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Big Oil Ally Derrick Hollie Dismisses Environmental Justice, Promotes Natural Gas, at House Climate Hearing

Yesterday, during the House Committee on Natural Resources’  hearing on “Climate Change: Impacts and the Need to Act,” Representatives heard about the threats that climate change poses to the safety, prosperity, and general well-being of Americans, and particularly to marginalized communities of color. Multiple experts testified on environmental and climate justice issues. However, one of the Republicans’ experts, Derrick Hollie of Reaching America, told a dramatically different story, attempting to argue that climate-friendly policies actually harm low income and minority communities.

During the hearing, Hollie did not disclose his organization’s involvement in multiple campaigns funded by the oil and gas industries.

Continue reading “Big Oil Ally Derrick Hollie Dismisses Environmental Justice, Promotes Natural Gas, at House Climate Hearing”

Senator John Barrasso Parrots Koch Talking Points to Kill Electric Car Tax Credit

This morning, Wyoming Senator John Barrasso, published an op-ed in Fox News, arguing for an end to the federal electric vehicle (EV) tax credit and a new “annual highway user fee for alternative-fuel vehicles.”

Barrasso, who has cashed more money from Koch Industries in the 2018 election cycle than all but two senators, and has taken in $45,400 from Koch Industries from 2013 to 2018, introduced a bill last October that would immediately amend the tax code to terminate the EV tax credit and calculate a new annual user fee for drivers of cars that aren’t powered by gasoline or diesel. A similar bill was introduced at the same time in the House by Ways and Means Chairman Kevin Brady of Texas, a key Koch ally.

Besides the Trump administration’s proposed rollback of fuel efficiency standards—which the Koch network and other oil and gas interests have been aggressively lobbying for—Barrasso’s proposal reflects a top policy priority of the Koch network, one that would greatly benefit oil refiners and gasoline marketers who are desperate to keep American drivers coming back to gas stations.

Senator Barrasso’s Op-Ed Echoes Koch Network Talking Points

If the Republican Senator’s op-ed sounds familiar, it’s probably because Barrasso repeats a number of talking points that Koch network representatives have been honing over the past year.

For instance, Barrasso writes that “Every time one of these cars sells, the U.S. taxpayer must help pay for it.”

Within just the past two  months, we’ve seen some slight variation on this line in a number of opinion pieces and commentaries, all penned by beneficiaries of Koch cash. In December, Jonathan Lesser of the Manhattan Institute (which has received more than $2.6 million from Koch foundations) tried to paint the EV tax credit as “inequitable” in Investors Business Daily.

A couple days later, George Landrith, president of Frontiers of Freedom (at least $335,000 from Koch foundations) and the Energy Equality Coalition, argued the same in The Daily Caller.

Just two weeks ago, Ross Marchand of the Taxpayers Protection Alliance (at least $1.1 million from Koch groups) bashed the “EV tax credit gravy train” and then a couple days later, Drew Johnson of the National Center for Public Policy Research (at least $1 million from Donors Trust and Donors Capital Fund) asked readers of the Austin American Statesmen to “Imagine taxing middle-class families to help rich folks buy luxury cars.” 

What the Koch EV Attacks Leave Out

All of these commentators fail to mention a few crucial and relevant facts, besides their immediate ties to Koch funding.

1) First, while attempting to portray the EV tax credit as a “handout to the rich,” the Koch-funded advocates harp on one particular figure, as Johnson puts it: “Almost 80 percent of EV federal consumer tax credits go to households making more than $100,000 a year.”

This is deceptive and inaccurate framing that has been widely used in anti-EV arguments. To support the point, some authors cite a study by the Congressional Research Service  (though most make the claim without any reference), which describes how in 2016, 57,066 individual taxpayers claimed $375 million in plug-in vehicle tax credits. Of these 57,066, 78% have an adjusted gross income of $100,000 or more.

However, as Wade Malone explains in InsideEVs, 158,614 plug-in vehicles were sold in 2016. What about the other 100,000 or so EVs? They were leased.

