Posted September 29, 2021
The global COVID-19 pandemic has shifted, and continues to shift, human behavior in ways that would have been difficult to imagine in 2019. In a new white paper, Center for Energy Studies Assistant Professor Cody Nehiba examines the transportation sector to provide valuable insights into the economic and social disruption caused by the pandemic, how we have adjusted the way we live and work, and what changes may become permanent. He offers an overview of the dramatic effects of the pandemic on the movement of people and goods, with a focus on Louisiana.
Nehiba finds that as of August 2021, vehicle miles traveled (VMT), which fell almost 40% in April 2020 relative to April 2019, has largely recovered. Mileage remains lower than pre-pandemic levels and, though still increasing, may not reach those levels in the near future. While mileage is down from long-run trends, the relatively high level of VMT over the summer of 2021 compared to previous months increased fuel demand and prices. Interestingly, Nehiba reports, the pandemic may have had a long-run effect on fuel consumption, as Americans have begun shifting automobile purchases from light trucks to more fuel efficient automobiles.
Data show that, like vehicle travel, air transportation and tourism numbers have been increasing, but remain persistently lower than prior to the pandemic. The rapid increase in air passengers over the summer of 2021 posed challenges for the industry, as flight delays and cancellations propagated throughout the system due in part to employee shortages and work hour restrictions. And finally, freight services appear to have weathered the pandemic with relatively minor disruption relative to other areas of the transportation sector.
Will these trends continue? As the pandemic has made abundantly clear, the future can be hard to predict.
“With the emergence of virus variants and increasing infection rates, particularly in Louisiana where a mask mandate was recently reinstated, the recent increases in travel may once again fall,” Nehiba said. Louisiana, which has one of the lowest vaccination rates in the country, may become a cautionary example of the dangers of viral mutations in unvaccinated populations.
Posted August 26, 2021
On July 29, Center for Energy Studies Executive Director Professor David Dismukes presented a draft of the updated greenhouse gas (GHG) inventory report to a committee of scientists advising Gov. John Bel Edwards' Climate Initiatives Task Force. The report will serve as a starting point to develop strategies for meeting the governor’s emission reduction goals.
The inventory surveys and provides quantitative estimates of GHG emissions by economic sector using methodologies and modeling established by the Environmental Protection Agency and following guidelines set by the Intergovernmental Panel on Climate Change.
The preliminary findings show:
- 65% of Louisiana’s 2018 GHG emissions come from the industrial sector (138 million metric tons out of 213 million metric tons), half of which are concentrated in the chemical and refining sectors.
- Aggregate industrial GHG emissions have been growing around 1.0% to 1.5% per year over the last seven years. Emissions at the top 20 industrial locations have been growing around 3.5 percent per year.
- Louisiana’s top industrial GHG emission source is the CF Industries plant (~8 million metric tons per year) followed by the ExxonMobil refinery (~6 million metric tons per year).
- Prior to 2008, industrial GHG emissions hovered around 120 million tons per year. Plant expansions appear to have driven this steady state level up to 135 to 140 million metric tons (12.5% to ~17%).
Dismukes is set to deliver the final version of the report in September.
Posted August 23, 2021
LSU Center for Energy Studies Professor, Radiation Safety Office Director, and LSU System Radiation Safety Officer Wei-Hsung Wang was recently invited to serve on the U.S. Environmental Protection Agency (EPA) Science Advisory Board (SAB) and the Radiation Advisory Committee by EPA Administrator Michael E. Regan. According to the EPA’s announcement on August 2, 2021, the SAB will be composed of 22 women and 25 men, including 16 people of color, making it the most diverse SAB since its creation.
The SAB is a chartered Federal Advisory Committee, established in 1978, under the authority of the Environmental Research, Development and Demonstration Authorization Act, to provide independent scientific and technical peer review, consultation, advice, and recommendations to the EPA Administrator. Members of the SAB constitute a distinguished body of non-EPA scientists, engineers, and economists who are nationally and internationally recognized experts in their respective fields. The EPA’s request for nominations to the SAB in April 2021 garnered significant public interest and resulted in 352 candidates representing a cross-section of scientific disciplines.
“It is an honor and privilege to have been selected to serve on the SAB,” Wang said. “I look forward to representing LSU and having the opportunity to work alongside the other members of the Board.”
Wang has served on various advisory capacities for both federal and state government agencies including Louisiana Department of Environmental Quality, Louisiana Department of Health, National Oceanic and Atmospheric Administration, U.S. EPA, and U.S. Nuclear Regulatory Commission. He is a certified health physicist, Fellow of the Health Physics Society, and current Chair of the American Board of Health Physics.
Posted May 3, 2021
Louisiana has the longest-standing gasoline tax in the nation, logging more than 375 months since it was last changed. Calls to increase the seventh-lowest gasoline tax in the nation to improve road infrastructure appear annually but fail to gain traction. While the state’s citizens enjoy the low $0.20 per gallon tax rate, its benefits are likely offset by the costs of inferior roads, which lead to additional fuel consumption, vehicle damage, congestion, and in some cases, accidents.
In this white paper, CES Assistant Professor Cody Nehiba offers a nontechnical guide to the economic benefits and costs of increasing Louisiana’s gasoline tax. He considers practical implementation options regarding the tax’s equity, revenue usage, and more.
