Hybrid vs. Gas Enters New Phase

October 15, 2010 By

For some time hybrid vehicle sales have been hampered by the usual green price premium, as I like to call it.  Typically a hybrid model would cost $2-4,000 more than the exact same gasoline model.  From an economic standpoint this can be completely justified – if the drive train and more importantly battery components are more pricey than clearly this must be passed on to the consumer.  But consumers who did the math (like me) found that it might take 7-10 years to recoup the extra cost via savings at the pump (assuming gas wasn’t $5/gallon or worse).  That meant a hybrid was far more a lifestyle choice than an economic one.  In comes Ford with their latest announcement about the Lincoln MKZ hybrid model – priced this fall the same as the gas model.  Score one for the economics of hybrid innards becoming cheaper.  I’ll be interested to see the results of this “social experiment” as well.  Shouldn’t the hybrids sell out first?

The announcement, below, was obtained from AP online.

Jul 22, 2010 Associated Press Online
By DEE-ANN DURBIN

DEARBORN, Mich., Jul. 22, 2010 (AP Online delivered by Newstex) — For the first time, an American automaker plans to sell a hybrid car for the same, lower price as its gas-powered counterpart, removing at least one obstacle for drivers who want a greener ride.

At a little more than $35,000, the 2011 Lincoln MKZ sedan won’t be cheap, but the decision by Ford to match the prices of the two styles could lead competitors to follow suit with future models.

The hybrid MKZ, debuting this fall and running on both gas and electric power, will be a bargain after factoring in savings at the pump. It gets more than double the mileage of the traditional version in city driving.

While automakers won’t reveal what they spend to install a hybrid system in a car, the final product usually costs several thousand dollars more than a gas-powered version of the same car.

The Lexus HS 250h, the MKZ’s closest competitor, costs about $2,500 more than the Lexus IS, a similar, small, gas-powered sedan. Ford charges $8,840 more for the hybrid version of its Ford Escape SUV.

The MKZ can still make money even if Lincoln doesn’t charge more for the hybrid, said Erich Merkle, president of the consulting company Autoconomy.com. Luxury cars are sold at a significant premium, he said, ensuring a profit for Ford.

Lincoln can also borrow the hybrid system from the Ford Fusion, its corporate twin, and save on development costs.

“Conventional wisdom is that the hybrid should be priced higher, but there’s not really anything to say that a hybrid has to command a higher price,” Merkle said.

Besides, Ford had to keep the price down, said Jessica Caldwell, an analyst for Edmunds.com. If it had sold for more than $40,000, it would have faced tougher competition from luxury cars like the Mercedes E-Class or the Audi A6, she said.

“It’s going to take moves like this one to break into the luxury market,” she said.

Other automakers may not try to match Lincoln’s move if it is limited to the MKZ, but they will have to take notice if Lincoln uses the same strategy with future hybrid models, said Aaron Bragman, an analyst with IHS Automotive.

John Felice, Lincoln’s marketing manager, said pricing strategy is an opportunity to get buyers interested in the Lincoln brand. Even after a complete revamp of its cars in the past few years, Lincoln still lags behind other luxury brands. Lincoln sales were up 7.5 percent in the first six months of this year, compared with 17 percent industrywide.

Lincoln is also trying to make up for the sales it is losing by phasing out its Mercury brand, which includes two hybrids.

The MKZ is one of most popular Lincoln models, but its sales have fallen 5 percent so far this year.

The MKZ will get 41 mpg in the city and 36 on the highway. That beats the Lexus HS 250h, which gets 35 mpg in the city and 34 on the highway. The gasoline version of the Lincoln MKZ gets 18 mpg in the city and 27 on the highway.

The new hybrid system isn’t the Lincoln MKZ’s only nod to the environment. Its wood trim comes from well-managed forests, while the leather seats use a chromium-free tanning process that makes them easier to recycle, Ford said.

Lincoln MKZ buyers are not eligible for federal tax credits for alternative-fuel vehicles. Federal law limits the credits to the first 60,000 buyers of a company’s hybrids, and Ford hit that number on March 31.

Ford is the first U.S. automaker to offer a hybrid and conventional version of a car at the same price. Industry analysts say they are unaware of a foreign automaker doing it, either.

Even if Ford were to lose money on the MKZ hybrid, it would probably be willing to make the trade in exchange for marketing value for the Lincoln brand, said Bruze Belzowski, assistant research scientist at the University of Michigan Transportation Research Institute.

