Monday, May 31, 2004

Potential of Biofuels

Tom from DC/VA pointed me out to this comparison of Biodiesel and Hydrogen. Tom also correctly pointed out that the comparion needs to be taken with a grain of salt. Such a comparison is unfair in my opinion because of the following reasons:
* Diesels are going to have to do a lot of hard work before they can become a preferred choice in the U.S. market.
* While biodiesels can solve the particulates problem, emissions of NOx are actually worse. Remember that with current Diesels, the problem is NOx, and not the particulates.
* Even if these problems are overcome, to think that Biodiesel can displace entire petroleum consumption is wishful thinking. Biodiesel can be used in existing diesel engines, but that does not eliminate the "chicken and egg" dilemma of who is going to invest in the mammoth biodiesel production capacity, and why?
* Recently, IEA brought out a report on Biofuels in transport (I don't think that they consider the algae based option). They say:
A 5% displacement of gasoline in the EU requires about 5% of
available cropland to produce ethanol, while in the US 8% is required. A 5%
displacement of diesel requires 13% of US cropland, 15% in the EU. Land
requirements for biodiesel are greater primarily because average yields (litres
of final fuel per hectare of cropland) are considerably lower than for ethanol.
Land requirements to achieve 5% displacement of both gasoline and diesel
would require the combined land total, or 21% in the US and 20% in the EU.
These estimates could be lower if, for example, vehicles experience an
efficiency boost running on low-level biofuels blends and thus require less
biofuel per kilometre of travel.

The IEA is very careful as to not exaggerate the benefits of biofuels.

* Some of the numbers on the UNH page hide information. For example see the Overall energy balance or tank capacity numbers. I immediately doubt the information which has clearly been massaged to make their option look better.

* Biofuels indeed have a potential to displace petroleum based fuels in the short term, and we should look at them seriously. At the same time, anybody who is looking at Hydrogen seriously is not thinking of it as a short term option. Honestly, in the long run (30 to 50 years), there does not seem to be another option. Hydrogen has it's own problems, but we need to take it seriously.

Oil production hike only short-term solution: OPEC

Some interesting statements being made by OPEC about the oil markets:
"Almost immediately, three OPEC countries can produce up to three million barrels more. They are Saudi Arabia, Kuwait and the United Arab Emirates,' Omar Ibrahim, head of the OPEC information department, told AFP.
'But its effect will probably not last longer than 48 hours... as supply and demand are not really the problem,' he said on the sidelines of a press conference ahead of Thursday's OPEC extraordinary meeting in Beirut.
'The current situation will only be solved permanently if we look beyond just supply and demand, we look also at geopolitics, we look at the problems of the United States,' he said. "

What does Mr. Ibrahim exactly mean ?

Friday, May 28, 2004

Why are conservatives supporting higher gas taxes?

Tom Curry points me to thisSalon discussion.

Reporting without understanding technology

I don't think that the BBC reporting here is quite as accurate. Specially when they say:
General Motors will not have a proper hybrid in place until 2007, and its stop-gap version that merely allows the petrol engines on its Chevy Silverado pickups to shut down while waiting for the lights to turn green has been described as laughable by critics.

I believe that they are talking about displacement-on-demand and/or cylinder deactivation. It is a smart idea to run only half of the engine cylinders when idling, and it can save anywhere from 6 to 10% of fuel on large 8 or 12 cylinder trucks.

Of course, I am going to try to defend GM's position of going slow on hybrids.

Wednesday, May 26, 2004

Doing What is Right!

Joan Ryan aska: Why should Americans be entitled to cheap gas? and then gives a sarcastic answer!

When asked to rank the importance of 56 characteristics they considered when buying a new car, Americans ranked fuel economy 44th. This explains why sport utility vehicles, minivans and light trucks accounted for 54 percent of all new cars bought last year.

"It's still more important to have the right number of cup holders than high fuel economy," said Art Spinella, director of CNW Marketing Research, which conducted the survey.

... "It's kind of amusing,'' Spinella said. "When we do an international wish list, it's remarkable how similar people are in the kinds of things they would like to get their hands on.''

See? There it is. We would be as responsible as the rest of the world if we had the benefit they do of high gas prices. The low price of gas in the United States enables our SUV indulgences. To put this complex social dynamic in the parlance of the latest psychological research: It is not our fault.

Therefore, since this situation is not of our own making, we should not have to pay higher gas prices and give up the big-car life to which we have become accustomed. That would not be right.


Tuesday, May 25, 2004

End of Cheap Oil?

