Yesterday, August 10th, was a great day. My all-time favorite Pennsylvania metal truss bridge, Messerall Bridge, was moved from its former location to a staging area where it can be rehabilitated. It will then become part of the Spillway Trail in Pymatuning State Park. Ownership of the bridge was transferred from Crawford County to DCNR. When it is opened, probably next year, it will extend an existing trail to 2.5 miles for walking and hiking.
DCNR stepped up to the plate to take this rare 1876 wrought iron bridge and give it a second life. Federal Funds, most likely FHWA funds, are being used to pay for the project.
When I started my blog in 2018, it was my hope that some way, somehow this bridge could be rescued. I have used it as my masthead and on business cards. When the bridge is re-dedicated next year, I will take a picture and update everything. For now, I feel I could walk across the bridge, deck or no deck.
The PA Transportation Revenue Options Commission (TROC) Final Report and Strategic Funding Proposal was recently released. It covers a myriad of financing options, given the projected demise of the gasoline tax as an effective means to fund roads and bridges. I don’t want to cover all of these as they are wide-ranging options and many go beyond my expertise. I do want to focus on a pair of options that deal specifically and only with Electric Vehicles (EV’s). One swaps out the current Alternative Fuels Tax for an annual $275 fee. This is a replay of last year’s misguided SB 845. For an EV driving the average number of passenger miles a year and getting a fuel economy 100-120 mpg-e (we will use our LEAF as the model, at 104 mpg-E), this translates into an equivalent of a gasoline tax of $2.29 per gallon. The other institutes a MBUF (Mileage Based User Fee) Pilot only for EV vehicles. To be clear, all vehicles on the road need to pay to support the upkeep of that road and associated bridges. However, the proposals with regard to EVs are punitive and unfair. They also discourage ownership of EV’s. Most agree EV’s are going to be a significant component of our future driving, if we are to address the climate crisis. The TROC Recommendations send us in the wrong direction.
EV’s in Pennsylvania are currently liable for an Alternative Fuels Tax, which is pegged to the mpg equivalencies of gas powered cars. The average passenger mileage driven each year is 12,435 (most recent numbers from 2014). A Toyota Prius gets 52 mpg and would consume an estimated 239 gallons of gasoline per year. At 58.7 cents per gallon, this yields a revenue of $140 a year. A Honda Civic gets 32 mpg and would consume an estimated 389 gallons a year. The Civic would yield a revenue of $228 a year. A Ford F-150 getting 16 mpg would consume 777 gallons and would yield a revenue of $455 a year. We own a Nissan LEAF that gets 104 mpg-e. For that average mileage, we would be consuming 120 gallons. Our alternative fuels tax would be $70, figured at $0.0172 per kWh. The Civic gets twice the fuel efficiency of the F-150, hence half the gas tax. The LEAF gets twice the fuel efficiency of the Prius, hence half the gas tax equivalent. The point of these numbers is to say that some vehicles get much better mileage than others and therefore pay much less in fuel taxes than others. Electric vehicles are the most “fuel-efficient.” And as a society we have accepted that, so far.
This is not to say the mechanisms for collecting the Alternative Fuels Tax are logical or efficient. First, it is not well advertised, either by the dealers or PennDOT at registration. Secondly, the forms are complicated and require registration of your own charger, if you have one. And you have to keep good records. I would put it at the same level of difficulty of filing state income taxes if you have a business. It could be greatly improved. I suspect collections are nearly non-existent.
For the proposed $275 in Electric Vehicle Fees, at the average passenger miles per year per vehicle, this would translate to a gas tax equivalent of $2.29 per gallon for the LEAF, not the 58.7 cents per gallon everyone else pays. Other EV’s would be in this range.
One of the principles of the Commission is to be Fair, and to produce balanced, reasonable, and responsible proposals. Why should EV’s be singled out, since there is an existing mechanism to collect the equivalent fuel taxes? The fact the TROC dismisses the existing mechanism is a flaw in the report, and support for the need to improve collection techniques. The removal of electric vehicles from the platform of equivalent fuels taxes is hardly fair and equitable. The Prius is a hybrid electric vehicle. Would it be fair to add a partial tax on these as well, since it’s partially an electric car? Hybrid owners get superior fuel economy. Shouldn’t they pay higher fees as well? In fact, shouldn’t every vehicle owner that gets good gas mileage be charged additional fees now, as they are evading the needed revenue to keep our roads and bridges maintained?
One of the principles of the Commission that is not on the list is a commitment to action on the climate crisis. A full 30% of the CO2 that will be required to be removed from our output comes from gas-powered vehicles. Getting this to zero in the next 10-15 years is critical if we are to meet IPCC goals. Tax policy is a powerful actor on behavior. We all know this, but despite the potential impacts of the Commission’s proposals on taxes, there is no acknowledgement of the need to direct some of that policy to addressing the Climate Crisis. It leads to a myopic view on revenue and at the minimum represents a missed opportunity to integrate revenue proposals with CO2 reductions. At the worst, it is a dereliction of duty for a governmental body in the middle of an existential crisis.
MBUF – Mileage Based User Fee – also known as VMT (Vehicles Miles Traveled), is a user fee that avoids the problem of fuel source. A car on the road driving a mile pays the same regardless of type of fuel. With regard to fairness, the MBUF is probably the most fair. The only other way it could be fairer is if there were a factor for vehicle weight as heavier vehicles beat up the road more than lighter ones. The TROC Report suggests an MBUF of 8.1 cents a mile in lieu of a gasoline tax (and presumably the EV Tax, although unstated.) For the average passenger car driving the average 12,435 miles a year, this would yield revenue of $1,007. Our F-150 drive would be paying more than twice what they are now in gas taxes. The Civic Driver 4x what they are paying now. The LEAF Driver 14x what they are paying now. But this would level the playing field with regard to road and bridge use.
Here’s my problem. The MBUF pilot is applied only to EV’s. As a pilot, it would begin in year 1 and could continue indefinitely. The MBUF is intended to replace the gas tax. Presumably, it would also replace the Electric Car fee. Fine, but for electric vehicle owners, it is a very expensive replacement. $1,007 versus $70, or $275 depending on how you view it: the report is not clear. Gas-powered vehicles would be spared the MBUF until much later. How is that fair?
One way to address this in a fair manner is to phase in the MBUF for all vehicles and phase out the gas tax. Start at a 0.5 cents per mile in Year 1, and increase it proportionally for 10 years until you get to the 8.1 cents per mile. At the same time, reduce the gas tax (and its alternative fuels equivalent) proportionally for 5 years until it is zeroed out. The MBUF can be calculated at registration or at inspection and collected then. That would affect everyone equally, regardless of fuel type, and by the end, fuel type would no longer be a factor in the amount collected. The TROC Report pegs the need to double the amount of revenue lost through a gas tax, so in principle, the 5 year phase out of the gas tax can be matched by a 10 year phase in of the MBUF without a significant financial impact in the first 5 years. I would note under Act 89, gas taxes more than doubled in 4 years. The MBUF would double in 5 years, between years 6 and 10.
The TROC seems hesitant to go forward with the MBUF now and wants to wait for national action. Oregon didn’t wait. Neither should we.
The Commonwealth still offers a rebate to purchasers of electric vehicles. Now, this Commonwealth Commission is recommending clawing back that rebate, through a fee just for EV’s, or an MBUF pilot just for EV’s. It seems that one hand doesn’t know what the other is doing. This may actually be likely as there are representatives of the Railroad Association, the Bus Association, Unions, AAA, Motor Truck Association, public transit, the Pennsylvania Diversity Coalition, and bicycle and pedestrian groups. None of the members either represent electric vehicle owners or appear to have any expert knowledge in the care and feeding of electric vehicles. Most of us don’t all own high-end Teslas or Porsche Taycan’s. Some of us own electric vehicles because of our commitment to the environment, not as some fashion statement.
Recommendations regarding EV’s that punish owners is one thing, but it is merely a symptom of the bigger problem. The recommendations move us further away from addressing the Climate Crisis. If the authors of the report are suggesting an urgency in acting to fix our revenue problem (and I agree there is urgency), there also needs to be a concomitant urgency in addressing the problems with gas and diesel-powered vehicle CO2 emissions. Ultimately, the TROC report is too narrow and too incomplete to be useful. If it were to be implemented, it would cease being irrelevant and begin being damaging.
A week ago, we took the LEAF Plus on a long delayed trip to Indiana, PA. The reason for the trip was to visit an Indiana University of PA summer archaeological field school near Blairsville. Their team is chasing down the lost town of Newport, which was established over 200 years ago and had pretensions to being not only a thriving port town on the Conemaugh, but the county seat. The town included several businesses, a hotel, a post office, and a wharf. By the mid-19th century, it had been largely abandoned. The other reason for the trip was to figure out how to get an electric car with a 200 mile range to complete a 375 mile trip. That and getting a sense of how the LEAF would perform on the interstate for an extended period of time.
We are pleased to report that we made it out and back in a very undramatic fashion. Nor were we shot at while in driving in Bedford County, even though we passed within 10 miles of Schellsburg and had a Biden/Harris sticker on the rear bumper of our foreign-badged electric car.
