MUNICIPAL “GREENING” OF FLEET SERVICES – WHAT’S THE PROBLEM?

Why is this topical?

 

The City of Ottawa, like many municipalities in North America, has established an official plan to address climate change by reducing the greenhouse gas (GHG) emissions of its operations over time. One part of that effort is the adoption of a “Green Fleet Strategy” aimed at reducing emissions from the city-owned and operated vehicle fleet to 30% below 2012 levels by 2025, 50% by 2030 and 100% by 2040. The City is now considering a draft of this plan, based on a report submitted by the engineering firm WSP Canada.

 

What does the plan entail?

 

The plan entails a two-phase replacement of the city’s vehicle fleet, which consists of 2,788 light-duty, medium-duty and heavy-duty vehicles so that the one powered by internal combustion engines are phased out and replaced by zero-emission vehicles, meaning mostly all-electric vehicles in the period to 2030 and other ZEVs as available after that. The plan does not state the total costs of conversion, only that the capital costs of the heavy-duty segment will average about CDN$20.5 million annually, maintenance costs will average CDN$27.3 million annually, and the total cost of ownership for the municipal fleet will reach CDN$1.656 billion by 2040 (annual average of CDN$ 92 million). Surprisingly, WSP Canada projects that this will actually save the City CDN$7.3 million annually by 2040 and reduce GHG emissions by 24,000 tonnes of carbon dioxide equivalent by 2040.

 

What are the concerns with this plan?

 

The concerns fall into five categories:

 

Its under-estimate of the direct costs of the proposed transition.

 

The report does not contain enough detail to allow one to understand how WSP Canada calculated the cost of switching Ottawa’s entire vehicle fleets to electric vehicles and vehicles powered by other technologies, but there are many reasons to think that it is flawed. WSP admits that most of the technologies that it hopes will be available post-2027 are today proven in neither technological nor commercial terms. How, then, is it possible now to predict the cost of using these technologies?

 

Its ignoring of the “social costs” of government measures artificially to reduce the costs of ZEV vehicles and increase the costs of internal combustion engine (ICE) vehicles.

 

With respect to WSP’s estimates of the costs of EV’s compared to internal combustion vehicles today, the costs attributed to electric vehicles ignore the many direct and indirect subsidies that governments provide to EVs and recharging stations and to the electricity generation/storage systems that will fuel them. The federal government has followed a dual approach, using regulations and subsidies. The regulations have mandated reduced emissions intensity to force vehicle manufacturers to achieve ever-higher percentages of electric and other zero-emission vehicles in their sales mix. A long list of subsidies has been granted to lower that cost of owning and operating zero-emission vehicles.

 

The Canadian regulations governing light duty vehicle emissions intensity are closely aligned with those in the United States. The standards have required that the miles-per-gallon performance of light-duty vehicles increase from about 18 mpg in 1978 to 27 mpg in 2010 and 45 mpg in 2020. The stringency of the regulations has been increased at faster rates than warranted by either vehicle technology or consumer demand. Vehicle manufacturers that do not meet the standard by reducing the prices they charge for electric vehicles (i.e. often requiring that they sell the EVs at a loss and increase the prices of ICE vehicles ) are obliged to purchase credits from manufacturers that exceed the standard, thus enriching companies like Tesla. The Canadian government has layered on to these regulations the EV Availability Standard that requires all vehicle manufacturers to ensure that their fleet average sales of light-duty vehicles include at least 20% zero-emission (ZEV) vehicles by 2026, 60% by 2030 and 100% by 2035.

 

These requirements are already so at odds with consumer preferences that vehicle manufacturers are losing significant amounts of money on each EV sold. Ford Motor Company alone lost USD 5.9 billion United States EV sales in 2024. No company has published the size of its losses in Canada.

 

The federal and provincial governments have added dozens of program, subsidy and tax measures to increase the costs to consumers of ICE vehicles and reduce the costs of electric vehicles and the infrastructure to refuel them. The highest profile measure is of course the imposition of carbon taxes, now at the rate of $80 per tonne of CO2, to make fueling ICE vehicles more expensive.

 

The other areas in which taxpayers or electricity ratepayers subsidise  electric vehicles include:

 

• Research and development

• Battery manufacturing

• Vehicle manufacturing

• Large scale regional and local refueling infrastructure

• Exemption of manufacturing plants from property taxes

• Exemption of EV sales from excise and carbon taxes

• Rebates for consumer EV purchases

• Rate exemptions for the electrical energy used by recharging stations

 

No studies have been done in Canada to quantify the value of all these subsidies and allow comparison of the costs of EVs and ICE vehicles. However, the Texas Public Policy Foundation published an excellent paper in October 2023 that examined most of the subsidies provided by federal and state governments in the United States. It concluded that the average light duty vehicle EV benefits from USD $48,569 in subsidies and is exempted from paying USD 4,569 in extra charging and electricity costs over a ten year period. That represents a total cost of USD $53,267 per vehicle.

 

Converting that to fuel equivalent terms, it totals a cost of USD16.12 per equivalent gallon of gasoline.

 

Attached as Annex A is a list of some of the measures taken by governments in Canada artificially to increase the costs of owning and operating internal combustion vehicles or to reduce the costs of owning and operating electric vehicles. The total cost of the measures I could quickly identify is almost $6.5 billion. WSP Canada did not take account of this at all.

 

Its ignoring of the operational problems of operating electric vehicles in a cold-weather climate.

