on the streets, and regulators and city planners are trying to keep up with the pace of technological change. This year will likely mark the beginning of the commercial, autonomous car era.
That brings us to the theme of the show this week. Will that era bring sweeping efficiency improvements to the transportation sector, or will it result in a chaotic, overcrowded hellscape for our streets? As our guests will explain, the decisions we make today will determine that fate.
In the second half of the show, we'll examine Uber's attempt to help city planners by releasing data, and we'll have a brief retrospective on President Obama on his final week in office.
I'm joined as always by my co-hosts. It's been a while, hello Katherine!
Katherine Hamilton: Hi, happy New Year! You know, nothing going on here in D.C.
Stephen Lacey: Yeah, it's a boring time over there, so it's going to be a stretch to find interesting things to talk about this year, huh?
Katherine Hamilton: Absolutely.
Stephen Lacey: Happy New Year, Jigar. How are you?
Jigar Shah: Good, happy New Year! I actually already went to a ball, Katherine, in D.C. There was a ball celebrating the new Congress, and the five new Indian-American representatives.
Katherine Hamilton: Wow, that's wonderful. I hope you had fun.
Jigar Shah: It was a good time.
Stephen Lacey: Joshua Goldman is our guest this week. He's a senior policy analyst for the Clean Vehicles Program at the Union of Concerned Scientists, where he focuses on everything related to cleaning up the transportation sector, which increasingly includes autonomous vehicles. Josh, welcome to the show.
Joshua Goldman: Hey, thanks for having me. I am ready to welcome our robot overlords.
Stephen Lacey: I'd like to start by quoting not a science fiction expert, but Charles Dickens, who in A Tale of Two Cities perfectly encapsulates what we're facing with autonomous driving. "It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of light."
Indeed, we are facing two futures. One in which autonomous cars bring a low-carbon revolution to transportation, and one in which they make the sector dirtier and more complicated. Let's pick up the story for our readers, Josh. Help us imagine each scenario. Let's talk about the dystopian future for autonomous vehicles first. Overcrowded streets, more people driving, therefore more miles driven, and potentially more pollution. What does that future look like in your eyes?
Joshua Goldman: Sure. Well, I think you hit on all the major potential negative consequences there. Basically, when autonomous vehicles hit the roads in mass quantities, we will see a dramatic change in how transportation operates in the U.S. and beyond.
For example, when I'm walking to the subway every day, and I come across a stop sign and I want to cross the road, I typically look at the car approaching the stop sign, and try to make eye contact with the driver before I cross. If that driver is in an autonomous vehicle, I'd probably be making no eye contact with the driver, instead seeing them buried in either their phone, or a book, or eating something, and not paying attention at all. Instead, I would have to sort of just trust that the vehicle will come to a stop, which could be slightly terrifying.
Then, assuming that maybe I need to take a highway trip and I'm not driving an autonomous vehicle, once I merge onto the highway, I might need to pass, or see conga lines of trucks, traveling very close together at high rates of speed, much higher than we're seeing now, and I might need to merge into traffic, where that traffic is not necessarily operated by human drivers, but mostly by robot drivers.
That means that while they might be a little bit more predictable, they might be going faster, they might be traveling closer together, and traveling on highways might become a little bit more of a terrifying experience.
Stephen Lacey: Hey, at least you won't have people running across the highway.
Joshua Goldman: That's true, but actually in that situation, an autonomous vehicle might need to make the decision of whether they need to avoid the person running across the highway and injure their passengers, or protect their passengers and injure the person running across the highway.
As that situation would happen right now, I mean, that would be a human decision, right? But as autonomous vehicles enter the market, how will the software program in the vehicles make that decision for us? There are all sorts of liability questions that arise because of that.
Aside from just making highways faster, and potentially a little bit more scary for people not in autonomous vehicles, they could dramatically disrupt our economy. Trucking is the No. 1 industry in many states in the U.S. The trucking industry has a large incentive to increasingly move toward automation. As they do that, we might see many truck drivers be left out of work, and need to transition to other careers. And so automated driving won't just affect the light-duty market, or regular passenger cars, but it will likely affect the heavy-duty [market] and trucking industry as well.
That's going to happen with taxi drivers too, as we're seeing with shared-ride and ride-hailing companies like Uber and Lyft, increasingly pushed toward further levels of automation.
Jigar Shah: I think that the other angle to this dystopian future is really around where you are now [in terms of] socioeconomic class. If you've owned two or three cars or...live in the suburbs, you're going to the city, and you enjoy that time in your car where you can talk to people through your Bluetooth, etc., versus people who are taking an hour to get from one place to the other place using public transit right now, that they could be able to do in 20 minutes with virtual public transit, once Uber or ride-sharing platforms become as cheap as you're describing.
They could be a huge boon for those folks on fixed incomes, while being slightly...more inconvenient for folks that already own three cars.
Joshua Goldman: It could, I mean if we play that out a little bit further, autonomous vehicles, if they're widely deployed, have the potential to dramatically reduce the amount of money that cities generate through parking, through speeding tickets, through other tickets. And so if autonomous vehicles both make it cheaper to drive, and if they reduce the amount of income that cities are generating, cities are going to have a lot less money to spend on public transit and mass transit.
One potential result which should be avoided is that cities won't have any money to spend on public transit, and therefore, we're going to see reduced bus service, reduced metro and subway services. Those services will probably hit low-income populations harder than medium- to high-income populations. Because no matter how cheap an autonomous ride gets, it still might be unaffordable for some people who need to rely on public transit to get to work.