We threw our suitcases into the trunk on a Monday morning and headed out on the PA Turnpike with a fully charged battery. Throughout the trip, we maintained the posted speed limit, although the LEAF had sufficient power to operate at any realistic speed. It was steamy and hot on that day and we had the A/C and the radio running throughout. The A/C does draw on the battery, but not very much, only about 10 miles per charge. What did draw on the battery was the 70 mph speed limit on the Turnpike. Overall, we maintained an average efficiency of 3.7 miles per Kw hour. By reference, the week before driving locally at 25-40 mph, we were getting 4.2 miles per Kw hour. The LEAF Plus is rated at 216 mile range for its 62 kWh battery, but a 3.7 mile per kWh efficiency should yield a range of 229 miles.
As an electric, the LEAF is incredibly quiet on the road, even at 70 mph. All of the safety features were turned on, so we had not only cruise control, but sensors that slowed the car if you got behind another one. If you drifted out of your lane, the steering wheel would vibrate. Intelligent Lane Intervention (I-LI) also uses selective braking to pull the car back to the center of the lane, but it is not a full-blown self-steering system. (Remember, this is a LEAF, not a Tesla.) The I-LI is a bit creepy and took some getting used to, kind of like having an orangutan as a back-seat driver, who rests both of his arms on your forearms and pulls you left or right, depending on the mood or circumstance.
Even at high speeds, the LEAF sits on the road. Lord knows, the 3,900 pound curb weight enabled by the large battery, gives it a low center of gravity. This might be the biggest surprise of a car like the LEAF. It may look like an SUV from the outside, but rides lower. All of the systems performed well – braking, steering, A/C, what have you. It more or less drives like a car.
Charging on the Road
After the first 100 miles, we took a break at the Sheetz in Bedford, right off the Turnpike exit. In the back there is a charging area and exactly one CHAdeMO port, which fortunately was free and working. Sheetz has a partnership with the Electrify America system which provides CCS and CHAdeMO stations across the country. You flip the charging lid on the LEAF, plug in the charger, and follow the screen instructions, which also allows you to insert a charge card. For non-members, it is 16 cents a minute for a Level 3 charge rated at 50 kW throughput.
A bathroom break and snacks brought us back to the charger in 20 minutes, but we stayed around for another 10 minutes to get 21 kWh added into the “tank” for a cost of $4.81. If you want the math, we added 78 miles of range for about 6 cents a mile. As gas is over $3.00 a gallon, we got over 50 miles per gallon equivalency. And this with a premium price for electricity at the stop.
We returned to the same Sheetz on Tuesday, the 8th and 13 put in kWh for $3.21. This gave us plenty of range to drive the remaining 98 miles home. With another round of bathroom breaks and a snack, we did not linger and were on the road in 20 minutes, the time of the charge.
The Right Hotel
In 2019, we were at Indiana for a conference and stayed at the Hilton Garden Inn, just off campus. At the time we noted that it had two chargers in the parking lot, one for a Tesla and one Level 2 charger running on a generic J1772 plug. The Level 2 charger is equivalent to the one we have in our garage, so we knew that we could get a full overnight charge from the hotel, if it was available. Fortunately, it was. We’re still at the point where Level 2 (public) chargers are usually available.
When we checked in, we plugged in the LEAF and went to our rooms. For dinner, we drove into town and returned to the charger and re-plugged it in for the night. By morning, we were fully charged and ready for our trip home. For reference, a Level 2 charger takes about 10-11 hours to fully charge the LEAF Plus’ 62 kWh battery.
As a plug for the Hilton, it is a nice hotel and better than what we normally use, but having the chargers made all the difference. One point of concern, though. When we pulled in, there was a large Toyota SUV sitting in the Tesla spot, in spite of the sign there stating it was for Tesla EV’s only. We mentioned it to the clerk at the desk.
Planning, Planning, Planning
We were able to make the 375 mile roundtrip to Indiana, PA through careful planning and just a pinch of luck. We located a fast Level 3 charger en route in Bedford. We selected a hotel that had an overnight Level 2 charger. We were fortunate that both were available when we needed them. Electrify America does take some precautions to ensure its ports are accessible. If you leave your EV too long at one of their chargers, it will tell you on the app and then charge you (not the car) after 10 minutes.
We know the range of the LEAF is circa 200 miles on the open road. We tried to make sure we had a 20-30 mile range at all times. This meant we needed to make sure that we were never further than 170 miles from a charger, whether it be Level 2 or Level 3. One thing more. Most Level 3 chargers are designed to get you quickly to an 80% charge, but move more slowly after that. Part of this is to ensure your battery is protected. On paper, and 80% charge gives the LEAF an 180 mile range, leaving you with less buffer but a faster trip.
That a non-EV was taking up one of the parking spots for the limited number of EV chargers was disconcerting. I would like the hotel and other hotels to treat these spots like Handicapped Parking spots. If you are not supposed to be there, you get a citation.
Planning is clearly the key to making a longer road trip in an EV. However, all of the planning would have been for naught if the charger in Bedford wasn’t working, or the one at the Hilton. We did check a backup Sheetz in Altoona, which also has a Level 3 Charger, but did not physically visit the place. There are 3 other J1772 Level 2 chargers in downtown Indiana, one at the Nissan Dealership and two at the Borough Building. If push came to shove, we might have parked the LEAF downtown and take a Lyft or Uber back to the Hotel, or walked. It’s about 1.2 miles each way.
One would think the PA Turnpike would have Level 3 Chargers for Tesla, CCS, and CHAdeMO at every rest area. They do not. Once you head west on the Turnpike out of Harrisburg, the first charging station west bound is at New Stanton. You can get to Indiana, PA via New Stanton, but it’s 55 miles further and an hour longer. New Stanton is 175 miles from New Cumberland and about the limit of range for the LEAF, considering buffer. Since it is a west bound rest area, on the return trip, you would have to drive west-bound to get on the Turnpike, then turn around to get home. It’s do-able, but will add another 15 miles to the trip, which is already 55 miles longer. The nearest east-bound rest area with a Level 3 Charger is Oakmont Plum, just out of Pittsburgh, and too far to make part of the trip.
This is a long way of saying to the PA Turnpike, “GET MORE CHARGING STATIONS, GUYS!!!!”
Addendum – June 21, 2021
Interestingly, in the June 20, 2021 Sunday New York Times, Elaine Glusac rented a 2020 Nissan Leaf Plus for a road trip in the mountains of Colorado. Compare her experience with ours.
Plumer, Popovitch, and Migliozzi’s NYT article of March 10th, Electric Cars are Coming. How Long Until They Rule the Road, makes an interesting point, that simply selling electric cars won’t get us to carbon-neutral quickly enough. People will keep driving gas-powered cars for a long time, because they can. However, the article has two flaws. First, the authors bury the lead until the very end, a journalistic offense. Economics, and by its application, human behavior are the tools by which gas-powered cars can be removed from the motor pool. Secondly, the authors are looking at the current landscape and making typical recommendations, but are suffering from a lack of vision that this large problem requires. A too quick or incomplete read of the article puts it on the brink of defeatism.
Our love affair with car ownership shows real cracks, especially with those under 40. More young people are living in cities, using public transportation or foot or bicycle, eschewing car ownership altogether. Car sharing has become an increasing part of the transportation mix. Why own a car when you can rent it by the hour, or buy a trip through Lyft and Uber. Leasing has creeped up from around 20% in 1999 to over 30% last year. The idea of buying a car new and driving it into the ground is likely to be entombed with the Boomer generation. People may need a car from time to time, but they may no longer have the kind of emotional attachments to it that some had when listening to the Beach Boys or Elvis on AM through the crappy 9-inch speaker in the dash.
Yes, cars are being built better to last longer, but people drive older cars out of economic necessity, not love or moral certitude. People drive older cars because they have no other choice. $40,000, the average price of a new car, is a major investment. The 12-year current lifespan of cars, e.g., 200,000 miles is not immutable. Fifty years ago, it was 100,000 miles and in the 1930’s, 50,000+ miles. Cars have been engineered to last longer. Refrigerators and other major appliances have been engineered to expire more quickly. Perhaps companies will respond to the nature of future demand and produce cheaper vehicles more like a Yugo and less like a Mercedes-Benz.
Leasing trends show a correlation between recessions and depressed car leasing – economics are inexorably linked with car ownership. For better or worse, buying a car is a somewhat rational economic decision. As the authors cite at the very end of their article, economic actions, through market or policy, can make gas-powered car ownership too costly to maintain in relationship to electric cars. Gas prices and carbon fees can be economic levers to use, perhaps in conjunction with something like the formerly ill-fated cash-for-clunkers program. The economic tools available to push people toward EV’s are almost endless. The goal is simple, make ownership or use of gas-powered cars too expensive to sustain.
If the policies are successful, the last owners of gas-powered cars, such as those that bought new in 2034, will be left holding the bag. As far as what to do with the musical chairs issue of gas-powered cars facing retirement before expiration date, companies may respond by producing cheaper and more disposable vehicles. Ultimately, the trick will be to incrementally depress resale value, such as through an excise tax on new and used cars. The buy-back clunkers program implemented by itself was unsuccessful. A buy-back program, coupled with other policies that keep the cost of “ownership” high, can systematically and relentlessly removed gas-powered cars from the pool.
