Chairman of Pohanka Automotive Group - Geoffrey Pohanka

Episode Transcript

Speaker 1 (00:01):
Welcome to the nationally syndicated Energy Mix radio show produced
by the Energy Network Media Group. The Energy Mixed Radio
Show will give you an inside look at the energy
industry and how it affects you by talking with industry leaders, experts,
and government officials on the Energy Mix Radio Show.

Speaker 2 (00:17):
Hi, and welcome to the Energy Mix Radio Show. I'm
your guest host, Brent Bennett. I'm the policy director for
the Life Powered Campaign, which is the energy policy initiative
of the Texas Public Policy Foundation based here in Austin, Texas.
I haven't seen you all probably about six months or so.
It took a little break to take care of the
Texas Legislative session. But we're back today with a great

(00:40):
topic talking about the complete u turn that the Congress
and administration and the courts have done on electric vehicle
subsidies and how all those are ending. Of course, today
this earlier, this earlier this month of the the federal

(01:01):
tax credit for electric vehicles was eliminated. But that's only
the start. There's many other things that have been changed
that are going to completely reshape not just the market
for electric vehicles, but the American automobile market at large.
And so I think it's a really interesting topic and
something I think that's probably one of the more underreported

(01:25):
energy policy stories of the last few years. And with that,
we've really fortunate to have Jeff Pahanka. Jeff is the
chairman of Pahank Auto Group, which is a network of
auto dealerships mostly in the Mid Atlantic, but they also
have a couple here in Texas. They've been operating for

(01:45):
over one hundred years. Family owned and operated for over
one hundred years, and Jeff is also the former chairman
of the National Automobile Deos Association, which one of the
primary associations for his industry. So I can't think of
really any one better who can come and talk to
us about, you know, what these how we got to
where we are with these policies, what's changed, and how

(02:07):
that's going to affect the autumn market in the future. So, Jeff,
welcome to the show. Thanks for joining us.

Speaker 3 (02:13):
Great great to be here. Thank you.

Speaker 2 (02:16):
So I think we want to start with kind of
you know, how do we get to this place where
there were so many policy levers and working to you know,
subsidized electric vehicles, right, you have not just the the
seventy five hundred dollars tax credit that's been around for
a couple of decades now. But you also had the

(02:38):
fuel economy standards, which have now been effectively gutted because
the Congress took away the penalties. There's no enforcement mechanism
for the fuel economy standards. You have, you know, what
was a broad push from you know, the big automakers
and also just the broader investment industry to get on

(02:58):
board with evs. There's this idea that EV's are going
to be, you know, rapidly taking over the auto market.
You had the prior administration, uh, you know, creating a
de facto EV mandate by setting greenhouse gas regulations on vehicles.
You have states that have been trying to you know,
set our missions regulations that effectively mandate the production of

(03:21):
more evs. All these things that have been in place
there are now being changed and so kind of you know,
take us through from your perspective as a as a
dealer working with customers. Help you know how we got
to this point kind of what's the what's the land
of the land right now?

Speaker 3 (03:36):
Well? Great, Uh, just to say this, I own two
evs right now, I've on total four. I've driven EV's
of one hundred thousand miles, and so I know a
lot about the subject. I'm here in Washington, d C.
And uh close to the government closer regulation, and so
I've watched this very closely. And the genesis of the

(03:57):
EV thing is too basically one has that came on
the scene and was very successful. The manufacturer looked at success,
they said, if we just follow their footsteps, will be
equally successful. Well, Charles Lindberger's first to fly solo across Atlantic,
who was second, Well, we don't really know. And Elon
really got a headstart and did really well, and copying

(04:18):
him was not necessarily a recipe for success so far. Secondly,
the government, largely driven by the fear of climate change,
have been promoting electric cars and the transitional electric cars.
And it's just as cars, electrification of everything, you know,
electric buildings, getting rid of fossil fuels, natural gas, and

(04:41):
I think a lot of this is beholden, you know.
And I follow energy pretty closely, which I know is
an important topic and for transportation, and in Texas it's
the wind and solar, which there's a lot of wind
in Texas but not so much in Maryland and Virginia
and that's but those are two primary drivers of our transition,
and it's coming to a brief halt right now. And

(05:04):
a lot of people don't know. Most people experience with
water hammer is they don't know what it is. If
you turn off a faucet all at once, it goes
like this. That's the energy of the water having to dissipate.
And we're getting going to get that at with the
ev transition right now, the valves being shot off, and
there will be repercussions from that.

Speaker 4 (05:26):
Yeah, And.