June Issue of National Geographic has a cool story on the end of cheap oil. An excerpt is online, but the print issue has some neat pictures and graphs.

Monday, May 24, 2004

Big 3 see tax hike as fuel-saving plan

But higher gas prices make the proposal politically unpopular:

Bill Ford, Detroit executives ranging from General Motors Chairman Rick Wagoner to GM Vice Chairman Bob Lutz to former Chrysler Chairman Lee Iacocca have talked about gasoline taxes as a way of building demand for more fuel-efficient cars. Without consumer demand, fuel economy will continue to decrease, they say.

Dennis Fitzgibbons, director of public policy in DaimlerChrysler’s Washington, D.C. office, says Corporate Average Fuel Economy standards alone encourage more efficient designs, but those gains are offset by people driving more because it is cheaper.

“A gas tax is the only honest solution,” Fitzgibbons says. “It encourages efficiency in the purchase and also the operation of a vehicle.”

But U.S. policymakers have emphasized trying to keep gasoline prices low. The economy is built on cheap gas.

...John DeCicco, a senior fellow with Environmental Defense, says broader economic forces are working against fuel economy. Unlike the early 1980s, consumers likely can absorb gas price increases because incomes have risen much higher than gas prices during the last two decades.

The price of gas has doubled since 1998 without much impact on the sales of gas guzzlers, DeCicco notes. And new car buyers are wealthier than all Americans.

“Everyone is stumped by the consumer side of the equation,” DeCicco says. “The American consumer today is way too affluent for this to be a serious issue.”

...Dan Lashof, climate science director of the Natural Resources Defense Council, says taxes could be effectively used in combination with fuel economy rules to offset the effect of cheaper driving. But he insists gas mileage rules need to be strengthened no matter what happens.

“I have had discussions with auto lobbyists for years, but I’ve never seen them put up a serious effort to match their rhetoric,” Lashof says. “They [taxes] have both been put forward as a kind of facade and excuse for not doing the one thing the administration has the authority to do, which is raise CAFE standards.”

James Dunn, a political science professor at Rutgers University, has studied the politics of gasoline taxation in the United States and other countries. In Europe, Dunn said, politicians have been willing to consider gas taxes as an essential stream of general government revenue. Here, gas taxes have always been dedicated to highway construction and repair.

I should point out that James Dunn has written a very interesting book called The Driving Forces, where he analyses the history of gas tax hikes and the political battles surrounding the automobile. if you don't have muchtime, scan through chapters 1, 2, 3, and read chapter 7.

That thing got a Hybrid?

Are hybrids really the shape of things to come ? I am fairly convinced, but not everybody is.

Sunday, May 23, 2004

To Fret or Not to Fret

The Oil Question has many dimensions. One that I am seeking to explore at the moment is this:
"There are other jolts as well. American car companies, for example, have become dependent on the sale of bigger, heavier sport utility vehicles and pickup trucks. Leave aside last year's frenzy over the Hummer H2 S.U.V., which gets about 11 miles to the gallon but has already seen its popularity plunge.

Consider what happened to Detroit's Big Three car companies in the 1970's, when they found themselves blindsided by demand for small cars. In their panic to change course, they introduced several of the worst new cars of all time: the Chevy Vega, the Ford Pinto and the A.M.C. Gremlin.

"The auto industry has a huge problem,'' said Philip K. Verleger Jr., an independent oil analyst based in Newport Beach, Calif. "Detroit is once again going to have to retool with hybrid cars of whatever the market demands.''

I am trying to argue that this is true, but there is no hard real evidence except for this.

Tax and Drill

Charlie Krauthammer has a suggestion on gas tax.

Saturday, May 22, 2004

It's Over!

I am glad to report that the May Madness® is officially over, although there may be some lingering effects.

Wednesday, May 19, 2004

Make room For The Hybrids

A story in TIME has another interesting quote from Bob Lutz. I find that interesting because it shows the mentality in Detroit. They are not completely wrong either. I have other reasons to believe that not persuing Hybrids actively is a bad business strategy, even if you did not care about the environmental benefits. The real question is whether you can use advanced vehicle technology as a competitive advantage. I think that Toyota has answered affirmatively, and Detroit is slow to respond. Anybody remember the quality gap in automotive industry from twenty years ago; well my claim is that you are going to see an environmental quality gap in the years to come which will make it hard (if not very hard) for Detroit to catch up with Toyota. More on that later.

Tuesday, May 18, 2004

An important psychological barrier is broken...

Gas is over two dollars a gallon. We just have to see if it stays there for some time. If it does stay there through the memorial day into June, then an important psychological barrier will be broken. We now return to the scheduled May Madness® which is projected to end on Friday, May 21st.

