A U.S. government-backed Silicon Valley company says it has reached a key milestone that will much-reduce the cost of producing lithium-ion batteries, whose high pricetag has been the primary hurdle making electrified cars prohibitively expensive. Envia Systems, whose shareholders include General Motors, said its improvement allows an electrified vehicle to travel for 300 miles at half the cost for the battery pack. If proven on a commercial scale, the advance could bring the price of electric and plug-in hybrid vehicles much closer to a par with pure gasoline-driven models.
There are almost weekly claims by private and university scientists to have broken through key technical hurdles preventing the commercialization of electric cars, but Envia CEO Atul Kapadia told the New York Times' Jim Motavalli that the improvement is different. "What we have are not demonstrations, not experiments, but actual products. We could be in automotive production in a year and a half," Kapadia said.
The technology is built from a breakthrough made at Argonne National Laboratory, which licensed the advance to Envia in 2008. Envia also received a $4 million grant from ARPA-E, the radical energy research laboratory at the U.S. Energy Department. GM invested an additional $7 million in the Newark, Ca.-based company. (Envia posted some of its lab data here).
The advance is in energy density -- the number of watt-hours per kilogram of kilogram of battery material. Envia says its battery cells deliver 400 watt-hours per kilogram, or more than twice the best performance currently on the market. Kapadia called the 400-watt-hour level "the holy grail of electric cars," writes Sarah Mitroff at VentureBeat. If GM could commercialize the development somewhere on the scale that Envia describes, it could make the $41,000 Volt much more affordable, writes Mitroff.
Envia's lower cost battery will give GM the chance to lower the cost of the Volt, making it more available to the general car buying public. In addition, other car companies could use the technology to create economically viable cars that could compete with gasoline-powered economy models.
Envia's announcement comes against a black eye suffered by the Energy Department for its investment in Solyndra, a solar panel company that has filed bankruptcy. To the degree the technology is proven out, it could be a public-relations boon for Arpa-E.
Pessimism inside the global electric gamble: Almost every motor company on the planet is eager to get electrified models into their showrooms, and the profit on their struggling balance sheets. So are thousands of smaller companies that supply parts to the carmakers, not to mention the mostly cash-strapped countries in which they are headquartered, seeing these vehicles as the vanguard of new, economy-leading industries. One might think it early to judge how the market will respond, yet industry insiders -- perhaps shell-shocked from their recent woes -- are already worried (see this excellent piece at Chemical & Engineering News. Subscription required).
Let's look at the fleet, which is divisible into three distinct groups: There is Nissan, whose colorful CEO, Carlos Ghosn, reckons that the world's motorists want an all-electric vehicle, such as his Leaf (or the new Tesla X, pictured above). Toyota leads the second group, and suggests that Ghosn is nuts -- drivers want only a dash of electric when they drive, says the Japanese company, which is offering cheaper, gasoline-propelled vehicles such as the Prius that benefit from a push from comparatively large batteries. The third group is typified by General Motors, whose plug-in hybrid Volt goes both ways, featuring a 40-mile battery and a backup gasoline engine with a 260-mile range.
So which has made the best bet? As suggested above, disheartened industry insiders, gathered in the Florida city of Orlando this week, think the answer may be none of the above, at least not at high sales volumes. Electrified vehicles are currently serving only a niche, "and that's probably all they're ever going to be," David Raney, a former executive of Honda Motors and now a Santa Barbara-based consultant, told me at the Advanced Automotive Battery Conference. Why is this so? The answer is one word, say these hands -- cost. A few wildly successful merchants manage to charge a premium -- Starbucks and Apple come to mind -- but makers of electrified cars are not currently among this starred group. Motorists by and large have not proved willing to fork over up to $10,000 extra for an electric car or a plug-in hybrid.
Go to the Jump for more on the electric car race, and the rest of the Wrap.
Jordan Strauss/Getty Images
The New York Times’ Leslie Kaufman and Kate Zernike had some fun over the weekend at the expense of an apparently large number of Americans, including a top presidential contender, who think clean energy is a subversive plot to create a world government led by the United Nations. Many people are merely annoyed by smart meters, bicycle lanes and added home insulation, but these folks say such ideas are seditious.