Speaker 2 (05:29):
I think that it's important to recognize that the policy
drivers here were manifold, right, So it's not just it
wasn't just that. Yeah, that in the timing of it
was such that, you know, you started with of course
Tesla going public in twenty ten and their stock price
going through the roof. But at that same time, you
had the Obama administration ratcheting up the field economy standards

(05:53):
for the first time in many years, and also proposing
and ultimately enacting the first regulations on greenhouse gas emissions
from vehicles, which if you think about it, you know,
you can't put carbon capture on a on a vehicle tailpipe,
right the only way to lower greenhouse gas emissions from

(06:14):
vehicles is to either dramatically improve the fuel economy so
it's using less fuel, or to replace it with a
zero emissions vehicle like an EV. So it was all
those things coming together and it and I think that
really the tax credit, which again expires, is just expired recently.

(06:37):
That gets talked about the most because consumers see it,
But what they don't see is the ways in which
automakers have to basically cross subsidized. They have to raise
the price of gasoline vehicles in order to meet these
regulations and bring down the cost of evs in order
to sell more of them. And how from your perspective
as a dealer, I mean, how is that? How have

(06:57):
you seen that kind of move along? Have you kind
of seen the pressure to you know, raise gas price,
gasoline vehicle prices, lower EV prices, get the sales right
and and then and also how is that track with
the actual cost of producing EV's. I mean, obviously the
cost of producing evs is going down, but not as

(07:17):
rapidly as as you know a lot of people expected.

Speaker 3 (07:20):
Right, Well, it's always in mistake when government decides winners
and losers. I mean that the blood the investments they've
made Slender and others have been horrible, horrible, uh uh
And and basically they've been picking winners and losers. And
the free market is very dynamic and moves really quickly
and uh and it's very efficient. And when every government

(07:43):
gets in with regulation deciding how things will go, it
could really mess up things tremendously, and they've really messed
it up now. The thing is we're in the world
economy and the manufacturers are global producers and and to
China's a very important market and difficult market for manufacturers,
and they're promoting electric cars. And it fits into Chinese

(08:05):
foreign policy because they import a lot of oil, they
have an air quality problem, and they've cornered the mineral
state they could. Automobiles are a major source of employment
and in China they have to keep the economy growing.
And since ten percent GDP is cars, they've invested a
lot in it. They could not compete gas cars so much,

(08:31):
so decided to get at evs. And because of that,
if you're a manufacturer, when most of the manufacturers are
global and you want to be trying to market, you
have to have vvs and that continues today. Europe also
is working towards one hundred percent evs by twenty thirty five,
which is where we were on course for pretty much
at least in some of the California states, And so

(08:54):
these manufacturers are still facing can is still one hundred
percent ev twenty thirty pot, So they're still facing with
this even though they're not in the United States, and
that's going to be a drain on their resources. If
you look at evs, look, the technology is good, the
performance is good, but there are a lot of Danjory
barriers to wider adoption. One does the purchase cost. You know,

(09:18):
it's so funny, it's so many false things being said
about things today. One is there are fewer parts in
a need. When they contribute, they attribute the battery being
one part. Well, there's really hundreds and thousands of parts
in the battery. They're actually more parts in the d
than a gas car. So let's they say it's only
one battery. There was only one motor, you know, but
they that's something. The purchase cost is higher, substantially higher

(09:43):
for an EV because it's more costly to produce half
the cost as the battery costs of the battery and
EV depreciation is is faster than a gas car and
because the demand isn't quite there on the used car side,
insurance costs are higher on an EV, substantially higher than
the gas car because they cost more to repair. And

(10:04):
that we have a lack of charging infrastructure. Well what's
that really mean. Well, if you don't have home charging,
you really are in a different situation than if you
have to rely on the public charging network. Your home
charge is very convenient if you're uses a commuter car
driving around in your metropolitan area, it really works well
and it's his cost effective. But only twenty five percent

(10:26):
people ever have home charging. Half the people don't own
a home with than a con or a department they
won't have and half of homes are older, they don't
have the electrical service they have their anchorage to put
a home charger in without a substantial additional cost. Because
a deal in North Carolina had an older home you
want to put a charger, it costs eight thousand dollars
to put the charger in, for example, because he didn't
have the electrical service to put a charge home level

(10:48):
two charger in. So if you have to rely on
the public charging network, it costs more, it's inconvenient, it
takes longer, and oftentimes they're broken or not functional. So
those are all major barriers. Now, the misnomer is that
evs are zero emission. Well, they're not zero emission. The
power comes from somewhere largely fossil fuels, and then making

(11:10):
electric car battery requires mining to five hundred thousand pounds
of minerals, extracting those wres and processing them. The carbon
footprint on an EV is actually larger than a gas
car at the factory door, substantially larger. You'd have to
drive that car for a lot of years to even
be equal to an ice car, and you may never

(11:31):
be equal did palm where how your power grah is configured?

