Federal Transportation Subsidies: Why Not Steam Cars Instead of Electric?

Economists have long been skeptical of national industrial policies, where politicians and bureaucrats try to pick and subsidize winning technologies of the future. Congress is currently debating tax reform and considering dropping federal subsidies for electric car buyers. “CONGRESS’ PLAN TO KILL THE ELECTRIC CAR TAX CREDIT COULD KILL ELECTRIC CARS,” (Wired, November 4, 2017):

…The House of Representatives released an early draft of a bill to remake the taxation system, one that would kill the federal tax credit that gives up to $7,500 to anyone who buys an electric car.

Created as part of the 2009 stimulus bill, this credit was meant to make the price of a planet-saving EV at least sort of comparable to one powered by gasoline, at least until battery and electric power generation technology get cheaper. …

Electric car advocates claim first, electric vehicles (EVs) are “planet-saving ,” and second, before long they will be competitive and won’t need federal or state government subsidies. Network problems are important. The U.S. has 168,000 gas stations to fuel cars with gas engines, but only 16,533 electric car charging stations (and 45,242 charging outlets). People have electricity at home,  so some could install charging system setup for about $1,000.

There’s a lot to like about shifting to nifty electric cars and home power stations. However, charging cars at home is almost more than most homes and local utility grids were designed for. “Charge electric car but don’t boil kettle, says National Grid: Homes likely to blow main fuse as system struggles to cope with electricity demand,” (Financial Times, August 20,2017) reports concerns in the UK:

Electric car drivers are unlikely to be able to rapidly charge their vehicles at home at the same time as boiling a kettle, National Grid has warned. 

The operator of Britain’s electricity transmission system has cautioned that using a powerful and fast electric car charger at home will trip a main fuse if vehicle owners simultaneously utilise other “high demand” energy items, such as kettles, ovens and immersion heaters.

Other news sites reported the National Grid story, but environmental sites claimed these articles and worries are misguided because most current home charging stations are too slow to cause problems (though slow charging stations mean long charging times for electric car owners).

But back to the question of continued federal subsidies for electric cars. How do we (or Congress) know that electric cars are better for the public or the environment than gasoline-powered, or various other alternative powered cars: say hydrogen-powered, natural gas powered or even steam-powered vehicles?

Business Insider looks at hydrogen-powered cars in “10 hydrogen-powered cars in the works right now,” (October 26, 2016). Many other articles examine the pluses and negatives of hydrogen fuel cells powering cars instead of gasoline or electricity.

A decade ago state and local governments thought natural gas would provide clean power for the car of the future, and offered subsidies. At Seattle’s Sea-Tac airport all the airport taxis were required to use clean natural gas. This was often a challenge for travelers since taxi trunks were half full of bulky natural gas tanks leaving limited space for luggage. State and federal programs supported natural gas. See CNGNow’s “Financial Incentives: Many states offer financial incentives for switching to CNG or buying natural gas vehicles.” Skeptical articles included “Natural Gas Vehicles 2014: Caution, not Government Subsidies,” (MasterResource.org, July 8, 2014) With natural gas as with hydrogen-power and electric-power, the cost of building out fueling stations is a big challenge.

The key public choice problem applies: the benefits of local, state, and federal subsidies for natural gas power cars are concentrated, with benefits flowing to natural gas producers and distributors. Costs for the program are spread out among millions of taxpayers.

Autoweek explains why yesterday’s hoped-for future became today’s past: “Here’s why the natural-gas car revolution ran out of gas,” (August 16, 2017)

Bloomberg notes that there are only 1,828 natural-gas filling stations in the U.S. at present time, with many of them operating in depots for fleets of delivery trucks. Gasoline stations outnumber LNG stations by a factor of 70, by comparison, and the investment in LNG infrastructure that does not serve a dedicated fleet of small trucks — the build costs of an average LNG station being $1.8 million — has kept the number of LNG stations very limited.