Stephen Lacey: We just breezed over a lot of potential impacts. We're talking about a complete disruption of certain sectors of the economy. We're talking about lost income for municipalities and states, liability problems for insurance companies, for auto manufacturers, a lot of confusion around who's liable during accidents, problems with income disparity; I mean, who's going to benefit from these technologies first? This is a remarkable set of potential problems that we're creating here with autonomous vehicles. We haven't even gotten to the environmental factors yet.
Joshua Goldman: Right, and the environmental factors are potentially huge because autonomous vehicles will make it easier to drive, both in terms of cost, and in terms of how we perceive the time we spend in vehicles. Right now, if people have to commute, it may be 45 minutes to work in bumper-to-bumper traffic, they value that time differently, as they would if they could sit in a robot car, and they could check their email, do work, listen to this podcast, do anything other than driving. That's going to make it easier for people to drive, aside from the lower costs.
One study found that increasing levels of automation could result in a 60% increase in vehicle trips. If you increase vehicle trips or vehicle miles traveled, without increasing the fuel economy of the vehicles, or the vehicle's environmental performance, then we're going to see increased air pollution. Both in terms of greenhouse gases, and other public health concerns that arise from criteria pollutants like particulate matter, and ozone, etc.
In the absence of any policy directives that will incentivize the pairing of autonomous vehicle technology with clean vehicle technology, we could see a pretty dramatic rise in emissions from transportation, which is now the largest source of greenhouse gas emissions in the United States.
Katherine Hamilton: Yeah, Josh, that's where I was going to jump in. First of all, I wanted to ask, are most of these autonomous vehicle technologies being developed on electric vehicles? That was my first question. Then, if that's what the goal should be, then how do we set forth policies that will enable those to be innovated and incentivized, rather than just sticking new technology on old vehicles?
Joshua Goldman: Yeah, I mean it varies. Uber has partnered with Volvo to release autonomous Ubers in Pittsburgh. These Volvos are Volvos like mid- to full-size SUVs that are gasoline-powered, not electric at all. In that instance, they're basically just sticking autonomous vehicle technology on an SUV.
Other autonomous vehicle industry players like Google, etc., have been seeking to make autonomous vehicles electric, but that's not necessarily the future that we're looking at.
There are a couple of policies on the books right now, that could incentivize automakers and technology companies to make autonomous vehicles electric. The primary one being the California Zero-Emission Vehicle Program, which requires automakers to generate credits for either selling electric vehicles in California, or buying credits from an automaker who has sold electric vehicles in California.
In 2018, that policy is set to extend to nine other states that have adopted it, pursuant to the Clean Air Act. If we were to extend that policy even further, and create a national framework for requiring automakers or other vehicle manufacturers to sell electric vehicles, that would essentially prompt them to ensure that the autonomous vehicles they're coming out with will be electric.
Jigar Shah: I think it's fair to say that's not going to happen anytime soon.
Joshua Goldman: No, it's not. Although once the California Zero-Emission Vehicle Program extends to those nine other states, collectively those states make up over a quarter of vehicle sales in the U.S., so that is a pretty large market share.
Jigar Shah: Let me take this from a different angle. I'm looking forward to autonomous vehicles. I'm probably going to buy an autonomous vehicle in the next few months. I was talking to Tom Matzzie at Ethical Electric, he's got that Volvo XE 90, I think. Looks pretty cool. Allows you to drive on the highway and be a little safer, and so I think that's pretty cool.
I also choose to believe that I think that this is going to be great for low income populations. I do think that the amount of time that they have to spend waiting for under funded transit agencies, will be cut down tremendously by services like Via and Uber and other things.
I think the bigger question really here is that for the Union of Concerned Scientists, you guys played a very pivotal role in between 2000 and 2003, around passing renewable portfolio standards around the country, and it was your analysis that actually was used by every public service commission and state legislatures, to evaluate whether they should vote for RPS standards.
It feels like you're not at that point in autonomous vehicles, where you've actually figured out what you're pushing for, and what the legislation looks like, and what the analysis is that you have to do, and how you actually roll this out.
Joshua Goldman: Sure, we're coming up against a pretty big problem of data availability. All of the current science right now on the impacts of autonomous vehicles are basically just best estimated forecasts, on how autonomous vehicles will operate, and the effects that they'll have.
The only way to really understand how autonomous vehicles will affect emissions and fuel economy, is to understand how they operate under real world conditions, and because autonomous vehicles haven't hit the roads in meaningful numbers, we don't have that data.
Moreover, we're seeing companies be pretty protective and selective about the data that they're willing to provide to non-profit organizations like Union of Concerned Scientists, or even the government. The main regulatory entity covering autonomous vehicles is the National Highway Traffic Safety Administration, which is part of the United States Department of Transportation.
The data that NHTSA can gather is really going to be limited to safety metrics. They're not necessarily going to be gathering data on when autonomous vehicle technology is switched on on the highway for example, how does that impact the vehicle's fuel economy? In your friend's Volvo for example, when they're on the highway, and they can take their hands off the steering wheel and gas and brake pedals, does that increase fuel economy, or decrease fuel economy? If it decreases fuel economy then how much, and how often is the technology being used, and what are the emissions impacts from that technology?
We're in this little bit of a chicken and egg situation where in order to do the analysis, we need the data. In order to get the data, we need the cars on the road.