Speaker 2 (11:34):
Now, if you're in.

Speaker 3 (11:34):
Norway with largely hydro electric power, yes you would probably
be a faster return a couple of years. But if
you're in placed where there's a lot of coal or
fossil fuels natural gas, you may never be a lower emitter.
So it's it's kind of a misnomer. These are zero
emission cars, and the more problem electric vehicles is that

(11:54):
the average buyer makes over one hundred and sixty thousand
dollars a year. It's a that's an affluent person's car
and they don't need subsidies.

Speaker 2 (12:04):
Yeah, I'm going to go back to that point our
next segment here about how you know, who do we
think is going to be buying evs going forward now
that the production the retail cost is actually going to
be more aligned with the actual production cost and what
other vehicles might people be purchasing instead. So let's take
a break here and we'll be back on Energy Mix
Radio to show in just a second.

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Speaker 2 (13:02):
Hi, and welcome back to the Energy Mixed radio show.
I'm your guest host Brent Bennett with the Life Powered
Initiative at the Texas Public Policy Foundation, and I've got
here with me today Jeff Pahanka, chairman of Pahanka Hata Group,
talking about the impact of the end of the all
the different EV federal EV subsidies on the auto market,

(13:23):
and in the last sek we kind of gave a
little bit of history about how we got to this
point and how it was that there's so much policy
that's been put in place which now is largely being
rolled back, both by Congress and the and the administration,
not just the federal tax credit, but also the feel
Economy standards and the credits that were being used to

(13:44):
subsidize EV's, the greenhouse gas emission standards, and also the
waiver that allowed states to set their own to facto
EV mandates. All of that is now gone, not gone
in four years, Like a lot of the substies for
electricity like wind and soul are gone now. So it's
really a really abrupt shift. And I wanted to kind
of get your inside, Jeff on kind of what how

(14:06):
you think that shift is going to play out over
the next couple of years. I think that, like as
we said in the last segment, ye're you still have
a lot of people that are going to want to
buy evs for either performance reasons or because they still
want to have a lower emissions car, or because it
just makes sense for them because they're using it as
a commuter car and it's very convenient for that purpose.

(14:28):
Who do you think think will continue to buy evs
and how much of the market will that occupy? And
then what other cars do you think might be a
little more favored now, especially since the fuel economy standards
are not just gone for evs, but all vehicles now
or can be reconfigured, they're not going to have to
meet fuel economy standards. How do you think that's going
to play out now?

Speaker 3 (14:48):
Well, the growth of evs has slowed the hown in
the past year, and there was year on year growth
and it's actually leveled off around seven percent eight percent.
And there's some people with you know, basically EV's been
just by affluent people and that's not their only car
in their garage. They have a probably talk a sports car,
you know, the average tesla. I read this and Tesla's
very popular in California. It's only driven six thousand miles

(15:10):
a year, so it's just one of several cars in
your stable, and that says something. So these the folks
buying evs don't need subsidies, but a lot of people
chase subsidies. So that's seven or eight percent, probably would
climb by fifty percent. And where will it level off,
Maybe level off at four or five percent, They won't

(15:31):
be the three, five, fifty, one hundred percent that some
people said for that. Some of the barriers I've talked
about because a really great article people want to know
every aspect about EDS if the Charging Network, Energy Minerals.
It's written by Mark Mills, and it's the titled Electric
Vehicles for Everyone, Impossible Dream, Electric Vehicles Starving the Possible Dream.

(15:53):
It's chock full of everything you'd want to know about
EDES and all the barriers. We'd have to increase mining
eight hundred percent to make all cars evs. That's just
not going to happen because the quality the oarders are
in decline, and we don't like mining in this country
to begin with, but bias against mining, so we have
to import all those minerals, which still Chinese largely control
around the globe. Now there are a couple of things

(16:15):
that have not been done. We can talk about what's
been done. The handcuffs are off to an extent for
the manufacturers, they have a lot more freedom to build
what people want to buy, which is a good thing.
Now we have a Creertia Review Act, which knocked California
out in the states to follow California. California was requiring
thirty five percent of vehicle sales in the twenty six