Those who benefit from natural gas subsidies know who they are and lobby for continued and expanded transfers. The story is much the same for today’s electric car industry, with benefits concentrated and the costs of various subsidies widely disbursed. Electric car subsidies don’t cost any single person much, so when Congress moves to end the subsidies, most people don’t pay much attention, but the electric car industry mobilizes, working with their associations and lobbyists to reach out to environmentalists and national media outlets.

On the current electric car tax reform debate, see also: “Tax Bill Attacked for Loss of Electric Car Subsidy—But Most Americans Don’t Want Electric Cars,” (MasterResource, November 20, 2017)

So if not electricity, hydrogen, or natural gas for future cars, what about steam? ExtremeTech asks “Are steam cars poised for an epic comeback?” (February 18, 2013)

Once upon a time, the steam engine reigned supreme — first in trains and heavy tractors, as you well know, but eventually in cars as well. It’s quite hard to fathom today, but at the turn of the 20th century, more than half the cars in the US were steam-powered. The steam engine was so advanced that, in 1906, a steam car called the Stanley Rocket even held land speed record — a heady 127 mph!

Entrepreneur Henry Ford’s assembly line dropped the cost of gas powered cars dramatically, and left the Stanley Rocket and other steam-powered cars in the dust. But steam power had and still has significant advantages over internal combustion engines (ICEs) because:

They require fossil fuels, they produce a lot of pollution, and they’re noisy. Steam engines, by comparison, are very quiet, very clean, and can use almost any fuel. Steam engines, by virtue of providing constant pressure, don’t require gearing — you have maximum torque and acceleration instantly, from rest. For urban driving, where stopping and starting consume huge amounts of fossil fuels, the continuous power from steam engines could be very interesting.

Cyclone Power offers its Schoell Cycle engine to advance a dynamic steam-powered future for cars and trucks (Cyclonepower vehicle webpage here). ExtremeTech concludes that steam-powered cars day may come:

Moving forward, it’s unlikely that steam cars will ever unseat the internal combustion engine, if only because of the massive momentum of Big Oil. One day, though, when we finally decide to take a serious look at the future of personal transportation, maybe the quiet, green, gliding grace of steam power will get a second chance.

For more on steam-powered cars, see “Is there a future for steam-powered, super-efficient cars?” (howstuffworks.com):

…there are some mechanically-inclined people who think that the way of the automotive future lies in another direction entirely: steam-powered engines. And though it might sound a bit antiquated, it’s less dated than one might imagine.

The best future power for automobiles is not just hard to know, but in fact impossible. New technologies and innovations emerge unexpectedly, and no one can predict which possible technology will out-compete rivals.

Engaging entrepreneurs like Elon Musk of Tesla can capture the spotlight and shift the future by drawing billions of dollars of private capital to finance his dream cars. Plus Musk has, Steve Jobs style, convinced tens of thousands of buyers to pay more for a stylish car he says is better. Musk and other electric car producers have also lobbied Congress and state legislatures for subsidies to help make electric cars more cost-competitive. Politicians have handed out billions of taxpayer dollars to automakers and others with various new technologies they hope will payoff sometime in the future.

“Elon Musk’s growing empire is fueled by $4.9 billion in government subsidies,” (Los Angeles Times, May 30, 2015), adds up the subsidies as of mid 2015:

Tesla Motors Inc., SolarCity Corp. and Space Exploration Technologies Corp., known as SpaceX, together have benefited from an estimated $4.9 billion in government support, according to data compiled by The Times. The figure underscores a common theme running through his emerging empire: a public-private financing model underpinning long-shot start-ups

The Washington Post asks “The government has spent a lot on electric cars, but was it worth it?” (January 6, 2016), but article is paywalled after first paragraphs. A 2012 Washington Post article noted projected federal electric car subsidies:  “CBO: Government will spend $7.5 billion on electric vehicles. What are we getting back?”:

Over the next seven years, the federal government will spend $7.5 billion on policies to boost the U.S. electric-vehicle industry. But a new report from the Congressional Budget Office raises questions about how quickly these programs will achieve many of their intended goals.

So, if Congressional and environmental enthusiasm for subsidies for electric cars, solar panels, and space ships run out of steam before too long, maybe that steam will return to power tomorrow’s automobiles.