Archive

Archive for the ‘Policy’ Category

If You’re Not Part Of the Solution…

August 10th, 2010 Comments off

Recently, a friend of mine forwarded me a diatribe written by Robert Bryce of The Manhattan Institute, bellyaching about government funding being used to accelerate the market introduction of electric vehicles.  In his rant, Bryce cites numerous examples of auto makers advertising the benefits of electric transportation and promising affordability for all.  In some cases, these quips are a century old.  Bryce uses these examples as proof that despite the hype, electric-drive vehicles will continue to fail, and that the technology “shows so little promise” and still isn’t ready for prime time.

I think Mr. Bryce’s fallacy here is looking to the past to predict the future.  (Look at the bottom of the prospectus of your favorite mutual fund.  “Past performance is not an indication of future results.”)  Energy storage (read: battery) technology is substantially beyond what it was even a few years ago.  Much of the government funding that Mr. Bryce feels is ill-spent is being used to establish immense battery manufacturing capacity here in the U.S., and will dramatically reduce costs.  He points out that hybrid vehicles currently account for only about 3% of the new car sales, suggesting that’s a sign of the lack of consumer acceptance.  (On the other hand, what percentage of new car models are hybrids?  If it’s  less than 3%, then I’d say this statistic is a sign of robust consumer demand!)

My main problem with Mr. Bryce’s article, however, isn’t his flawed arguments.  It’s the fact that he offers no mention of an alternative solution.  The reader is left to assume that he believes the government should end any and all subsidies to promote electric transportation, and let the market take care of itself.  (After all, one of the tenets of The Manhattan Institute is to “foster greater economic choice.”)  The problem is, the petroleum industry currently enjoys some of the largest subsidies imaginable, many of which are indirect, due to externalities that aren’t included in the price of a gallon of gasoline.  According to the National Defense Council Foundation, our oil dependence costs us around $300 billion each year.  If this cost were internalized (rather than being subsidized), a gallon of gas would cost well over $5.  (Oh, and don’t even get me started on the cost of the cleanup in the Gulf…)  In that respect, the cost of an EV or PHEV may not seem so high.

I’m all for a free market.  The problem is, there are no perfect markets.  Especially when it comes to environmental issues – in the case of transportation that means pollution and greenhouse gas emission, not to mention national security issues associated with our presence in the Middle East – there are externalities that aren’t priced in.  By funding the development and deployment of electric vehicles, the big bad government isn’t picking winners – it’s leveling the playing field.  And, you know, actually doing something to contribute to the solution.

And as the old saying goes:  If you’re not part of the solution, you’re part of the problem.

Spill, Baby, Spill

April 30th, 2010 Comments off

What a mess.

Less than a month after President Obama announced plans to open up areas off the east coast of the U.S. for oil exploration (in an effort to make nice with those who would otherwise attempt to derail upcoming climate change legislation), an oil rig in the Gulf of Mexico has gone and exploded.  And sunk. And the well at which it was formerly suckling is now leaking an estimated 5,000 barrels of crude oil into the Gulf of Mexico.  Each day.  For the past 9 days.

By my count, that’s 45,000 barrels of oil floating (and sinking, in the case of the heaviest crude) in the Gulf.  That’s approaching 2 MILLION gallons of crude.  After refining, that would make nearly 900,000 gallons of gasoline, enough to fuel about 22-million miles of driving in your average car.  (Or put another way, the gas used by about 1,500 average cars in a year.)

…So far.  It’s still leaking.

The oil companies tell us that oil exploration and extraction is perfectly safe, environmentally benign, and that the off-shore oil-rigs actually serve as artificial reefs, attracting and supporting a large number of ocean species. (That is, until the oil-rig blows up.)

And it’s not like this is an isolated event.  A quick search demonstrates that hardly a year goes by without at least one spill of some significance.  (The Exxon Valdez spill, 21 years ago, is still fresh in my mind.  By comparison, it resulted in 262,000 barrels of crude being dumped into Alaska’s Prince William Sound.)

