When Will the Auto Industry Reach a "Better Place"? 22 comments
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California has joined Israel, Denmark, and Australia by teaming up with Shai Agassi's Better Place to bring electric transportation infrastructure to the Bay Area. See these related articles at the Better Place website, "San Franscisco to Detroit: Go Electric" from Green Wombat, and "Recent Announcements Will Spark Electric Car Sales" at Seeking Alpha.
While this is indeed a milestone in the US, our political leadership still doesn't "get it". How ironic it is that the Big 3 bailout discussions continue without some basic common sense terms in return for US tax payer money:
- Existing "little 3" CEO's must make their exits without bonuses and golden parachutes.
- The companies must agree to make natural gas cars and trucks, electric cars, and hybrid high efficiency vehicles.
- Hummers, low mileage SUVs, and other ludicrous models must cease production.
Meanwhile, Obama's job creation plan missed a golden opportunity to put people to work doing something strategic and productive: building out the natural gas infrastructure on the interstate highway system so that the "chicken and egg" problem with natural gas powered transportation is solved once and for all. There remains only one natural gas powered vehicle for sale in the US (well, some parts of the US), the Honda Civic GX.
There remains only one natural gas garage refueling system on the market, Phill, and my understanding is the price is still in the $4,000 neighborhood. How in the world is the US going to solve its energy crisis when we cannot even get off the starting blocks with respect to natural gas powered transportation? At the same time, oil exporters like Iran and Brazil continue to build and convert their cars and trucks to run on natural gas so they can export more oil to the US.
There are some hopeful signs out there. Recently, several electric utility company CEOs had a meeting in which they agreed to support electric car manufacturing by purchasing electric vehicles for their operations. Apparently, it has finally dawned on them that electric vehicles will mean more sales and profits for their companies. That said, why in the world natural gas distributors and companies aren't supporting efforts by Pickens and others to build out natural gas powered cars and trucks is beyond me. Wouldn't you think local natural gas providers would be working hand and hand with the little 3 auto and truck manufacturers to build natural gas powered transportation that would increase their sales and profits? Why aren't they?
Meanwhile, the bailouts go on and, for the most part, sane energy initiatives are not part of the conversation. Just in case anyone has forgotten, the US *still* has an energy crisis and a strategic, long-term, and comprehensive energy policy is the only economically viable solution.
By the way, the auto industry makes arguments about the extreme costs of "re-tooling" to make alternative vehicles. I wish someone would explain to me why it cost so much to re-tool existing manufacturing lines to make natural gas vehicles when you can pull into any conversion shop in Utah, Iran, or Brazil and leave 4 hours later with a converted vehicle that runs on natural gas. You need two things: a different fuel tank (natural gas fuel is under high pressure) and you need a new fuel delivery system. Of course to optimize the car, the engine controller should be reprogrammed as well, but this is simply software and no "re-tooling" is necessary. So, the re-tooling argument doesn't hold. There are two reasons only the US lacks natural gas transportation solutions:
- Policy
- Lack of natural gas refueling stations
Back on the hill, the US continues its policy of flooding the uber-wealthy and well-connected with yet more bailout money as the printing presses are definitely running overtime. What this means in the future is much higher inflation and a huge reduction in the standard of living in the US (at least for those people not of the "chosen few"). If Japan, China, and the oil producers ever decide to stop financing this madness, the US dollar will drop like a rock. That said, I have certainly been wrong throughout this whole "financial crisis" in terms of what the US dollar and gold reactions would be: the US dollar index is up some 19% since July. I suppose this is result of deleveraging and a flight to "quality" US treasuries.
However, how long can this last? What is the compelling case to invest in a US economy which is not only based on very unsound fiscal policies but also imports 70% of its oil and has no energy policy? There is no case. This economy is simply not sustainable. The result will be massive inflation.
The only way US investors can protect themselves from this inevitable future is to gather their belongings and move to another country, or buy oil, gold, and other US dollar inflation hedges. I continue to recommend the purchase of US and Canadian gold coins (buy small denominations and take personal delivery), XOM, COP, CVX, BP, GLD, MERKX, and PSAFX. You might have to be patient while the deleveraging and financial insanity continue. However, long term, US investors should not be scared out of the assets which they will most need to own in the extreme inflationary future that economic theory and history teach us to expect. Meanwhile, collect your oil company qualified dividends and have a happy Thanksgiving.
The author owns all of the investments recommended in this article. The author does not own an electric or natural gas automobile, but desires availability of such vehicles in the very near future.
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This article has 22 comments:
1) CAFE > 50 mpg (no light truck exemptions)
2) At least half the vehicles produced using renewable resources; NG, flex fuel, hybrids, electric cars
3) Retool the heavy vehicle plants into producing bus and light rail. GM used to own a locomotive division (EMD- Electro Motive Division) a few years back.
Electric stations were built all over CA the last time the electric car was going to revolutionize transportation. What happened to those?
So, let me see, it would take 3x the quantity of CNG to get a vehicle the same distance as gasoline. Now compare the prices and cost.