“Lincoln might say, ‘We’re going to take a hit on this,’” Belzowski said. “They may say something like ‘We’re willing to take a hit on this because the marketing value is going to outweigh the cost.’”
Filed Under: Automakers, Efficiency, Technology, Transportation

Ten Years of the Peak Oil Puzzle

September 8, 2010 By

Steve Andrews is a friend and advisor to Energy Literacy Advocates, so when he published his commentary on the significant events over the last decade I took note and decided it was worthy of passing along to ELA supporters. While not exclusively the issue, peak oil (the concept that production of oil will/has peaked – no matter what the cause and not to be confused with oil physically running out) is one of the key issues surrounding our reliance on fossil fuels. No one argues that oil is an infinite resource and there is no peak, it’s just a matter of when. If you are an optimist and 2020 sounds good to you then I hope you are braced for some rather rapid technological advancements in order to sustain our economy, as even a partial shift away from oil will take quite a lot of effort. To get more details on this subject visit this page on our website. To dig even deeper and gather more opinions on the subject visit the Oil Drum blog.

Commentary: Top 10 Pieces of the Peak Oil Puzzle during the 2000s
By Steve Andrews

Here’s one take on key events that impacted the peak oil story during the decade of the 2000s. If you have a favorite factor that isn’t listed below, send it along; we may run a follow-up.

1. USGS World Oil Study released during summer of 2000. The USGS study was a continuation of efforts that Chuck Masters headed up every four or five years between the early 1980s and 1994. [Note: no USGS world oil report has been issued since the 2000 version—a notable break from tradition.] Life-long oil man Jean LaHerrere’s voice was probably the loudest among the early critics of the year 2000 report; he flogged the conclusions early and often, focusing on what he saw as a glaring methodological departure from previous studies (taking the mean of very high- and very lowprobabilities for the amount of future oil discoveries). Despite the critics, the USGS’s numbers from the 2000 study still retain their status as the official US government view. This is shaping up as an instant replay of the USGS’s position back in 1962, when they denied a 1956 warning by M. King Hubbert that U.S. oil production would peak between 1965 and 1970. The USGS told then-Interior-Secretary Stewart Udall that the USA probably wouldn’t hit peak production until near the turn of the century. They were very wrong. Back in 2000, the US Energy Information Administration (EIA), using the optimistic USGS data, plotted their first “reference case” that showed peak production in 2016; since then, using only-in-Hollywood assumptions, they’ve replotted the curve to show a peak delayed until 2043. Dream on…

2. The oil production plateau. Using EIA data, world oil production grew 14% between January 2000 and year-end 2008—from 74.8 million barrels a day to 85.4 mbd. Production dropped last year by an estimated 1.2 million b/d, due in large part to OPEC cuts that matched declining worldwide demand. But nearly all of the decade’s production growth—9.8 out of 10.6 million b/d—occurred by year-end 2005. Despite one of the longest and steepest oil price run-ups (mid-2002 through mid- 2008) in modern times, world oil production started slowing in mid-2004, and then nearly flattened. Several OPEC nations—mostly Saudi Arabia—have enough idle production capacity to increase production and maybe break the plateau, though demand may not call for it soon. Total SA’s CEO Christophe de Margerie says that increasing world oil production to 90 million b/d would be “optimistic.”

3. Several important oil-producing nations in decline. The 21 largest producers—the millionbarrel- a-day club, oil’s Dream Team—supply about 85 percent of the world’s daily oil consumption. They are the big dogs; as they go, so goes world oil production. During the 2000s, three more of these dream teamers—first the UK, then Norway, then Mexico—slipped into long-term decline. They join the USA, Indonesia and Venezuela among Top 21 producers that are likely past their oil production peaks and where production is either flat or in long-term decline. As a group, during the decade these six nations lost over 4 million b/d of production (BP data). Increases from several non-OPEC countries more than offset the above declines. Most notable was the 5 million b/d oil production comeback by the nations that comprised the Former Soviet Union. Other non-OPEC nations among the Top 21 with a total increase of 3 million b/d were Brazil, China, Canada and Angola (which recently became a member of OPEC). But the bad news is that Russia’s production growth spurt has ended; both Russia and China, two of the world’s top five producers, will see their production plateau and decline during the coming decade, and probably fairly soon.