Stephen Lacey: That point on data is really important, and it's something that we're going to talk about in our second section on Uber, which has started selectively releasing data. Ultimately, regulators on the state level and the federal level are asking for data and not getting it, much more than they're actually getting it.
There's a real tension here. The car companies that are deploying these autonomous vehicles, they don't seem to have much of an incentive to get a lot of data out there, because they want to deploy as many vehicles as possible. Clearly, on a safety side, they probably do have more incentive, because they want to convince regulators that these cars should be on the road.
On the environmental side, if you're potentially looking at local regulations to encourage these cars to run off of renewables or to be electrified, or to offer a certain level of efficiency, I can't imagine that a lot of these auto makers want to face some of those regulations early on.
There just seems to be a conflict about what type of data they want to release, and what that ultimately means for what they're required to do, because they just want to get these cars on the road, as quickly as possible.
Joshua Goldman: I agree with that. I would take it further to say that the auto companies don't want to be regulated, at all. Our near term ask is to increase the level of data and the amount of data that autonomous vehicle companies, both auto makers and technology companies, are required to provide to the government, and to the public, so that the science can progress to the extent where policy can be based on real world data, on the real world performance of autonomous vehicle technology. Both in terms of safety, emissions, congestion mitigation, and also equitable access, to make sure that this technology does not increase the gap between low income and high income populations.
Stephen Lacey: Before we get to the utopian vision, I want to turn around to Katherine and Jigar, and hear your thoughts. How worried are you about this potential scenario? Let's put insurance and revenue, municipal revenues aside, and just talk about the environmental piece of this. One could imagine a car owner driving to work, and then getting dropped off at work, and that car driving back to their house, parking for the day, and then coming back and doing a double trip to pick that person up from work.
That's not an unrealistic scenario. There have been a lot of worries about just car sharing, in general. If you have car2Go, and you have these other car sharing services, does it encourage people to instead of using their bicycle or public transportation, to use an automobile. I think there are very real questions around this. I don't think that the data is very solid yet, but it is certainly concerning to me, and I just wonder, Katherine or Jigar, how worrisome this is to you, and if you have any thoughts on this potential scenario?
Katherine Hamilton: The way I think about it is that I have two kids in their mid 20s, and they both have cars, but their driving has slowed down. Not slower, but the number of trips that they make in their cars is greatly reduced because of Uber, and other ride sharing. They both live in cities. They use transport technologies. As people move more to cities, I can't imagine that autonomous vehicles are going to drive people to not live in cities, if they want to live in cities. I guess I'm not as worried about that.
Jigar Shah: I am hugely excited about this. You know, I've been a contributor to Union of Concerned Scientists for years, and what's frustrated me the most about Union of Concerned Scientists, which Josh and I have talked about, is that they don't actually have plan around figuring out how to reduce vehicle emissions. I think they're getting better at that plan now, but 10 years ago, that plan was non-existent.
I think autonomous vehicles are going to solve all the world's problems. You're talking about 35,000 people a year that die from auto vehicle deaths. Clearly, human beings are not good drivers. They want to shave, they want to eat, they want to put on make up, they want to do everything but actually drive their vehicle. Autonomous vehicles lets them do all the things they want to do, and not drive their vehicle.
Separately, traffic is a human problem. If people were to space their vehicles out two seconds, you would get rid of traffic, because traffic is not solved by extending more lanes, doing more huge highway projects. I think the amount of money we're going to save on infrastructure, is going to be gargantuan because of autonomous vehicles.
I also think we're going to be able to figure out how to subsidize road maintenance and public transit through autonomous vehicles, because we don't want the cost per mile for driving a car to go down to 18 cents a mile, as Josh was talking about. We don't want vehicle miles traveled to go up by that much. I think we're going to tax the crap out of these autonomous vehicles, which I think is also amazing, because we're going to get tons of additional revenue into cities.
I think for cities and states that are well managed and have good public policy people, like New York, California, Massachusetts, other places, this is going to be an ability to really bring about an extraordinary future, which I think has been dulled a lot by human driven automobiles. I think it's just going to be a really exciting time, moving forward; on the environment, and on safety.
Stephen Lacey: That's a great place, to talk about all the positives here, and Jigar, you did a fantastic job of outlining how this could play out, in a way that benefits all of us, in terms of human health, improving public health, improving the environment, helping fund public infrastructure. Josh, any thoughts on what Jigar just outlined there, and what you feel is the likelihood of that scenario playing out?
Joshua Goldman: Yeah, so first of all UCS does have a plan to reduce emissions from transportation. In fact, a couple years ago, we released a plan that we're calling Half The Oil. You can check it out at HalftheOil.com. Basically, it's a realistic plan that would cut the nation's oil use in half, in 20 years. That has actually nothing to do with autonomous vehicle technology. Those improvements, and those emissions and oil reductions, we see coming through improving the fuel efficiency of our cars and trucks, investing in electric vehicles, and also investing in cellulosic biofuels, or biofuels made from non-food sources. I'd encourage you to go check out that plan, to see how we envision cutting emissions from the transportation sector.
I would also agree with Jigar, that it's clear autonomous vehicles will improve traffic safety. I'll just throw out a couple stats. Over 40% of the over 30,000 fatal crashes in the United States in 2015 involved some combination of alcohol, distraction, drugs, or fatigue. Robot cars, they don't drink yet, and they don't do drugs, and they don't get tired.
Stephen Lacey: You just wait. I've seen plenty of science fiction movies, that would lead me to believe that that's a scenario.
