Electric Cars - Kicking The Oil Habit and Saving Money Doing It

I've brought up the idea of peak oil on this blog a few times before. It's a topic that's starting to enter the mainstream's consciousness the way global warming was 10 years ago. I think it's going to loom larger and larger as oil production flattens and/or falls, and demand for oil keeps going up. The Wall Street Journal this week pretty much said: Peak Oil, Not Just For Wackos Anymore. OK, so maybe they call it an "oil production plateau" and not peak oil, but the concepts of "energy shortages, high prices and bare-knuckled competition for fuel" are similar.

And so far I've talked a lot about renewable energy sources such as solar and wind, but they won't solve the problem of peak oil, at least not by themselves. That's because there are no realistic solar vehicles, and the idea of a wind-powered boat, or "sail" boat, is ridiculous. Oh wait...

Jokes aside, our country's transportation is 90% dependent on oil. So to avoid the Energy Crunch of peak oil, we're going to have to come up with another way to fuel our cars and trucks, and quickly. That is if we want to avoid paying massive prices for gas, having those price increases hit our middle and lower classes the hardest, entering a recession or possibly depression, having our gas money go into the hands of countries that hate us, and possibly tangling militarily with other large economies vying for oil around the world.

I'll take a look at three ways we can kick the oil habit: electric vehicles, hydrogen vehicles, and biofuels. I'll start today with electric vehicles which, in my mind, have suffered badly from poor PR and from some of the most unfortunate car designs ever to hit the road. This has cemented them in the average consumer's mind as the car of the be-turtlenecked tree-hugger with his head in the clouds, a car no real man would ever be caught dead in. What a tragic error!

I've said it before and I'll say it again. Change will have to make sense where it matters most: in the pocketbook, and well in this case, the consumer's ego. So this Thanksgiving many many thanks go out to Tesla Motors, whose new roadster (right) has changed everything. Finally a good-looking electric car which, oh by the way, completely dusts the Ferrari going from 0-60.

So maybe now we can leave behind those lame wheel-covered designs and make a nice electric car. But what about the pocketbook? Won't an electric car be too expensive because of the battery?

Let's do the math. New electric cars are piggybacking off the extraordinary amount of research that's been done on Lithium-Ion batteries for cell phones and laptops, and the idea is that one of these batteries for a car might add $1,200 to the price. That's a big hit... until you think about the money you save.

Here are some assumptions. Electric cars use about 0.215 kWh per mile. Cost of a kWh from the electric company (at least for me here in L.A.) is 10.5 cents. MPG of an internal combustion engine vehicle is 23 (U.S. fleet average). I used $3/gallon prices, as well as the new and improved $5/gallon we'll be paying soon (ok, that's just a guess for now), and I came up with the following annual costs of fueling your vehicle to go 12,000 miles:

















At those rates, here is the money you'd save after five years of using an electric car versus the car you drive today, and that's including the battery:


I don't know about you, but I could use the extra $10 grand. And mass production of these vehicles would reduce our dependence on that dwindling supply of oil, helping us avoid the problems I mentioned above. And to top it off, you'll be pumping less pollution into the air, especially as more of the electrical grid is powered by renewables. How could a mass-produced electric vehicle fail? Detroit, Japan, and Germany - market opportunity beckons.

Energy Crunch

Okay, I came across an amazing article that happens to be titled 'The Energy Crunch to Come.'

If you don't know about the idea of peak oil, suffice to say that most experts agree that it's real. They disagree on the date, but this article explains why it may come sooner rather than later. His conclusion should sound familiar if you've been reading my blog:

"Only an ambitious program of energy conservation -- entailing the imposition of much higher fuel-efficiency standards for American automobiles and SUVs -- and the massive funding of R&D in, and then the full-scale development of alternative, environmentally-friendly fuels can offer hope of averting the disaster otherwise awaiting us."

The Gas Tax - Is It Feasible? (Don't Kill Me!)

I was talking with my friend J-Ro* about his favorite subject, Peak Oil, and we began talking about taxing gasoline. Obviously it's not the most popular of political moves (ok, it's political suicide), and there are concerns about the ripple effects to the economy, including potential recession. But on the upside it could be used to develop renewable energy (see my first post for the benefits of this), and it could speed the consumer's move to reducing energy/oil consumption and demanding renewable energy. So I did what I am wont to do... I opened up an Excel spreadsheet.