4. Formation of ASPO in Europe in 2001, under the leadership of lifetime oil man Colin Campbell
and physics professor Kjell Aleklett. Their first conference was held in 2002 in Uppsala, Sweden,
with subsequent annual conferences in Paris, Berlin, Lisbon, Pisa, Cork, Barcelona and Denver. In 2004, Campbell encouraged nations to form their own ASPO-like organizations; over 25 such
educational organizations now exist, from the UK to China.

5. An avalanche of books and videos released and websites established. While several books
broke trail back in the 1980s (Beyond Oil) and 1990s (The Golden Century of Oil; The Oil Coming Crisis; Geodestinies), the dam broke during the 2000s. Early books by Kenneth Deffeyes (Hubbert’s Peak; 2001) and Richard Heinberg (The Party’s Over; 2003) led the way for some 30+ book titles on the topic. The documentary “The End of Suburbia” (2004) featured warnings from Heinberg, Jim Kunstler, Matt Simmons and a host of other commentators. More followed. These have helped inject the word “peak” into numerous uses in the English language: peak growth, peak debt, peak water, peak food, etc. But despite the exposure, “peak oil” remains controversial.

6. Some key papers and reports published. These efforts contributed in ways both narrow and
broad to the small but growing dialogue. In 2001, Matt Simmons published “The World’s Giant Oil Fields”—which helped launch a growing focus on analyzing oil flows, not just oil reserves, as a key to understanding peak oil. In 2005, a report funded by the US Dept. of Energy—“The Peaking of World Oil Production: Risks, Impacts & Mitigation Strategies”, aka the Hirsch Report—introduced a paradigm-shifting notion: be aware of how long it will take to adapt to the reality of declining world oil production. A PhD dissertation on peak oil came from Sweden. And many more.

7. Breakthrough coverage by mainstream media. It didn’t last long, but the spike in savy coverage seemed to start during the fall of 2007; consider the kick-off a November 19th piece in the Wall Street Journal—“Oil Officials See Limit Looming on Production”—by Russell Gold and Ann Davis, with a slew of WSJ articles during the first half of 2008 by Neil King and others. But the flurry died off after the price crash, when the financial system nearly collapsed and the economy shifted to deep recession. Thereafter, coverage reverted to the “What peak? Isn’t technology great?” angle that we heard during most of the decade. Most media have lost interest in following the story.

8. The corn ethanol boondoggle. US energy policy rolled the dice on dead-end corn ethanol way
back in 1978, giving it a $0.51/gallon tax credit. Then we doubled down on corn ethanol with our
“new” energy policy of August 2005, finally putting corn and non-corn ethanol on steroids in late
2007. This only showed the bankruptcy of how challenged we are to respond intelligently to our
long-term liquid fuels problems. It also highlights the danger of government “picking winners.”

9. Voices in the mist: The peak oil concept has engendered sustained push-back, lead by
organizations like Cambridge Energy Research Associates, EIA, ExxonMobil, British Petroleum, and individuals like energy economist Michael Lynch. But this club has been losing adherents faster than it has been picking them up. As industry CEOs start to speak out in 2007, the dialogue gained beef on Team Peak Oil’s side. In 2008, even the International Energy Agency (IEA) started sending at least mixed messages that our oil future no longer included cheap and plentiful oil.

10. The IEA Whistleblowers of November 2009, as reported in the Guardian (November 2009). That was probably the first major public revelation of under-the-rug numbers that the IEA doesn’t want to talk about in mixed company but which show their understanding that world oil production isn’t going to come close to the 105 mb/d production they currently forecast for 2030.

Honorable mention? How about:
A) the shale gas revolution…but it probably won’t replace substantial amounts of US liquids
for a decade or more, if ever; or
B) deepwater production developments…but are they more desperation than inspiration?; or
C) development of unconventional oil shows problems (time frame for scaling up; high costs;
large environmental footprint, poor energy return on energy invested); or
D) the messes in Nigeria and Venezuela; or
E) since late 2007 the slowdown in energy investments due first to skyrocketing costs for
industry services, and second to demand destruction caused by the incredible shrinking
economy; or
F) the extensive moves by the Chinese to secure long-term oil supplies; or
G) the second Gulf war was started, acknowledged by some to have been fought primarily
for oil; or
H) Dr. Al Bartlett delivers another 500 of his 1780 presentations on the forgotten
fundamentals of our energy crisis?

Steve Andrews began following the slowly emerging peak oil story during the late 1970s.