(16:37):
calendar year the EV and moving up to one hundred
percent at some point in twenty thirty five. So that's off.
They can't it's a federal rule. Now basically there's still
rule Biden see you two rule that would require fifty
five percent of vehicles the United States to be EV
by twenty thirty two. That's sales that has to be

(17:00):
changed because no GASCAR meets that requirement. The only way
to meet it is with more EV sales. They say
it's not a mandate, Well, it is a mandate. It's
a mandate on manufacturers, so it's not a mandate on consumers,
So consumers just stop buying. Probably under that that has
to be Undone. You have the U two endangerment finding,

(17:22):
which is the process of being undone that U two
is a dangerous pollutant, which it is not. If you
look at this the geological record, there's no correlation with
U two and temperature over one hundreds of millions of years.
CAFE corporate average fuel economy still exists. They have to
come up with the number we should have fuel efficient cars.

(17:44):
It may be more closely to the Safe Act, which
was under by the Trump's first term about three percent
improvement every year, which is technologically possible without having to
go with EVS. So there's still some things that have
to be done to idle the manufacturers again, who are
faced with other issues in Canada, of Europe, China where

(18:06):
they'll have to have EVS. But I think that the
move is in the right diaction. We have the adults
in the room making decisions now, they're making the right
decisions for the environment, for the economy, and let the
other people in Europe's going down the drain with regulations.
Just tribing the cost or energy through the roof makes

(18:26):
them less competitive from a manufacturing standpoint, and people just
have less money to spen. So I'm pretty excited about
the moves we're making for the auto industry and and
the general economy. When the economy rolls, car sales role.
So we we we're locked up with that.

Speaker 2 (18:44):
Yeah, and we definitely definitely want to see the economy
roll a little more, hopefully over time as the regulatory
burden starts to relax a little bit, hopefully teariffs don't
bite too hard. I think that's a great, a great
point you made about how you have most you know,
most people buying ev as a second car. Both of
my neighbors own Teslas. My next door neighbors, Uh, they

(19:05):
have a Tesla and an Suv. They got kids, they
got kids, they got to haul around and you know
all that. So so the Tesla is great for for
you know, the commuter car, and then they've got the
SUVs for you know, all in the kids. And I
think over time you'll see more you know, you've already
seen Rivan kind of trying to get into the suv market.
I think that s batteries improve over time, you'll see

(19:27):
more of them use for SUVs, but you're still going
to need something for you know, other uses. Baticularly pickup trucks,
so that's you.

Speaker 3 (19:35):
Know, big in Texas pickup trucks, and then manufactures thought
if I put a I need to preserve my pickup truck.
That's where their margin is. That's where they make their money,
not small cars and trucks SUVs. But I just put
a battery in it, it'll continue to sell. The problem
is those batteries are very large. It costs a lot
of money. The EV trucks are very expensive. And then

(19:56):
if you're towing a boat or something, you can't just
go to char a public charger in Block five charging stations.
You have to unhook that boat what is somewhere, go
charge for an hour and a half and go hook
it back up. And we know all know, AHAs hooked
that ball back up and that's just not going to work.
And the large truck sales medium de trucks, it just

(20:18):
doesn't make any sense.

Speaker 2 (20:20):
Yeah, like the guys that you know come out and
you know, lowriard and stuff and have the big trailer
behind them there. There's no way, yeah, no way you
can do that with the you know, with the EV
battery right now. So maybe in the future, but we've
got a lot of things to figure out first. So
all right, well, that's the end of our our second segment.
We'll come back in just a couple of minutes. This
is the Energy Mixed Radio show.

Speaker 5 (20:43):
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Speaker 2 (21:22):
Hi, welcome back to the Energy Mix radio show. Talking
about the end of all the electric vehicle subsidies and
what that's going to mean for the auto markets going forward.
I wanted to take a few minutes, Jeff and talk
about how these how these changes will impact hybrids and
the hybrid market. I'm actually my first job out of

(21:42):
school was working for a material supplier to companies that
were trying to build battery manufacturers that are trying to
build start stop in hybrid vehicle batteries about ten years ago,
and uh and hybrids make a lot of sense because
they're used a very small battery, you know, ten times
smaller than an EV battery and can give you a

(22:05):
big boost and fuel efficiency. And they're also one tenth
of cost, so that's just a little bit of a
marginal cost of people looking to you know, improve their
fuel consumption. It's a really good option. And yet, under
the way federal regulations were being promulgated, electric vehicles got

(22:27):
a nearly seven times multiplier on their rated fuel economy.
So if they rated fuel economies one hundred miles a gallon,
they were getting almost seven hundred miles per gallon worth
of fuel economy credits, and hybrids weren't getting that. Hybrids
are just being rated at their actual fuel economies. So
automakers have had a huge incentive to produce more of

(22:48):
vs try and lower the cost of these vv's relative
to hybrids. And now that's gone. Not only is the
fuel economy standards gone, but also the Eighth Circuit recently
struck down the rule that allowed them to have that multipliers.
So now you's are going to have to be you know,
get credits according to the rated fuel economy. So how
do you see the hybrid market kind of playing out

(23:09):
now that you know this leveling out is occurring.