Joshua Goldman: Right. Well, they get buggy. I mean if every iPhone needs to be replaced in two years because it gets so slow, I mean what's going to happen to an autonomous vehicle's software?
Regardless, taking the human out of the driving equation will certainly improve traffic safety. The main question is, at what cost? How is that going to impact our environment, both in terms of climate change and local air pollution, like smog and particulate matter? And how is it going to affect the economy?
Like I mentioned earlier, trucking is a really big industry in many portions of the United States, and the taxi industry is a substantial employer, as well. I think companies and regulators to some extent, are very keen to get more autonomous vehicles on our roads, because they see the huge benefit for safety improvements.
Before we go too fast, and before we have one in four cars be either fully autonomous or semi autonomous, we really need to figure out how they're going to impact all of these other factors that they're going to influence, and ensure that there are some policy frameworks that prioritize the best outcomes, instead of these potential negative ones.
Jigar Shah: I just think that this is going to come together really nicely. My sense is that when you look at places like California and other places, it looks to me like every new car on the road will have autonomous features this year. Most of them will have advanced autonomous features, by the end of the decade.
Once that occurs, it feels like you can really use regulation to get to the outcomes we want to get to. I think that this really is around collective good, versus individual good. The car is the ultimate expression of an individual's rights. Once you move to an autonomous future, you start to think about things more in a collective rights basis, through the feature set that you want to mandate into the autonomous vehicles. I just can't imagine that being anything but a good thing.
Stephen Lacey: Let's finish up by wrapping this all together, and talking about the positive scenario. Since we are focused on energy, and clean tech, and the environment in this show, I would like to focus a lot on the environmental impact of autonomous vehicles, as well.
A couple stats here to set it off. Automation, according to NREL, and the University of Maryland, could actually deliver about 15% fuel savings, according to research by those organizations. Goldman Sachs once said in its research, that driverless cars would improve fuel efficiency by more than 30%. There has been other research at Lawrence Berkeley National Lab that shows renewables could cut greenhouse gas emissions per mile by up to 94%, when you look at autonomous fleets.
There are some potentially huge impacts here, in terms of efficiency and cleaning up automobile fleets. But, I think as we pointed out, it's going to take a lot of moving pieces to get us there. How do we get there, Josh, and what might that utopian future look like, in your eyes?
Joshua Goldman: Sure, so I like Jigar, am excited for an autonomous future. I don't ever really need to drive again, I think. Especially if I'm taking my annual trips all the way up to Connecticut to see friends and family, with taking a solid eight hours of bumper to bumper driving. I'll add some statistics to the ones you just mentioned, when it comes to fuel consumption emissions.
Autonomous vehicle technology could change how our vehicles look and operate in a couple ways. One is that if you have a autonomous vehicle, it might not need to be the fastest vehicle on the block, or to have a big engine. De-emphasizing a vehicle's performance could drop fuel consumption by 23%. Also, what's called vehicle right sizing, could also add another 45% reduction in fuel consumption. What that means is that, let's say you need to take a personal trip to work; maybe a one to two seat autonomous vehicle could come get you, and take you to work. Whereas, if you needed to take a family of six somewhere, an autonomous minivan could come get you. Maximizing the number of occupants per vehicle can make a big difference, in terms of how our vehicle trips operate efficiently.
In addition, studies have shown that the use of shared autonomous vehicles in applications like Uber or Lyft, will decrease the need for private vehicle ownership. A study in Lisbon, Portugal found that one autonomous vehicle could replace 10 private vehicles. In Singapore, they found that autonomous vehicles could cut the private fleet by a third. A study of vehicle ownership in Ann Arbor, Michigan found that an autonomous vehicle could cut private ownership by 15%. One particular study in Zurich, Switzerland found that just for inter-city trips, so trips within the city of Zurich, if there were enough shared autonomous vehicles, it would reduce 90% of private vehicle ownership.
From an environmental standpoint, cutting the number of vehicles that are owned and used, and maximizing the number of passengers that are in each vehicle, will result in many fewer vehicles on our roads, and therefore will result in fewer emissions.
In order to get there, we also need to incentivize ride sharing and ride hailing companies, to operate autonomous vehicles in a manner that maximizes occupants, instead of just maximizing the number of trips they take. Right now, there's a big incentive for these vehicles to do as many trips as possible, and carry as many people as possible, regardless of how many people are in the vehicle. There's an incentive for these vehicles to operate with no passengers, if they have to go pick someone up, etc.
Ensuring that ride hailing and ride sharing companies get as many butts in seats as they can, could help reduce private vehicle ownership, and then as a result, could help reduce transportation emissions by cutting the number of vehicles on the road.
Stephen Lacey: Really interesting time for autonomous vehicles, and I really appreciate you coming on the show, Josh. Josh Goldman is a senior policy analyst for the Clean Vehicles Program at the Union of Concern Scientists. We'll link to their fuel consumption plan that he mentioned in the Show Notes, and some other resources that Josh has written on, related to autonomous vehicles. Thanks again.
Joshua Goldman: Thanks for having me.
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Our second topic is an extension of the first. It also deals with transportation planning. Uber is not known just for its rapid rise as a car hailing service, but for the way it grew. Under the leadership of CEO Travis Kalanick, the company has abided by a simple philosophy: act first, and apologize later. Or don't apologize at all, and just keep acting.
