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WSJ reports that Saudi Arabia is finally committing itself to invest in increasing its capacity in the next few years. Of course, we don't know what "few years" means.

"Saudi Arabia's oil minister confirmed plans to boost the kingdom's production capacity by as much as 14%, to 12.5 million barrels a day, during the next few years, in a bid to keep up with surging demand and fortify the nation's influential role as the world's producer of last resort.

Ali Naimi pledged to steadily match oil-demand growth with increases in output capacity. The commitment is a significant step for Saudi Arabia, which has long signaled to world markets that it can easily raise output to meet growth in demand. But it has balked at setting concrete targets or time lines.

To some extent, Mr. Naimi continued to hedge his bets yesterday, saying the kingdom would increase capacity gradually and in step with demand growth, keeping spare capacity at 'no less than' 1.5 million barrels a day above current production levels. He didn't indicate whether the kingdom already had started boosting capacity above the current level of about 11 million barrels a day.

But he indicated for the first time that Riyadh's political leadership had committed to the large-scale capital-investment program needed to fund a big boost. 'Fields and reservoirs for the [expansion] program have already been identified, and the decision to invest in added production capacity on this scale reflects our belief that demand for Saudi oil will continue to increase,' he said."

1.5 Million barrels per day sounds like a lot, but at the current rate of growth in demand that may be just able to keep pace with the demand.

2005 Honda Accord Hybrid Review

NYT Review: Greening Without the Preening.

A Green Perk Offered for Green Car

From a WSJ reprint A Green Perk Offered for Green Car:

In one of the first examples of a U.S. company offering money to encourage employees to buy environmentally friendly vehicles, a California software firm says it will give its employees $5,000 apiece toward the purchase of such cars.

Hyperion Solutions Corp., based in Santa Clara, Calif., will provide the reimbursement for vehicles that achieve 45 miles per gallon or more in the federal government's highway fuel-economy rating and that meet a strict low-emissions standard. Currently, the only generally available vehicles on sale in the U.S. that qualify on both counts are hybrid gasoline-and-electric-powered cars from Honda Motor Co. and Toyota Motor Corp. Hyperion counts many car companies, including Honda and Toyota, among its customers.

Initially, Hyperion has budgeted $1 million a year for the program, enough to incentivize the purchases of 200 cars annually. All of Hyperion's 2,500 employees globally, including 1,500 in the U.S., are eligible.

Well, $5000 is certainly a hefty incentive. Most people who want to buy these hybrids should be able to get many accesories included in that price!

ChevronTexaco building Hydrogen fueling stations in China

The question we should aks is whether it makes sense to use the Natural Gas to Hydrogen Pathway as a transition strategy?

"'First and foremost, we're an energy company, so we're always going to be looking at, 'What's the energy the world needs and in what form?' ' said Greg Vesey, president of ChevronTexaco Technology Ventures. 'We look to natural gas as a product we're going to be producing for a long time, so this fits in with the natural gas strategy.'

The system isn't perfect. Extracting hydrogen from natural gas emits carbon dioxide, a greenhouse pollutant, as a waste product. Still, some environmentalists interested in hydrogen view natural gas as a useful stepping stone.

'That's probably one of the most economical ways to get the hydrogen infrastructure off the ground,' said Roland Hwang, vehicle policy director for the National Resources Defense Council. Like many environmentalists, he would rather see hydrogen produced from water using renewable energy sources such as solar power, once the technology for doing so in large quantities improves.

Natural gas 'has to be seen as a transition strategy, not the ultimate source of hydrogen,' he said."

Some might argue, quite legitimately, that currently there is no other viable alternative. The follow up question should be whether we will be able to develop a viable alternative in the coming decade or so to enable deployment of commercial fuel cell vehicles by 2020? A colleague working on solar power estimates that Solar PV deployment will grow about 20 times in the next fifteen years or so, mainly through rooftop installations. His estimates of about 83 GW solar production capacity by 2020 match quite closely with IIASA-WEC scenario 'B'. Many believe that a radical innovation in solar technology is needed to make even larger scale deployment of solar to hydrogen conversion, possibly through photoelectrochemical solar conversion devices or other options. Many challenges, and hence many opportunitities!