In 1841, Charles Mackay wrote a gem called Extraordinary Popular Delusions and the Madness of Crowds, a history of market bubbles based on misperceptions of reality. Call it what you will, but we are in a period of unusually high erroneousness when it comes to energy and the places it’s produced.
Consider the petro-state of Russia. Over the weekend, tens of thousands of people stood outside in minus-10 degree frost in Moscow in order to inform leader Vladimir Putin that he could not simply presume to swap places with President Dmitry Medvedev. What did Putin hear and see? Treacherous protestors acting under orders from Washington.
The Wall Street Journal’s Alan Cullison explains Putin’s assessment as a campaign strategy. Yet the last six years of history suggest that the former KGB officer does actually perceive a White House plot behind the outbreak of popular uprisings of recent years, including the color revolutions of the former Soviet Union and the Arab Spring. (This delusion extends to Washington, where current and former U.S. officials have informed me with serious brows of their decisive role in the color revolutions; these hands still believe that democracy is exported.)
Spencer Platt/Getty Images
When one technology sees a rival coming over the hill, it does not ordinarily just lie down and surrender -- clunky cigarette-box-shaped cell phones persist despite the feverish popularity of the smart phone, for example. So it will be with electric-propelled vehicles. Plug-in hybrids look likely to start small, then make a serious dent in the vehicle fleet in the 2030s -- forecasters think that half to 70 percent of new vehicles sold in 2030 in China will be electrics of some sort. But that does not mean the disappearance of gasoline-driven vehicles -- makers of vehicles using the internal combustion engine are already cooking up devilish upgrades now that they see competition nipping at their heels.
The latest rollout in this devilish category is Ford, which next year will roll out a gasoline-propelled Focus in Europe that it says can get 69 miles per gallon. How does this Focus (race car version pictured above) do so? By downsizing the engine to three cylinders, reports the London Independent.
It is interesting how efficient a car can become -- and how overall oil demand can plummet -- when the factor of economic extinction comes into play. BMW has unveiled a concept car called the i8, also featuring a three-cylinder engine but in this case hedging its bets -- this is a hybrid vehicle with a battery that alone can take the car for 20 miles.
These are all signs of an industry undergoing a fundamental shakeup. In a way it is simply back to the future, writes Rohit Jaggi at the Financial Times, who notes that Porsche unveiled its first hybrid electric in 1900.
Look for the makers of gasoline-driven cars to dig in their heels with greater and greater efficiency. But the result of that seems likely be more robust plug-in hybrids. This blog has noted that it will be difficult for pure electrics to gain wide popularity since range-anxiety will persist, but the same does not hold for plug-in hybrids, which will calm nerves with a back-up gasoline engine. Even I am being forced to give up my clunky cellphone.
David McNew/Getty Images
Should nations single out select big products to manufacture, and put millions to work on them in the confidence of a big economic upside? China has done so -- solar panels come to mind, in addition to wind turbines, high-end batteries and bullet trains. Japan has done similarly with cars since the 1980s, and South Korea more recently. But in the United States, this approach to industrialization is highly controversial -- swaths of the economic and political edifice scorn it in highly unflattering terms, such as that it is "chasing fads," and puts "the chosen few at a competitive advantage over all other job creators." (Above President Obama visits a Smith Electric Vehicles plant.) On the ExxonMobil website, Ken Cohen says parts of the Obama Administration's industrial policy amounts to "telling oil workers that their jobs are less valuable to the economy than those in other manufacturing industries."
Such detractors have gained fuel in recent weeks with the implosion of one of those winners -- the solar company Solyndra, which has filed for bankruptcy after receiving $535 million in stimulus funding. Yet the Administration is pushing ahead. Just last Friday, it announced a $90 million loan for a Colorado solar power project.
Over the last couple of weeks, the New York Times has been exploring industrialization in an interesting way. Here is what the issue adds up to: Manufacturing produces a lot of jobs -- five indirect jobs for each one in the actual plant, writes Louis Uchitelle in a piece yesterday. Therefore, if the U.S. wishes to drive down its long-term unemployment rate, factories must get up and running.
