Amid recent media reports that President Trump is planning to
issue an executive order aimed at expanding offshore drilling
opportunities for petroleum exploration and production companies
– opportunities that had been restricted by the Obama
administration – Volkswagen ("VW"), one of the
world's largest automobile manufacturers, has announced its
plans for investing the first $500 million of the $2 billion that
it is required by court order (associated with the diesel emissions
litigation) to invest in zero emission vehicle ("ZEV")
Of the $500 million, $200 million would be
invested in California, and the other $300 million elsewhere in the
United States. Virtually all of the $500 million would be spent on
the installation of charging stations, according to VW. Under
VW's plan, the chargers would be located on highways spanning
39 states and separately in 16 metropolitan areas. Reportedly,
VW's plans call for 1,100 fast charging stations to be built,
with installation to occur within 30 months. The United States
Environmental Protection Agency and the state of California are
currently reviewing the plans.
For context, Tesla states that it has 828
"Supercharger stations" in the United States, with 5,339
"Superchargers." This network, of course, has been built
out over a number of years.
Charging stations require a supply of electric
power, of course, but of the fossil fuels likely to be used to
generate that electric power, oil is the least likely to be chosen,
for a variety of long-standing reasons. Currently, less than one
percent of the nation's electricity is generated by combusting
oil. To the extent that electric powered automobiles gain market
share, petroleum-fueled vehicles will, by definition, lose market
Much is uncertain about the extent to which
the current administration's adoption of policies in support of
the petroleum and coal industries will translate into tempering (or
possibly even expansion) of production and sales of zero emission
vehicles. But it is safe to say that the ZEV infrastructure
investment mandates that were built into the VW diesel emission
settlement should provide a meaningful boost to the vehicle fueling
transformation that many wish to see. This will happen without any
court challenges – of the kind that face projects for Artic
or Atlantic off-shore drilling – in the way.
Disclaimer:This Alert has been
prepared and published for informational purposes only and is not
offered, nor should be construed, as legal advice. For more
information, please see the firm's
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