If I Had a Billion Dollars… I’d Spend it on Today

At his virtual climate change summit on Earth Day, President Biden committed the United States to reduce greenhouse gas emissions by 50% to 52% by 2030. In doing so, the President said, “This is the decade that we must make decisions to avoid the worst consequences of the climate crisis.”

The President’s goal isn’t impossible, especially if an immediate shift from the heaviest of carbon offenders – coal, oil, gasoline and wood combustion – are replaced by low or zero-carbon alternatives immediately. What is challenging, however, are the economics of the conversation

Ben Geman reports for the news site Axios, and not long ago, he talked about that subject in the context of climate change in a piece about the Biden administration’s $2 trillion infrastructure plan. Geman outlined the spending involved:

“The infrastructure component of the proposal includes $400 billion in spending to combat climate change, including $60 billion for infrastructure related to green transit and $46 billion for climate-related research and development.”

Federal Spending – In the Trillions

Since the onset of the pandemic, the Congress has obviously conditioned itself to the idea of spending trillions of dollars. The Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act was a $2.2 trillion economic stimulus package passed in March 2020. An additional near-trillion, but just $900 billion, in spending was attached to the Consolidated Appropriations Act which was passed by Congress in December 2020, and most recently, the Congress passed the $1.9 trillion American Rescue Plan Act of 2021. Add in the latest $2 trillion proposal and, to paraphrase the old saying, pretty soon you’re talking real money.

Maybe we’re all getting used to it? After all, we hear about trillion-dollar companies like Apple and Alphabet, both of which are valued in that range. USA Today speculated that Jeff Bezos of Amazon fame might become a trillionaire by 2026. Still, it’s just a crazy amount of money. A New Mexico public radiocommentator did a great job of putting it in perspective:

“If you spent $40 per second, around the clock, it would take you 289 days to exhaust a billion dollars. If you did the same thing with a trillion dollars, it would take you 792.5 years to go broke.”

All of the trillion talk makes it interesting to imagine what it would be like if a trillion dollars were devoted to immediate decarbonization. The all-electrification fans at Rewiring America can’t complete the exercise. To electrify everything, they need “…total public and private spending over 20 years [of] about $20-$25 trillion dollars.” President Biden’s pledge calls for urgency and action, not for waiting 20 years, so we need pragmatic and proven solutions right away.

If I Had a Billion Dollars

Let’s imagine that “immediate” meant this year and that the budget was $1 billion? How would propane put that money into decarbonization?

In the school bus market, 485,000 school buses are in service today, and around 30,000 of them are decommissioned and replaced every year. An electric bus can cost as much as $400,000, so at best (because infrastructure costs are not included here), we would replace 2,500 of the 30,000. A well-equipped 77-passenger propane school bus, on the other hand, can be purchased for $106,000, which puts 9,434 new propane school buses into service this year. Compared to diesel, propane buses reduce NOx by 96% ,and in one year of operation, our $1 billion in new propane school buses reduced CO2 emissions by 13%overall.

With a Billion Dollars… It’s Also Possible to…

Immediately decarbonize the 6,090 hospitals in the U.S. by replacing one of their 500-kilowatt diesel-powered backup generators with cleaner propane models. This size of generator costs about $200,000 so the final ticket is just a nudge above $1 billion, but the carbon reduction is terrific.

Replace 10,000 terminal tractors with new generation propane-powered tractors. A natural terminal tractor retirement rate is about 5,000 units per year. Accelerate that by 2X at a cost of approximately $100,000 per unit, and you’ve made smart use of $1 billion. Currently, propane fueled medium- and heavy-duty vehicles provide a lower carbon footprint solution in 38 U.S. states when compared to medium- and heavy-duty electric vehicles that are charged using the electrical grid.

Today, more than 24,000 active food trucks are operating in the U.S. An estimated 30,000 people work in the food truck industry feeding hundreds of thousands of people incredible food. Virtually every one of these trucks run their grills on propane, so with a billion dollars, every food truck’s 40 lb. propane tank could be filled. A 40 lb. cylinder holds 9.2 gallons, so at an average price of $2.50 a gallon, it’s a cost of only $552,000; plenty of room to repeat the process as many as 1,812 times. It’s a very good thing because when used, low-carbon propane also emits virtually no particulate matter that might make the air in a food truck unhealthy.

The Energy Information Administration’s latest numbers show that 54.6 million U.S. homes use electric water heaters, the second-most energy intensive appliance in a home behind space heating. The problem is, the average grid-powered electric water heater is only about 30% efficient and is responsible for about three tons of carbon dioxide annually. The average cost of a tankless water heater is $3,000, so with $1 billion, let’s replace 333,333 electric water heaters, and in the process, eliminate about half –– 82 tons –– of CO2 generated by those electric water heaters.

Sharp CO2 Emission Reductions

Ben Geman’s reporting colleague at Axios, Andrew Freedman, agreed with President Biden’s pledge. In a short article, he wrote this important paragraph:

“In order to have a decent chance of meeting the [Paris] agreement’s most ambitious temperature target — holding warming to 1.5 °C above preindustrial levels — greenhouse gas emissions need to be sharply reduced before 2030.”

The billion-dollar investments considered above are just a start. Today’s propane-powered forklifts, combined heat and power systems, cargo ships, and medium- and heavy-duty trucks can all contribute to sharp CO2 emission reductions by replacing diesel, gasoline and grid electricity –– and it won’t take a trillion dollars to make a world of difference.