Nehiba notes that gasoline taxes are generally viewed as user fees for roads, funding infrastructure improvements and expansions. Two factors have contributed to the substandard condition of Louisiana’s roads: Inflation has reduced the purchasing power of the current per-gallon tax, and more fuel-efficient vehicles mean that our roads experience more vehicle miles driven, with lower gasoline tax revenues per mile collected.
Critics of increased gasoline taxes argue that the tax could be regressive, disproportionately affecting low-income residents; however, Nehiba points to certain policies, such as revenue-recycling schemes, that could offset those tax burdens.
Another issue of concern is that gasoline taxes do not perfectly align with road usage. “A driver’s total tax burden depends on how much fuel they burn, which is not perfectly correlated with the amount they drive,” Nehiba said. “It’s one reason that it is fair to ask whether we should use gasoline taxes to fund our road infrastructure.”
One option Nehiba examines is a vehicle miles traveled (VMT) tax that charges road users based on how much they actually use roads. VMT taxes are already being tested in other states, including Oregon, which has an opt-in VMT tax that allows drivers to replace their gasoline tax charges with a VMT charge. The system allows Oregon to examine the costs and benefits of a VMT tax on a small scale and examine different technology options.
“Louisiana could benefit from implementing a similar pilot program, potentially getting a ‘head start’ on what very well could be the future of infrastructure funding,” Nehiba said.
Posted April 30, 2021
Associate Professor Gregory B. Upton, Jr., prepared a response to a February 10, 2021, request from Louisiana State Representative Jean-Paul Coussan, chair of the House Committee on Natural Resources and Environment, regarding an independent analysis of the impact of House Bill 57 of the 2021 Regular Session. The response includes a dynamic scoring analysis of the economic impact as a result of the proposed severance tax exemption. The analysis includes taxes, licenses, and fees (TLF) collected by state government, but not local governments. Analysis is based on the pre-filed version of HB57, filed on March 4, 2021.
CES Associate Professor Gregory B. Upton, Jr., prepared a podcast for the International Association for Energy Economics on March 25, 2021. In the podcast, Upton discusses how, over the past decade, the advent of oil and natural gas production from shale geological formations fundamentally changed not only global energy markets but also the communities that reside above these formations. He examines how economists might gain insights from this natural experiment about labor markets and business cycles more broadly.
The discussion was motivated by three working papers:
Posted February 24, 2021
Dr. Wei-Hsung Wang, professor, Center for Energy Studies, and director, Radiation Safety Office, Louisiana State University, was recently invited to serve on a U.S. Environmental Protection Agency panel charged with reviewing a revision of the Multi-Agency Radiation Survey and Site Investigation Manual, or MARSSIM (Revision 2). MARSSIM provides information on planning, conducting, evaluating, and documenting the building of surface and surface soil radiological surveys used for demonstrating compliance with regulatory requirements. The panel will provide comments on the concepts, methodologies, implementation, presentation, and understandability of the document.
MARSSIM was developed collaboratively by four federal agencies that have authority and control over radioactive materials: Department of Defense, Department of Energy, Environmental Protection Agency, and Nuclear Regulatory Commission.
Wang, who is also the LSU System Radiation Safety officer, is one of 20 panelists, who represent academia (Clemson University, Columbia University, LSU, University of Florida, University of North Carolina, and University of Southern California), government agencies (Lawrence Berkeley National Laboratory, Lawrence Livermore National Laboratory, U.S. Geological Survey, and Washington Department of Health), medical and research institutes (Memorial Sloan-Kettering Cancer Center, Radiation Effects Research Foundation, and University of California Irvine Medical Center), and private industry (DAQ, Inc., Goldin & Associates, M.H. Chew & Associates, Renaissance Code Development, and independent consultants).
“It is an honor and pleasure for me to be involved as panel member to review this detailed guidance document and provide independent advice to the Administrator of EPA in this regard,” Wang said.
Wang has served in various advisory capacities for the Louisiana Department of Environmental Quality, the Louisiana Department of Health, National Oceanic and Atmospheric Administration, and U.S. Nuclear Regulatory Commission. He is a certified health physicist, fellow of the Health Physics Society, and current chair of the American Board of Health Physics.
Posted February 3, 2021
A new white paper reveals an approach that Louisiana can use to decrease the burden of a carbon tax on large industrial CO2 emitters. Titled “Overlooked Opportunity: Incentivizing Carbon Capture through Carbon Tax Revenues,” the paper details how carbon tax revenues can advance Carbon Capture Utilization and Storage (CCUS), a technology that reduces CO2 emissions.
A carbon tax, which prices CO2 emissions equal to their environmental damages, is becoming a likely tool for Louisiana and 24 other states as they work to reach net-zero carbon emissions. The white paper, written by LSU Center for Energy Studies Assistant Professor Brittany Tarufelli, reviews the appeal of utilizing carbon tax revenues to fund the research, development, and implementation of CCUS.
“Policymakers have largely overlooked the possibility of recycling carbon tax revenues to incentivize and reduce the costs of CCUS,” said Tarufelli. “This proposition would help emissions-intensive industry and smooth the transition to a lower-carbon economy.”
With global energy consumption forecast to grow 50 percent by 2050, and the industrial sector expected to account for roughly half that growth, industry and policymakers are pressed to address the challenges of meeting rising energy demands while reducing CO2 emissions.
“Advancing CCUS through carbon tax revenues would enable Louisiana’s emissions-intensive industries to meet CO2 reduction goals without drastic cuts in production. This approach would also reduce the tax burden on these industries and ultimately save consumers money,” said Tarufelli.