Uchitelle's piece features the thinking of Andrew Liveris, the CEO of Dow Chemical, who has made himself a spokesman for U.S. re-industrialization even as he has relocated much manufacturing to China. Dow is benefitting from $141 million in public funding for a Michigan solar pilot plant, and $161 million for a nearby advanced battery factory for electric cars. In both cases, the grants amount to half or more of the cost, but Liveris says that is what is required to revive the U.S. as a manufacturing country. He says the federal government must pick winners. "I would not let free markets rule without also addressing what I want manufacturing to be 20 or 30 years from now," Liveris says.
Saul Loeb AFP/Getty Images)
We continue to see new critical rankings of the top electric and plug-in hybrid vehicles, but the truth is that these models so far are selling at best in the low thousands and more often in the hundreds (the new French-German Mia pictured above). So neither the U.S. nor Chinese are likely to achieve their competing goals of 1 million such cars on their respective roads in the next few years.
This is not surprising -- it is simply the air starting to go out of the hype. So what truly does seem likely in the coming years? Read on to the jump.
Alain Jocard AFP/Getty Images
Over the weekend, the New York Times Magazine ran out an interesting piece on a big U.S. problem -- its much-weakened capacity to manufacture consumer products. The piece, by Jon Gertner, tells the story of the Obama Administration's effort to start restoring that ability through an energy policy focusing on advanced batteries. It's a controversial policy -- Washington has distributed some $2.5 billion over the last two years to build a lithium-ion battery manufacturing industry from scratch, which critics call "picking winners" -- but it shouldn't be. Given the lack of a growth scenario for well-paying U.S. jobs, it is sensible to get serious about the hot global competition to dominate future battery-driven industries.
But there is much chance that U.S. companies need more than stimulus to triumph -- the trial-and-error process of scaling up does not happen in a season or two, but over many, many manufacturing cycles often lasting years and sometimes decades.
Which explains a second bit of news -- that General Motors is intensifying its collaboration with South Korea's LG Group on the manufacture of the hybrid Volt. LG is one of the world's most agile and competitive manufacturers, a company with $89 billion in 2010 revenue and a big part of South Korea's eclipsing of the Japanese in the making of many electronics. LG already manufactures the nerve center of the GM Volt -- its lithium-ion battery -- but now the two companies are going to share costs 50-50 on the entirety of future electric and hybrid models.
Yoshikazu Tsuno AFP/Getty Images
The Kremlin Contest: Perusing the first week of entries in our friendly, low-risk wagering contest for who will be Russia's next president, I've discovered that I am not alone: Many conclude that Vladimir Putin will step aside and permit Dmitry Medvedev to remain Russia's president. But where are the Putin bettors -- the multitudes who are sure that Putin will return to the Kremlin in elections next year? Get your bets in: You must name who will be president, who will be prime minister, and the date on which Putin will disclose his choice. You must also name your small, non-cash wager (one contestant has wagered a shot glass; I have wagered a glass of Rioja). Remember that, if you lose, you must mail your wager directly to the winner. You can use the email link in the "About this Blog" box on the right, or my twitter address: @stevelevine. The deadline is Sept. 1.
When oil is next door: On paper, the gasoline-guzzling United States has no oil scarcity problem. To the south, Venezuela has 211 billion barrels of oil reserves, second only to Saudi Arabia. To the north, Canada's Alberta province possesses a conservative estimate of 175 billion barrels of oil. At home, there are the newly prolific volumes of the Bakken and Eagle Ford oil shales, and new plays in the Gulf of Mexico. So why do Americans fret about the supposed peaking of oil? Because of geopolitical, environmental and self-imposed impediments that keep these enormous volumes at arm's length.
Alberta is the piece of this picture that's on my mind today. Chip Cummins and Edward Welsch weigh in with a long, page-one piece in the Wall Street Journal on the province's long, grueling campaign to persuade its southern neighbor -- the United States -- to accept a near doubling of current oil exports to 1.1 million barrels a day, and more down the road. The hang-up is that the crude comes from oil sands (pictured above), which get a lot of Americans riled up because of the pollution created during production and refining.
The worries about oil sands have led Alberta and the companies working there to try to make the sands more environmentally acceptable. For instance, unlike shale gas drillers in the United States, who all-but refuse to police themselves and go transparent, Alberta has adopted a pro-active carbon offset program. They say that, all in all, oil sands are now no more polluting than almost any other form of oil drilling.
