You've Got GM, President Obama: Build Natural Gas Vehicles

President Obama has rejected the reorganization plans submitted by General Motors (GM) and Chrysler Corporation. Obama fired GM's CEO, Rick Wagner. The company has 60 days to submit a more "acceptable" restructuring proposal in exchange for more of our taxpayer money (Government aid).

This coincided but did not necessary cause stock and commodity markets world wide to fall another 2-5% across the board. Hardest hit were the financials. Bank managements across the country must be wondering if GM's fate is prologue to their own.

When will President Obama reject the bank's business models, cut off capital, oust current management, and effectively seize control? Will bond holders and lowly common equity holders be spared?

No mercy has been shown for GM's current bond and equity holders. No wonder any bank that can wants to return TARP money. Kind of makes one wonder what the Bank CEOs and President Obama chatted about last week at the White House. Where they told to plan on taking early retirements?

But, to take the other side of the argument, GM and the banks had run themselves into bankruptcy, and President Obama is attempting to soften the blow under his own terms. He appears to want to remake GM in his own vision as a manufactuer of "green" cars that run off batteries that do not exist, that will be charged from an electrical grid that does not exist.

Like Boone Pickens has been saying, we could power a whole lot of cars in a cheap, environmentally friendly way with natural gas. If President Obama has the vision to create and have manufactured fleets of natural gas vehicles along with the requisite infrastructure to refuel the vehicles, that would be something worth doing, in my opinion.

Disclosure: None

Comments

[Dr. O:]

I checked out Tesla's web site. They have made "over 250" sports cars at a price of over 100K per car. They will begin producing sedans in late 2011 or 2012 for about 50K+.

A very cool concept but not exactly transportation for the masses.

Mar 31 09:26 AM

[JerseyMike:]

ExxonMobil paid income taxes of $40 billion in 2007 (check out their annual report). On top of this, the government taxes every consumer at the pump. Given that the government also taxes every other major oil company, ExxonMobil's profits are miniscule compared to what the US government collects from the sale of each gallon of gasoline. Given the insinuation that money prevents ExxonMobil from moving from oil to NG - the logic would apply doubly to the US government. I am just tired of successful American businesses being demonized because they turn a profit for their shareholders. ExxonMobil could move its operations off shore and avoid paying taxes to the US government. They have chosen not to do so. They should be commended rather than demonized.


> In addition, how do you think Exxon Mobile would feel about changing
> their business model that consistently provides $40 billion in profits
> year after year, totally independent of demand for gasoline?

Mar 31 09:40 AM

[msftxno:]

Using natural gas for cars is a no brainer. It just hasn't gotten any mindshare. The technology to make these cars is trivial, and fleets or them have been running since the gas crunch of the 1970's. They are a better bet in many, many ways compared to all electric cars. We can build these NOW. It is also (relatively) easy to convert large pick-up to natural gas, which some in the west have done for years. Vehicles running natural gas produce a tenth of the pollution and have triple the engine life, because natural gas doesn't wash the lubrication off the engine like petroleum.

Honda sold a natural gas car with a home filling appliance called "Phill" that would hang on the wall of your garage. When you get home you plug you car into it and it fills the car from your home natural gas line. This is the cheapest way to run a car ever devised. But it is all but unknown, natural gas vehicles are all but invisible. They are never promoted because of the few refueling stations, but the reality is, compared to full electric, there is a lot of refueling infrastructure and the technology is dead simple and well proven.

You don't see natural gas vehicles in Europe because Europe doesn't have any natural gas. They do have diesel thanks to the heavy north sea crude oil.

Every car rolling of the production line should be by law either e85 capable or natural gas. Whether you use it or not, e85 lets an engine burn most any mixture of gas and alcohol from mostly alcohol to mostly gas. Adding the e85 feature would only add $25 to the cost of the vehicle and would provide a lot of fuel flexibility for the life of the car. Between these two things - and they are both easy, low technology, cheap to implement solutions - we could take the pressure off of petroleum use very quickly. While full electric cars are the goal, car makers could be adding these features NOW, while we ramp up electric car technologies and bring down the costs. Batteries for electric cars are still crazy expensive - which is why the Chevy Volt is going to cost around $40,000. Unfortunately, that price limits the number of people jumping into a new and unproven technology. We need a transition technology which is not petroleum dependent; natural gas and e85 are cheap and proven; everything that is not an electric vehicle should have this capability.

Mar 31 10:04 AM

[Miken:]

From EOM 10-K filed 2/27/09, they paid $37.5 billion in income tax. Earnings before taxes were $81.8 billion. Income after tax was $45.2 billion.