People complain to no end about increases in gas prices, and to me it's highly irrational. A tax of $1 per gallon (which would cause large-scale mobs to burn in effigy whomever had proposed such a monstrous tax, which, I now fear, they could think is me!) only costs the average driver $50 per month.

A tax of $0.20 per gallon, which would most likely still be hugely unpopular, would only cost $10/month.

So consumers seem to resist anything that costs them $10/month.

Now let's look at that same average consumer and see what they might save by replacing current 100-Watt bulbs with 26-Watt fluorescent bulbs.

$8.16! That's almost the $10 the gas tax would cost. So it's basically a wash.
I just installed these bulbs and they're actually brighter than the old 100-watt bulbs. So now the consumer is resisting using a better product that saves them the $10 per month they were about to kill me for suggesting I put into renewable energy.

I really believe this is an information war. The ultimate answers to the Energy Crunch will come from rational decisions. We just need to make sure the rational arguments get into the heads of the decision-makers.

*Incidentally, J-Ro, whose full name I won't use to protect his identity, was the one who suggested starting this blog in the first place. Thanks J-Ro!

Peak Oil - the Energy Crunch Opportunity

Peak oil is here. I don't want it to be here. You don't want it to be here. But as someone once said (I think it was Jack Welch, although he surely can't have been the first), "deal with the world as it is, not as you want it to be."

Oil production is declining according to a report from the Energy Watch Group in Germany. The world currently produces 83 M barrels/day, or 30.3 billion/year. At current oil prices of ~$93/barrel, that means $2.8 trillion spent on oil this year worldwide.

As that report predicts, global oil output is going to drop by 25 million barrels/day by 2020 to a predicted output of 58 million barrels/day. That equates to almost a trillion dollars of value PER YEAR that will need to be replaced, and that's not even taking into account the projected increase in the world's energy demand over the same period. That amount will rise to a trillion and a half dollars per year by 2030.

Where will that energy come from? Oil shale, oil sands, or natural gas? Biofuels, solar, wind, or geothermal? The answer is yes. It will have to be a combination of a lot of different answers, since no single answer seems complete.

A trillion and a half per year. Seems like a fairly large market. Clever entrepreneurs wanted.

Introduction to Energy Crunch

Welcome to Energy Crunch. As this is my first post, I think I'll lay out why I'm blogging here, why I'm focusing on energy.

Simply put, we are facing an Energy Crunch. Energy is going to be the #1 issue facing our country in the coming 50 to 100 years. Our economy has been built on the back of cheap energy. But getting that cheap energy out of oil has caused lots of problems. And lots of indicators show that we may not be able to get that energy out of the ground so cheaply anymore. Alternative energy sources will be needed, and fast. I say that energy is the #1 issue because working to solve the energy issue means that you're simultaneously working to solve other major issues, such as global warming, peak oil, and terrorism.

Global warming. We need to stop producing CO2. Renewable energy sources (which I will argue need to be re-branded as "free" energy sources, which is what they are... a post is almost certainly forthcoming on the re-branding of energy as the front line of the energy war) don't produce CO2, or produce a lot less of it. That case is pretty clear.

Peak oil is happening, in that oil production has already begun its decline year-to-year. Some will debate whether we're just seeing the effects of various geopolitical situations, which, when cleared up, will see us back to producing more and more oil for the foreseeable future. I think, though, the most reasonable assumption is that peak oil is here, and that we need to start thinking about what's going to replace all that oil. I'll do a post on that in the very near future.

Terrorism is linked to the oil problem, but this will be a lesser focus of my blog. Suffice to say for now that the U.S. needs massive amounts of oil, and this has meant dealing with the Middle East. It may be oversimplified to say our thirst for oil causes or funds terrorism, but not by much.

So what am I going to do? I'm on a mission of exploration. I'll be looking, and re-looking, at a lot of the potential solutions for what I see as the Energy Crunch problem. I'll spend some time discussing the problem itself (i.e., what is peak oil, have we hit it yet, etc), but I want to focus more on the solutions. What are the viable alternative energy sources out there? What new breakthroughs are popping up? How do those impact that technology as a viable source of energy in the future? How should individuals and governments act and react to these changes?

Let the energy exploration begin.