Uber has been at war with taxi commissioners, governors, city planners, other car hailing competitors, and a host of other regulators. Most recently in California, regulators got very angry when Uber started driving self driving cars without permits.
The company is now attempting to cozy up to city planners, and position itself as a team player. On Sunday, it launched Uber Movement, a website with anonymous data on traffic patterns in major cities.
With 2 billion trips under its belt, Uber has a lot of data it can offer, but is it truly offering the data that city planners need? Jigar, this is an area of particular interest to you, the city planning side. How did you react to Uber's service? Do you think it's valuable?
Jigar Shah: I think it's awesome! Look, here's the thing. I don't love the tactics of the Silicon Valley folks. I do think that just doing things and asking for forgiveness, is not the right way to do things. I think when you think about just how intractable this problem is in transportation, and how slowly everything is moving, I just think that Uber had to do something that was bold and innovative.
I do think that it works. When you think about Washington, DC for instance, where I've spent a lot of my professional life. When you think about what the city planners have done there, without telling anybody, they've basically banned cars in DC. All the new condos that have gone up, they've said you don't have to actually put in sufficient parking spots for the new people that are moving in. They've basically jacked up all of the parking meter costs to $2.00 an hour, or whatever it is, to be able to get people to stop driving to their favorite hot spots.
They've got Car2Go and Zipcar. They've given away a lot of the parking spaces on the street, to people to do these car sharing services. At some point, it becomes obvious to you that DC's basically trying to get you to get out of your car. The question is, do they actually have the data necessary to convince city council members, and mayors, and others, to go all the way? To go to this entire utopian future, that we just talked about with autonomous vehicles, and the answer is "no."
I think getting someone like Uber that did things, not the way that I would have done things, but really shaking things up, I think is critical to be able to get one city at least or five cities around the country, to actually go to this City on the Hill.
Katherine Hamilton: Yeah, and they do have the data, because they have 13 million users, two billion trips, and they'll be able to help congestion mitigation, identifying traffic patterns, and the timing of traffic, improve safety.
It was interesting that one of the articles Stephen, that you pointed us to, was the Boston Department of Innovation Technology said "Uber and Lyft is like having a whole other transit line, and we have to consider it when we're doing urban planning."
I think not only do you need to consider it, but you need to have them help you design your traffic plans, and design your transit. I don't think, based on what's happened in London, I asked the folks at Uber, I said "Tell me more about this program." They pointed to London, and how they have this night Tube set up, where they've extended hours for the underground metro service. That has been very complimentary with Uber's services, as well.
It doesn't have to go oppositional to public transit. I think it just is super complementary in developing plans for cities that make sense.
Stephen Lacey: You mentioned the Boston experience, and that's actually a really interesting back story, to why they rolled out this service. In early 2015, Uber announced this big deal with the mayor's office in Boston, to release a bunch of data, because the City of Boston did say exactly that. We have this whole new transit line that we can't see, help us understand this. Uber made a big publicity splash by saying that they were going to hand over all this data. Then a year later, reporters uncovered emails that showed a very contentious relationship between the mayor's office and Uber, and Uber was basically saying, "Hey, you can't really share this data across agencies. You're very limited in what you can do." They were not giving the data to officials, that officials really wanted which was like where exactly people are getting in and out of the cars. They were just using big zip code data. Zip codes here in this area are really big.
It wasn't exactly what city officials wanted. They did extend that relationship, but once the reporting came out critical of Uber, showing that city officials were not happy with the relationship, Uber went behind the scenes and figured out how it could add more data, clean it up, and actually provide a real service, anonymized service, for city officials. This is the second iteration of that.
They have had a relationship on data sharing in the past that has not gone that well, and there's a really fascinating story locally here in Boston, that resulted in this latest website.
That actually gets to Uber's motivations here, and I agree with both of you that this is very important. It gets the data in the hands of city officials who need it. It gets Uber in the good graces of these city officials. Uber really does need to start building allies now. This is both a way for it to better operationalize its fleets, and help work with city officials, and just a good PR move.
Whether or not the data is the best it can provide, it shows the public that Uber is trying to work with cities to maximize or to optimize its fleets. As it starts going into these cities with autonomous vehicles, like it is in Pittsburgh, and like it's tried to do in California, they really need to start building good partnerships with regulators, or else the public is going to potentially turn against Uber. Because people are afraid of autonomous vehicles right now. There's a lot layered into this.
Jigar Shah: I'll push back on that. I don't know that the public is against autonomous vehicles. I think they're actually, I think they love it, because they don't want to drive. I think the broader, macro piece of this is what's more important. Whether people love Uber or not is sort of beside the point. If you look at Houston, Texas, which is largely built post World War II, 21.3% of their entire land mass of the entire city, is for surface parking lots. The entire city, right? 3.7% is garage parking, and 39.7% of their entire land mass is street area, including sidewalks, that jurisdiction that the city has to pay for.
It's not surprising that cities are saying "We need this data, because we basically want to ban parking. We want to get rid of all of this wasted space, that we're not earning property tax income on." We actually need to radically change the way in which our cities are funded, so that we can actually have enough money to pay for universal basic income, or all of the social services that we're doing, etc.
Uber is at the center of that, because cars are by far the biggest subsidy in the entire United States economy.
Katherine Hamilton: Yeah, so I agree with Jigar that I don't care so much if it's Uber having the relationship, or anybody else. If we can improve our transportation infrastructure, increase efficiency, lower carbon through better planning, I think that's all to the good.