Hydrogen ICE Vehicles

H2 ICEs seem to gaining some acceptance finally. Originally, we only had BMW, and then FORD. These NYT articles report that GM, Mercedes and Mazda have also joined the party. May be they were impressed with the work Ricardo did with the UK government :-)

Coming up...

I am reminded of my May Madness. I do, however, have to report on two things. One: What some members of the oil industry think about the high oil prices and Two: What Carlos Ghosn had to say last week. So, more when I get time.

Industry backs EPA claim in CO2 dispute

Sounds like an odd headline? Well, it isn't. Remember when California and then several northeasters states were talking about sueing EPA about not regulating CO2 emissions as an air pollutant under the clean air act? As expected, the automakers and dealers are backing EPA's claim that EPA does not have the authority to regulate CO2.

The industry argues that the law addresses specific pollutants, such as oxides of nitrogen, whose effects on human health are well established. But carbon dioxide is a naturally occurring part of the atmosphere.

...Industry groups also assert that regulating carbon dioxide under the Clean Air Act would undermine the federal law that governs vehicle fuel economy standards. The only known way to limit carbon dioxide emissions from vehicles is to reduce fuel consumption, the industry says.

This lawsuite is important because it directly ties with California AB 1493. I'll be watching with excitement as the story unfolds.

Eliminate Gas Tax - And Pay Per Mile Instead?

bad idea

The new head of California's Department of Motor Vehicles has come up with a plan to reduce or eliminate the state's gasoline tax -- but there's a catch.

The idea from DMV chief Joan Borucki would replace that revenue with a tax that would charge drivers per mile driven. To keep people honest, every car would be equipped with a tracking device that would send mileage information to a satellite.

Borucki says more people are driving fuel-efficient cars, so the gasoline tax is generating less revenue for needed transportation projects. But some say the plan might discourage people from buying cars that burn less gas.

If Pay-as-you-drive schemes are to be implemented, they should be considered as a replacement for the insurance. You pay less insurance if you drive less and vice versa. We do know, however, that any idea of a mileage based fees is wildly unpopular. In fact, I should say that the motorists do not like any form of control over their driving habits.

If gasoline tax revenue is the real concern, then the only feasible way to make up for the revenue is by increasing the tax. I don't know when was the last time gasoline tax was increased in the state of California, but it has probably not kept pace with the inflation. So, a legitimate argument can me made in favor of gas tax increase. If people don't want to pay more in gasoline taxes, they should also just shut up instead of complaining for poor road conditions.

Some Europeans see U.S. excesses in SUVs

From IHT -- Some Europeans see U.S. excesses in SUVs

"They're status markers because they're big and expensive and profligate with the earth's resources," said Steven Stradling, professor of transport psychology at the Transport Research Institute at Napier University in Edinburgh.

"They are a symbol of power without responsibility, and that's what we feel about you guys right now," he said.

In the United States, SUVs are no longer novelties, but until recently they had not made much impact in Europe, the land of old, narrow streets and $5-a-gallon, or $1.30-a-liter, gas.

Lately, however, SUV sales have soared, touching off bitter complaints about American cultural imperialism and a flurry of proposed anti-SUV legislation in several countries. So far, though, none of those proposals has passed, and, just as they did in the United States, SUVs are spreading steadily across the European landscape.

It is not a secret anymore that high gasoline prices will NOT stop the spread of SUVs around the world!

"I don't want to be like Freud, but SUVs are a projection, a compensating thing," Di Carlo said in an interview. "They're when you want to show how rich, how powerful, how tall, how big you are."

It has proved hard to enact anti-SUV legislation, partly because of the different ways of defining what exactly constitutes an SUV, and partly because of the influence of the automobile industry in places like Britain, Germany and Sweden.

I am reminded of the Anti-SUV humour post. Whether we love SUVs or hate them, the reality is that they are here, and we have to deal with them.

Top Ten Future Cars?

As per Fuel Cell Works.

Chinese Fuel Economy Standards

Green Car Congress has some details on Chinese Fuel Economy Standards via a WRI Report.

Hydrogen Refueling Station Opens in D.C.