Malone explains:

In this situation, leasing companies claim the $7,500 tax credit. The tax credit is then almost always applied directly or indirectly to reduce monthly lease payments. As a result, lease rates are typically in the same ballpark (or lower) than equivalent ICE vehicle leases.

Others cite older data from 2014 IRS filings that was promoted in a recent Pacific Research Institute study, which also ignores the significant role leases play in the EV market. Through 2017, the vast majority of EVs were leased—a full 80% of non-Tesla EVs and still well more than half of all EVs including Tesla, according to Bloomberg New Energy Finance.

As Malone explains, these leases have a trickle down effect of making EVs available to all economic classes.

This is appealing to many middle class buyers for a variety of reasons. The buyer is able to see an immediate reduction in their monthly payment rather than waiting until tax filing season to receive a full or partial tax credit. Secondly, EV tech is rapidly improving. Leasing allows buyers to drive for 3 or 4 years, then move on to the next generation of electrics.

When the vehicle is turned in at the end of a lease, the car hits the used market at a reduced price. Because a used electric car is no longer eligible for the $7,500 tax credit, dealers price it factoring in the full credit. Otherwise, purchasing new would be more cost effective over used. Because of this, middle class and lower middle class buyers can affordably finance a used EV or PHEV. It is not simply the wealthy who benefit.

2)  While falsely claiming that 80% of all EV credits benefit households that earn more than $100,000, these op-eds ignore the fact that the average income of households that purchase any new vehicle—plug-in or gasoline powered—is even higher than that. According to a report by the National Center for Sustainable Transportation, the average household income for new car buyers was $119,400 in 2012.

3) Finally, the cost of the EV tax credit is a tiny fraction of the lost tax revenue that results from permanent tax breaks to the oil and gas industry. In his 2018 study for the Manhattan Institute, Lesser argues that the EV tax credit is costing the U.S. treasury hundreds of millions. To be precise, in 2017, this total was $670 million. However, according to the treasury’s own figures, oil and gas subsidies and tax credits cost $4.7 billion annually.

Or, if we repealed just nine tax breaks commonly used by oil and gas companies, as the Center for American Progress has calculated, the U.S. Treasury would save an average of $3.7 billion every year.

In his op-ed, Marchand wrote, “It’s tough to decide which is worse: a subsidized company that can’t survive without government largesse or a well-off successful business that doesn’t need taxpayers’ help but gets it anyway.” Yet, none of the self-described free market advocates are arguing to end the billions handed out to the very “well-off successful” oil and gas companies.

To summarize, EV tax credits benefit all income levels, especially when factoring in leases and secondary sales markets, and the entire EV tax credit program costs the U.S. Treasury a lot less than oil and gas tax breaks.

Senator Barrasso and Colleagues Echo Faulty Koch Claims

Promoting his “Fairness for Every Driver Act” in Fox News, Barrasso claims that the EV tax credit “disproportionately subsidizes wealthy car buyers.” He argues, without citation, that “eight out of 10 electric-car tax credits go to households earning at least $100,000.”

When Barrasso introduced the bill, the Senate Committee on Environment and Public Works, which he chairs, released a press release citing estimates from the Manhattan Institute that axing the tax credit would save $20 billion in taxpayer dollars over the next decade. Even if this estimate is true, the savings would be less than half of those achieved if the oil and gas industry’s permanent tax breaks were repealed.

The Manhattan Institute, which has received more than $2.6 million from Koch foundations, argued aggressively in 2011 for the preservation of the oil and gas tax breaks.

If Senator Barrasso’s bill were to move, it would have to clear the Senate Finance Committee and a comparable tax package would need to pass the House Ways and Means Committee. As Barrasso is no doubt well aware, the Koch network has already invested in those committees. Elliott Negin at the Union of Concerned Scientists noted, “Since 2013, Koch Industries has given $253,600 to 11 of the 14 Republicans on the Senate committee and $374,000 to 21 of the 24 Republicans on the House committee, including Chairman Brady.”