Electric conversions are not new. Home mechanics have been experimenting with this since the 70’s, and at the top end, I can buy a 1960’s electrified Jaguar if I have $350,000 laying around. Seriously, later model SUV’s would be good candidates for a company that could retrofit them with electric motors and batteries. Recycle or melt down the rest. Lord knows, if we can be somewhat successful in promoting electric cars, the supply of suitable gas-powered cars for conversions should be ample. Will people care? I doubt it, as long as their transportation needs are met. As far as those on the bottom of the economic ladder, their getting adequate transportation goes far beyond the issue of the nation getting carbon-neutral. But keeping them in old gas-guzzlers won’t solve these larger problems of income inequality.
The saying goes that the only sure things are death and taxes. For electric car owners in Pennsylvania, the only sure thing is death. Taxes seem to be a bit iffy. PennDOT is funded by gas taxes, registration fees, and other fees and tolls. Most of these are characterized as user fees, which over the decades has proven to be a sensible way to fund our transportation infrastructure. For 2020-21, PennDOT should get $6.9 billion for highways and bridges. Of that, 74% will come from gas taxes. Currently, the Federal gas tax is 18.4 cents a gallon, unchanged since 1993. The State gas tax is 58.7 cents a gallon. Both are folded into the pump price of gasoline. But if you have an electric car, there are no visits to the gas pump.
User Fees and the Pump
Should electric cars get a pass for helping to fund the transportation infrastructure? Having worked for DOT’s for over 30 years, I do believe that common roads and bridges, managed by government and funded by taxes and fees, are the fairest and most sensible way to maintain a transportation network. One need only look at the numerous private bridge companies, canal companies, and toll road companies that operated in the 19th century, all of which went bankrupt or out of business, leaving their wreckage to the management of the state. I presume some investors made a profit and the facilities operated in good condition for a while. Ultimately, this failed business model led to the incorporation of state highway departments and the establishment of steady funding, e.g., the gas tax in 1919. But I digress.
“Fortunately,” the Commonwealth has developed a process for collecting a user fee from electric car owners. It relies on a process known as the Alternative Fuels Tax. Each kWh that is “pumped” into an electric car is subject to a $0.0172 tax, payable to the Department of Revenue. The tax is charged at the charging station (makes sense). If you charge your electric car at a public charging station, the owner of that station is responsible for registering that station and remitting the tax on a periodic basis. If you own your charging station, as we do, that burden falls on you. You might imagine that it is a simple matter of tracking the amount of electricity used and doing a simple calculation and cutting a check. You would be wrong. This is state government, after all.
The first step is to register your charging station with the Commonwealth as an Alternative Fuels storage tank, using a Form REV-822. We did that in October 2019 and had the permit gone through, we would have received an Account ID. We finally received our ID in Late April 2021. Then we would complete and submit an Alternative Fuels Tax Report, a form DMF-101, with a check, perhaps monthly. The form never really says. This process covers “natural gas, compressed natural gas, liquefied natural gas, liquid propane gas, liquefied petroleum gas, alcohols, gasoline-alcohol mixtures containing at least 85 percent alcohol by volume, hydrogen, hythane, electricity, and any other fuel used to propel motor vehicles on the public highways which is not taxable as fuels or liquid fuels under Chapter 90.” Wood is not mentioned. (Yes, there were wood-powered cars.) Nor is the wood tax rate provided (by the cord? How many cords could a Cord burn if a Cord could burn wood?).
After waiting a year, we completed a DMF-101 for 2019 and one for 2020 and sent in our calculated taxes. Our charger does not have a meter on it, so I had to estimate our kWh usage into the Leaf. Each time we charged the Leaf, I recorded the miles travelled and the miles-per-kWh recorded in the car. That yielded the kWh used. I kept a log for each charge and totalled the kWh for years 2019 and 2020. Klugey, but workable.
I don’t consider myself particularly virtuous, but I did drink the kool-aid regarding user fees and am committed to paying our fair share for use of the road. I might be alone. No one approached me about the Alternative Fuels Tax, or how to secure a permit, or pay the tax. The Department of Revenue seemed to be a bit blasé about collecting the fees. Two gentlemen did come by and visit in November, 2019 to check out my charging station. I think they thought I was a bit crazy.
We paid our taxes for the 2,131 miles we drove in 2019 (the car was bought in September) and the 7,076 miles we drove in 2020. We are not driving a lot right now and the amount in question is less than a good steak dinner. There are probably fewer than 10,000 electric cars on the road in Pennsylvania out of over 10 million registered. Is it even worth having this discussion?
I believe so. GM is committing to an all electric fleet by 2035. California is calling for all new cars to be electric by 2035. Meeting climate goals will require the US to have a majority of its cars and trucks be electric by 2040. Relying on gas taxes to support the transportation infrastructure is unsustainable. And this does not take into account improved CAFÉ standards. Coming back to my first point that user fees are a way to support transportation infrastructure, we are going to have to come up with a fair way to collect revenue, regardless of fuel type.
The current system of collecting revenue from electric vehicles suggests the system is mysterious, broken, and failing. There are several ways this can be rectified, with and without legislation. The current method of taxation relies on measuring electric use directly from the charger. This can be modeled, relying on miles traveled and the car’s EPA-rated mpg-e. In our example, in 2020 we travelled 7,076 miles. Our Leaf is EPA-rated at a combined mpg-e of 104 miles. Using the factor of 33.7 kWh per gallon, you can estimate a miles-per-kWh of 3.09 (104/33.7). For the 7,076 miles traveled, you can estimate a use of 2,290 kWh. Taxed at $0.0172 per kWh, we would owe $39.39. All that is required to be known is miles traveled and the EPA mpg-e rating by car model.
The tax could be collected at the time of annual registration, with a line added to the form. PennDOT could provide an on-line look-up table to help. Punch in your car model and miles traveled and it will tell you the tax. Or, the tax could be collected at the time of inspection. The shop inspecting the car could calculate and add the tax to the inspection fee.
Sooner or later, VMT will have to become a larger part of the user fee equation, especially if revenue is to keep up with the need for infrastructure repair. User fees should be bifurcated into two components. The first is the fuel tax, tagged to consumption. Gas taxes would continue to be levied. Electric vehicles would be taxed at a kWh equivalency. This would reward fuel efficiency and electric vehicles, as most electric powered cars operate at over twice the fuel efficiency of gas-powered cars. The second component would be a VMT levied on all cars, which would be the purest form of a user fee. A 4 cent a mile VMT would roughly match the revenues generated from gas taxes, and together would double the total revenue, which most certainly be used to meet the current deferred need. The VMT could be phased in over several years, but would buffer the projected loss in revenue from traditional gas taxes.
Understanding we need to wean ourselves from fossil fuels, I do support a carbon fee and dividend that would also apply to gasoline. A $100 a ton CO2 fee would add a dollar to the cost of a gallon of gas. But this fee provides nothing for roads and bridges and only hastens the (good) transition to decarbonized transportation. Another discussion for another day.
Call to Action
The process for folding electric car owners into the revenue system is at best, haphazard. Most owners are oblivious to their obligations. The forms, the applications, the messaging, are all barriers to collecting revenue, especially when compared to paying the tax at the gas pump. PennDOT should be more proactive to inform new electric vehicle owners of their responsibilities. They should work with Revenue, and possibly the Legislature, to simplify the process. This will pay back handsomely as the number of electric vehicles on the roads grows.
Action is needed now if there is any hope to raise the revenues needed to maintain our roads, bridges, and transit. Recent proposals from the legislature only unfairly punish electric car owners through artificially high registration fees. Very soon there is going to be a national push to put people into electric cars. As someone worried about climate change, I welcome it. However, what good will it do when half of the cars are in the shop for repairs for pothole damage, and the other half is stuck in traffic?
On April 14, 2021, I received my Account Number to be used for my DMF-101 form.
On April 28, 2021, I learned of my mis-calculation of the DMF-101. The true rate is $0.0172 per kWh, not the $0.0137 previously reported. $0.0172 is very close to the gasoline equivalent for electric energy.
Recently, one of President Biden’s cabinet picks has come under scrutiny, largely for the apparent youth and inexperience of the candidate. Kind of a flashback to President Reagan and the then 56-year old candidate Walter Mondale 35 years ago. How times have changed. Pete Buttegieg, Mayor Pete, has been nominated (and as of February 2, 2021, confirmed) to head the Department of Transportation, a large and sprawling agency with almost 56 thousand employees and a budget of $75 billion. Almost everything you buy or touch is affected by transportation.
Mayor Pete is 39 years old and the only elected office he has held has been Mayor of a small city in Indiana. His transportation experience has largely been limited to the 18-stop bus system in South Bend, and an eternal pothole problem. In this discussion, there are really only two questions worth pursuing. First, what really is the job description for US DOT Secretary? And two, how does Mayor Pete’s credentials match up to the job? The final question will have to wait for a bit. How well is/was he doing?
What does the US DOT Secretary Do?