Filed Under: Alternative Fuel Sources, Automakers, Economy, Efficiency, Energy Providers, Infrastructure, Natural-Gas, Oil, Oil-Supply-Demand, Peak-Oil, Policy, Regulation, Solutions, Technology, Theories, Transportation

Charging Infrastructure for Electric Cars

November 19, 2009 By

Below is a good article about how car makers are approaching the range issue with electric vehicles. It will be interesting to see how this plays out in the end.

Where can I juice up my ride?
Nov 17, 2009
Washington Post
Peter Whoriskey
As their manufacturers see it, the electric cars entering U.S. showrooms as early as next year will be engineering marvels: stylish, battery-operated, zero-emission wonders.
Yet for all their technological prowess, there’s one practical question that unsettles the green dreamers and entrepreneurs alike:
Where, oh, where, can you plug them in?
While most electric cars are expected to be recharged at home, the predicament of a driver who runs out of battery power on the road has yet to be settled, and the issue of “range anxiety” has set off an array of billion-dollar speculations.
On Monday, a coalition of companies that includes Nissan, FedEx, PG&E and NRG Energy issued a report calling for billions of dollars in government aid to support the transition of the U.S. vehicle fleet to cars that run on batteries.
The group is asking for $124 billion in government incentives over eight years including $13.5 billion for tax credits to build public charging stations.
“The public charging infrastructure is really important early on for getting drivers over range anxiety,” said Sam Ori, one of the authors of Electrification Coalition report. “No one really knows how intense it will be. Everyone has pet theories. But consumers need to see that the whole thing works and feel confident in adopting this new technology.”
Indeed, one of the main rivalries in the race to build mass-market electric cars, between the forthcoming Nissan Leaf and the Chevrolet Volt, turns on the different ways that each will address range anxiety.
Nissan chief executive Carlos Ghosn said in an interview Monday that he believes that range anxiety will afflict only a portion of the potential market. For plenty of people, trips of 100 miles or less will be fine.
Thus, the Nissan Leaf is a pure electric vehicle with a battery that will give it a range of approximately 100 miles.
If the Leaf were targeted for all drivers, “range anxiety would be a real issue,” he said. But it only “exists for 30 percent or 40 percent of the market.”
General Motors, meanwhile, has studied range anxiety and seems to have arrived at a different conclusion.
During the late ’90s, it produced about 900 electric vehicles, known as EV1s.
“Our experience with EV1 told us that range anxiety is very real,” company spokesman Rob Peterson said. “It was something the drivers experienced.”
Accordingly, its forthcoming electric car runs on a battery for the first 40 miles, but when the charge runs low, a gasoline engine kicks in. With or without public charging stations, a Volt driver can motor on as long as there is a gas station nearby.
“For a long time, cars have represented a way to move around — freedom,” Peterson said. “Some people are unwilling to accept restrictions to that.”
One critical distinction between the Leaf and the Volt will be price, though neither company has said what their vehicles will cost. Both are struggling to make the price comparable to a gas-powered car.
But Ghosn said that by forgoing the gas engine at the expense of a more limited range, Nissan will be better able to make its electric cars cheaply.
“We are not a maker of electric cars,” Ghosn said. “We are a maker of affordable electric cars. That is the most important thing from the beginning.”
Even so, Nissan and other companies exploring the market for electric cars say it would be very difficult to win over consumers without the benefit of the $7,500 tax credit for people who purchase electric cars.
Ghosn said Nissan plans to sell the Leaf only in countries such as the United States, Japan and France that offer consumer incentives.
Not surprisingly, the Electrification Coalition, of which Ghosn is a member, proposes that at least $75 billion in U.S. government money be used to fund the consumer incentives.
That’s a lot of money to ask of government, the coalition’s Ori said, but it “pales in comparison to the cost of U.S. oil dependence, which has huge environmental, economic and national-security costs.”

Filed Under: Automakers, Energy Policy

Ethanol Conversion Untruths

October 20, 2009 By

Whether or not ethanol should be embraced at any level is an argument worth having (although ELA generally sees it as a small contributor to a mix of fuel alternatives where it is logical and cost effective to produce – especially if cost breakthroughs can be obtained for cellulosic based ethanol production). Regardless one of the complaints is that vehicles must be equipped to burn higher concentrations of ethanol since it can be more corrosive than regular fuel. While there is some expense, more often than not the actual cost of ethanol ready components is in the hundreds of dollars at best, not thousands as some have claimed. In addition, mass production of these parts in all vehicles would surely drive the price down to insignificant levels.