Before Senator Barrasso introduced his bill last year, Koch Industries’ lobbyist Philip Ellender sent a letter to various members of Congress asking for an end to the EV tax credit and all energy related subsidies

“Instead of expanding this subsidy for wealthy EV owners, Congress should eliminate it along with all other energy incentives — including eliminating any incentives given to us and our competitors where we may participate. We are focused on long-term value creation, not short-term windfalls.”

While the federal government would gain significantly more revenue by killing the tax breaks to wildly profitable oil and gas companies, Senator Barrasso’s legislation is only focused on the part of the Koch Industry’s request that would repeal the relatively small tax credit that makes it easier for Americans of all income levels to enjoy the economic and environmental benefits of electric vehicles.

Main image: Senator John Barrasso at CPAC. Credit: Gage SkidmoreCC BY-SA 2.0

How AFPM Rallied GOP Governors’ Support for Trump’s Rollback of Auto Standards

As the Trump administration worked to revise and relax federal fuel economy and emissions standards for cars and light trucks, an oil refiners trade group worked connections with Republican governors to rally support for the proposed rollback.

Emails obtained by Documented, a watchdog group that tracks corporate influence in government, revealed that the American Fuel & Petrochemical Manufacturers (AFPM) were actively recruiting Republican Governors to sign onto a public comment letter supporting the weaker CAFE (corporate average fuel efficiency) standards, while also “shopping around” a pre-written op-ed with language borrowed from the American Energy Alliance, a free market advocacy group run by a former Koch Industries lobbyist.  

A blockbuster New York Times investigation published in December revealed how AFPM, using a front group called Energy4US, deployed Facebook advertisements to prompt thousands of identical public comments filed in the Federal Register supporting the proposed rule. An earlier article on the Facebook ads by ProPublica had linked AFPM to Energy4US, and researchers at DeSmog’s KochvsClean had since connected the front group to more than one-quarter of all public comments that the Department of Transportation (DOT) had received on the proposed rule, while also revealing that the Consumer Energy Alliance was connected to the campaign.

In addition to the more than 3,000 identical comments, the emails obtained by Documented through a number of state open records requests revealed a much broader influence campaign.

Email messages show AFPM representatives reaching out to the staff of Republican governors, soliciting signatures for a formal letter that was eventually submitted to the Department of Transportation and the Environmental Protection Agency (EPA). In another email, AFPM’s Senior Vice President of Federal and Regulatory Affairs shared a pre-written draft of an op-ed with the Wyoming Governor’s office, asking if Governor Matt Mead would consider putting his name on it.

Email from AFPM rep to staff of New Mexico Governor.

How AFPM Rallied Republican Governors to Support the Rollback

AFPM deployed the corporate-backed Republican Governors Association (RGA) and their policy arm, the Republican Governors Public Policy Committee (RGPPC), which helped circulate the letter. AFPM contributed more than $200,000 to RGA during the 2018 election cycle, according to IRS filings.

“Brian Sanderson, the Policy Director with the RGA, has been circulating the letter as well as informational materials to Governors across the country for review. I wanted to reach out to offer to answer any questions and ask for Governor Martinez to consider joining the attached letter,” AFPM’s manager of state and local outreach Peter Barnes wrote in an email to Keith Gardner, chief of staff to New Mexico Governor Martinez. Barnes wrote an identical message asking for support from Mississippi Governor Phil Bryant.

Eventually, governors from Texas, Kansas, Kentucky, Maine, Mississippi, Nebraska, North Dakota, and Oklahoma co-signed the letter, which was sent to the DOT and EPA on October 26, 2018, and subsequently added to the official rulemaking records.

The letter was initially spearheaded by Texas Governor Abbott, whose office sent AFPM talking points on the rule. A close reading of the documents obtained paints a picture of AFPM playing an instrumental role in the organization and dissemination of this governor’s letter to others.  