As far as with Uber, with the price signals that they have, there's a funny story from this weekend where my daughter said she was going to a birthday party. I said "Oh, where are you going?" She said "Well, we're going some place downtown, unless Uber has surge pricing, and then we're going to walk to this other place." It was all based on price signals, and that's a behavior relationship to price signals, and that changes the carbon footprint too.
I think no matter what service it is, if we can increase transportation efficiency, we're in good shape.
Jigar Shah: Also, for many cities that don't have these extraordinary people... I mean, in DC it was really Harriet Tregoning, who was the head of DC's Office of Planning for a decade, that really led the charge on this stuff. For many of these cities who don't have people like Harriet, now they have this data, they actually are going to go out and find somebody like that person.
They just have realized that they're sitting on this gold mine that they didn't know about, and now they're saying well "We never even thought about unlocking all of the parking subsidies we provide cars. We should absolutely hire somebody in with all this data that's being offered by Uber for free, and do something about it."
I don't even know that most of the largest cities in the country were even thinking about needing this data.
Stephen Lacey: There is also a direct lesson that can apply to the electric grid here. Data sharing is a way to optimize grid infrastructure on the utilities side, and for vendors, and installers, and distributed energy companies to get into the good graces of regulators, so a very similar experience in Uber's case, to what we're seeing on the distributed grid.
Jigar Shah: There's a reason why electric utility companies don't want to give up that data, Stephen. I think it's going to be interesting to see how the solar industry actually potentially just usurp the right to share that data directly from its PPA customers.
Stephen Lacey: This is probably a different discussion, but if we want to get into real time pricing, nodal pricing on the distribution grid, then certainly utilities are going to have to cough up more data. That is something that we'll tackle on a future show, as well.
Let's get into the third topic, just briefly talking about President Barack Obama. On numerous occasions, we've debated his legacy on energy, environment, and climate policies. I think we each have unique takes on his strengths, his weaknesses, and ultimate impact. I think we're all in general agreement that the outgoing president did a lot more to support renewables through federal policy, than any other president. Jigar may disagree with that a little bit, but certainly he did a lot.
This week, writing in Science magazine, the president reflected on the last eight years of his energy policy, titled the "The Irreversible Momentum of Clean Energy." The piece kind of echoed what we, and many others have been arguing since the election. Basically, that government support was crucial for helping renewables, and is still crucial for deeper de-carbonization of the economy.
But market forces are taking over, and the progress that we see in certain areas of this business are just going to occur no matter who sits in the White House. Make sure to read that piece. We're going to have a link to it in the Show Notes as always.
As Obama reflected, it has us reflecting, as well. What are the policies that this president will be known for most? Katherine, what do you think are some of the most important decisions that this president and his staff made that will carry forward into the future?
Katherine Hamilton: Over the last few weeks, and especially toward the end of December, I noticed a lot of emails from the Department of Energy about various and sundry appliance standards being put forward, regulatory standards. I thought "gosh, this is something that just kind of happens, and without a lot of to-do. It's not like the Clean Power Plan, that's been very contentious, and public."
I reached out to ACEEE, the American Council for an Energy-Efficient Economy, and just said, "Tell me something about energy efficiency. I keep seeing these things. What is Obama's legacy on energy efficiency?"
They said "Of course, energy efficiency is the cheapest option to moving toward a clean energy future that you have." They kind of said "Here are three big things." CAFE standards, and so for heavy duty vehicles, trucks and buses and the like, we have until 2027, the regulatory construct. The light trucks and cars are up from renew and review. That's going to be kind of in play as we move forward, but CAFE standards have been huge, and that was a big thing the administration did.
The appliance standards are huge. What has happened is that there was an enormous backlog from the Energy Act of 2007, that all of these standards are in statute, and most of them are consensus agreements with industry, so industry since 2007 has been shifting, but there was a backlog on actually developing the standards.
Jigar Shah: Yeah, they were sitting there, for like four or five years.
Katherine Hamilton: Yes, and so those have been issued. That will take us a huge step forward. They'll have to be updated over the next eight years, but a lot of those are in place, and safely in place.
Finally, certainly the Clean Power Plan, and carbon emission standards, and in that ruling, while that ruling is certainly about to be dismantled in a thousand different ways, energy efficiency is still the cheapest option for states.
What ACEEE said is the bottom line is, this year alone, we've saved $30 billion from energy efficiency. By 2040, it will be two and a half to $2.9 trillion. That is huge for this president to have done.
Stephen Lacey: That's a good one, and not something a lot of people outside the efficiency industry know, because like in 2011/2012, when this backlog had piled up, there were a lot of people really criticizing the administration. When the president started getting serious about climate, they saw these efficiency standards as part of that bigger plan. All of a sudden, they really started acting at DOE.
People were pretty pissed off there for awhile, and then it just kind of came together at once.
Katherine Hamilton: He's been working on it for eight years. The other thing that happened was today, they announced -- I guess it was actually December 28th -- that they announced that the federal government has acceded its goal for energy savings performance contracting, which will reduce energy spending by $8 billion over the next 18 years.
While a lot of this has been done in the background, they're now starting to make these announcements, and they're pretty significant.
Stephen Lacey: Jigar, how about you? Do you have any positives, or do you have negatives? What do you think the president will be known for, or what's on your list?
Jigar Shah: Look, I want to start by saying that I think words matter. I think the fact that the president has used such positive words to describe what it is that we're talking about, is a good thing.