Over at Time, Tara Thean asks validly whether new doubt is cast on Alberta's plans to pipe more oil to the United States because of a fresh oil spill from an ExxonMobil pipeline in the Yellowstone River. Alberta will have to respond. But if it does -- which one imagines it will -- U.S. environmentalists ought to reconsider their opposition to this expanded oil flow. Hydrocarbon developers have little incentive to repent if environmentalists demonstrate no capacity for compromise.
Read on for more of the Wrap
The conventional wisdom about the global electric-car race is that China is a shoo-in because of its enormous domestic market: The Chinese may be laggards in the laboratory, which is the current battleground, but they will best everyone else when the competition reaches the equally pivotal stage of the manufacturing scale-up. The Communist Party, it is thought, will simply order massive numbers of Chinese to buy electric cars. With their plants churning at full hilt, the Chinese will learn far more quickly than Americans, Japanese or South Koreans how to most efficiently create these vehicles, and hence give their vehicles a decisive advantage.
The Chinese are among more than a dozen countries vying to dominate the nascent advanced battery and electric-car industries. If these technologies turn out to be economy-makers over the next two or three decades as many project, the race will confer on the winner serious geopolitical leverage along with financial potency. The Obama Administration is fully engaged in the race, against biting criticism from its political opponents.
Because of everything else it has managed over the last quarter-century, China is regarded as the 800-pound gorilla in the room -- it aspires to have a half-million electrics and plug-in hybrids on the road by 2015, and almost everyone has assumed that's what will happen. But one wonders how. A few hundred electric-taxis are on China's roads or nearly so -- 50 BYD e6 cabs are in Pengcheng, with 250 more on their way by next month, write Fang Yan and Don Durfee of Reuters. Yet in Hangzhou (pictured above, batteries are installed in a Hangzhou taxi) there have been hiccups -- 30 electric cabs had to be pulled off the road in January when the engine in one of them caught fire; they went back into service last month. But safety isn't the main problem with these cars in terms of taxis -- as everywhere else, it is the high cost. The e6 costs 179,800 renminbi, accounting for subsidies, compared with less than 100,000 renminbi for the Volkswagen Santana, a popular Chinese taxi model.
When you turn to ordinary people, electrics haven't done better. Shanghai's 20 million residents have registered a total of 10 electric cars. Hangzshou, with 8 million people, has 25 registered electric cars, as Reuters quotes China Business News.
According to China Car Times, Chinese are no longer prepared to buy simply because a product is presented to them. In a survey of potential electric-car buyers by Tongji University and Sohu Auto, 76.8 percent of respondents said they wouldn't pay a electric-car sticker price 50 percent higher than that for a gasoline-driven model, the newsletter reports. Just 35 percent of Chinese said they would buy an electric solely for environmental reasons.
These results mirror similar U.S. surveys. The Boston Consulting Group has produced a new report concluding that electric cars will take another 25 years to capture a serious U.S. market, which seems reasonable against the history of the adaption of new technologies. It appears that China may be in the same loop.The race is still joined.
AFP / Getty Images
For electric cars, a long battle: A misunderstanding about the international electric-car race -- the rivalry for domination of a possibly gargantuan market for electric cars and advanced batteries -- is that the winner will be known soon. It's clear why people would so conclude -- so much hoopla has surrounded the launch of the Volt, the Tesla, the Leaf and other models that the international contest looks a bit like the U.S. Open. We only wish we knew now which one is Rory McIlroy (pictured above). But does this perception conform with other recent examples of big technological adaptations? Not really. Even in our super-charged, accelerated world, laptops took 15 years of scaling up and pricing down before embedding themselves popularly, and cellular phones have been the same. By that measure, it will be the second half of the 2020s before electric cars are a significant part of the highway traffic.
In an upcoming study, the Boston Consulting Group, a management consulting firm, forecasts that electric cars will make their biggest splash from 2035 to 2050 (autonews.com helpfully posted a draft copy of the study). While no one can reliably forecast consumer taste one way or the other, this outlook seems a reasonable dart-throw. Of course, we are talking pure electric vehicles -- when you add in hybrids, penetration will be much faster. The reason is that both manufacturers and consumers are going to be thinking flexibility -- it will be prudent to have hybrid capability. Yet one reason the climb will be long is not just the height of the bar -- making models that travel far enough before requiring a recharge -- but the requirement to beat out gasoline-driven rivals, which for competitive reasons are bound to become far more efficient, as Jeff Bennett writes at the Wall Street Journal.
