Bill James'  Instablog

A tipping point was passed the last week in September 2009.  The following documents the events and recommendations on how to profit from this paradigm shift.

On Monday, agreements were affirmed to deploy solar-powered transportation networks at the Space and Rocket Center in Huntsville, AL. 












On Wednesday an agreement was signed in Kunming, China.  This is the first city in the world to commit to deploying solar-powered transportation networks.  It is a city of about 6 million people in south-central China. 









The technology is referred to as Personal Rapid Transit although it moves people, cargo, trash and other materials approaching the efficiency of long-haul freight.  In response to the 1973 Oil Embargo, the Congressional Office of Technology Assessment in study PB-22854, identified this technology as the solution to foreign oil.  The network built in Morgantown WV has since delivered 110 million injury-free passenger miles.  Morgantown PRT's only failures have been the vehicles were too large and very few people know of its stunning success.

JPods networks are smaller, lighter and much less expensive than Morgantown's.  The result is a radical reduction in power required and the ability to convert about 85 cents of every dollar spent on oil to jobs and materials to build networks and profits.  Cars operate at about 1,033 watt-hours per passenger mile, trains at 900 and busesat 1,246 .  JPods networks operate at about 127 watt-hours per passenger mile.  This 85% reducing in energy requirements matched with unstable  energy prices is what I believe has finally allowed JPods to gain commitments to build networks.

Similar to long-haul freight's 400 ton-miles per gallon of fuel, JPods vehicles move non-stop from origin to destination carrying 1200 pound payloads in 350 pound vehicles.  Remove the parasitic mass, remove the repeated start-stops and energy costs drop by about 10x, 10 times current efficiency.  A 10x performance jump or cost reduction seem essential to paradigm shifts such as with the Personal Computer in the early 1980's, the Internet/cell nets in the late 1980's and even railroads in the 1860's.

Size of the market:
The International Energy Agency (US is a treaty signatory) and Congress have estimated the cost to sustain the oil-powered transportation infrastructure through 2020 at $27-57 trillion.  The cost to build 1.4 million miles of solar-powered transportation networks that can displace about 70% of oil-powered urban transport in the US is about $11 trillion.  The world market is an additional $40-60 trillion.

Investment Opportunities:
Disclosure:  The author is the founder of JPods, Inc.  I am completely invested in JPods and this industry so please take that into consideration.

Most attempts at innovation fail.  Investing in positive Black Swans is risky, the cemetary is full of silent evidence.  But Seeking Alpha is an investment site so I will give you my best guess where profits are likely if JPods profitable completes the above agreements:

• + Investment in bonds that finance construction and operation of these networks.  Transportation is the circulatory system for an economy.  Cutting costs by 85% will create stable returns in an unstable economy just as the railroads did at the 1800's..
• + Investment in JPods' publicly traded allies of Club Car (Ingersoll Rand) and Novelis (Hindalco).  Someday, JPods and its competitors may provide direct public investment opportunities.  Ultra and Vectus have networks coming on line.
• + Investment in mining companies and manufacturers of steel, aluminum, copper, plastics and wood products that can be used to build the rails and supports.  There will be shortages of all these commodities based on the size of networks in the above agreements.
• + Investment in communication and electronic equipment manufacturers as  mass and oil are displaced by electronics.
• + Investment in oil, coal and nuke power.  It will take a lot of energy to re-tool. We past Peak Oil in 2005, as JPods networks deploy, they will compensate for depleting oil availability not create excess oil capacity.
• + Investment in solar manufacturers.  Applying solar collection to transportation changes the payback from 7-15 years to 1-3 years.  Demand will far out pace manufacturing capacity for several years.
• + Investment in currencies of countries that embrace this paradigm shift most quickly.  The Silicon Valley boomed because it was a first mover creating jobs and wealth from the de-monopolizing AT&T.  De-monopolized centrally planned transportation, shifting to managed by performance standards, will  repeat the model of the Internet.  Economies will be strengthen as transportation costs are slashed and jobs are created to manufacture and build the infrastructure.  Materials and talent will be in short supply, so countries acting first will gain more, faster.  
• - Investment in automobiles for four reasons.
  • Current car fleets will out last gasoline costing less than $8 a gallon (Peak Oil).
  • JPods provide personal on-demand mobility without personal debt.
  • About 70% of cars cannot compete with the better service, convenience, speed and safety of JPods vehicles. JPods will increase disposable income by $2,000 to $5,000 per family per year by slashing costs associated with automobiles:
    
    • AAA estimates car accidents cost each per $1,051 per year.
    • AAA estimates that car congestion costs each person $434 per year.
    • Gasoline costs increased from $2,000 to $4,000 between 2000 and 2006 for working class families.
  • Electric cars move a ton to move a person in start-stop traffic the same as gas cars. There is no carbon, energy, congestion or safety savings.