After the $4K you'll spend on your garage refueling station, you'll also have to pay for the electricity to run it.
Now that I've mentioned electricity, let's talk about the overstressed power grid we keep hearing about. How will all these electric cars and garage refueling stations affect that? What are the power providers using to create that electricity anyway? (burning fossil fuels maybe?).
If your proposed solutions were 'real' solutions, they would have already been adopted. The truth is that no alternative is as efficient or cost-effective as gasoline or diesel to propel a vehicle down the road. There's your sign.
Electric stations were built all over CA the last time the electric car was going to revolutionize transportation. What happened to those?
So, let me see, it would take 3x the quantity of CNG to get a vehicle the same distance as gasoline. Now compare the prices and cost.
After the $4K you'll spend on your garage refueling station, you'll also have to pay for the electricity to run it.
Now that I've mentioned electricity, let's talk about the overstressed power grid we keep hearing about. How will all these electric cars and garage refueling stations affect that? What are the power providers using to create that electricity anyway? (burning fossil fuels maybe?).
If your proposed solutions were 'real' solutions, they would have already been adopted. The truth is that no alternative is as efficient or cost-effective as gasoline or diesel to propel a vehicle down the road. There's your sign.
Come on America, let's get the ball rolling.
On Nov 26 11:57 AM Marte wrote:
> Compare the energy density of CNG vs. Gasoline (or any other highly
> touted "alternative"... fuel) and you'll quickly see why there is
> no rush to adoption.
>
> Electric stations were built all over CA the last time the electric
> car was going to revolutionize transportation. What happened to those?
>
>
> So, let me see, it would take 3x the quantity of CNG to get a vehicle
> the same distance as gasoline. Now compare the prices and cost.<br/>
>
> After the $4K you'll spend on your garage refueling station, you'll
> also have to pay for the electricity to run it.
>
> Now that I've mentioned electricity, let's talk about the overstressed
> power grid we keep hearing about. How will all these electric cars
> and garage refueling stations affect that? What are the power providers
> using to create that electricity anyway? (burning fossil fuels maybe?).
>
>
> If your proposed solutions were 'real' solutions, they would have
> already been adopted. The truth is that no alternative is as efficient
> or cost-effective as gasoline or diesel to propel a vehicle down
> the road. There's your sign.
NG should be conserved for those uses where it is hard to replace - like home heating for one.
It is just my luck, I hitched my wagon to a process that eliminates CO2 while producing valuable products and saves the Enviroment, then Mark Goldes comes along with a miracle power supply that eliminates the need to burn fossil fuels. I can't wait to celebrate Mark's success. Happy Thanksgiving, Merry Christmas & a very Happy Prosperous New Year to all!
longoil: well, it's congress that will legislate and fund any big 3 bailout and i am very dissapointed at the conversation Congressional leaders are having with big3 on terms. i mean, they are asking the big 3 CEO's for a "plan" when it is most obvious the big 3 CEO's are incapable of any strategic thinking except what to do with their millions in salary in bonuses. as i said, Congress is giving them tax-payer money, and therefore Congress should dictate the terms. like your thoughts on light rail, but not sure we want to get big 3 involved in that..we'll be lucky enough to get fuel efficient alternative vehicles from the idiots.
holstrom: thanks for your support. contact your congressmen and let them know what you think.
geranz: yes, exactly! NGV (both cars and trucks) exist and have existed for years...just not so much here. google NGV and read the articles on all the NGV's in Utah for example. a "single sourced" manufacturer of the "Phill" speaks volumes doesn't it? in my mind, we won't make any progress on NGV until the interstate highway system NG refueling infrastructure is built out. again, to me that is a no-brainer.
Marte: i have compared the cost of NG versus gasoline in a previous SA article, and it is embedded in the comments of this article:
seekingalpha.com/artic...
the only thing i neglected to do was add the cost of electricity to run the Phill, which is a good point, but i doubt seriously it changes the economics that much. if NG vehicles are such a bad idea, why are oil *exporters* like brazil and iran buying and converting a large percentage of cars and trucks to run on it? what happened to the electric recharge station in cali? GM killed the electric car (and their future). read about that here:
seekingalpha.com/artic...
as far as the electric grid goes, read my strategic long-term energy policy and you will see that i mention modernizing and building out the electric grid as well as the sources to feed it: nuclear, wind, and solar.
you criticize my solutions as not being "real", but you offer no solutions of your own, and suggest we keep importing 70% foreign oil. the only sign i see as a result of your comments is that you don't "get it" and prefer the current situation. you are as enlightened on energy matters as george bush, and the verdict is already in on that "strategy". try writing again and giving some concrete policy solutions and perhaps i will give you another chance. as it is, i am simply not impressed.
epiac1216: thanks...i appreciate your comment after the prior one from marte.
mark goldes: if what you suggest is true, i suggest you raise some capital and start a business based on it. you will soon be the richest man in the world.