Read on for more of the Wrap.
Rob Carr/Getty Images
As the year started, we were in the beginning stages of an unprecedented upheaval in global energy and an associated shakeup of geopolitical presumptions. A whole string of dominoes were poised to drop. Especially potent was a global glut in natural gas -- a technological breakthrough in shale gas drilling, plus a surge in liquefied natural gas, which together promised to deliver a reliable flow of the relatively clean fuel for decades. This alone made Russia weaker in Europe, which now had new supplies to challenge Gazprom's monopolistic hold on the continent. But it also was a potentially fundamental influence on China, which consequently could substitute gas for some of its projected steep growth in oil and coal consumption, and thereby significantly lower the currently foreseen buildup of heat-trapping gases. On top of that was a trend toward bigger and broader electrification - for powering cities and vehicles - that could shake up everything. Depending on what fuel is used to create the power, among the outcomes could be a lower growth rate in global oil consumption, and weaker influence for some current petro-states.
All that was before the Arab Spring and the Fukushima nuclear power plant crisis, which are roiling the politics of Middle East petro-states, as Javier Blas writes interestingly at the Financial Times, and the future of nuclear energy.
Today, President Barack Obama dove into this vortex with a fresh attempt to reshape how the United States powers its economy, homes and vehicles. But, for those that are not doing so already, countries around the world will also have to begin reconsidering their energy strategies. Because one can no longer state flatly that Saudi Arabia will be the strongest energy force on the planet for decades to come. China isn't necessarily going to be quite the greenhouse gas-spewing machine of current projections. Russia may not be the neighborhood bully, and may become much closer to the West. And so on -- one must recalibrate one's national and corporate strategy to take into account the potential results of a primary energy shakeup. Take a look at this video clip, then read on to the jump.
Alex Wong / Getty Images
Saudi Turnabout on Egypt: When geopolitical chess players observe the uprising in Egypt, they don't see Egypt and Hosni Mubarak, who has now stepped down from power. They see Saudi Arabia and the rest of the big Persian Gulf oil producers, and the question mark of whether they are immune to the Tunisian Contagion, the popular uprising ignited by the ouster of Tunisian President Bine Zine El Abidine Ben Ali (who incidentally received refuge in Saudi Arabia). After all, Saudi Arabia alone produces 10 percent of the world's oil supply, and through its ability to produce a few million barrels a day on top of that singularly influences whether or not oil traders go into panic.
It turns out that the Saudi regime sees the same thing. So in recent days, the kingdom toned down its categorical support for Mubarak's continuation as president, reports Abeer Allam at the Financial Times. Specifically, Allam points out the recently more measured reporting on the Egyptian events on Saudi-owned al-Arabiya TV. Allam quotes one expert close to the Saudi regime: "They do not want to be seen as against the [Egyptian] people."
Meanwhile one wonders at the role of the Egyptian Army in edging Mubarak out. In recent days, Mohamed ElBaradei, the Nobel laureate and former international arms inspector, called on the Army to step in and stave off a situation that he says may otherwise "explode." This was almost certainly an ElBaradei blunder -- one thing a popular uprising does not want is a record of reliance on military force, because, historically speaking, once an army senses it's responsible for a fellow or movement being in power, it cannot resist later issuing reminders of it in the form of requests (read: demands) for more power and privileges.
In Tunisia, Ben Ali left in the face purely of the popular uprising. In Egypt, the uprising in Tahrir Square was the technical cause of Mubarak's abdication. But if it was the Army that ultimately pushed him out -- with the request of the uprising's leaders -- the opposition may come to regret it.
Egypt and oil prices: No sooner did Hosni Mubarak step down then oil prices continued their slide of recent days. Immediately, prices dropped to about $86 a barrel in New York. The price of U.K.-based Brent crude, traded abroad, continued its very strange, unanchored trajectory upward; one presumes that later today European traders will realize that there is still a glut in global oil.