Monday, May 17, 2004

Plan of Action

Here is what I plan to do over the next few weeks:

First, I need to answer all the questions that Mike and John asked.

Secondly, I promise to read and review Joseph Romm's book on hydrogen economy.

By that time, Daniel Sperling's book on Hydrogen should be out.

I started reading an older but much more fascinating book before all the May Madness® began. The book is Dan Yergin's The Prize. The Prize narrates the fascinating story of Oil. As you read the book, it becomes that it's just not about OIL, but the business models and politics that oil brought with it. Finishing this book from where I left off is a priority on my reading list!

Henry Lee on Energy Policy

Via Curblog .

Saturday, May 15, 2004

At $2 a Gallon, Gas Is Still Worth Guzzling

Hybrid SUV getting big response

Ford gets ready to launch Hybrid version of Escape.

Friday, May 14, 2004

Blogger troubles

I told people at Blogger that their reorganization of blogger interface sucks. They think that I don't like the looks of it. They are wrong. In getting better looks, they have screwed up functionality, and blogger has slowed down in all its operation. Some new things are good, but overall performance is down. They seem to have enabled blogger comments, but you can't see them unless you click on the permalink for the post, as in here.

Thursday, May 13, 2004

Fight Obesity with small clothes?

Mike says in response to a previous post:
Your stats still don't address Mr. Lutz's point. We ask car manufacturers to change their cars, because people won't change their consumption patterns. Yet if you do that for clothing, it just sounds ridiculous.

Sure it's a market failure. Mr. Lutz's point is that you are trying to solve it in a way that would be laughed at if applied to other problems.

As I say in the post, and I am begining to be a believer in it, this is not just a market failure. It is a market that happens to be screwed up. The standard response of getting the prices right would help, but not solve the problem. What I mean by it is this: Yes, gas prices will need to go up for consumers to start demanding more fuel efficient cars. At the same time, the more fuel efficient cars cost more, and it is not clear how high the gas prices need to be to stimulate the market, but my data shows that gas prices need to be about 3 dollars a gallon or above. Now, if you calculate the amount of externalities, the so called optimal level of taxation is around 1 dollar per gallon => a gas price of about 2-2.5 per gallon.

You would agree with me that Obesity is bad, and is a problem. As I said, the solution is not to get smaller clothes, but it is not to get fat in the first place.

Reducing the size of the cars and trucks is only one of the ways by which you can improve fuel consumption. However, it is by no means a wrong way of doing so. There is no doubt that cars and trucks in the US are heavier and bigger than anywhere in the world. The average occupancy is 1.3 or so. Do you really need to be surrounded by 5000 pounds of metal in order to feel safe? The correct answer is NO! SUVs are no safer than some of the large cars. Trucks are in fact less safe to drive.

There is a reason why Bob Lutz wants to sell bigger, heavier and powerful vehicles. If you look at where GM is making money, it is by selling there trucks and SUVs, where they are earning profits of up to 10,000 dollars per vehicle (YES, it is true!). On the other hand, they are actually subsidizing the sales of smaller cars like Cavalier by about 500 dollars or so.
No time right now to post links to all the supporting material.

Just in case you thought...

.. that Americans are the only once whining about the rising gas prices, here are the friends from across the northern border.

Wednesday, May 12, 2004

Oil supply 'cannot match demand'

The reason may not be that consumption has increased suddenly, although it has been going up. But...
Nowhere near all of the apparently increased demand is connected with increased consumption.
Instead, it seems that major buyers - especially governments - are stocking up on oil, possibly to guard against any disruptions to supply.
The US strategic petroleum reserve has been a particularly active buyer, and governments such as China and India have followed suit.
At the same time, traders in the futures and options markets have anticipated a tighter market by bidding up forward prices.

This is an interesting explanation. Some good food for thought.

Comparing Obesity to Fuel Consumption...

One of my friends forwarded this quote to me:

"Robert A. Lutz, GM's vice chairman, often likens fuel regulations to tackling the nation's problem with obesity by forcing clothing manufacturers to produce smaller sizes."

The correct response to this is: What if the nation were take steps not to be obese in the first place. EPA analysis of vehicle characteristics over the period 1981-2003 indicate that if the new 2003 light-duty vehicle fleet had the same average performance and same distribution of weight as in 1981, it could have achieved about 33 percent higher fuel economy. Similarly,
... had the new 2004 light-duty vehicle fleet had the same distribution of
performance and the same distribution of weight as in 1987, it could have achieved about 20 percent higher fuel economy.