At the level of a US Cabinet position, the job of Secretary is the job of a manager and administrator. They are to guide the Department, following the lead of the President, and push the President’s mission down the line. Historically, some Departments are highly politicized and some are not. You could say that Secretary of State is politics played at its highest level, that it is pure politics. Some, like Transportation, or Agriculture, seem much less politicized. Much of this depends on whether the people back home are directly affected by the actions of the Department or not. I can tell you, that through the Highway Trust Fund, and the Federal Highway Administration, a part of US DOT, the dollars become local and immediate. People do care whether the roads and bridges are fixed. They care how long it takes to get to work. They care how safe the planes are, whether the airports are open or closed, and do the trains run on time. To that end, US DOT becomes one big meritocracy, performance-based, and it has to be functioning, or there will be hell to pay.
Back when I was working at PennDOT, we used to joke that we were in the land of engineers, these bloodless and calculating souls whose job it was to squeeze a few pennies out of a contract and to ignore everyone who was not an engineer. By and large, working at PennDOT was a pure pleasure, since science and not religion reigned in practice. Let’s just say when trying to figure out how to build a bridge, the engineers would consult testing results and data, not the ACLU or the Pro-Life Action League. Roads weren’t Democrat or Republican. I suspect it is the same as USDOT. I raise as Exhibit A, that although the most recent Secretary was one Elaine Chao who married to a certain former Senate Majority Leader, she did have prior transportation experience and seemed to have had a good grasp of the job and how to do it. Thinking about all of the Cabinet-level appointments made by the prior President, selecting Chao as USDOT Secretary seems to be one of the least nutty choices that was made.
Wait! This is the job?!
Under normal times, the job description would be like that of a ship’s captain, keep the vessel pointed forward and try not to wreck it on an iceberg. The little secret about DOT and most large bureaucracies like it is that there is enough inertia within to keep it moving forward on autopilot. Yes, everyone has to do their job, but that’s precisely the point. The Secretary is the main liaison between the agency and the President. Undersecretaries do most of the real work and need to have the most knowledge-base.
But these are not normal times. The President has made it pretty clear that grappling with the warming planet is an all-hands-on-deck enterprise. A one-government approach will be needed to address our activities to help or hurt the carbon balance. On this specific problem, a few Departments are key. Transportation – the sector, not the Cabinet position – contributes 36% of the CO2 into the atmosphere, and (in 2017) 29% of greenhouse gases. The transportation sector is the largest single emitter, followed by power generation, industry and agriculture. All of a sudden, the Transportation Department has a central place at this table and what happens at Transportation will largely determine the success or failure of President Biden’s climate policy.
What are we talking about here? Baby steps, like CAFÉ standards, only nibble at the edges. And yes, it would be nice to have cars and trucks with higher fuel economies. But to get to the kind of carbon neutral targets that are being proposed, the entire fleet will need to become either 100% electric or mostly electric. That includes trucks.
Biden’s climate plan gives you an indication of what lies on Mayor Pete’s plate. He wants to create a million new jobs in the American auto industry, building this zero-carbon future. He wants to improve the infrastructure, to include smart roads, transit networks, airports, rail, ferries, and ports. He wants to give every city with 100,000 residents a carbon-free public transportation system, everything from light rail to buses, bikes, and pedestrians. GM seems to be on board with this vision, but it will take much more than pliant manufacturers to get to these goals. Roads and bridges consume enormous amounts of cement, the production of which produces a lot of CO2. DOT will need to work with manufacturers to reduce the CO2 emissions from cement manufacturing. Trains are enormously energy efficient, but these are currently controlled mostly by private entities. Cooperation here will be needed to improve passenger rail service (I’m sure Amtrak would like that!). In urban areas, transit is critical to move people around, but transit has been neglected for support for decades. Soooo… much money is needed for transit. Even in Podunk Harrisburg, transit is essential and the buses will need to be converted to electric to make a difference.
Powerful interests are lined up against a climate friendly agenda. For any incoming Cabinet Secretary, the knives will be out before any meaningful action. A lot of what is being proposed will require bipartisan support. In normal times, the Secretary can guide the ship. In these times, the Secretary will have to rebuild the ship from the keel up, while it is sailing. Mayor Pete, welcome aboard.
How does Mayor Pete Stack Up (on paper)?
Pete Buttegieg is 39 years old and has been the mayor of South Bend, population 102,000, and a career politician with a very short career. How does he stack up to his 18 predecessors, who have served as US DOT Secretary since the position was created in 1967? Well, here are some fun facts:
Fully half of the Secretaries had no transportation experience prior to entering the position, neither with government nor industry.
Five had been former majors, from cities the size of Portland, OR to Denver. I would argue that being mayor of Denver or South Bend is basically the same kind of job and experience, when the mayor acts as the chief executive and not just the agent of city council.
Two other nominees were 39 years old when selected. Pete is the youngest by a few months. The median age is 45.
Basically, the individuals coming into the position have had a range of experiences, from transportation to law, to private industry, to politics. Possibly the best of the group was Drew Lewis, appointed by President Reagan. Forty-nine years old, with no transportation experience, Lewis was a former business executive and political consultant and operative. He had never held elected office. Within the company of nominated DOT Secretaries, Peter Buttegieg’s resume doesn’t stand out nor is his an outlier.
The Unanswered Question
Mayor Pete is now our Transportation Secretary. For the reasons stated above, he will have to draw on all of his political skills to move the Department in a direction that aligns with a carbon neutral future. He will need vision and help. He will have to use all of his God-given smarts. He will need to be a good listener, but lead he must if he is to succeed. From the relatively short 55 year history of the cabinet position, nothing in his resume qualifies him or disqualifies him from the job. In previous administrations, he would be able to sleepwalk his way through it and use it as a steppingstone to higher office or a lucrative career in industry. In this administration, he will have to work hard to make the kinds of changes that are needed to be made. I suspect that conversation took place a while ago between the President and Mayor Pete. For the rest of us, we shall see.
Before we get into this, I want to make some things as clear as possible. First, I am not an investment professional. I am not going to give you specific investment advice. What I am doing here is telling my story that you may or may not find instructive. Your financial situation is unlikely to be the same as mine. But I do feel safe in saying that you should do your research, become an educated investor, so that you know why you are doing what you’re doing with your retirement savings.
Over the last several years, I’ve become sensitized to the impacts our government and economy has on the environment. In particular, I’ve become horrified how our state Legislature is beholden to oil and gas interests and continually hands out subsidies and favorable treatment to an industry sector that routinely does not return the love, i.e., screws up our landscape and health at every opportunity. It seems like the history of Pennsylvania repeats. First we chop down all the forests and erode our soils. Then we dig out the coal and leave flooded mines and mine spoil. Then we drill for oil (160 years ago) and leave uncapped wells, poisoned land, and petrochemical spills. Now, it’s fracking and we face a future of abandoned and badly managed well pads, spewing methane into the atmosphere. But, I digress.
In some states, public pension funds are divesting from fossil fuel companies. These decisions are driven by public outcry over environmental pollution and a warming planet caused by CO2. There is also a sense that these companies are going to fare poorly in the decarbonized future and may be losing concerns in the long run. In the news a few weeks ago, Exxon wrote down the value of its natural gas properties by something like $17-20b, which even for a behemoth like Exxon is real money.
Unlike other state Pension systems, like CalPERS, the Oregon Investment Council, the Washington State Investment Board, and the New York City Pension Funds, our state pension fund, PSERS, does not have a policy with regard to social investing, commonly known as ESG (Environmental, Social and Governance). Given its existence as a political football and alternatively controlled and manhandled by the Legislature, it was unlikely that PSERS would adopt an ESG philosophy.
It gets worse. Our good friends at the US Department of Labor feel considering the social impacts in public and private pension fund management would be wrong, somehow. They recently finalized a rule that essentially blocks ERISA pension plans from considering ESG criteria in investment decisions. I suspect it will be reversed in the new Administration, but ESG got some troll’s attention at Labor. To paraphrase Churchill, this Administration can always be trusted to do the wrong thing, once all other possibilities have been exhausted.
For me, the bad news was that my pension fund was likely to stay strictly in the Milton Friedman universe of maximized profits and zero social responsibility. The good news was that I might have some control over other retirement funds, which are separate from the pension fund. So, if I have some control, what exactly does that mean? More importantly, what do I want?
ESG is a set of standards for evaluating a company’s operations. According to Investopia:
Environmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. Environmental criteria consider how a company performs as a steward of nature. Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates. Governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights.
ESG investing, therefore, is an approach to investing that takes these three criteria into account when making decisions in whom to place your money with. The origins of ESG investing are only about 60-70 years old. The main philosophy toward investing was and still is a focus on the bottom line, the Milton Friedman bottom line cited above. However, beginning in the 1950’s and 1960’s other criteria than the bottom line started creeping in. One of the most memorable was whether funds should participate in supporting Apartheid in South Africa. In 1977, Reverend Leon Sullivan, a member of the board of General Motors, drafted a set of principles to apply economic pressure on South Africa, principles that latter become known as the Sullivan Principles. The Principles essentially demanded that a company provide equal treatment to workers regardless of race.