Whatever the case, at least for now we are looking at stable oil prices in the $80-$100 per-barrel range, more toward the lower end. The Paris-based International Energy Agency continues to remind us that global demand continues to rise, so that supplies are becoming tighter. But that is to worry about next year.
Grandiosity on the Silk Road: At Oil and Glory, we keep receiving emails from current and former U.S. diplomats unhappy with our skepticism about a plan to turn Afghanistan and all the surrounding nations including China, the former Soviet Union and South Asia (excluding Iran of course) into one, big, happy Silk Road family. The people suggesting this idea, meaning a spider's web of interconnected electric lines, roads, energy pipelines and other projects, believe possibly rightly that only trade and infrastructure -- a connection with the rest of the world in every direction -- will ultimately bring peace to the region. Their most recent announcement is a two-lane, U.S.-financed highway straight through the militant stronghold of South and North Waziristan in Pakistan's trial belt, abutting Afghanistan, reports Matthew Green at the FT.
Is this region truly ready for expensive infrastructure projects imposed from the outside that they themselves cannot -- according to the people sending me emails -- plan, build or manage themselves? How about some food for thought -- yesterday in the Pakistani city of Quetta, near the Afghan border, Baluch rebels for the second time in a week blew up the biggest natural gas pipeline in the province, leading to the Pakistani gasfields at Sui. Virtually all the trans-Afghan pipeline plans I've seen call for transit through Baluchistan. So do the trans-Afghan road networks. Are these Baluch on board with you?
More food for thought: China meanwhile is again going where the West fears to tread. It has agreed to build $13 billion in railroads in Iran, Reuters reports.
they had spilled electric-car secrets to China. Two of the accused have since filed defamation suits against the company, denying they were doing any such thing. One of the executives said the whole matter must be the result of dirty tricks by rivals in the high-stakes electric-car race. So what is really going on?Spying and batteries: A month ago, Renault filed a criminal complaint against three executives claiming that
In an interview with the Wall Street Journal's Sebastian Moffett and David Pearson, Renault CEO Carlos Ghosn suggests that it comes down not to specific evidence of why the trio had Swiss bank accounts, the proceeds of which were allegedly traced to China. Instead, Ghosn said, there was an unacceptable risk that, given the allegations of an appearance of financial impropriety, he could not gamble that they had divulged secrets, for example, on the cost of Renault's battery.
Ghosn said: "The most interesting information I can have about a competitor is the cost. For a battery, the most important element is the cost per kilowatt. From the cost per kilowatt, I may guess what kind of technology you're developing."
With Hu Jintao in Washington, and China's clean energy manufacturing juggernaut among the thorniest subjects between the U.S. and China, Steven Chu is doing his part to bring down the temperature. In a decade or two, the U.S. energy secretary asserted at a joint dinner last night, the symptoms of climate change will become so apparent that they will wash away the divisive politics we currently see in the United States on the issue. Most everyone will agree there is a serious problem, and the discussion will turn elsewhere, specifically to How Can I Get Rich in Global Warming. And somewhere in the race for wealth, said Chu, the two countries can find collaborative common ground.
It was hard to discern how many people in the packed ballroom at the Mandarin Oriental Hotel bought all that. Friendship? Hard to say. There is much acrimony over China's green subsidies, and Beijing's assertion that the U.S. does the same thing. But if there is agreement between the sides, it's on Chu's point that there is the potential for incredible economic growth for the country that best manages the green-energy manufacturing space, huge sums of cash. As we have discussed previously, the advanced battery and electric car industries alone may become large enough to drive economies.
It seems to me that, given the stakes, it will be hard to collaborate seriously, as Chu suggests. Yet the show of comradeship was there. Earlier yesterday, Wan Gang, China's celebrity minister for science and technology, called clean energy cooperation a potential "bright spot" in the two countries' relations, Reuters' Timothy Gardner and Ayesha Rascoe write. One possible area of cooperative business is the development of nuclear power - Bill Gates is talking up the deployment of a new U.S.-designed reactor in China that would not make it past U.S. regulators given years and years of trying, as Matthew Wald writes at the New York Times. If it's tried and works in China, it can be rolled out internationally.