This is a disaster – ecologically, economically, and for the families of the 11 oil-rig workers who will likely never be found. There’s no telling what sort of damage might occur to the environmentally sensitive coastal areas and wildlife refuges in Louisiana and Mississippi.  (Of course, you could argue that the Gulf of Mexico is already a vast ecological dead-zone, thanks to all the shit we flush down the Mississippi River.)  Thanks to the Valdez incident, we now have a law that requires BP (in this case) to clean up after themselves.  How much might that cost?  $500-million?  $2-billion?  Who knows – it might even put a dent into the $5.6-billion of profits that BP “earned” in the last three months.

Unfortunately, a year from now, I suspect we will have moved on, and we’ll all be doing the same thing we do now – filling up our gas tanks with little attention paid to the consequences of our addiction.  And complaining that gas is too expensive.

And we’ll be right.  Gas IS too expensive – more than we care to admit.

Categories: Policy Tags:

Piety

April 7th, 2010 Comments off

On my commute to work this morning, a Toyota Prius passed by me in the HOV lane.  (It wasn’t traveling at a high-rate of speed, so I suspect the throttle was not stuck open.)  The personalized license plate on the Prius read “H8 GAS“.  Although I could only see the back of the driver’s head, I’m quite certain his expression bore a certain degree of smugness.

The gas-hating Prius-driver obviously feels he is doing right by the environment by purchasing one of the most fuel-efficient vehicles available.  (I mean, he did go so far as to plaster the motivation for his good eco-deed on the back of his car!)  The irony here, however, is that this driver sat alone in his Toyota, taking advantage of the policy that’s in place in most major metropolitan areas that allow drivers of hybrid vehicles to travel in the HOV lanes regardless of the number of vehicle occupants.  Meanwhile, I was motoring down the carpool lane while seated on a bus – powered by natural gas – along with several dozen neighbors.  (Once disembarking from the bus, we all boarded a subway – powered by electricity.)

Now, I don’t want to fault the Prius driver too much.  Perhaps he had a good reason for taking up space in the HOV lanes today.  And he did, afterall, make a good vehicle purchasing decision from an environmental standpoint.  I do have to question his taste in license-plate personalization, however. It exudes the same self-righteousness as the stock broker whose plate says MONYMAKR.  Or the Christian’s whose plate says FORGIVEN.  …Or the urologist’s whose says GR8FNGRS

I also have to question the HEVs-in-HOVs policy that so many people exploit.  Much like Cash for Clunkers, the intent is a legitimate one (to accelerate the deployment of fuel-efficient hybrid vehicles), and it has been somewhat successful – many folks buy hybrid vehicles solely for the privilege of traveling solo in the carpool lane.  However, I cringe at the large number of single-occupant, HOV-traveling hybrid Ford Escapes and Toyota Highlanders I see – both reasonably fuel-efficient vehicles, but nowhere near as economical as many smaller conventional vehicles.  (God help me the first time I see a BMW X6 ActiveHybrid exploiting the rule..)

Don’t get me wrong – I’m all-in when it comes to promoting the development, manufacture, deployment, and market penetration of hybrid vehicles.  (In fact, that’s what I do everyday.  For my job.  For which I get paid.)  But perhaps it’s time to revisit some of the policies that were put in place to spur the HEV market, and instead focus on policies to promote public transit.  (Some places, like California, are starting to do just that.)  After all, if he hadn’t been able to drive in the HOV lane alone in the Prius, the Gas H8r may have been enticed to keep his conventional vehicle and make a few carpool buddies.

…Or even ride the bus – leaving him time to think of other ways to advertise how proud he is of himself.

Truckin’

March 8th, 2010 Comments off

There’s a big push to increase the fuel efficiency of our country’s – our WORLD’S – passenger cars.  All of the major automakers are working on more fuel-efficient engines, hybridization, electrification, lightweighting, idle-reduction, and other technology pathways in an effort to meet more stringent CAFE standards in America and compete in the new, greener automotive landscape.