The thing that bothers me is his actions don't really line up with what he's taking credit for. It was George W. Bush that banned the incandescent light bulb, and the vast majority of energy efficiency that's going across this country, in the move to LED lighting, etc., came from that ban. I just want to make sure that we're clear about that.
Separately, on the energy efficiency spending for the federal government, they're going to reach $4.2 billion worth of total contracts out the door, when they have $80 billion worth of authority. They're basically going to use something on the order of around 6% or so of their entire authority, and going to claim a big victory, which is sort of typical government stuff.
Look, I'm a big fan of this president. I'm a big fan of his family. I'm a big fan of his ethics. I really am going to be sorry to see him go, but I just want to make sure that everyone recognizes that it's not this president that is the reason for our success in our industry, it's our people that are the reason for the success of our industry. This president, like most presidents, take credit for what happens under their watch.
Stephen Lacey: Okay, so a couple counters to that. I think that's right, in terms of the president not being able to take credit for everything that's happened, but in that piece in Science magazine, he's pretty careful about saying that the government can't take credit for everything. In fact says "Okay, this is what we did. Here's what we made in terms of efficiency improvements, and renewable energy investments." But then calls out the private sector for acting on this stuff.
To be fair, I think the president is clear in not taking credit for everything.
Jigar Shah: Yeah, no, I'm not blaming him, and I'm not saying that he did take credit, but I do think that the people of our industry oftentimes get lulled into this "Obama was extraordinary, and Donald Trump's not going to be anything," my sense is that in the end, we make our own fortune. We're going to continue to just hit the ball out of the park, over the next four years. Just because that's how powerful we are as an industry.
This new president-elect, I'm sure will take credit for all of our great work over the next four years.
Stephen Lacey: The industry was not that powerful in 2007, and 2008.
Jigar Shah: In fact, we were. When you think about what actually happened, I think it's important for us not to have revisionist history. When the Solyndra loan was made, and then a big deal was made out of the Solyndra loan, the president and the entire administration dropped us like a hot potato. We were persona non grata probably until 2013, during the State of the Union Address, when the president mentioned us again.
To suggest for a moment that we didn't actually make our own fortune is crazy; we did. The president thought that we were radioactive for about three years.
Katherine Hamilton: Okay, so one thing I want to jump in on is the Recovery Act. The stimulus package which ended up being over $800 billion. It would have been nice if it had been an even better; really set industry on a course where they required investment from utilities, they spurred action. I think that teed everybody up. The Loan Guarantee Program, other than Solyndra, was enormously successful. That has borne out to be true. I don't even want to have an argument about that.
I think the Recovery Act made people step up, and gave them the incentive to step up. Remember in 2010, the mid term election, and Congress completely flipped. That is why we were unable to get as much done as we could. Because Congress made a pact to stop the president, every single step of the way. What did the president have to do? He had to figure out what can I do within my own authorities? I can do appliance standards, which are backlogged. I can do performance contracting, as quickly as I possibly can, and I can negotiate global agreements, which he's done. I feel like he has done everything he could.
Jigar Shah: I agree, when John Podesta came in and kicked him in the ass, I think he did a lot. I completely agree with the fact that China got done, because John Podesta came in and others.
Look, I'm a big fan of this president on a personal level, but I'm just saying I don't want our industry to believe that it was this president's force of will, that this was even a top five goal for him. I think that it became a bigger goal, when Podesta came in and said "Look, you really need to make this a goal."
The Stimulus Bill, you and I both know that it was Nancy Pelosi that got 1603 into that. It wasn't like the transition team that was pushing that. I just think even if John McCain were president, we would have gotten the 1603 Grant Program, because we needed a stimulus. The economy was in free fall. Everyone agreed, from Republicans and Democrats. Nancy Pelosi would have been in the Congress to put that in, regardless.
Stephen Lacey: Eventually, when the president did decide to start publicly talking about this, and sort of came back around to clean tech, after a couple years of trying to stay away from it, the pulling the levers of government to accelerate automobile efficiency standards, appliance standards, to make sure that the Loan Guarantee Program was operating. I know that was actually well before -
Jigar Shah: It was put in place during Bush.
Stephen Lacey: Right, right, right, but that program was not moving very effectively under Bush. The Obama administration revisited it, and actually got deals out the door. For better or worse, I think there's a clear argument for the effectiveness of that program. They got deals done, and even though it was put in place by the George W. Bush administration, the Obama administration pulled the levers of government to do those deals.
Same thing with efficiency standards. A lot of those were sitting there, but they decided "Okay, how are we going to get this stuff done?" I think that's really important.
Jigar Shah: Absolutely, I just want to make sure that it's clear that there are 208,000 people in the solar industry, almost 100,000 in wind, many, many more in LED lighting and other places, who have worked their butt off over eight years to get us to where we are today in EVs, LEDs, solar, wind, battery storage, etc. I think they're going to continue to work their butt off over the next eight years. I think you're going to see it's just as successful over the next eight years.
Yes, when there was a tie out there, and we need things to go our way, it's entirely possible that the Trump Administration is not going to go our way. For instance, the IRS ruling that we want on storage, or some of these other pieces.
I just feel like it's important for everyone to recognize that we did this. In the same way that Obama said "You have to push me to do the right thing," we pushed him to do the right thing. It wasn't him dragging us along.