AFPM Was Also ‘Shopping Around an Op-Ed’

Prior to submitting the letter in the Federal Register, AFPM also asked Republican governors to publish an op-ed supporting the rule. According to an internal memo for Wyoming Governor Matt Mead, AFPM had been “shopping around an op-ed” supporting the changes to fuel economy standards.

The American Fuel and Petrochemical Manufacturers Association has been shopping around an op-ed which supports the changes and are requesting Governor’s [sic] to sign on (op-ed attached). So far, to my knowledge, the op-ed has been presented to you and the Governors of New Mexico and Nebraska,” the memo stated.

In an email correspondence from AFPM‘s Senior Vice President of Federal and Regulatory Affairs, Derrick Morgan, to the Nebraska Governor’s office, also obtained by Documented, Morgan alleges that there was “initial interest from Governor Mead of Wyoming.”  

“We put together a potential op-ed (draft attached) that will support what the Trump Administration is doing on fuel economy through the EPA and DOT,” Morgan stated in an email to Nebraska Governor Chief of Staff Matt Miltenberger.

Wyoming Governor’s office memo addressing the draft op-ed distributed by AFPM.

The governors ultimately passed on the opportunity to put their names on the op-ed, a decision that might have spared them considerable embarrassment, considering the source of much of the language of the draft.

AFPM’s Op-Ed Borrowed Heavily from the American Energy Alliance

The op-ed draft that was “shopped around” by the AFPM included many sentences lifted entirely from an April letter distributed by the American Energy Alliance (AEA), and which followed the same format as the original letter.

The AEA letter — also signed by representatives of 12 conservative free market groups, including Americans for Prosperity, the Competitive Enterprise Institute, and Americans for Tax Reform — featured sections describing the “fundamental problems” with the Obama-era clean car standards. The sections were titled: “cost to consumers,” “consumer choice,” “inefficiency,” and “It’s a relic.” 

The AFPM draft op-ed included similar sections titled: “The mandate makes cars more expensive,” “The mandate minimizes consumer choice,” “The mandate gives California a disproportionate say in the mandate,” and “The mandate fails to recognize our new energy abundance.” 

Within each of the mimicked sections, some phrases and sentences are reproduced verbatim from the AEA letter. For example, both texts include a slight variation on the line: “who should decide what cars and trucks you should buy, you and your family or unelected bureaucrats in Sacramento or Washington?”

Compare the two:

The original American Energy Alliance Letter.
The draft op-ed “shopped around” by AFPM.

Both texts also include this often debunked statement: “According to the National Auto Dealers Association, the existing mandates would cause the price of an average vehicle to increase by $3,000 in 2025.”

There are plenty of other examples, which you can see for yourself by comparing the AEA letter with the AFPM draft op-ed.

AFPM has not responded to DeSmog’s questions about the provenance of the draft op-ed and if the group was actively working with the American Energy Alliance or others on this issue. So, it’s impossible to know whether the group was working in concert with AEA, or whether AFPM staff were simply lifting language from a fellow Koch-affiliated organization. Among other ties, AFPM has received funding from the Koch Industries PAC and has a past board member who worked for Koch Industries.

Cross posted from DeSmog. Main image: President Trump in front of a gasoline refinery in Mandan, North Dakota. Credit: Official White House Photo by D. Myles Cullen, public domain

Senators Demand Trump Administration Reveal Marathon Petroleum and Koch Influence in Clean Car Standards Rollbacks

Two senate democrats this week ordered several Trump administration cabinet members and agency officials to reveal how the oil industry and Koch network have worked behind closed doors to influence the proposed rollback of auto efficiency and emissions standards.

Senator Tom Carper of Delaware and Senate Democratic Leader Charles Schumer sent a letter to the current heads of the Department of Transportation, the Environmental Protection Agency, and others in the administration to demand information about a “covert lobbying campaign with oil industry groups to support Trump Administration efforts to weaken fuel economy standards and increase demand for oil consumption.” Continue reading “Senators Demand Trump Administration Reveal Marathon Petroleum and Koch Influence in Clean Car Standards Rollbacks”