But what about trucks? No, I don’t mean the pickup in your neighbor’s driveway.  I mean the big, 18-wheeled, freight-haulin’, diesel-drinkin’, noise-makin’ semis that move approximately two-thirds of our nation’s freight around, accounting for around 7 TRILLION dollars annually – a substantial portion of our economy.  These trucks get, on average, around 6 miles per gallon.  Horrible, right?  (Well, consider that these trucks, when fully loaded, weigh up to around 80,000 pounds – about the same as 20 passenger cars.  If you assume the cars get 25 mpg each, then the group as a whole gets the equivalent of 1.25 mpg.  In that respect, the semi ain’t so bad…)

…Which brings me to my point.  When talking about fuel efficiency in the trucking industry, FREIGHT efficiency is the proper metric.  (Units of freight-ton-miles-per-gallon are most often talked about.)  And despite the fact that not much effort has been put forth historically into improving the freight efficiency of long-haul trucks, that trend is certainly changing.  The US Department of Energy recently announced awardees under the SuperTruck program – funded in part by the American Recovery & Reinvestment Act of 2009 (i.e., the Stimulus Bill) – to improve the freight-fuel-efficiency of Class 8 trucks by 50%.

And how is this being accomplished?  Although the impacts of hybridization in long-haul trucks may be modest, electrification can have a LARGE impact in idle-reduction at truck-stops.  (Today, when truck drivers take their mandatory rests at truck-stops, they must let their engines idle to maintain the heating, cooling, and other ancillary functions within their cab.  Having an auxiliary power unit – whether battery or fuel cell – could eliminate this need.)  Aerodynamics plays a HUGE role as well.  Think about it – semi-trucks today are a bit like a brick – an extremely large brick – blasting down the freeway at 70 mph.  Aerodynamic improvements are the low-hanging fruit.  Even simple add-ons that address the gap between the cab and the trailer, the space between the trailer and the road, and the flow-field immediately behind the trailer can have significant impacts.

Beyond this, truck OEMs are working on improvements with more efficient engines through downsizing and downspeeding combined with improvements in the transmission and controls.  The use of waste heat recovery systems is being investigated to capture some of the heat energy that is released through the exhaust system, converting it to electricity to power accessories.  Even driver aids, such as eco-feedback to provide information about the fuel-economy impacts of driving habits, and intelligent route mapping that considers traffic and topography in plotting the most optimum course for shipment, are being considered.  Super-insulated cabs to reduce the heating/cooling load, and super-wide low-rolling-resistance tires are also being developed.  The list goes on and on!

Why is this important? By some estimations, the emissions (of pollutants AND greenhouse gases) from passenger vehicles in the U.S. could flatten out as our vehicles become more efficient, combined with the (slight) potential for mass-transit as our population increases.  (In developing countries however, that might not be the case, unless you’re an eternal optimist and believe that China/India/Brazil will seize the opportunity and grow more smartly than we did.)  Freight, on the other hand, will continue to grow with our population, magnified by the globalization of trade. Basically, if we don’t do something now, the problem could be huge.

Plus, freight companies are businesses.  Businesses make money (or fail).  Rising and uncertain fuel costs wreak havoc with their operating expenses.  More freight-efficient transport translates into more stable profits for freight companies, and more stable prices for the consumer.

Of course, we haven’t even begun to discuss rail-freight yet.  But that’s a topic for another day…

Missing the Point

January 7th, 2010 Comments off

The fuel-economy of our nation’s light-duty vehicle fleet has been roughly stagnant for the past three decades, following a significant (but unsustained) improvement just after the Corporate Average Fuel Economy (CAFE) rules were enacted in 1975.  And although our cars’ fuel-economy hasn’t really improved, their efficiency certainly has.  We’re certainly moving around a lot more mass, a lot faster, on the same amount of fuel (per car) we were using 30 years ago. The problem is, all this technology packed into our automobiles has been engineered almost entirely to give us more performance (a 1980 Honda Accord had less than 80 hp; today’s base-model is approaching 200) and move us around in a lot more luxury (with a resulting heft of 3200 lbs for today’s Accord, a gain of a half-ton over the 1980 version) than we ever thought possible, at the complete expense of fuel-economy.  (I know, it’s a result of market demand…  But the best marketers are experts at selling us what we don’t need.)