 

From December 1 to February 28, average daily temperatures in Ottawa range from about 23 degrees F to 28 degrees F. and average nighttime temperatures range from 9 degrees F. to 14 degrees F. Every year there are some days when overnight temperatures drop to minus 20 degrees F. Colder temperatures reduce the driving range of electric vehicles and increase the amount of time needed to recharge them. At 16 degrees F. the driving range is reduced by about 25% and up to 41% when the heater is on. This especially affects electric buses. This point was not addressed at all in the WSP report.

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Its failure to account for the risks of increased brownouts and blackouts due to the proposed electrifying of the economy, as projected by the North American Electric Reliability Corporation (i.e. leaving all police, fire and other emergency vehicles without power to recharge for days).

 

In its 2024 Long-Term Reliability Assessment, NERC found that most of the North American regions face mounting resource adequacy challenges over the next 10 years as surging demand growth continues and thermal generators announce plans for retirement.

 

The trends point to critical reliability challenges facing the industry: satisfying escalating energy growth, managing generator retirements, and accelerating resource and transmission development. The findings presented are vitally important to understanding the reliability risks to the North American bulk power system as it is currently planned and being influenced by government policies, regulations, consumer preferences, and economic factors.

 

NERC used both a probabilistic assessment and a reserve margin analysis to assess the risk of future electricity supply shortfalls. Both are forward-looking snapshots of resource adequacy that are tied to industry forecasts of electricity supplies, demand, and transmission development.

 

Areas categorized as “High Risk” are likely to experience a shortfall in electricity supplies at the peak of an average summer or winter season. “Elevated-Risk” areas meet resource adequacy criteria, but analysis indicates that extreme weather conditions are likely to cause a shortfall in area reserves. Ontario is an elevated risk area, as are New England, most of the US south and south-east and California. The high risk areas include the mid-continent system (Illinois, Indiana, Iowa Arkansas, Kentucky, Missouri, Minnesota and Michigan).

 

The proposed Green Fleet Strategy ignores the problems of reliability that will inevitably arise if the City of Ottawa requires its police, fire and other emergency service vehicles to be all-electric in a situation in which, as recently described in the NERA assessment, most of the electric utilities in North America face the likelihood of much increased brownouts and blackouts of electricity supply due to current climate policies. Imagine a situation in which Ottawa was without power for three to five days and the police, fire and other emergency vehicles could not be fueled because they were dependent on the electricity system.

 

The negligible, if not zero, environmental benefits of the plan.

 

The reduction in emissions would be by 24,000 tCO2e in 2040. To place that in context, in 2022 global GHG emissions from energy consumption were 35 billion tCO2e, and those by Canada were 525 million tCO2e (i.e. 1.5% of the global total). The emissions reduction effected by the Ottawa action would today amount to one fourteen thousandth of Canada’s emissions. The planned 24,000 tonnes per year reduction constitutes a fly-spec in the world’s emissions.  

 

To illustrate, If the whole world achieves all of its stated electric vehicles emission reduction targets by 2030, the additional saved CO2 emissions over this decade would be 235 million tonnes. The standard climate model used by the Intergovernmental Panel on Climate Change reveals that this would reduce global average temperatures by only 0.0002 degrees F. by 2100. That is two ten thousandths of a degree Fahrenheit.

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Why Does This Matter?

 

I submitted comments to the clerk of the responsible Ottawa Council committee so that the concerns will be on the record. I expect my comments to be ignored, partly because of the views of the current councilors and partly because my lone voice will be drowned out by a parade of presentations by representatives of well-funded environmental lobby groups.

 

Many other municipalities in Canada and the United States may face similar choices as long as climate activists are in control of the policy agenda. Currently, municipalities in the United States are not as advanced in their commitments to electrify their vehicle fleets as the ones in Canada. Madison, Wisconsin plans to eliminate its gasoline-powered vehicle fleet by 2030; New York City and San Jose, California are aiming at 25% ZEV vehicles by 2030. 

 

It is important that citizens in both Canada and the United States inform themselves and take the time to submit comments when issues like this arise.

 

 

 

 

 

 Annex A

 

 GOVERNMENT OF CANADA MEASURESCONCERNING VEHICLES

 

The following is a partial list of the measures implemented by the Canadian government intended to increase the costs of owning and operating vehicles powered by internal combustion engines or decrease the costs of owning and operating so-called “zero emission” vehicles.

 

                                    Measure                                                                                       Cost

 

            Green Freight Program                                                                                   $200 million

           

            Greening Government Fleet Program                                                             $2 million

           

            Incentives for Medium and Heavy-Duty Zero-emission Vehicles                    $8 million

           

             Large truck retrofits                                                                                         $200 million

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            Large-scale urban ZEV refueling Infrastructure                                               $500 million

 

            Low-Carbon Fuel Procurement Program                                                          $228 million

 

            Safety testing for long haul zero emission trucks                                             $34 million

 

            Zero-emission vehicles charging station funding                                             $150 million

 

            Zero-emission vehicles incentives                                                                    $1.7 billion

 

            ZEV charging and fueling infrastructure                                                           $630 million

 

            Canada Infrastructure Bank subsidies to ZEV charging infrastructure            $500 million

 

            Transfers to provincial governments to fund public charging infrastructure     $637 million

 

            ZEV mandate – light-duty vehicle emissions standards                                   Regulation

 

            ZEV mandate: medium and heavy duty vehicles standards                            Regulation

 

            EV mandate – sales target                                                                                Regulation

 

            ZEV tax write-off                                                                                                n/a

 

            Green Shipping Corridor Program                                                                    $165 million

 

            Total                                                                                                                   $5,494 million

 

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