The two sides orchestrated the signature of business deals. Yet one got the impression that at least some of this was of the Potemkin type - much nice talk without many of the details worked out. For example, Alcoa announced a $7.5 billion agreement to work with the China Power Investment Corp., but the sides actually have not agreed on any specific projects, nor any specific dollar amounts, Natalie Doss, Xiao Yu and Feifei Shen report at Bloomberg.
Chu, a Nobel laureate, said that some of his greatest scientific rivals have become his best friends. But he also noted a stark fact, which is that it's easy to be gracious once one wins the race: "The second person to say that E=MC2 doesn't get much credit." Which is why some of the rough edges can be shaved off, but the highly emotional atmosphere is likely to continue.
With the push of oil prices up up up, we are seeing genuine security threats -- food prices going through the roof and populations thus endangered. Then there are the crises-of-convenience that also hew closely to the price of oil, but are actually public relations exercises. Interestingly, this time airlines are not predicting their imminent demise, but instead say they have learned from the past and are hedged for survival and even profitability with even $100-a-barrel oil, Linda Loyd reports at the Philadelphia Inquirer. The automobile industry is another story -- U.S. carmakers, only recently rescued after decades of losing market share to forward-thinkers abroad, are again suggesting that if they are forced to produce fuel-efficient vehicles, well, they just might not make it. Pass the Kleenex.
In Detroit, the North American car industry's annual auto show is under way in an ebullient atmosphere, with carmakers from around the world elated over their sales numbers and revived future. New luxury models are among those unveiled, in addition to well-considered concept vehicles meant to cash in on forecasts of oil-price spikes. Chrysler, for example, suggests boosting the number of gears in its automatic transmission to nine from the current five for a 25 percent increase in fuel efficiency, writes David Sedgwick at Crain News Service. China's BYD, Toyota (Prius), and Ford all talk of their new electric and plug-in cars, David Bullis reports at MIT Technology Review.
Against that backdrop, American carmakers -- as they did in previous decades in protest of calls to improve efficiency -- have gone to Washington arguing that they simply cannot meet a 15-year goal of creating 62 mile-a-gallon car and truck fleets. And if they do, the price will rise so high, they won't sell enough to stay in business, Josh Mitchell writes at the Wall Street Journal. Cars could cost $6,400 more and drive down sales by 25 percent. (Once one accounts for inflation, is a 21 percent price increase on a $30,000 car over a 15-year period egregious?)
Others have asserted public-policy arguments for higher fuel efficiency. Less oil use means a better balance of trade: If you strip out oil imports in the most recent reporting period, for example, the United Kingdom's import-export balance would have shown an improvement rather than the worsening that did appear, Emma Rowley reports at the Daily Telegraph. More efficient vehicles would instantly boost the United States' ability to meet CO2 emission- reduction goals.
But what about the simple matter of competitiveness? Toyota is busy branding itself in the efficiency space by trotting out a whole line of Priuses, Hybrid Cars reports. Renault and the whole country of France are preparing to file an intelligence case today against a trio of scientists who may have passed on highly strategic electric-car secrets to another country, said to be China, Reuters reports. (Update:Renault today filed a criminal espionage complaint that does implicate a Chinese firm, the State Grid Corp. of China, in allegedly making payoffs to two of the three Renault employees, reports Bloomberg.)
Yet in the United States, we see the Alliance of Automobile Manufacturers arguing that carmakers must be permitted to churn out gluttonous vehicles. I wonder, however, if we are seeing a version of the airline industry's hedging strategy -- carmakers may be seeking flexibility in Washington, first and foremost because, with a new Republican surge, they can. In actuality, however, as Bernard Simon writes in the Financial Times, carmakers are fairly cheerful regarding the financial potential of their new fuel-efficient fleets.
Caution is advised. One cannot ignore the Jevons Paradox, for instance, which argues that more fuel efficiency could result in more gasoline use because people might drive more, writes Edward Glaeser. In addition, there are winds blowing the other way -- Americans are still buying large vehicles. Simon writes:
Demand for big pick-up trucks has been unusually strong in recent months, accounting for 13 per cent of US industry sales in December, the highest in almost three years. According to a survey published by Consumer Reports, an independent consumer watchdog, only 28 per cent of car buyers cited the environment as an important factor in their choice of vehicle, down from 40 per cent in 2008.