By the turn of this century, more institutions have taken a ESG approach, weighing factors for investment beyond simply bottom line. One of the more compelling reasons for ESG investing is that a company that considers environmental, social, and governance factors in its operations might not maximize profit in the short term, but might be less susceptible to bad outcomes that can strike, such as the BP Oil Spill, or Liberty University and the Jerry Falwell scandal. ESG investing might not scrape the last dollar out of an operation, but it might be the most sustainable and profitable in the long term.
Furthermore, the risks to companies that do not plan for the upcoming climate crisis are likely to face those bad outcomes sooner than later. Maybe, it’s something in the water, but on today’s news feeds, there’s an article on how investors are up in revolt at Exxon over it future investments, seeking a greater stake in renewable energy.
Blackrock CEO Larry Fink just stated that, “climate change has become a defining factor in companies’ long-term prospects … But awareness is rapidly changing, and I believe we are on the edge of a fundamental reshaping of finance.” Now Blackrock is an investment firm, but saying Blackrock is an investment firm is like saying the New York Yankees are a baseball club. Blackrock is the world’s largest investment manager, with $25 trillion under its control.
And in a non-environmental cautionary tale, two members of the Sackler family are going to appear before Congress, no doubt to be grilled on their role in promoting addicting drugs like Oxycontin. Their company, Purdue Pharma is in bankruptcy, being kept alive long enough to pay out settlements to injured parties. I could not find out what its stock price was in 2000, but Purdue Pharma had sold $35b in Oxycontin alone by 2017 after its introduction in 1995. I suspect investors that followed the Friedman rule were quite happy, until the stock tanked, mired in controversy.
Defunding Fossil Fuel Companies
Most of you who have read my bio know that I am retired from State Service, and no longer working for a living. My wife, who also spent her career with the Commonwealth of Pennsylvania, and I depend on monthly pensions for income. We are fortunate that in addition to our pensions, we set up 457b accounts – the governmental equivalents of 401k’s. The money in those accounts are not expected to be needed for a while and at age 68, we do not need to take disbursements from them for several years.
That being said, I’ve wondered what that money is doing and whether it is doing any good beyond building a nest egg. I am not alone. Boomers make up 21% of the US population, but control more than half of the nation’s wealth. Unfortunately, much of that wealth is concentrated, such that the median boomer has only $144,000 saved for retirement. Wealth inequality deserves its own column, but it will be another day. In any case, most of us have something saved in a retirement account, doing god knows what.
Money is power, and the money tied up in these retirement accounts represents a lot of collective power. For those of us who have control over our investments, we face choices on how that money is working. Do we put it into casino and tobacco stocks? Do we, like my mother and her generation, keep it in government bonds? Do we buy unicorn futures? Do we even know, especially since many of us have chosen algorithm-driven balanced funds or target date funds. We let the machines do the thinking.
The Escape Hatch
(or the Trap Door depending on which way you are going)
457b funds behave much like traditional IRAs. You put the money in pre-tax, it accrues value (hopefully). When you withdraw these funds, then you pay income tax on the growth. They are attractive because they can grow pre-tax. So, my 457b funds (from Pennsylvania and a smaller fund from Maryland) are safely tucked away pre-tax. Within the Pennsylvania fund program, administered by PSERS, the Pennsylvania State Employee Retirement System, there are investment choices. Same in the Maryland MSRP, Maryland Teachers and State Employees Supplemental Retirement Plans. Most of the Pennsylvania choices are plain vanilla, as they should be. No unicorn futures here. There are a skein of retirement date funds, from 2025 to 2065 (at which time I would be 113). There are several stock index funds, for small to large US companies, a bond fund, and a Stable Value Fund (read Mattress). None of these provide ESG options. Again, plain vanilla. But I do like vanilla.
Hiding in the corner is a Schwab Self-Directed Brokerage Account. Huh? What’s this? They explain it is a self-directed account that lets me select from numerous mutual funds and exchange-traded funds, which aren’t offered through the regular PSERS agent. Best of all, any funds sent to Schwab stays within the 457b fence, meaning it won’t be taxed until it is withdrawn. Apparently, moving funds to another brokerage within this system is OK. My PSERS managers handle the transfer to Schwab and mark it in the books as staying within the 457b. Schwab gets the money and I direct investments in their website, but it hasn’t left the 457b. I feel like Alice looking through the looking glass. Or maybe Groucho trying to get into the speakeasy. In either metaphor. I am on one side of the world and this magical place exists on the other. I wonder if they have unicorn futures?
On the entry door is the fine print:
The Schwab PCRA is for knowledgeable investors who acknowledge and understand the risks associated with many of the investment choices available through PCRA. PCRA is designed for individuals who seek more flexibility, increased diversification, and a greater role in managing their retirement savings.
At least that’s more warning than you get entering the speakeasy, or the casino. I am knowledgeable only to the degree that I want to explore ESG investments, or more specifically to purge my portfolio from CO2. Usually, that and 3 bucks will get you a cup of coffee.
I gingerly enter, and discover that it is a speakeasy, but the cocktail of the month is ESG. Schwab, it seems, is interested in your money and in that regard is a total agnostic. When I first bumped into this company, my initial assumption was that the originator of this eponymously named company was the Charles Schwab of Bethlehem Steel fame. That was Charles M. Schwab. Our Schwab is Charles R., a California boy, still among us. The only irony is that I am using the company he founded to invest in things I doubt he would support. He is a big Trump supporter and for other conservative Republican causes. But I appreciate his agnosticism when it comes to investing.
The list of ESG funds runs to 8 pages, single spaced, two columns, and includes mutual funds and ETFs. Many of them are mirror images of the funds in the PSERS lists, only like non-fat milk, remove the objectionable parts, whether it be fossil fuels, or tobacco, or gun manufacturers, or whatever. Sadly, I never found the unicorn futures fund. Probably for the best. I needed to order a cocktail with something better than rainbows.
If you are looking for specifics and numbers, I will disappoint you. First, they aren’t relevant to this post. Secondly, as I said in the beginning, everyone’s situation is different and what works for me probably doesn’t work for you. In any case, I took all of the money in my Maryland and Pennsylvania 457b’s and spilled it onto the table. Had to unfold some of the bills, put the Euro’s in a separate bucket, and pick up some of the loose change that spilled onto the floor. Once order had been restored to the table, I divided the pile in two. Half was going to stay with the existing Maryland and Pennsylvania managers; half was going to Schwab. The half that stayed was largely bonds and fixed income instruments, with low risk. The half that was going to Schwab was the more aggressive stock funds. Within the Schwab ESG lists, I found a a large cap stock ETF (A), a small cap stock ETF (B), something called a global clean energy ETF (C), and an international ETF (D). I’ll spare you the specific names of the funds, but they all have desirable attributes by either including “good” companies or excluding “bad” companies.
US stock companies
excludes stocks of certain companies in the following industries: adult entertainment, alcohol, tobacco, weapons, fossil fuels, gambling, and nuclear power.companies that do not meet standards of U.N. global compact principles and companies that do not meet certain diversity criteria
US small cap companies
adhere to predetermined ESG, controversial business involvement and low-carbon screening criteria
Global clean energy companies
based on the WilderHill New Energy Global Innovation Indexcompanies worldwide whose innovative technologies focus on clean energy, renewables, decarbonization, and efficiency
International small, medium, and large cap companies
Screened for certain environmental, social, and corporate governance (ESG) criteria
companies in the following industries: adult entertainment, alcohol, tobacco, weapons, fossil fuels, gambling, and nuclear power.*companies that do not meet certain standards of U.N. global compact principles and companies that do not meet certain diversity criteria.*
All in all, it took about a week to set up the Schwab accounts and transfer the funds and purchase the ETFs. There were no extra charges in doing this, other than the ongoing charges to each fund, which would be accrued within the Maryland and Pennsylvania managers or within Schwab. I hope by now, you understand that I am not a day trader. I’ll leave the trading up to the fund managers. In any case, I am not inclined to review these choices more than once or twice a year. Set it and forget it. I hope to not need any of these funds for at least 3 years and possibly longer, so this is ultimately a longer term investment strategy. I might or might not provide a performance report in 2024.
If you have a retirement fund or are saving in a retirement fund, you should become familiar with the basics of retirement investing and know what your goals are.
If your company or the fund provides you with basic investing training or course, take it. You should know generally why you have picked the funds you have.
Now we come to the main point: Ask yourself this question. Do I have any social responsibility in investing, or is my sole goal to maximize my profit? Do I agree with Milton Friedman, or do I believe that companies and by extension, I, have some responsibilities to the public square that requires additional considerations? If you need some research to be able to answer that question, you can read this article from Nerdwallet.
If you do believe there is a social aspect to pension funds and investing, and you have a retirement fund that you control, then you may wish to do additional research into ESG investing and determine if there are better funds for your investments. Better in this case, means not just returns but the ESG principles described above. And since not all ESG funds have the identical objectives, more research is warranted.
If you’ve made it this far and have a retirement fund and/or are saving toward retirement, consider yourself lucky, and smart. A fourth of Americans have no retirement savings or pension.
Good luck, all and thank you for you patience on this one.