Yahoo! News - Hydrogen Refueling Station Opens in D.C.Here is the interesting stuff:

"GM hopes to sell affordable hydrogen-powered vehicles by 2010, and Shell envisions building on the number of stations and having mass-market penetration between 2015 and 2025."

I don't know if somebody said this at the event or the reporter is parroting something out of a previous publicity material. If GM is ready to sell an AFFORDABLE H2 powered vehicle by 2010, then I will salute them. I have been, however, spending some serious time reading and thinking about the H2 based vehicles, and I am not ready to believe that claim. May be 100,000 dollars is affordable to a few people, but not to 99.999% of the population. Even if the vehicle costs were somehow magically down to 30,000 or less, I have serious doubts about reliability, performance, range amog other things. I believe that such publicity events like this one are premature, and are creating a false sense of hope in the minds of the public. Given the state of the technology, scare resources should be spent on serious R&D and not on demonstration events.

UPDATE: The Yahoo Story is likely to expire after some days. Matt Wald reports in NYT on the same.

Cost of California's Climate Change Initiative per SUV

Danny Hakim reports on How much it might cost to improve fuel economy of SUVs. I am not sure about the following points:

* Are the costs in the accompanying chart in 2004 dollars?

* When the chart says Diesel-like combustion, I think that they are talking about HCCI (Homogeneous Charge Compression Ignition) engines. In that case, we know that the technology is not there yet.

* I don't understand the Alliance's comment that Tire redesign to reduce rolling resistance is not feasible. I will look in to the tire pressure regulations, but my first impression is that the claim is not correct.

* I know of no reason why Variable Valve Lift (VVL) and Cylinder Deactivation (DeAct), both could not be used. I am sure that the benefits of using both technologies are not entirely additive, but the benefits are real and the costs are modest.

* I agree that weight reductions may not be required to meet the proposed standards, but to get to the 60-70% emission reductions, weight reduction may be a more feasible option.

* I will get some reliable estimates on costs and benefits of a 42-Volt starter generator by tomorrow, so more on that later.

* I do not know anything to comment on the torque convertor issue.

* The last three points account for the price difference between the two estimates.

* Finally, the discount rate used and the estimated gasoline price would both turn out to be critical parameters in deciding if the proposed technologies are cost effective. As long as the discount rate used by the UCS was not too low (less than 7% since DOT uses 7%), I would feel comfortable. As for the current gas prices, they are much above the $1.69 used in the UCS analysis or $1.74 used in the CARB analysis.

There is a lot of juice still left in the story, and I promise to come back to it.

Canada considering adoption of California's AB 1493 regulations

In what could be a twist in the way Auto Companies take on AB 1493, Canada is considering using the same proposal to lower it's greenhouse gas emissions.

Canada considers curbs on emissions - 11/07/04: "The moves in Canada could have serious implications for major automakers. If Canada were to adopt California's restrictions on tailpipe emissions - and a bloc of Northeastern states matched the effort as they have pledged to do - the auto industry would be forced to build more fuel-efficient vehicles for more than one-third of the North American market."

California, Northeast and Canada together could force the change in the American fuel economy standards!

UPDATE: NYT Story for archiving purposes.

New hybrid cars driving us wild

Are the hybrids really taking off?

Maroone said hybrids have the potential to account for a bigger share of auto sales.

''A lot depends on the reliability and durability of hybrid engines and whether they can continue to drive the performance characteristics . . . that make the performance comparable to the combustion engine in terms of torque and horsepower,'' Maroone said.

Southeast Toyota's Reilly added it's only a matter of time before Toyota makes a hybrid version of all of its vehicles.

''I think it's not too far off when hybrid power train is just another option, like a four cylinder or six cylinder, or a two-wheel drive or a four-wheel drive,'' he said."

Not too far off?

G.M. vs. Toyota

This article portrays a G.M. vs. Toyota in the automotive sector. Such a case is perhaps exxagerated, even though Toyota's growth has come partially at GM and other American Car Manufacturer's expense. GM is just too big to be discounted so heavily. This does not mean that Toyota may not become world's leading car manufacturer some day, but I have hope that GM can start to turn things around too.