Katherine Hamilton: Yeah, he did say that in his Farewell Speech. He said "I wasn't the one who was the change. You were the one who made the change." That's important, but it was really critical that he and the administration, and all the people who worked for him, helped set the course and create a sense of certainty. The Clean Power Plan really put a stake in the ground for investors, for utilities, for states, to really change, to continue to change they were investing.
Not to down play what the whole clean energy technology, and application community is doing at all, but having some certainty really does make a difference.
Stephen Lacey: Okay, I think that's sufficient for now. We'll probably bring President Obama back into future conversations. Go read his piece in Science magazine. We'll link to it, as well. I think it's a fantastic piece.
Jigar Shah: It was fantastic, I completely agree.
Stephen Lacey: He's done a couple others, I think on justice reform, and something else, oh health care. He's making the rounds in his last week in office.
Let's tell our listeners something they may not know, and Katherine, I'd like to hear your story. What is it?
Katherine Hamilton: Sure, I have two things I want people to read. The first is Hawaiian Electric Company's Power Supply Improvement Plan. That sounds more boring than it is. It's really is about how they're going to attain Hawaii's 100% RPS goal before their 2045 deadline.
Remember HECO was about to be bought by NextEra, that was stopped by the Public Utility Commission, and HECO said "All right, we'll figure this out." This is without LNG, so there's no liquefied natural gas, which NextEra was bringing into their plan, into this one. It looks like that could meet their 100% renewables by 2040. It's worth reading how they plan to do that.
Secondly, I wanted to bring to everybody's attention that the Quadrennial Energy Review 1.2, was just issued late last week, and it really does focus a lot on distributed energy resources, so it's worth a look. If everybody says "Oh, this is part of the outgoing secretary's last hurrah," that is true. At the same time, the Senate and House are looking at dusting off the energy bill from last year. There's not much dust that's actually collected on it, and revisiting doing an energy bill.
There's a lot of appetite to get something done; a lot of pent up energy, so to speak, because they just didn't get it done last year. If they can use this set of analysis to inform that, I think that will be helpful, and I think it will be seen as a useful document, so something else to read.
Stephen Lacey: It's a big one to bite off, the Quadrennial Energy Review. You can read Jeff St. John's coverage of that. He picks out some of the more interesting grid modernization recommendations in that report. Go check that out on Greentechmedia.com.
Jigar, what's on your plate?
Jigar Shah: Well, I mean the first thing was just an "aha" thing, which is there's a book on Amazon about Donald J. Trump being an environmental hero, that was published on September 13, 2016 --
Stephen Lacey: I got back from vacation, and that was the first thing that I saw posted, when I signed into social media. You had posted this link to that book, which I thought was quite funny.
Jigar Shah: I have not read the book, and nor do I plan to read the book, because I'm sure it's probably blank. It's just crazy to me how much fake news can get around.
I really want to talk about China. China announced around the first of the year, that they're going to invest $360 billion over the next five year plan into renewable energy investments, to convert an additional 15% of their entire electricity grid to clean energy. Which I think is just such an extraordinary announcement. It just goes to show you that we're now in a place where people like China, and I think the US could do the same thing, are viewing clean energy through the lens of infrastructure, and jobs, and economic development. It's just such a milestone for us.
Stephen Lacey: This I think is the first time in the history of the Energy Gang, that we both have the same story, for Tell Me Something I Don't Know. I was going to mention the same thing.
I'll just add to it, actually, because I thought that number was really stark. Bloomberg New Energy Finance came out with their numbers on global investment, too. They show an actual dip in 2016 of 18%, falling from 348.5 billion in 2015, to 287.5 billion in 2016. Some of that is related to falling equipment prices, which is a good thing.
Jigar Shah: Almost all of it. They're not assuming a reduction in megawatts, they're just assuming a reduction in cost.
Stephen Lacey: Definitely, but there was a big drop in Chinese investment, and Japanese investment. Chinese investment fell 26%. It's not all bad, because of falling equipment prices, obviously.
China's been building a lot of projects that have been getting curtailed, too, and is also heavily subsidizing its manufacturers. A slow down doesn't necessarily mean a troubled market, and could result in some good things, because their project development is over heating, and their grid can't handle many other projects.
That 360 billion number that they announced in the beginning of January, was just like remarkable. In order to make sure those dollars are spent wisely, I think it needs to improve its grid to accommodate all these new projects. Some of it could go to waste if they don't. It sounds like that money is going to be spent across the board, and I definitely agree with you that it is a pretty remarkable sign that a country like China sees this as a really important piece of its infrastructure plan. And important to consider, as China becomes more important on the world stage, and the US potentially takes a step back politically on climate and clean tech internationally. This is a diplomatic issue now. It's all wrapped into some pretty interesting story lines.
Jigar Shah: Since we have the same story, let me add one from CES, the Consumer Electronics Show, that our good friend Julia Pyper attended. I think that what really came out of that show was how they were putting in remote control of all appliances, on the show floor. Whether it was your refrigerator, your toaster, or anything you had, you could remotely control it from your phone. I think that hearkens to demand response. I thought that was a huge thing, that came out of the CES this year.
Stephen Lacey: I'm still waiting for blockchain, to control your toaster. That's what we talked about with Paul Brody. "Next year's CES is going to be all about blockchain. You heard it here first."
Katherine Hamilton: I agree.
Stephen Lacey: All right, well, that's it for the show. Thanks to KACO New Energy for sponsoring the show. Great to have them as the kickoff sponsor this year. You can get all of our back episodes on SoundCloud, iTunes, Stitcher Radio, NPR One, anywhere you get your podcasts.