The pandemic has changed our lives in many different ways, but I think it’s enduring impact will be on our language. Before March, who had heard of Zoom, let alone “zoomed” a call. No one other than CDC had been thinking about pandemics, at least not in a 100 years. COVID-19, or just plain COVID, is now the shorthand excuse for any behavior not previously considered normal. As in, “Why are you going to the grocery store at 2 AM?” “COVID.” “Honey, why is our liquor bill tripled this month?” “COVID” And so on.
In this COVID year, our language has evolved to handle the moment. It always does. One term that has especially come to the fore is “essential worker.” Well, just what is an essential worker? Homeland Security has conveniently provided us with a formal definition.
However, in this 19-page definition, I am hard-pressed to identify a non-essential worker. So to fall back on common sense, maybe we can define an essential worker as someone who does a job that the society really can’t do without, that if they weren’t doing this job, somehow the whole infrastructure of our country would fray and fall apart. I’m OK with that definition, because it includes the workers at the meat processing plants (sorry, vegetarians). It includes police, nurses, your dry cleaner, folks who mail out your credit card, your handy (Ace is the Place) hardware guy, now person, and your local school’s lunch lady, now person. It does not include athletes, stationers, florists, philosophers, or anthropologists. Which is a shame and a mark of governmental short-sightedness. Ten months into this pandemic, I could use a greeting card, some flowers, a football game, and some understanding of what it all means. Am I alone?
COVID isn’t the only large problem we face today. Before and after this pandemic is over, we have faced and will face economic problems of income inequality and income inequality’s children, hunger and homelessness. There is the 400-year legacy of systemic racism to be addressed. The planet is burning up. Some of these are more existential than others, but all are crises and all need our attention. We have conveniently defined essential workers for the COVID crisis, but shouldn’t we also be defining essential workers for these other crises, too?
Anthropology as an Essential Degree
I am biased as all three of my college degrees are in Anthropology, even though I specialized in archaeology. I find that anthropology has served me well in navigating my world over the last 50 years and has given me the tools to process and address the current crisis listed above.
Within these definitions, I believe are some key concepts, building blocks, if you will. First, anthropology is a scientific pursuit, meaning it relies on observation and evidence for testing hypotheses. Anthropology is an observation-driven discipline, with data gathered through fieldwork (in both cultural anthropology and archaeology, and often in physical anthropology). Good anthropology requires engagement with the world, to the degree that we’ve coined the term “armchair anthropologist” as a form of derision, equivalent to calling someone a dilettante (although there is a functional difference).
Another building block is the concept of culture. While there are as many different definitions of culture as there are cultural anthropologists, I think we can again find the nut of the matter as culture involves shared beliefs within a society that is passed down through learning, or as one of my old text books states:
A system of shared beliefs, values, customs, behaviors, and artifacts that the members of a society use to cope with one another and with their world and that are transmitted from generation to generation through learning. (Daniel G. Bates and Fred Plog. 1990 Cultural Anthropology. Third edition. McGraw-Hill, Inc. New York.)
The third building block is the understanding that the human experience encompasses diversity in terms of culture. There are a lot of ways to skin a cat and a lot of ways cultures address similar problems. This diversity permeates social and political organization, economies, language, belief systems, and how we physically adapt to our environment. One size does not fit all. When a politician argues that free-market economics is the natural and only way, we tend to point to successful pre-market and non-market examples. When someone in the room says, “everyone thinks the same,” we duck and cover. When clergy talk of universals in religious behavior, of what is natural and right, we point to other religious systems, drop the mike, and leave. Anthropology makes us naturally contrarian, but at least we know dogma when we see it.
Studying cultures from an anthropological perspective forces you to consider the interdependency of the various parts of the culture, how the social system is connected to the economic system; how religious beliefs affect language and vice versa. Over the years, the terms to describe the interconnectedness have changed, from organic, to functional, to holistic, to systems, but they all convey the same idea that to understand part of the culture, you need to also understand the whole.
The fifth building block is a bit more elusive, but I believe it to be the understanding of the difference between the emic and the etic, especially as it affects our understanding of our own culture and how we operate within it. An emic viewpoint is from within the culture, seeing the activities of the group from the culture’s own perspective. An etic viewpoint is viewing a culture from outside of it, using those comparative or objective standards of anthropological science. Anthropologists look at culture from both perspectives but it is the methodology of looking from within and looking from without that is special to anthropology. From a practical standpoint, when we drink the Kool-Aid, we know that we are drinking it.
Anthropology is a study of cultures, of societies, of groups of humans, not of individual humans. We are social creatures and have evolved as such. Almost always, we will look at the group behavior before looking at the individual behavior, and even when looking at the individual behavior, we reference it to the group.
As an archaeologist, a subset discipline within anthropology within the United States, anthropology affords us a time depth missing in other social sciences. We can build on the written historical record by using the material cultural remains of a society. What is left in the ground are facts that are not bound by the emic interpretations of that society. We can’t interview peoples no longer present on the earth, but we can listen to their stuff. Archaeologists also have a special take on systems, understanding that what we see as a system is a snapshot in time and not necessarily immutable.
With Regard to COVID
Back to COVID. Anthropology has prepared me for responding to the COVID crisis in several ways. First, the respect for science lets me acknowledge that this is a novel virus and that medical science will guide the best public health response. Even the concept of public health is one that we can grasp fairly quickly.
From the CDC website:
Public health is “the science and art of preventing disease, prolonging life, and promoting health through the organized efforts and informed choices of society, organizations, public and private communities, and individuals.” — CEA Winslow
For us, it appears to be just applied medical anthropology, i.e., using the methods of medical science applied holistically to a society, understanding how the society will understand and accept or at least react to those applications, and finding the best ways to foster those informed choices.
I believe most anthropologists would look at the last 11 months and our government’s response to the pandemic and shake their heads. The politicization of the crisis, even down to wearing masks, brings its own special problem, one that must address the belief systems of nearly half of the population that is unwilling to embrace public health guidance, where it exists. Our future and our lives depend on getting the 30% of Americans who aren’t worried about getting the virus and the 40% who believe that the current Administration is doing a good job responding to the Pandemic to adjust their behaviors going forward.
First, while we can expect an effective vaccine to be widely available by the middle of next year, it won’t be worth a damn if most people don’t take it. The WHO estimates are that 60-70% of a population needs to be vaccinated to develop herd immunity, which will protect those unable to take a vaccine as well as the rest of us, and offer a chance to stamp out the outbreak. However, current polling indicates that less than half of Americans are willing to get the vaccine as soon as its available. Applied medical anthropology is the best means we have available to advise public health officials to encourage all segments of the society to get vaccinated, including those dis-inclined.
Secondly, until the vaccine is widely available, the troika of masks, social distancing, and washing of hands could greatly reduce the current outbreak. Yet in many communities, these simple and effective actions are viewed with scorn. If everyone took the mask mandate seriously, we could probably save a third of the expected deathsbetween September and February of next year.
Much has been written about what not to do with regard to masks and social distancing, i.e., don’t directly challenge individuals, don’t tell them they’re wrong, don’t scold. However, not much has been written about what to do and this is where anthropologists, applying their craft can help change behaviors, if not beliefs.
We will need medical anthropologists now more than before to advise the public health leaders on change behavior. Necessary, but not easy.
With Regard to Income Inequality and the “K” Economic Recovery
An economic anthropologist would have no problem understanding that the US economy has essentially two tracks, one for the well-off and one for everyone else. One for the stock market, and one for the unemployed and underemployed. Therefore, it would be no surprise that the so-called recovery of the US economy following the pandemic’s entry would be two-tiered, or the so-called “K” recovery.
Our economic anthropologist would understand the economic sub-cultures that exist in our society and be as concerned with food insecurity as price-to-earnings ratios. They would understand that the unemployment rate doesn’t include individuals who have stopped looking for work because their sector has dried up. And our economic anthropologist would see the inequalities built into our current free-market economy, whether it be in housing, education, job opportunities, advancement, diet, or health.
Finally, our economic anthropologist would systemically understand that the economic recovery is wholly dependent on addressing the pandemic, instead of arguing for two tracks or one versus the other. The two are systemically interconnected.
A harsh eye on what is happening today doesn’t necessarily offer the solutions, which have ranged from neglect to state control and everything in between. Without understanding the problem, there really can’t be an effective solution. (Hint: we have seen what neglect has brought us through the continued inaction of Congress. Maybe we should try something different.) And finally, the systemic nature of culture would inform us that when many people can’t put a roof over their head and/or worry about how they are going to get the next meal for their families, other parts of society, including institutions, belief systems, government, etc, are all going to be affected, and not in a good way. And as a final editorial flourish, folks are tempted to think about the collapse of society fueled by socialists and anarchists tearing things down. This certainly was the Republican message during the elections. While this does occasionally happen (see Russia 1917), the more common model is an attack from the right and a push toward authoritarian control (see Germany 1933). Militias, not mobs. Never a good look for a democracy.
With Regard to Race
Race is a social construct. It does not exist as a biological fact. Again, to be clear. Race is a social construct. It does not exist as a biological fact. And thank you, Franz Boaz for that clear message, and for demolishing Madison Grant’s arguments of The Passing the the Great Race a hundred years ago, even though Grant’s ideas still have currency today.