These days, hybrid technology seems to be the solution to significant increases in fuel-economy, as it becomes ever more difficult to squeeze further efficiency improvements from conventional powertrains.  But BMW has taken a different tack with their ActiveHybrid X6.  Touted as “the world’s most powerful hybrid,” BMW starts with a 4.4-liter, 400 hp V8 internal combustion engine – which, until recent years, would have been enough of a beast to power anything but vehicles of near-supercar status – and integrates it with not one, but TWO electric motors totaling an additional 174 hp.  And sure, the combined 574 horses will be enough to provide incredible acceleration in this nearly 3-ton mammoth, but … what’s the point?

2010 BMW X6 ActiveHybrid

2010 BMW X6 ActiveHybrid

The X6 ActiveHybrid starts at a base price of nearly $90k.  At that price-level, you could almost have a Tesla Roadster, or one of the other upcoming EVs or PHEVs with phenomenal performance and actual environmental benefits.  Granted, the X6 will carry a little more gear than a Roadster.  But, it’s ugly – no matter what powertrain is under the skin.  The X6 looks like the answer to a question that nobody asked.  And while I’m sure it, like all BMWs, offers a driving experience more exhilarating than the majority of other cars on the road, I can’t help but think of it as a caricature of a Honda CRX.

I hope automakers don’t repeat the trend of the past 3 decades, by following BMW’s example of continuing to utilize efficiency-improving technology to increase performance while sacrificing potential fuel-economy benefits. Fortunately, due to the recent and long-overdue increase in CAFE standards, this trend may be thwarted.  At least, as it was in the 1980s, temporarily.

High Speed Rail

October 31st, 2009 Comments off

OK, so this is supposed to be a car blog.  But, the tag-line says personal mobility, and as one cog in the wheel of transportation options, high-speed rail certainly falls into that category.

BUT, high-speed rail is currently a very under-represented option for moving people around here in the U.S.  That might soon change, however.  (Well, soon might not be accurate.  Maybe one day, or eventually is more appropriate.)  Earlier this year, the Obama administration proposed significant investment (starting with $8-billion in stimulus money) for developing a high-speed intercity rail transport network, targeting travel distances of approximately 100-600 miles – distances now typically traveled by car or plane.  (Personally, if I can drive somewhere in less than 12 hours, I would much rather drive than fly.  I rank flying as one of the most unpleasurable activities one can undergo – right there with root-canals and vasectomies.)  Speeds will be in excess of 150 mph, making longer distance trips feasible.

So, what’s the point?  Well, to give travelers another transportation option and promote competition for one.  (Choices and competition are good, right?)  Secondly, to stimulate economic activity, through the activities involved with developing and building the high-speed rail system, as well as through the services that high-speed rail will provide once it’s functional.  Another goal is to reduce fossil-based fuel consumption and the effects thereof.  While air travel is now, on average, slightly more efficient per passenger-mile than car travel, high-speed rail is significantly less energy intensive than either.  (Think about it: it takes energy not only to move a giant airliner through the air, but also to keep its immense mass suspended at 30,000 feet.  Trains, on the other hand, travel much closer to the ground.)  A final goal is to support and promote more livable, sustainable communities, by interconnecting them with an affordable, efficient transportation option.

It’s this last goal that’s most intriguing to me (and harkens back to the whole systems thinking theme of my last post).  Viewing high-speed rail not in a vacuum, but as part of a larger transportation ecosystem, we could dramatically change the way we move people and things around.  And if it’s an attractive option for travelers – costing no more than equivalent airfare, while providing at least a modicum of comfort and chance at productivity (unlike air travel) – I see no reason why it shouldn’t succeed.  And the ability to connect high-speed rail with other travel options (such as commuter rail in major metropolitan areas, or car-sharing programs such as the one being piloted by Better Place in Denmark) is just icing on the cake.