Speaker 3 (23:13):
Well, government regulations are largely responsible for the manufacturers, you know,
building hybrids to get increase your fuel economy. See the
manufacturer facing a twenty five thousand dollars fine per car sold,
or they didn't meet the fuel economy standards, which is
tremendous you know, cost which they could not afford to pay,

(23:33):
so they started building hybrids. And the thing is, consumers
started buying the hybrids. See, consumers do want their fuel economy.
And a hybrid actually is a battery electric car just
as smaller battery as you said, and you have reachanitor
of braking. And the thing is is a return on investment.
If you keep the car long enough, you'll save money
with a hybrid, and hybrids get maybe thirty five percent

(23:54):
better fuel mileage than just with a non hybrid car.
So it is something that people do want and we're
seeing more of them. And as you said, Toyota did
it an analysis. They said, you're trying to convert to
a very expensive barrier electric full baryo electric vehicle technology
where if you want to reduce CO two, it'd be

(24:15):
much faster if you went and promote it made one
hundred percent of cars hybrids, which you could do, they
would be affordable to people. Then that that much more
cost and you would have a low, a faster reduction
CO two if you want the hybrid route versus full
barrier electric. But of course Toyota caught hell. They had
chairman had to resign from it. Toyota caught hell. I mean,

(24:40):
how caught hell too, because they were going, you're going
slow in eds and how's this happening. Well, they actually
were really smart about it. And Toyota is in Texas,
they're a great organization, and they were right. But they
they again they caught a lot of flak by being right.
Sometimes when you're right, you're in trouble initially. In the

(25:00):
long run, you end up on the right side of things,
and they and they were right about that. So hybrids
are very popular, they're a good technology, they're affordable, and
they can be rarely produced, and we're going to see
more and more of them. And then but then you
have the state governments who are losing tax revenue, fuel

(25:22):
tax revenue. So now they're starting to put additional fees
on hybrid owners to come the lack. So here's a
government that wants you to reduce your fuel consumption, but
they don't want to lose their money on fuel taxes.
They're gonna put a search charge on your on your hybrid.
How does that work? You get?

Speaker 2 (25:42):
You have it both, and we're gonna have to ready
to find other ways to pay for roads, you know,
And that's yeah, that's a that's a whole other subject
of conversation.

Speaker 3 (25:50):
So sink I looked into that the Highway Trust Fund
is rated for other non highway projects. Up to fifty
percent of the money goes to a turtle road crossings
and things like that, or mass transit, so they don't
this the money's not going to the highways that's collective
or highways going somewhere else.

Speaker 2 (26:08):
Largely, Yeah, they have to kind of write size those
things and get the right people paying for things too.
I mean, that's kind of what we're trying to do
with toll roads and building more tour roads here in Texas. Yeah,
I think that. I think, you know, you look at
what I see into the future is you look at
where hybrids were when they first came out twenty five
years ago with the first priests, and they weren't they

(26:30):
were very good cars, and I mean that was kind
of tough to It was tough to kind of make
a car that was competitive and make it a hybrid.
But now you've seen over time that technology evolve and
hybrid cars now are they look and feel much like
regular cars. They just get better gas mileage there and
they're a little more a little more expensive, but not

(26:51):
a lot more expensive. I think that, you know, for
commuter vehicles, evs will also follow that trend. You know.
Having come from the battery business, I know that you know,
batteries get better over time, it's just very slow, and
so I think we'll see that evolution too, and I'm
excited to see how that evolution occurs without the government,
you know, putting their foot down on the pedal. So

(27:13):
we'll go ahead and take another quick break and then
we'll be back to talk a little bit more about
the future on the Energy Mixed Radio Show. And welcome
back to the Energy Mixed Radio Show. I'm your guest
host Brian Bennett with our guest Jeff Pahanka talking about
the future of the auto industry now that EV sub
steeds are gone, and kind of what are some of
the policies that, you know, we need to change and

(27:35):
really make permanent going forward. I think that there's one
of the things I think is key, especially in the
auto business where your development timelines are many years. The
policy whiplash that we've seen over the last decade plus
has been I think quite quite damaging to the industry.