I would think that they're not anxious to change that business model which is exactly what I said below.

By the way, don't you think it's time to voluntarily give up the government subsidies?

On Mar 31 09:40 AM JerseyMike wrote:

> ExxonMobil paid income taxes of $40 billion in 2007 (check out their
> annual report). On top of this, the government taxes every consumer
> at the pump. Given that the government also taxes every other major
> oil company, ExxonMobil's profits are miniscule compared to what
> the US government collects from the sale of each gallon of gasoline.
> Given the insinuation that money prevents ExxonMobil from moving
> from oil to NG - the logic would apply doubly to the US government.
> I am just tired of successful American businesses being demonized
> because they turn a profit for their shareholders. ExxonMobil could
> move its operations off shore and avoid paying taxes to the US government.
> They have chosen not to do so. They should be commended rather than
> demonized.
>

Mar 31 10:16 AM

[paulvard:]

Exxon pays $40 Billion in tax. That's nice. How much does the US spend just in Iraq a month, $10 Billions to fight terrorism.

Mar 31 10:40 AM

[bluesmoke:]

The business model of using natural gas, even as a TRANSITIONAL fuel, needs to be implemented. There is no more time for talk, and plenty of gas for everyone. Forget about the lobbyists. Do it now!

Mar 31 10:40 AM

[traderstraffic:]

General Motors was building natural gas cars for Japan in the last gas chrunch in the early 1980. Pickens is right, build the natural gas cars and trucks. Ft. Worth, Tex.,, is running buses on nat gas. All tractor trailers need to be nat gas. If nat gas is that cheap, what better way to get away from Middle East Oil. Only one thing stopping it, Natural Gas is cheap.

Mar 31 10:49 AM

[WayneS:]

On Mar 31 09:15 AM Miken wrote:

> All it would take to build CNG fueled vehicles would be the desire,
> the technology exists,> In addition, how do you think Exxon Mobile would feel about changing
> their business model that consistently provides $40 billion in profits
> year after year, totally independent of demand for gasoline? Think
> our government is willing to withstand their lobbying effort? They
> have effectively blocked the implementation of E-85 ethanol even
> though there are 7 million vehicles that could start using it today

1) There may be the technology, but you need people to buy the product. People want the easiest, fastest and cheapest vehicle.

2) It's actually ExxonMobil and they don't own any gas stations. Independently-owned stations that supply Exxon or Mobil gasoline only makes up 3% of the gas stations in the US. If it were profitable, the other 97% of the gas stations would supply E85, methane or propane. Gasoline sales only provide enough income to cover the overhead costs. Gas stations make money selling beer, cigs and colas. Grocery and discount stores use gasoline as an incentive for you to spend money at their store. The five cent discount they offer you is the profit margin that gas stations make.

Mar 31 11:50 AM

[WayneS:]

PS - Last year the "Big Three" oil companies combined to make $71 billion. They paid $169 billion in taxes. Where are the subsidies Miken is talking about? Also, there are 500 other oil companies in the US, also paying taxes.

Mar 31 12:03 PM

[Mr. Ed, Jr.:]

"If President Obama has the vision to create and have manufactured fleets of natural gas vehicles along with the requisite infrastructure to refuel the vehicles, that would be something worth doing, in my opinion."

So now the government should start making the cars ? Of course, we sure don't want to make cars that Pelosi, Reid and Obama don't approve of, because they have the "vision".

And as other companies go broke during this crisis, instead of just allowing them to go into bankruptcy, the government could take them over and make better, more environmentally friendly products, if they have the "vision".

It is hard for me to believe that so many in this country actually believe this to be a good thing. Our country is being destroyed right in front of our eyes.

And we're even starting a "suggestion box" about how to do it.

Mar 31 12:15 PM

[Willie Wise:]

Not only is NG cheap and available here in the USA___its use would create new jobs___here in America!

Mar 31 12:20 PM

[Mad Hedge F...:]

