Why gas stations are still under construction with a 2035 deadline for new gas-powered car sales
Here is a bold prediction.
The world will not end in 2035.
Gas stations are not going to collapse until they die.
When they do, it will be a slow economic death, as most today are built on high future development value plots.
That’s why Maverik, Chevron, Rotten Robbie’s and 7-Eleven are all heading to the grand opening of new gas stations in Manteca.
In fact, 7-Eleevn is adding two gas stations if you count the one currently under construction on Avenue Louise and Main Street.
The year 2035 is when Governor Gavin Newsom warned the world that no new vehicle can be sold in California unless it is zero emissions.
Greenhouse gas activists have since questioned the wisdom of California cities — including Manteca — in approving additional gas stations or even allowing existing locations to add more pumps.
They were successful in passing local bans on new gas stations in towns like Petaluma.
The death of gas stations has been greatly exaggerated.
Alright, so they’ll eventually go the way of most blacksmiths and livery stables.
But the timeline that they’ll go fast as the dinosaurs did – a tongue-in-cheek analogy if there ever was one – is wishful thinking.
There were 18.5 million vehicles registered in California in 2021. Of those, 563,070 were “lightweight” electric vehicles.
Original owners now keep their vehicles for an average of 12 years. Then they are resold and driven for more years.
Chances are there will easily be over 5 million vehicles on the road in California running on fossil fuels by 2045 if all goes according to plan.
That’s more than three times the number of vehicles registered last year in Colorado.
It will still represent an important market.
Next, consider the economic realities of gas stations and commercial lending.
Gas station retailers – unlike oil companies – don’t get rich from every gallon of gas they sell.
The margin is a penny and sometimes less on each gallon sold.
This is determined after taking into account the wholesale price they pay for gas and a small detail called overhead – employees and related payroll costs, business loans, utility bills, property taxes, building upkeep and maintenance. , etc.
Today, gas stations make their money selling other things to the motoring public, from coffee, soda and beer to candies and chips that have higher profit margins.
As for commercial loans, almost all of them are much shorter than the typical 30-year home mortgage.
Like a fixed rate mortgage, the monthly payment does not change.
Take this reality against the return of higher inflation and loans to build and open new gas stations, the percentage of gross retail dollars to repay loans decreases year after year.
The bottom line is funding new gas stations for those giving loans isn’t a greater risk with the 2035 deadline California has imposed to stop selling new vehicles in the state that are fueled by fossil fuels.
There’s also the detail that most of the gas stations being built in California today — and especially in Manteca — are on prime real estate on the corners of busy thoroughfares.
These are not the gas stations of yesteryear such as the mid-block Sinclair station on East Yosemite Avenue between Mylnar Avenue and Powers Avenue.
Nor is it the 1930s one that was built on what is today off the beaten path like Moffat, hence why closed gas stations persisted for years.
Since Manteca stations – with the partial exception of Rotten Robbie’s – are built at intersections that serve four-lane arteries that already intersect with high traffic that will increase as the next 10,000 approved homes are built, this fate does not await them. .
Rotten Robbie’s is even close enough to a major intersection with four-lane roads in all directions that it doesn’t matter if they’re overhead.
That means the real estate they’re sitting on is likely to still be top-notch — and much more valuable, even in 2022 constant dollars — as the years go by. That would save the economy of removing gas tanks and that pencil for most, if not all, cases.
In Manteca, those who question the wisdom of building new gas stations have asked at Planning Commission meetings why the stations don’t include electric vehicle charging stations.
It comes down to economics.
You can fill up a gasoline vehicle in minutes. With today’s technology, it takes at least 30 minutes to fully charge an EV.
The amount of land needed for a gas pump means that on one side you can easily fuel 20 or more vehicles in an hour.
This same amount if the earth recharged at best two electric vehicles in the same hour.
Given the price of land in the design of projects, whether residential or commercial, this does not make sense.
That’s why the State of California requires new malls to pre-wire “X” parking spots for future charging stations.
The technology is unlikely to reach a point where a vehicle can be fully charged in five minutes.
That means consumers parking their car to shop will have to plug in and pay a partial charge so they don’t run out of juice.
That’s why the EV stations that are popping up today independent of new construction do so in parking lots strategically located under used parking lots such as the Tesla Super Charging Station near Target in Manteca.
The exceptions, of course, are Tesla charging stations in the middle of nowhere, like in Kettleman City off Interstate 5. Without Tesla making those investments given that they don’t anticipate anyone else do so, it would diminish the attractiveness of purchasing their electric vehicles.
Let us now turn to the political and economic reality.
The deadline for phasing out fossil fuel-powered lawn equipment was pushed back several years because the market and technology couldn’t move fast enough for the state edict.
A sign that is likely to happen to vehicles resurfaces this month.
Newsom is relaxing the mandate that electricity used in California cannot be generated by fossil fuels.
This reflects the economic reality that the electricity market is not here yet and may not be there for years, even with incentives.
It would also be bad optics if one plans to run for the White House and some 2 million homes a day experience power outages this summer, as the state’s own experts have warned that will happen. under current green rules.
That’s why Newsom floated the idea of extending the operation of PG&E’s Diablo Canyon nuclear power plant a few months ago.
It doesn’t burn fossil fuels, but it’s high on the list of climate activists.
None of this is to say that switching from fossil fuels is unnecessary and shouldn’t happen.
It’s just that people who think just because the government has issued an executive order that fossil fuels are going to disappear overnight or even be weaned off the way the state hopes to start doing by 2035 are just looking at part of the overall picture.
This column is the opinion of the editor, Dennis Wyatt, and does not necessarily represent the opinions of the Bulletin or 209 Multimedia. He can be reached at D[email protected]