(27:55):
It's been difficult to assess what automakers. Automakers are trying
to assess what they should be building, and Ford is
out there losing you know, they've been reporting losing buildings
of dollars on their EV business, trying to get that
built up. Uh, And now all of a sudden, all
the policy drivers that were behind that are now you know,
going away, which I think you know a lot of

(28:19):
a lot of them will welcome, but also they want
to make sure that, Okay, if if they're going to
go away, will they will they stay gone? Will things
stay as they are? And I think that something really
important that you brought up earlier was the you know,
the the regulations, including the Endangerment Finding in particular, that

(28:40):
need to go through the courts, and the courts need
to I think make a clear distinction about you know, okay,
here's here's what can cannot be regulated in the Clean
Air Act, and Congress needs to affirmatively, you know, make
those decisions right and and not and not just allow
the President to go, you know, unfettered and put regulations

(29:01):
on every source of CO two emissions he can he
can find. So how do you what do you think
going forward is the kind of the the importance of
having policy certainty in how that you think will help
both the automakers and also your businesses get the right
products to consumers and keep car prices down. Going forward, the.

Speaker 3 (29:23):
Lean time for omobiles years. You know, AI and others
will probably reduce the timeframe. Maybe in China they can
take build a car in two and a half years
or something, and that they can do it and they
reduce the time will align a lot, But generally they
need years to decide. The average car model is five
stays five four or five six years. You know, you
change the model and they need certainty and they haven't

(29:46):
had certainty. I'm concerned the manufacturers will be have a
lot of costs. Now the government has been subsidizing people
to buy cars, but also subsidize the manufacturers to make ebs.
They've been spending billion by manufacturers to build battery plants,
build electric car plants and other things. And will they
be saddled with these additional costs which will? I mean,

(30:09):
affordabillion of cars is a really problem. Before COVID, the
average car was around thirty six thousand dollars. Now it's
forty nine thousand, so affordability only twenty five percent of
consumers actually can go buy a car, a new car.
The average car is thirteen years old, and you know
that car, thirteen year old car is not as safe,
not as fuel efficient as a newer car. So fleet

(30:29):
turnover is really important for a safety and emission standpoint.
So I'm worried there'll be a lot of costs in
the system. Rivian was given six point five billion loan
by buying to build a plant Georgia. Now they're losing
three five thousand dollars per car where they're ALINOI plant.
Do they need a second plant right now? Well, I
guess when you have free money, you can do a
lot of things. And there's a lot of costs in

(30:50):
the system. Now HANDA I think has figured out what
to do. They want to have flexible manufacturing. They want
to up an assembly line can make a gas car,
a hybrid or eb on the other and then you
can meet true demand, manufacturer demand versus trying to force
something in the market maybe a market doesn't want. Now.
The real question is if you have a democratic administration

(31:11):
the next go around, will things just snap back to
where they were? That will not happen. The Congressional Review Act,
which eliminated California from making their own emission standards, is
a permanent thing. It cannot be adjudicated, it cannot be
challenged in court. So I think that's finalized. The SEW
two endangerment finding the EPA was allowed by the Supreme

(31:34):
Court in two thousand and nine to name se you
two as a pollutant. This is found in a lot
of regulations that face construction and the transportation that's being
overturned right now, and that likely would stay permanent because
of certain court cases which said a regulatory body cannot
make major questions, decide major issues a cost consumers without

(31:57):
congress expressed approval. Did that without Congress, and so they
will probably won't be able to do that again with
US Congress names it as one of the six critical pollutants. Yeah,
along with six critical plllutants. I mean, say one thing
about air quality. Our air quality is clean and it's
ever been, at least in our lifetimes. The EPA, you
can look this up since nineteen eighty, the six primary

(32:19):
air pollutes have declined seventy eight percent, seventy eight percent
since nineteen eighty, even though the GDP has grown three
hundred percent. So our air is very clean. And if
CU two is not a pollutant, they say it is,
you know, so it actually plant food, you know. And
if you look at the geological records, U two has
never been a driver of temperature. Ever, there have been

(32:40):
ice ages with more CO two today. So I think
that those some things will behind us permanently. Now, I'm
sure they'll work around the edges, but I think a
lot of the changes they're making will be permanent, which
will help the industry up going forward.

