President Biden has been very busy during his first two weeks in office. He has signed over 20 executive orders undoing a number of Trump’s own executive orders and implemented several key agenda items. In addition to these executive orders, Biden has shared several legislative goals that he hopes to get passed in the coming months, now that the Democrats have a majority in both the House and Senate. His agenda relating to renewable energy, CO2 reduction, and climate change is both impressive and expansive in its breadth and scope. Based on recent reporting, here are a few of Biden’s key goals that he hopes to achieve:
- Converting the U.S. fleet of vehicles from gas to electric. This is significant as the U.S. owns over 650,000 vehicles (only 4500 of which are currently electric), which are made up of passenger vehicles, heavy-duty trucks, vans, and ambulances. The combined fleet uses 375M gallons of gas annually.
- The challenge here is availability. While there are many electric passenger cars available today, there are surprisingly few options for electrified vans, heavy-duty trucks, and ambulances. Many companies are working on this problem, but mass production for these types of vehicles is still several years away. One of the companies leading this charge, Tesla Motors, just announced that they are suspending production of its new Semi truck until its new battery plant in Nevada is completed.
- De-carbonize U.S. power production by 2035. This would be a significant milestone for the United States. Power production makes up roughly 31% of all U.S. carbon emissions. Creating enough renewable electricity is a solvable problem. There are currently gigawatts of wind and solar online and many more scheduled to be built in the coming years. Renewable energy is financially competitive with fossil fuels in most parts of the country, and the model is proven and replicable.
Creating renewable energy in relation to when it is needed, however, is the real problem. Renewable energy sources (primarily wind and solar) only work when it’s windy and when the sun is shining. However, people use electricity during all hours of the day, and aligning renewable energy production with usage is where this plan runs into significant difficulty. The only simple path the U.S. has currently for solving this problem is battery storage, but batteries are still costly and have limited life spans. As more “giga-factories” for batteries come online, this problem will diminish, but it will take years to achieve this.
- Net-zero emissions for the U.S. by 2050. This goal would necessarily include:
- Electrifying America’s fleet of vehicles
- Shifting our energy production entirely to renewables
- Zeroing out emissions from agriculture
- Dramatically lowering or eliminating carbon emissions from the country’s building stock.
Electrifying the U.S. Airline Fleet
We have already covered some of the challenges that electrifying the country’s vehicle fleet would pose. The one area not covered was zeroing out carbon emissions from the country’s airline fleet. This is a very tricky problem to solve as batteries have limited capacity and are very heavy, which makes them challenging to use for flight applications. Other solutions have been posed, such as using hydrogen, but this technology brings its own host of challenges such as containment (hydrogen is the smallest element and has shown itself to be very difficult to contain without leaking), as well as protecting against its highly explosive nature. The short answer is: there is no clear path currently to solving this issue. We will have to see what new technologies are brought to bear on this problem in the coming years.
Zeroing out Agricultural Emissions
Zeroing out emissions from the Ag sector is a relatively straightforward problem to solve on the energy creation side of the equation. However, there are two specific challenges that still need to be addressed to fully zero out emissions for this sector:
- Electrifying farm production equipment (machines like threshers, balers, tractors, etc.). While large manufacturing companies like John Deere are spending significant amounts of time and money researching this issue, few products have been brought to market, and almost no production is in place. This would require an entire revamp of the manufacturing process for this market, which means the government would most likely have to offer some sort of assistance such as Federal Tax Credits (much like the tax credits offered to purchasers of electric passenger cars) to advance this market through the initial R&D and ramp-up phases of production.
- Nullifying the methane produced by farm animals like cows, pigs, and chickens. Farm animals (specifically cows) create an enormous amount of methane through their digestion process. Methane is 21 times more potent than CO2 as a greenhouse gas and has been identified as a significant problem for this sector. A number of companies are attempting to tackle this issue by way of anaerobic digestion machines that take in manure as a feedstock and process this into high-grade fertilizer and methane as the primary outputs. This process shows real promise, but very few actual installations are in place currently. I believe further incentives will be needed to kick this process into high gear.
Zeroing out Emissions from the U.S. Building Stock
This is also a solvable problem as many financially viable technologies are already available. Technologies such as Energy Management Systems (EMS), LED lighting and smart control systems, higher-efficiency air conditioning units are all being installed in new and existing buildings all over the country. This will continue and accelerate moving forward and probably doesn’t require additional help from the federal government to achieve.
To support the achievement of all of these goals, Biden hopes to commit over $400B in funding from the U.S. Government. This will, of course, require approval by both the house and senate, but if passed, this money will go towards incenting manufacturing companies to create cheaper and more efficient technologies to solve the issues listed above. Additionally, the market could see extensions and potential enhancements to the current Federal Investment Tax Credit program, as well as a broadening of the technologies eligible to receive the tax credit. In addition to the significant number of new renewable energy projects this program would create, the goal would also be to create 10 million high paying new jobs in the process. This would clearly be a big win for the blue-collar jobs market and would go a long way towards stabilizing the eroding middle class in America.
While Biden’s goals are certainly ambitious, the majority of them seem possible, or maybe even probable. It will merely be a question of whether Biden can get the U.S. Congress to come along for the ride?