This is what Boone thinks. Reformed oil man, repenting sinner, and borne again environmentalist T. Boone Pickens says that “when we turn the US green, it will have the best economy ever.” I met the spry, homespun billionaire at San Francisco’s Mark Hopkins on a leg of his self financed national campaign to get America to kick its dangerous dependence on foreign oil imports. For the past 30 years, the US has had no energy policy because “no one wanted to kick a sleeping dog.” Production at Mexico’s main Cantarell field is collapsing, and will force that country to become a net importer in five years. Venezuela is shifting its exports of its sulfur laden crude to China for political reasons, once refineries in the Middle Kingdom are completed to handle it. Unfortunately, the collapse of energy prices since June and the disappearance of credit have put urgent alternative energy development on a back burner, with his preferred natural gas (NG) taking the biggest hit. If the US doesn’t make the right investments now, our energy dependence will simply shift from one self interested foreign supplier (Saudi Arabia) to another (China). Wind and solar alone won’t work on still nights, and can’t power an 18 wheeler. Don’t count on the help of the big oil companies because they get 81% of their earnings from selling imported oil. The answer is in a diverse blend of multiple alternative energy supplies from American only sources. Although Boone now has Obama’s ear, it’s a long learning process. Boone has donated $700 million to charity, and says the 20,000 trees has planted should offset the carbon footprint of his Gulfstream V. I worked with Boone to organize financing for a Mesa Petroleum Pac Man oil company takeover in the early eighties, when it was cheaper to drill for oil on the floor of the New York Stock Exchange than in the field. Now 80, he has not slowed down a nanosecond.

Mar 31 12:37 PM

[Mister Jimmy:]

NG cheap would be a cheap source of vehicle fuel...until millions of vehicles are running on it.

Mar 31 12:41 PM

[Steve in Gr...:]

Nothing should frighten you more than having politicians, lawyers and heaven-help-us community organizers trying to organize anything more complicated that a fight in a whorehouse.

Mar 31 03:07 PM

[Miken:]

"The return ExxonMobil gets for the millions it spends on lobbyists and campaign contributions comes back in the billions. The industry as a whole receives up to $113 billion per year in direct federal subsidies, according to experts."

www.exxposeexxon.com/E...


On Mar 31 12:03 PM WayneS wrote:

> PS - Last year the "Big Three" oil companies combined to make $71
> billion. They paid $169 billion in taxes. Where are the subsidies
> Miken is talking about? Also, there are 500 other oil companies
> in the US, also paying taxes.

Mar 31 06:53 PM

[s.c.:]

What powers this refueling? Is it solar panels? wind turbines? I agree, as most do, that the country needs to invest in alternative sources of fuel. The reality, like it or not, is that we will have to remain dependent on oil and gas for quite some time while the infrastructure for these alternative soures are implemented. Natural gas powered cars is a "greener" alternative than gasoline and should be explored on a larger scale. Just my opinion.


On Mar 31 08:43 AM chistletoe wrote:

> Boone Pickens happens to own a lot of natural gas, that he'd like
> to move. While cars run on natural gas might be a little cleaner,
>
> there's still the designed obsolescence of 6,000 little explosions
> per minute tearing out the guts of the machine.
> On the other hand, there's Tesla Motors, without the centennial culture
> overhang, the unions, the pension liabilities, the perpetual problems,
> producing cars that run on electricity, cars that will last for 10
> or 20 years or more, requiring a small fraction of the fuel cost.

Apr 01 11:16 AM

[Paul Killinger:]

Unfortunately, Dr. O, Obama says the answer's "No!" This makes WAY too much sense for the Green idiots and Socialist ideologues who populate his Administration and a majority of our Congress. The voting polls will be open again soon enough.

Apr 01 01:07 PM

[WayneS:]

Read the fine print from exxposeexxon: "Figures are based on contributions from Political Action Committees, soft money donations and corporate executives and their families giving $200 or more as reported to the Federal Election Commission." i.e. not ExxonMobil Corporation.
The rest of exxposeexxon was total propoganda with nonexisting links.
I know propaganda, I was in the military and watched armed forces TV

Apr 01 02:22 PM

[Pstoneki:]

msftxno - There are lots of CNG vehicles in Europe - they just aren't labeled as such. It is a common conversion to existing gasoline powered vehicles and is relatively cheap ($1500 in the UK). I have quite a few friends with V8 powered SUVs and cars that run on CNG. In fact, they used to run fuel-tax free (not sure if they still do) which made them cheaper than diesels to run. The engine is happy to switch back and forth from gasoline to CNG so issues with finding CNG are not important. Of course, the CNG tank tanks up space (under the vehicle for an SUV, in the rear load area for a car) and the range isn't as great. However, the engine seems to run more smoothly.

It might be a good business model to start converting the existing gas-powered SUVs. I for one would do this as I have a gas well (I live in NE Ohio) to fill from.

Apr 03 01:13 PM

[Dr. O:]

Now President Obama has Chrysler as well. Still no talk of natural gas vehicles. Why? Apparently, Obama wants to make the leap directly from gasoline to electric vehicles. I wish this were workable, but, with current technology, and infrastructure, it is not.

May 01 05:35 AM