User 223007: NG is abundant and there are studies that indicate american supplies (***american supplies*** - what a concept!) alone could power ALL transportation in the US for 60 years. you can't say that about oil. other studies indicate that worldwide natural gas reserves dwarf US reserves. so, why, exactly, is natural gas such a "monumentally" dumb idea? what is monumentally dumb is relying on a resource (oil) in which we import 70% from our enemies, send the money out of the country, destroy the air, fight wars to aquire, and see the price go to $145/barrel and continue to do nothing. what is your plan stan?
theproclaimer: yes, i too hope Mark contacts me when his miracle vehicle is available.
wizard: i concur and well said! i don't like the spending on new roads and bridges either..they should be building out the nat gas infrastructure, the electric grid, solar, wind, and nuclear and mass transit. new roads when we are depending on foreign oil to drive on them is ridiculous.
kunst: heh heh. well, some people think there is a heaven (and hell), but me, well, i'd like to make the best of my time on this planet while i am alive.
Just because Mark's and my claims are unbelievable doesn't mean that they are not true.
Even though Mark Goldes solution may reduce the value of my investment, I am happy that we all can soon celebrate a cleaner Environment!
the proclaimer: i would love to see more details. my email address is on my blog, please send me more details. i have a background in physics, so i could probably hang with it...if i cannot, i wil ask questions until i understand. meantime, you guys should get busy and commercialize it and become, as i said, the richest men in the world.
wiz: iran has the world's largest reserves of nat gas, so i am sure that is one reason, and the refineries is another. but, i am sure they also want to sell more oil to the market, and the US is glad to oblige. brazil has a real energy policy, and they have boats loads of oil reserves which will be tapped. they too are ready and willing to sell oil to the market knowing the US will continue to suck it up. it's just economics. we can either do something about the fact that we use 25% of the world's daily oil production, have 3% of the world's reserves, and buy 70% of our oil from foreigners, or, we can ignore it, wait for "lights out" in 2 or 3 years, and face what will probably be the largest standard of living change any country has experienced since Germany at the end of WWII. you are already starting to see the changes $145/barrel oil has had on the US equity markets. if we do nothing about our oil addiction, the next time oil spikes will simply have disastrous consequences if we don;'t have the alternative transportation solutions available that i am advising. you will see ames' hummer abandoned in a ditch cause poor old ames won't be able to buy (find?) the gasoline he will so badly need to support his addiction to idiotic transportation means.
It is a futile battle, even with determined politicians leading the charge in Washington. Roscoe Bartlett, Congressman from Maryland, is aware of Peak Oil. He gave a speech in April of 2005 entitled "Our Dependence on Foreign Oil." The speech was also an open letter to the president signed by many prominent people including 12 retired generals and admirals, five Secretaries of Defense, and several retired Senators and Representatives. In his speech he ruefully admits that had he given his speech a few years earlier, he would have been consigned to the same loony bin reserved for wackos.
For more information on Bartlett bartlett.house.gov/
CNG= less power and less mileage. Despite the lower cost/gal, in the end you'll save little if any $$. CNG vehicles are several thousand dollars more expensive. If you save anything, how long will it take to recoup that money?
Natural gas has had wild price fluctuations of it's own due to supply issues. How abundant is it? When all the cars are burning CNG, what will we heat our homes with? Gasoline?
I don't need to have a better plan to see that your plan has little merit and to point that out. Then we can start talking about 'unintended consequences', like we are experiencing with the ethanol debacle.
Our energy 'problems' will solve themselves. New technologies will be adopted when it makes economic sense, it is nonsensical to force the issue.
Anytime our government tries to solve a problem, it is a disaster. The government should govern and stop taking money out of our pockets to throw it toward policies that ultimately make our problems worse as they have proven time and time again.
Sorry you're not impressed, neither am I. Keep thinking though, maybe you'll come up with something that will work and retire a very wealthy man. Good luck.
longoil: yes, you mentioned him before i am read up on him. he's trying. but just like jim garrison...anyone who points out the obvious is placed into the "looney bin".
marte: you assume because something isn't commercially viable it is because it cannot be commercially viable. this is the flaw in your logic. do you think the refuel appliance (the "Phill") would cost $4000 if it was not a single sourced item? do you think NGV would have a cost premium if they were built in quantity? do you realize that on a mile per mile basis the Honda Civic cost half of a gasoline powered vehicle when gasoline was $4/gallon? less now that nat gas has come down a ton. you seem to believe i am suggesting that ALL vehicles be NGV. i am not. however, do you understand the impact of what a few million NGV would do for the trade deficit and unfunded terrorists from oil producing countries? you seem to think that the government cannot be successful with NGV encouragement, but you seem to not comprehend the fact that YOUR government has kept you addicted to foreign oil and you seem ok with that even while the financial consequences are staring you in the face everyday. we have huge nat gas reserves in the US lower-48 and alaska. we could also import LNG from many non-OPEC sources. if your solution is to stick with foreign oil until "the market" takes care of "the problem", then you are correct, i am not impressed with your solution nor your logic. you should run for congress - you'd fit right in with that crowd (and probably get some big oil lobby money under the table....).
So.... since it IS science, the answer is a fact.