Speaker 2 (32:58):
Yeah, I agree. I think our position at the Foundation
is that Supreme Court needs to it needs to rule
definitively that Congress must authorize and create a structure for
regulating CO two emissions if they want to do that
that we can't just allow the President to manhandle the
Clean Air Act to do The Clean Air Act was

(33:19):
not designed with greenhouse gas regulations in mind at all.
This is a very different thing from actual pollutants, right
like certain smog that have local impacts, direct impacts on
human health, not just you know, CO two and other
greenhouse gases are diffuse in the atmosphere. They have a
global impact on warming, but not a direct impact on

(33:41):
human health. And so if we want to regulate that,
it needs to be under entirely different structure. And our
hope is that the Supreme Court ultimately when these cases
get up there takes sense says yes, that that's how
this must work. And if Congress wants to do something
about is, then it needs to amend the Clean Air

(34:02):
I can create a separate structure just for these emissions,
and then in that way you can do it in
a way that's sensible and not just in this kind
of manhandling had hawc way. So I think that's yeah,
that's a really that's a really good point. And again
also making sure, as you said, that the states don't

(34:22):
have the ability just to do whatever they want that
there is some consideration of you know, if a state
does X with their emission standards, how that's going to
impact the rest of the country. So we hope that
you know, there is some certainty there going forward, and
also that you know, the automakers are able to you know, balance,
like you said earlier, balance what they're having to do
here versus what they're having to do globally. At least

(34:45):
if for America can be that anchor of freedom and
policy sanity that the automakers can, that will help us
to prosper relative to the rest of the world. So
I look forward to hopefully that happening more in the future. Hright,
we'll come back for our last segment and talk a
little bit about some of the positive policy changes that
we should also be made going forward. This is the

(35:07):
Energetics Radio Show.

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Speaker 2 (36:12):
All Right, welcome back to the Energy Mix radio show,
and we want to talk a little bit about kind
of what do we think the future of transportation is
now that that uh there's kind of been more of
a reality set with regard to electric vehicles, at least
in the US, and uh, there will obviously be continued
development of the technologies and particularly batteries. My former business, uh,

(36:36):
you know, is always always developing and finding new ways
to uh, you know, help improve transportation, et cetera. But
now we're going to do it at a pace that
consumers want rather than that the government dictates. And I
think that's that's a great thing. But you know, looking
looking at the rest of the world too though, you know,
just the importance of personal transportation I think is something

(36:59):
we take for granted in the US because we've had
it for so long. But you know, I've been to
you know, several countries in the developing world where, you know,
the best thing that most people have personal transportation might
be a motorbike. They can't afford cars, but as they develop,
they're going to want to have cars. And the Chinese
are at that point now where the Chinese auto industry

(37:19):
is just exploding because they're now just getting people are
just getting to the point where they can a lot
of them can afford cars. The Chinese becoming a big
player in the auto manufacturing, you know, globally. So, Jeff,
how do you kind of see both the consumer market
in the developing world and also the manufacturing market and
how that might impact those of us in the developed orle.

Speaker 3 (37:42):
Well, I think demand for cars will continue to be
really robust, not the United States but elsewhere, you know,
I think what's really important for us is to preserve
affordable personal transportation. And that's so people can live where
they want to live, work where they want to work,
and take their families where they want to work. It's
really a source of freedom, actually, and we're getting away
from affordable personal transportation. But if you look at a

(38:05):
global standpoint, you know, CO two, a fear of C
two has been driving the bus pretty much here with
electrification and all these mandates on cars, fuel economy, that
type thing. We're long waves away from the oil air
of oil embargo, and that was really the genesis of
fuel economy standards to reduce our consumption. Now we found
a lot, a lot more oil permian basis in other places,

(38:28):
and we have a vast supply now, so that's not
the big danger right run out. I think from a
global standpoint, I think people want cars. They want cars
in the undeveloped or developing world for the same reason
we do. And if you look at CO two is
an issue, which I look at that because it's the
root cause of a lot of things. If everything they

(38:49):
said about C two is true, rising sea level storms,
adaptation to the only solution because the undeveloped world wants
to develop and they can only do that but with
affordable enner fossil fuels, winness solar won't cut at for them. Now,
we should want the undeveloped world or developing world to
develop because two things happen. They become cleaner, become more modern,

(39:11):
and their population growth is arrested. Now the developed world,
every single country absent immigration, has of losing population. Their
birth rates below two point one needed to sustain population.
So if you're concerned about a global population growing, it's
in the undeveloped or developing world. And as they develop,
that population growth will be arrested and they'll become cleaner

(39:35):
and more modern. So that's a good thing and as
something people have to think about. But then the auto industry,
I think is going to be healthy. Look, the car
is one of the most perfect things ever designed, even
back to the beginning an engine in four wheels. It
really hasn't changed. Propulsion change. Maybe it'll go to hyergen
that's proving to be elusive and complicated and expansive. But

(39:58):
I think the pres that personal transportation is really important.
I'm not saying you shouldn't have mass trans so things. Yes,
we need a balance transportation portfolio, but I think, uh,
I'm pretty excited about it. And I think some of
the changes coming from Washington are really good for our country,
good for the world. But the world's a little slow
to catch on to what they should be doing. They
might have to learn the hard way where they can

(40:21):
start going direction we're in.