I could spend several blogs talking about race, but much useful stuff has been written lately and I don’t feel the need to review the landscape. My training as an anthropologist has allowed me the frame to see the concept of race for what it is and isn’t. It has also taught me to react when I hear phrases such as “All lives matter,” “they do ____ naturally” or “it’s in their blood,” “I’m not a racist,” “some of my best friends are ____,” etc.
It took 400 years to get into where we are with regard to race relations and systemic racism. We aren’t going to get out quickly or easily. But until we understand the problem(s), we aren’t going anywhere. Anthropologists could be useful guides in that journey.
With Regard to the Climate Crisis
Finally, to the elephant in the room, the burning planet. Conrad Kottak, a cultural anthropologist has defined ecological anthropology as how cultural beliefs and practices helped human populations adapt to their environments, and how people used elements of their culture to maintain their ecosystems. Well, as a species we certainly had adapted to our environment, but this adaptation has spun out of control and our behavior of emitting too much carbon dioxide is rapidly leading us to soil our nest. We haven’t maintained our prime ecosystem, the earth, and we need to quickly change our behaviors.
Anthropologists understand the ecological implications of too much CO2 and what it is doing to our planet. Anthropologists can help societies devise social responses to adapt to our ecosystems so much less CO2 is emitted. It’s one thing to look at the burning Amazon rainforest and say that it’s no good. It’s quite another to understand the underlying economic and social drivers of that burning and to help the Brazilian economy reward its Amazonian occupants with something other than what can be earned from cleared forests.
The solutions to the climate crisis are going to require multi-faceted approaches that need to systemically interact. We can’t just stop driving gas-powered cars and say we’re done. People laugh at the Green New Deal as something beyond the climate crisis, but what the Green New Deal gets right is that it understands the linkage between the economy and the environment. I recently heard a commentator state that our economy depends on fixing the climate crisis in the same way that our economy depends in the short term on ending the COVID pandemic. They are interlinked and inseparable.
Anthropology as the Basis for Learning
Anthropology is the one field that brings together a toolkit for addressing our major crises, a toolkit comprising a scientific approach, a concept of culture, an understanding of diversity amongst peoples on the planet, an appreciation of the systemic interrelationship of different aspects of our society, a method of observation that allows us to simultaneously look from without and from within, and a moral foundation that recognizes we are social animals and all that goes with it.
The US does not need 330 million professional anthropologists. However, I do believe we would all be better served if we started teaching this toolkit in elementary schools and encouraged specialists to get foundational training in anthropology before going off to their preferred discipline, whether it be economics, law, public policy, ecology, or medicine. Anthropology could be the essential degree to prepare us to face our current and future crises.
In the recent lame-duck Pennsylvania Session, our legislators in their infinite wisdom have sent forth Senate Bill 845. It is a relatively simple bill that substitutes a $175 Electric Vehicle Road Use Fee (EVRUF) fee on electric vehicles each year in lieu of the current alternative fuels tax. More for electric buses, less for electric motorcycles. This is legislation that punishes electric car owners by imposing on them a “fuel tax” more than twice that for a gas-powered vehicle. While all car owners should be contributing to the maintenance of our state’s highways and bridges, this particular method hurts for several reasons.
The Electric Vehicle Road Use Fee (EVRUF) is Excessive
The $175 Fee is presented as a Road Use Fee. Gas-powered vehicle owners pay a Pennsylvania gas tax, which currently is $0.587 per gallon. This is in addition to a Federal gas tax, but for purposes of this discussion, we are only comparing Pennsylvania taxes. The average Pennsylvania motorist drives 12,435 miles per year. They are rewarded if they buy a fuel-efficient vehicle as opposed to a gas guzzler. If you are the average motorist driving a Toyota Corolla Hybrid that gets 52 mpg, you will end up buying 239 gallons of gas and paying $140 a year in Road Use Fee taxes. If, on the other hand you are driving a Jeep Grand Cherokee Trackhawk that gets 13 mpg, you will end up buying 957 gallons of gas and paying $562 a year in Road Use Fee taxes to the Commonwealth.
One of the attractions of an electric vehicle is that they are “fuel” efficient. Although they do not consume gasoline, the EPA has rated electric cars in mpg-e, i.e., miles per gallon electric equivalent. The four most common electric cars in Pennsylvania are the Nissan Leaf, the Tesla Model 3, the Chevy Bolt, and the Ford Focus Electric. They average 113 mpg-e among them, more than twice the efficiency of a hybrid like the Corolla or Prius. If you could treat them as gasoline equivalent, for the purposes of exacting a Road Use Fee, this fleet averaging 113 mpg-e would consume the equivalent of 110 gallons of gasoline, yielding $64 in gas taxes. In this model, fuel efficiency is rewarded with regard to tax.
In fact, there is a mechanism for electric vehicle owners to pay a road use fee. It is called the Alternative Fuels Tax, and like the gas tax, is charged at the pump as it is used. In this case, though, the pump is a charging station. The owners of charging stations, including individual electric vehicle owners who have home chargers, owe the Commonwealth $0.0172 for each kWh put into their vehicles for fuel. A REV-822 form is submitted to the Department of Revenue to register a charging station, and a DMF-101 form is used to report the alternative fuels consumption. It is possible to convert mpg-e into kWh. Our fleet of electric vehicles would consume 29.83 kWh for each 100 miles driven. Driving the average 12,435 annual miles would require 3,709 kWh in electricity. At the rate of $0.0172 per kWh, our average electric vehicle would owe $64 for the year, which matches up nicely with the gasoline equivalent model previously estimated.
Both methods for estimating the Road Use Fee come up with $64 for the year. The proposed $175 per year Road Use Fee is almost 3 times as much as for an equivalent gasoline powered vehicle, if by equivalent you mean a gas-powered car getting the same mpg-e. To put it another way, it is the same as adjusting through legislation the fuel economy of an electric car to 41.7 mpg. If you drove a Kia Optima Hybrid, a Ford Fusion Hybrid, a Lexus ES Hybrid, a Toyota Avalon Hybrid, a Honda Accord Hybrid, a Toyota Camry Hybrid, a Toyota Corolla Hybrid, a Honda Insight Hybrid, or a Toyota Prius Hybrid – if you drove any of these cars, you would pay less in Road Use Fees than any of the fleet of electrics cited above. Each group gets good gas mileage, but only electric vehicles don’t use gas.
The Electric Vehicle Road Use Fee (EVRUF) is Punitive
The Fee as implemented would charge each electric car owner an additional $175 at registration. Regardless of the miles to be driven that year or future ownership, the Fee is applied at the beginning of each registration year. If for any reason, the full year is not driven, the fee is still paid.
Secondly, the Fee is irrespective of mileage. Whether you drove 25,000 miles a year or 8,000 miles a year, it is still the same $175. That is not a road use fee. It is an excise tax. This last year, we drove a total of 7,258 miles in our Nissan Leaf. We used a total of 1,892 kWh as measured. We should owe $32.54, not $175.
The Fee is targeted toward electric vehicles, even though there are several non-EV cars that generally pay less in Road Use Fees. Natural gas or fuel cell (hydrogen) vehicles are not considered, yet they also would use the roads and pay much less in Alternative Fuels Tax than the average gas-powered car.
The Electric Vehicle Road Use Fee (EVRUF) Exposes a Real Problem and Finds the Wrong Solution
The Federal gas tax is almost 90 years old, but hasn’t been changed since 1993. Bill Clinton was in his first year as president. Whitney Houston’s “I Will Always Love You” was the number 1 song that year. Beanie Babies and the World Wide Web were introduced that year. And the gas tax was raised to 18.4 cents per gallon, where it remains today.
Pennsylvania’s gas tax has grown due to Act 89. Ten years ago it was 32 cents per gallon and has nearly doubled since. However, even those increases do not address the current need in revenue to maintain the current infrastructure of roads and bridges, which has been estimated at $7.2 billion beyond existing revenues, which has come mostly from the gas tax.
The future does not look cheery and the original model of relying on gas taxes to build and maintain our highway system no longer works. The Federal Highway Trust Fund, originally funded by gas taxes, has run out of reserves and is being propped up by appropriations from Congress. Which means it is running in the red. Inflation has taken it’s toll. In 1993, the Federal tax represented 16% of the cost of a gallon of gas. Today it is 7% of the cost of a gallon. Fuel efficiency has been increasing, despite presumptive relief from the Trump Administration, and will continue to increase, further reducing revenue, as the tax is pegged to the gasoline consumption, by the gallon.
Finally, we get to electric cars and other alternative fuel vehicles, such as hydrogen. In 2018, there were a million electric cars on the road in the US, out of a total number of 274 million registered vehicles. The UK has committed to selling no new gas-powered cars by 2030. California has committed to phasing out new gas-powered cars by 2035. This is the future, whether we like it or not. Even before gas-powered cars are eliminated from our market, the percentage of electric vehicles will hit 50% possibly in the next decade or so. What of the premise basing infrastructure repair on gasoline sales? Failing quickly.
Currently, there are all of 7,700 electric vehicles on Pennsylvania’s roads today. At $175 a pop, the Commonwealth would reap a gross of $1,347,500, or about 2/3 of one bridge replacement. Squeezing electric vehicle owners isn’t going to solve any of the massive problems facing our roads and bridges. However, focus on electric vehicles does illuminate the problem. Unfortunately, the legislature is finding its solutions in the wrong places.