Of course, there will be nay-sayers that predict the push for high-speed rail is just another way for government to spend billions of taxpayer money without any result.  But, the same might have been said half a century ago when Dwight Eisenhower pushed for the interstate highway system.  And that certainly had an impact, resulting in the car monoculture that we have today.

High Speed Rail Map

Categories: Policy, Public Transit Tags:

You Lie!

October 6th, 2009 Comments off

This is not a political blog.

24

TWENTY-FOUR.  That’s the number of misleading statements (most of which are outright lies) that I just counted in this 9-and-a-half-minute video showing two Fox News segments about the DOE loans given to Tesla Motors and Fisker Automotive through the Advanced Technology Vehicles Manufacturing Loan program, authorized by the 2007 Energy Independence and Security Act.  The myth perpetuated by the Fox folks (and a WSJ columnist) is that these loans are going to European companies, creating jobs overseas, to build ultra-expensive cars that nobody can afford, all because of Al Gore’s influence over the DOE.

As pointed out in this Autobloggreen post, Fisker is not a Finnish company – they’re based in Irvine, California.  The Karma’s body construction is contracted out to Valmet, a Finnish company that also builds Boxsters for Porsche.  As Fisker points out, 65% of the Karma (by cost) is built in the United States.  Similarly, Tesla Motors is not a British company, but is based in San Carlos, California.  Lotus builds the bodies for their Tesla Roadster in the UK, but again the majority of the car (not to mention the R&D efforts) come from the U.S.  And while the Fisker Karma and Tesla Roadster are indeed more expensive than the Camry in your garage, they are first-generation high-performance electric vehicles.  (The first computers were also outrageously expensive.  So were CD players.  And video cameras.  And DVD players.  And any other new technology that makes its way downmarket.)

The DOE loans are intended to increase the pace of technological development and volume manufacturing at these companies, and help bring the technology into the mainstream more quickly. Tesla’s Model S and Fisker’s NINA will arrive sooner than they otherwise would have, and they will be built here in the U.S. because of these loans.  And what role did Al Gore play in all of this?  None.  He (along with about 43 other individuals) is a partner at Kleiner Perkins, one of the financial backers behind Fisker, and a host of other companies.

Describing Fisker as “an Al Gore-backed company from Finland” isn’t only a stretch – it’s a blatant lie.

The Hangover

October 1st, 2009 Comments off

I heard a story on NPR today about what auto dealers are calling the Cash For Clunkers Hangover.  September, it seems, was a dismal month for auto sales, primarily due to the fact that so many cars were sold in late July and August due to the CARS program.  The two reasons cited are that people purchased new vehicles earlier than they otherwise would have to take advantage of the incentives, and dealer inventory was quite sparse in the post-CARS weeks.

Is this really a story, though? I wrote about CARS prior to the program here, and midway through it here, and stated that CARS had such an explosive effect due to pent-up demand (i.e., people delayed their vehicle purchase due to the economic downturn).  CARS was intended to counteract this delay by accelerating vehicle purchases – essentially compressing time for the auto industry.  Unfortunately, the program was a victim of its own success and was thus short-lived.  So, is it any wonder that sales slacked off after the incentives ran out?  Not to criticize NPR (one of my favorite news sources), but isn’t this story akin to headlines like “Fans Celebrate After Team Victory?”

CARS HangoverOne good point that was made in the story, though, was that perhaps the incentives were too high, and thus too large a market distortion.  Maybe if the incentives had been only $1000 or $2000, instead of typically $3500 or $4500, auto sales would have been stimulated for a longer duration (though to a lesser degree).  …Then maybe the hangover wouldn’t have been so bad for the dealers.

MORE Cash for Clunkers

August 4th, 2009 Comments off

CARSA couple of weeks ago, I talked about the Federal Car Allowance Rebate System (CARS) program, and the effects it might have on the auto industry and the environment.  It turns out, the program has worked a little too well, at least in some respects.  Nearly as soon as the final rules were published, the $1-billion allocated to the program was exhausted.  Now, the House has authorized an additional $2-billion, though the Senate must do likewise for the program to continue.  The debate is now whether or not to spend this extra cash before fully understanding the effect that the program is having.