Speaker 2 (40:25):
Yeah, And I think that the point you made about
just the fact that that personal transportation is so important
to freedom, I mean, it's one of the I would
put that alongside electricity is really two of the foundations
of the modern world. You know, back in before we
had automobiles, you know, you had you had a horse,

(40:47):
which you know, maybe not everyone could afford. A horse
is also very hard to take care of horses. My
friend Isaac Oro wrote a great piece on substack recently
about and you go look them up energy bad boys
plug them right here on substack wrote about how his
his you know, great grandfather, how to use horses, that

(41:08):
was using horses to farm their land and then switched
over to tractors. Just how much of a difference that made.
And it was also true for people how to use
horses for transportation or other animals or just had to
travel on foot. It really is one of the most
transformative elements of mon society. I like I said, I
put it out there with electricity and the you know,

(41:29):
I think it's the developed world, it's it's it's it's
hard for us to in the developed world to just
unless you've been to undeveloped countries to see how lacking
personal transportation is. The best most people have are maybe
motorbikes or something that can kind of get them around,
but they can't carry a lot of stuff, whether they

(41:49):
can't take their family on it, or you'll see rickshaws
in India with like eight people piled onto them because
that's all they can afford. And so I think, you know,
for us to really liberate people's lives in the developed
world in the developing world, we have to be able
to produce affordable cars. That's really important for us and

(42:10):
for them. And so the extent that we as Americans
can lead on that and be out there in front
producing the best technology, the most affordable, reliable cars out there,
I think that that's if we can do that, then
we'll be successful well into the future.

Speaker 3 (42:27):
Big challenge will be China. China as the largest automobile
market as twice a size as the United States are
more or say a lot more population. I'm sorry, and
China see see China is has been learned from the
West how to make incredible cars and they're leading in
electric vehicles. We mentioned reasons for that, but the difference

(42:50):
is not about profit loss in China, it's but job creation.
The Chinese government only peers one thing to people. They
must keep the people happy. How they do this by
growing the economy. And since cars are such a big
employer Chinese, China is subsidizing the car manufacturing. This could
undermine global car manufacturers because they can produce cars cheaper, faster,

(43:12):
in some cases better than other manufacturers who don't have
the subsidies that Chinese governments giving them. So the big,
the big grill in the room is China, and we'll
have to see how that plays out because it's going
to undermine a lot of global manufacturers because of the
unfair It was a level playing field. We compete with anyone,
but it's not, and we have to recognize it for

(43:34):
what it is.

Speaker 2 (43:36):
Yeah, I think that's a that's a great point. To
end on that.

Speaker 3 (43:39):
Uh, you know, we have to.

Speaker 2 (43:41):
I think we have to understand how how you know,
critical it is that we maintain our ability to you know,
to manufacture vehicles that we you know, we were the
ones who pioneered this, uh, you know, over a century ago,
and you know we've the freedom of personal transportation is
flourished within the freedoms that our society has given us,

(44:04):
and we have to keep building on it. We have
to maintain that. And it's up to you know, my
generation and my kids to you know, take that and
moving forward and build on it. Because if we if
we see that to other countries, if we see that leadership,
or we seed our freedoms to you know, government overreach,
then we're not going to have the same things that

(44:24):
we've been that we've been enjoying for the last hundred years.
And we want to we won't just want to maintain that,
We want to build on it. So I hope that
our change and you know that we can get policies
consistent with that going forward for the rest of our
lives and our children's lives as well. So thanks again
Jeff for joining us to really appreciate all the insight
and the points you bring to the discussion, and look

(44:47):
forward seeing again in the future.

Speaker 3 (44:48):
Thank you great.

Speaker 2 (44:49):
This is again the Energy Mixed Radio Show. I'm you
guys to ut Bread Bennett and look forward to seeing
you next time. Take care.

Speaker 1 (44:55):
The Energy Mixed Radio Show is where we explore topics
that affect us all in the oil and gas industry.
Every week, our host will interview the movers and shakers
in this fast paced industry. You'll hear from industry experts,
elected officials, and many more on the Energy Mix Radio Show.