VMT, or vehicle miles traveled is a concept that has been around a long time within DOT’s. So has the concept of assessing road use fees based on miles driven. In some ways, this is the fairest and most stable form of funding as it more truly reflects the actual use of the highways. If you go to the hardware store and buy a gallon of paint, you pay your 6% sales tax. If you buy 2 gallons of paint, you pay twice as much tax. Simple as that. The more you use the more you pay. A VMT-based tax would include on an equal footing electric or hydrogen vehicles and would de-link revenue with fuel efficiency.
If we are to consider fuel efficiency a virtue, then the best approach might be to keep a gas tax in some form and blend it with a VMT, so that there would be some advantage to having a fuel-efficient vehicle, but that everyone would pay something to maintain the roads and bridges.
While our legislators seem to have put their finger on a problem, they’ve lunged for the wrong solution. They should try again. Governor Wolf, you should veto this legislation if it gets to your desk.
Most auto reviews take the reader through the paces based on a very short experience with the particular vehicle. A good reviewer will answer the right questions and put the car through a variety of conditions to give as rounded a picture as can be done quickly. This review is different, as it covers a full 12-month experience for our Nissan Leaf, which was purchased September 21, 2019.
There’s not much to add regarding the driving experience of the Leaf, except to confirm that it rides like a very quiet “normal” car. The acceleration is definitely more than what we had been used to with the Toyota Prius or other cars we had owned. It took some time to get used to the e-pedal feature, which does offer passive braking and improved travel economy. Once mastered it was my preferred mode. The safety features are definitely appreciated, especially the lane change warnings. These were optional and can be had on any new car, but they are a big help to us. That and the Sirius Radio feature that lets Linda listen to the Beatles channel when she wants. The car is roomy enough for 4 adults and the cargo area is large enough for 6 bags of groceries or other packages.
We continue to charge the Leaf in our garage. When the battery gets to 10%, we charge it overnight. A full charge takes about 11 hours. In the morning, it is ready for travel. On average a charge is 50 kWh.
Efficiency and Range
Anyone who owns an electric car is concerned about range. Don’t let them tell you otherwise. Until Level 3 charging stations are as common as gas stations, range is a concern. Yes, you can plug in to any 110 volt outlet almost anywhere, but to get 30 mile added will take 8 hours. Even a 240 volt outlet will take 90 minutes. Level 3 charging stations and ones that work with the Leaf configuration are few and far between.
The 2019 Leaf SV Plus is advertised with a range of 215 miles, based on a 62 kWh battery. During the course of the year of driving the Leaf, the range varied from a low of 192 miles to a high of 266 miles, with an average of 238 miles per charge. As would be expected, winter was the hardest on the battery, drawing electricity for heater, defroster, and often windshield wipers and lights during the trip. The lowest ranges were on December 20th and January 10th. Conversely, the highest ranges were in June through October. Highway driving is a slightly higher draw of electricity than hill and dale city driving, probably due to the consistently higher road speeds. The longest trip we took was to Pottsville on December 30th in the dead of winter, a distance of 120 miles round trip, mostly freeway driving. That trip was made at 3.3 miles per kWh, which translates to a range of 205 miles.
Another way to calculate efficiency is to look at miles per kWh. The promised efficiency for the Leaf was 100 miles per 32 kWh (3.125 miles/kWh). Overall, during the course of the year, the battery averaged above what was advertised for the Leaf, 3.84 miles per kWh. The driving year encompassed 7,258 miles, consuming 1,892 kWh of electricity. The MPGe (miles per gallon electric equivalency) that was advertised for the Leaf was 114 for city driving and 94 for highway driving. The combined MPGe for this last year was 129.3, again higher than the claims by Nissan. (Converting electricity to gallons is done by multiplying each kWh/mile by 33.7.)
The attraction of the Nissan Leaf was that it is an electric car and does not use fossil fuels. It replaced a 2008 Buick Lacrosse that got 18 miles per gallon. In the year we’ve had the Leaf, we’ve put on only 7,258 miles, which was probably limited due to the Pandemic. Had we put those miles on the Lacrosse, we would have consumed 403 gallons of gasoline. As each gallon of gas produces 19.6 pounds of CO2, we prevented the release of 7,900 pounds of CO2 into the air, almost 4 tons. So, good for us. Except you need to know that every year, Pennsylvanians put almost 40 million metric tons of CO2 (a metric ton is about 2,200 pounds) into the air from the burning of gasoline, almost all of which is due to driving. Pick your analogy – bailing out a boat with a teaspoon, Sisyphus, etc.
You may ask where the electricity we used to charge the Leaf came from? Good question, as using electricity generated from coal-fired power plants defeats the whole idea of reducing greenhouse gas emissions. Burning coal, one kilowatt hour of electricity produces 2.21 pounds of CO2. Our Leaf used an estimated 1,892 kWh of electricity during the year. Had all of the electricity been produced by coal-fired power plants, we would have been responsible for the emission of 4,181 pounds of CO2 or a little more than 2 tons. This would have been half of what the gasoline fueled Buick would have produced. OK, but not great.
However, we used our rights to pick an energy provider to find one that produced 100% solar and wind power. Ultimately, we did not add CO2 to the atmosphere by using electricity to power our car. Our solar panels replaced about 80% of our electric use during the year, the difference purchased by a green energy provider. If you are interested in making sure that your electricity is non-polluting, you can select providers that are committed to green energy. The program is administered by the Pennsylvania Utilities Commission, under the name, PaPowerSwitch.
For the available suppliers, you can filter your search by Renewable, PA Wind, or Solar to find providers that can sell you 100% renewable energy.
Alternative Fuels Tax
I worked for PennDOT for over 25 years and value the importance of the Federal and State Gas Tax to provide funding to repair our roads and bridges. Leaving aside the fact that the current fee structure is woefully inadequate to address the current needs, I think it is a good governmental solution to require all users of the road to help pay for its maintenance.
Currently, the Federal Gas Tax is 18.4 cents per gallon (not changed since 1993). The State Gas Tax is now 58.7 cents per gallon. Going back to the Buick example, the 403 gallons driven by the Buick would have resulted in $310 in taxes paid for roads and bridges. By the way, if we used the Nissan Leaf rating of 129 MPGe, we would have been responsible for 56 gallons equivalent of gasoline, resulting in $43 in taxes paid for roads and bridges.
If you don’t have a gas-powered vehicle, are you still responsible for an equivalent gas tax? The answer is yes. But the Commonwealth of Pennsylvania does not compute taxes as suggested above. The method is as follows. The alternative fuel is recalculated into BTU’s and normalized. For electricity, the converted tax is $0.0172 per kWh.
The 1,892 kWh consumed in the last year should yield an alternative fuels tax of $32.54.
This is the easy part. Had I been able to charge the leaf at a public charger, the owner of that charger would have been responsible for the alternative fuels tax. The taxing source is where the electricity is provided. We have a charger in our garage, and therefore have become an alternative fuels distributor. Every month, I should submit a DMF-101, otherwise known as the Alternative Fuels Tax Report to the Department of Revenue. In October 2019, I submitted a REV-822, AKA, the Application for Alternative Fuels Tax Permit, which would get me a Permit Number. In November, two gentlemen from the Department of Revenue came by the house looking for my charging station, which was inside my garage. I gave them the necessary information and showed them the facility and sent them on their way. Without the Permit Number, I cannot complete my Tax Report. I am still waiting for my Permit Number. However, if anyone from the Department of Revenue reads this and can give me instructions on where and how to send my check, I am ready to get them the $32 and change for this last year.
We can laugh about this now, but as the country goes to non-fossil fueled vehicles, the loss of revenue from electric cars and other options (hydrogen) will force a reckoning over user fees. VMT (vehicle miles traveled) will have to be part of the solution in the near future if we still want to have roads and bridges in any kind of state of service.
Cost to Own
We are currently paying $0.14 per kWh for 100% renewable electricity from our provider. This prices the 1,892 kWh needed to drive the 7,258 miles into a cost of $265, or about 3.6 cents per mile. The Buick Lacrosse, at 18 miles per gallon, cost around 15 cents per mile to operate at current gas prices. Beyond that, inspection of the Leaf was $33.87 with tax. It does not require an emissions test and sticker, which would have added an additional $18.00, nor does it require an oil change, which would have occurred at this time. Apples to apples, the cost to run the Buick for the year would have been around $1,200. The cost to run the Leaf was $300. We continue to get oil change discount coupons from Faulkner Nissan and don’t know whether to laugh or cry.
As long as we are using the Leaf for local travel or shorter trips, it is a more than suitable replacement for a gas-powered vehicle. It is quieter than any car we have owned. It lacks an engine, radiator, emission controls hardware, exhaust, catalytic converter – these are all parts that are neither needed nor missed. Even compared to a new gas-powered car getting 40 miles per gallon, it is still much cheaper to operate, and that factors in gas at the lowest levels in years. We keep the Prius as the second car and a car that would take longer trips. As we have taken few long trips in this year of COVID, we have largely relied on the Leaf for our transportation, and we expect to do so in the future.