Obviously, it seems the program was underfunded.  If we assume the average rebate is $4,000 (which is likely not accurate, but it’s the average of the two possible rebate amounts of $3,500 and $4,500, and the math is easy), then the initial $1-billion represents 250,000 trade-ins and new car sales.  That’s only about 1.7% of the yearly new car sales in the U.S. (prior to the meltdown of the auto-industry).  So the fact that $1-billion was burned through so quickly isn’t surprising.  I tend to think the downturn that we had seen in new car sales wasn’t so much a result of people deciding not to buy cars, but rather deciding to delay their car purchases.  With so much pent-up demand, it’s no wonder the CARS program had such an explosive effect.

The program has certainly had an impact on the auto industry.  Today’s Wall Street Journal (Clunker Plan Gives Car Sales a Lift) describes auto makers’ plans to begin increasing production as a result of the boost in sales.  It also mentions that suppliers to the auto industry plan to benefit as well – ripple effects that result in tangible benefits to the economy.

The environmental impact is less clear.  The US Department of Transportation reports that the average fuel economy of new cars being sold under this program is 25.4 mpg, compared to 15.8 mpg for the vehicles being traded in – a 9.6 mpg average improvement.  Assuming these cars are driven an average of 15,000 miles per year (and assuming my previous statement of 250,000 cars is correct), that’s 390-million gallons of gas saved, or over 3.4-million metric tons of CO2 avoided, at a cost of $290 per ton – expensive carbon mitigation by any measure.

…Of course, to quantify the actual effect, one would have to know the baseline – what would have happened in the absence of the program.  (It’s likely that, since traded-in cars were probably bought when gas prices were lower than they are today, their average fuel economy would still be worse than the new cars replacing them.)  Plus, my calculations are so full of my assumptions as to render them pointless.  But, it makes for good blog discussion!

I Have Two Clunkers

July 21st, 2009 Comments off

Most everyone who cares about cars has heard of the Cash for Clunkers program by now.  Basically, if you trade in your clunker for a more fuel-efficient vehicle, you get an instant credit of either $3,500 or $4,500, depending on the type and mileage of the traded-in vehicle and the vehicle being purchased or leased (with  various restrictions).  This program is intended to have the dual benefits of accelerating the transition of our nation’s light-duty vehicle fleet to a more fuel-efficient one, as well as helping to stimulate an auto industry that’s currently in dire straits.  (Plus, folks buying a new car can get a substantial discount – not bad, politically!)

But, what constitutes a clunker?  Essentially, it’s a car that you’ve driven for at least a year, and that has a combined city/highway fuel economy rating of 18 mpg or less.  Also, it has to be newer than 25 years old.  This means my wife’s Buick Enclave, which we bought new in 2007, and which has a combined rating of 18 mpg, qualifies.  My truck, which on its last tank averaged 12.4 mpg, and which doesn’t have an official fuel economy rating, qualifies as a “Category 3” work truck.  We could trade both these vehicles in today and take advantage of the program.

Crushed CarsThis got me thinking – I wonder how effective the Car Allowance Rebate System (CARS) will have been once it concludes on November 1 (unless funds run out first).  The goal of stimulating the auto industry will almost certainly be reached.  It’s the other goal that worries me.  Who will take advantage of the program?  If consumers who had already planned to purchase a new vehicle are swayed towards a more fuel-efficient choice because of CARS, then that would be wonderful.  On the other hand, if folks are tempted to trade-in a nearly-new vehicle, or one that doesn’t get driven very often, simply to get their slice of the government pie, then the overall benefit could be negative.  After all, the program mandates that traded-in vehicles be shredded or crushed (and hopefully recycled) so that they aren’t resold as used vehicles.  And using my truck – which I probably drove less than 3000 miles in the past year – as an example, the net environmental impact of building a new vehicle (and scrapping the old) is likely negative when that vehicle is rarely used.

I hope the CARS program proves to be an effective mechanism for reaching both goals.  But as for me – I’m keeping my two clunkers.