By Bob Gordon
President and Co-publisher
The Auto Channel

http://www.theautochannel.com/news/2009/05/25/462650.html

Originally published May 25, 2009

There are a growing number of automotive aftermarket companies offering E85 Flex-fuel conversion kits for many of the U.S.’s 192 million EFI equipped cars and trucks. Vehicles that if converted to run on Ethanol would save American drivers billions of dollars each year and stop our support of the Oil Cartel that has been strangling our country for the past 50 years while also making Mother Earth a lot happier.

Be aware that it is illegal and against federal law to install these devices EXCEPT for a certain make and year that Flex Fuel U.S. has gotten EPA certification on. Doing so carries a $10K fine for “Fuel System Tampering”.

So what’s the problem you ask.

There seems to be a concerted campaign to slow up or prevent the support of converting existing gasoline powered vehicles into cars and trucks that run on Ethanol. The next generation Ethanol made from U.S. farmer grown switchgrass or as most of us know it as plain old hay. We believe that E85 could be our best stopgap in the, must happen, move away from gasoline powered vehicles into a EV-Motoring sustainable future.

As a good example of misinformation, some of you may have watched Pat Goss the in house mechanic and “expert” on Motor Week, the long running PBS TV car show and pass on what we have now discovered is just GM propaganda.(See Complete Story Below)

The premise of the Motor Week story was to illustrate the enormity of a Flex Fuel retrofit conversion of a GM/Chevy’s 5.3L engine & fuel system, an engine available as both a gasoline and flex fuel version to power the Tahoe, Silverado and Suburban would be. The gist of the story was to show how different most of the main parts of the Flex Fuel version was from the gasoline powered version.

Well what was shown and discussed just wasn’t accurate or even true!

Just today I have been made aware of a presentation that the Ohio BioSystems Cooperative has put together to show some of the misconceptions and untruths about E85 can hurt our nation.

A section in the Ohio BioSystems presentation contains side by side part numbers for both the Flex Fuel and Gasoline versions of the 5.3L engine, they show a comparison of the part numbers of these OE parts as listed in the GM inventory… and folks, over 85% carry the SAME PART NUMBER for both the gasoline powered version and Flex Fuel Version…85% are the exact same part.

Below you will can see the parts, which are linked to the appropriate page in the Ohio BioSystems presentation, the red highlights show the part numbers that are different but in fact may be the exact same part.

Fuel Caps, Fuel Pump, Fuel Tank(Plastic), Vapor Canister, Fuel Tank Sender, Fuel Filler Hose, Fuel Rail, Engine Control Module, Intake Valve, Exhaust Valve, Piston Rings, Intake Manifold Gasket, Intake Valve Seal.

As you saw, over 85% of the part numbers were EXACTLY THE SAME, leading to our conclusion that maybe the conversion of certain gasoline engines to flex fuel is really not such a big deal…it’s the only way to take our existing fleet and make it green and fuzzy.

The Motor Week misinformation example is just an easy one for me to point to,(and I like easy) but there are many, many others.

I have talked with manufactures of Ethanol conversion kits and other bright smart engineers, inventors and entrepreneurs who want to do what’s right for their customers, our country and the ecology and instead of getting support and encouragement from our government they are getting roadblocks from the EPA…roadblocks, while our nation is losing our most precious asset, our children in the defense of our need for oil to power our cars and trucks to maintain the freedom of mobility that our country is proud of…road blocks, huh?

You can read the complete presentation here for your self (but don’t forget the Rolaids and your anger control breathing): http://www.ohiobiosystems.org/OBSC-NTEP_files/frame.htm

Let me know what you think; bgordon@theautochannel.com

Filed Under: Automakers

Let the diesel invasion begin!

October 13, 2009 By

Diesel engines – to the average American consumer, those two words conjure up smoke-filled tailpipe emissions and deafening noise. But in Europe, diesel engines have long been a major part of efforts to gain more miles per gallon while reducing emissions. That technology has been steadily slipping in to the USA.

Diesels and diesel-hybrids may play a large role as we strive to make our vehicles more efficient and cut down on pollution. They offer great advantages – utilizing proven technology allowing a car to perform while still conserving fuel. Diesels also extend the lifespan of a vehicle, meaning that cars become less disposable, while the diesel engine is much more adaptable to renewable and biofuels, making it a possible transfer platform as fuels change.
The diesel engine – greener than you may think.

To learn more about diesels, check this out.

Filed Under: Automakers, Efficiency, oil price
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