Yet, gasoline prices will not drop back down to $2 a gallon anytime soon. And that is apparent in Detroit's move to reduce its reliance on gluttonous vehicles. Do not weep for Detroit quite yet.
Bill Pugliano/Getty Images
Yesterday I wrote that 99 is a highly compelling number when applied to the miles per gallon one can obtain while driving an electric car, in this case the Nissan Leaf. Many more people will be attracted to take a look at a car with such a credential. But Vaclav Smil, a University of Manitoba professor, author of Energy Myths and Realities and a generally wise hand, responds by taking issue with the Environmental Protection Agency's evaluation of the Leaf's mileage. When one takes into account the use of coal or natural gas to produce the electricity to power the Leaf - as opposed to the more highly energy-dense gasoline in an internal combustion energy - the mileage plummets, Smil wrote me. Here is his beginning salvo:
33.7 kWh is indeed a thermal equivalent of a gallon of gasoline (America still prefers its medieval units). But that electricity has to be generated, and 80 percent of the United States' electricity comes from coal and natural gas, which is about 35 percent efficient, so that 2.85 TIMES as much chemical energy in coal is needed to produce those 33.7 kWh, or, inversely, the actual ‘mileage' would not be 99 but 34.7 mpg, MUCH worse than my Honda Civic. As always, little kindergarten science and basic numeracy goes a long way.
Thanks Professor Smil, I replied. What about natural gas? Isn't it much more dense energy-wise than coal? Yes, but still nowhere near gasoline. Here is Smil's breakdown:
A correction (which does not affect the outcome) first: I said 80 percent but it is actually 70 percent fossil-fueled (roughly 50 percent coal, 20 percent gas), 20 percent nuclear and 10 percent hydro. If the electricity for electric cars would come ONLY from hydro or PV or wind then we could use the STRAIGHT thermal equivalent (1 Wh = 3600 J or 1 kWh = 3.6 MJ) and, obviously, no carbon burden is involved (except, of course, for fossil energy needed to MAKE the turbines, cells, steel for towers etc, all embedded energy).
Coal generation involves a mix of old and new plants, the former as low as 30-32 percent efficient, the best new ones about 40 percent. If we go with 35 percent as a good U.S. coal-generation mean, then we need 1/0.35 or 2.857 kWh of coal to generate a kWh of electricity.
Gas-fired generation is more efficient, 40 percent straight, and up to 60 percent in combined cycle with a steam turbine. So if we assume a liberal mean of 50 percent, we need 1/0.5 or 2 kWh of natural gas to generate a kWh of electricity. All in all, this involves two recurrent and a bit tricky problems of converting different energies to a common denominator and choosing the average efficiency rate (keeps changing!). One way to do it (particularly when doing international comparisons) is to assume that a kWh of hydro or wind or nuclear electricity equals its straight thermal value of 3.6 MJ; the other is to assume (for all, or at least for the nuclear) the prevailing mode equivalent, in the U.S. case the fossil fueled generation using coal and gas, and multiply the non-fossil kWhs roughly three times.
The EPA used a straight equivalent converting kWh to gasoline, but as most of those kWh will come from fossil-fueled combustion it should have used a weighted mean of the U.S. electricity generation, and hence at least roughly halving the 99 mpg claim. Of course, it would be nice if we could generate with 100% efficiency, but thermodynamics does not play nice.
The blogosphere is beginning to gripe about No. 99 as well. At Forbes, Warren Meyer gets hot under the collar, and sees an EPA conspiracy afoot. At the New York Times, Matthew Wald merely notes that two federal agencies - the EPA and the Federal Trade Commission - disagree on the Leaf's range on a single charge. The former says it's 73 miles, and the latter 96 to 110 miles.
The trouble here is the inherent imperfection of attempting to translate a numbering system intended for one thing (gasoline-fueled vehicles) to another (electric cars). Yet, since the entire energy edifice is changing before our eyes, with natural gas moving closer to center stage in terms of electricity production, and the electric-power grid becoming generally more efficient, the ball is not static.
Update: The mileage numbers are just out for the Chevy Volt, which though advertised as an electric car actually is backed up by a gasoline-driven engine when the battery wears out. It clocks in at 60 mpg.
Steve LeVine is the author of The Oil and the Glory and a longtime foreign correspondent.