The fascination for ever bigger, heavier, faster and more powerful vehicles has got to stop somewhere. Clearly, Bob Lutz and GM are not going to make that happen. It is what economists like to call a market failure. Some actually argue that it is more than than: It is a failed market!

Monday, May 10, 2004

Consensus on a Gas Tax Hike?

It seems like the Contra Costa Times is a little late in picking up on Ford's suggestion to hike gas tax, but they have a few more quotes. Here is the story:

"Anything that can align the individual customer's purchase decisions with society's goals are the way to go," Ford's chairman and chief executive, William Clay Ford Jr., said, adding that his company has previously supported a 50-cent increase in gas taxes.

...G. Richard Wagoner Jr., the chairman and chief executive of GM, concurred.

"If you want people to consume something less, the simplest thing to do is price it more dearly," Wagoner said. "And there is just no track record of sustainable success in the U.S. of doing that, versus Germany, for example, which just regularly says, 'Oh, we have a budget deficit; we're going to raise the fuel taxes by 10 pfennigs, or euros, or whatever,' and do that. And I think that's the rub."

..."It's easy to argue for a politically unviable solution in place of actually making progress," said David Friedman, senior policy analyst at the Union of Concerned Scientists, an environmental research and advocacy group. "There's probably room to do both, but at a minimum we have to talk about ways to save consumers money by raising fuel economy standards."

...Daniel Becker, an expert on global warming for the Sierra Club, said: "It's like Bush saying: 'Let's go to Mars. Let me offer you the impossible to divert you from the practical.'

"We totally support a gas tax," Becker added, "and we'd be happy to meet with the other people who support a gas tax -- at a phone booth in Grand Central station."

Two points: If we raise the gas tax, then raising the fuel economy standards becomes more feasible. Either alone is not likely to solve the problem, but together they both can go a long way. I have talked about this before, and I will talk about in detail later.

Secondly, people like Baker are what I call Cynical Environmentalists. As E. W. Johnson said in the context of the future of automobile in urban environment:
Surely, we cannot accept the notion that the only feasible approach is one that fails to get at the heart of our problems. Surely, we must continue to search for solutions that are both feasible and effective.

This indeed is a daunting task.

Blogger changes

Blogger has made massive changes in the way the blogging interface look. These changes suck big time, and I mean it. Anyway, since the May Madness® won't be over until another ten days, I can afford to lay low. I promise to post a link or two in the meanwhile, but this new design really seems to have a lot of problems, and I don't have the time right now to understand what I may be doing wrong or what I need to do to improve the performance.
Everything should be made as simple as possible, but not simpler. -- Albert Einstein.

Sunday, May 09, 2004

Return of an economic demon: oil shock

Return of an economic demon: oil shock or a New Reality? Honestly, I do not know.

Saturday, May 08, 2004

Oil, Oil! (Contd.)

For Every Complex Problem...

there is a simple, elegant and wrong answer!

Thursday, May 06, 2004

ANWR vs. CAFE by Sen. Larry Craig

Sen. Craig says:
Developing ANWR to make use of America's own untapped oil resources is a far more preferable method of increasing domestic energy production and decreasing our dependence on foreign oil than is raising CAFE standards.

Let's just leave ANWR out of this blog, but let us say that the debate is about developing an oil and gas field in the U.S. versus employing conservation measures (such as CAFE). This is a wrong question to ask. There is no doubt that the country should explore domestic sources of production, but that is no excuse for not pursuing conservation. If one tries to understand the debate, then it becomes clear that the magnitude of U.S. fuel consumption problem demands that both supply and demand side measures be employed. Arguing for one does not and should not necessarily mean arguing against the other.

Wednesday, May 05, 2004

Average U.S. Car Weight Increasing

Why is that a problem? Approximately 10% reduction in vehicle weight can reduce the fuel consumption by about 5-6%. The average vehicle weight has been increasing for over a decade now. However, several issues get confounded with the story.

Government studies say these giant vehicles are increasing the overall number of deaths in accidents, mainly because of the threat they pose to people in cars they hit in collisions. The administration's plan does suggest that manufacturers be pressed to slim down the heaviest of the heavyweights, like the Hummer.

As I have noted previously, the arguments against the proposed changes in CAFE standards are weak. Of course, even if weight based standards were applied to the light-trucks (not to cars) as NHTSA proposes, the increase in CAFE standard would be small (~0.5 to 1.5 m.p.g. over three years). Further, lightweighting the heaviest of the vehicles will only improve overall safety. This is completely consistent with the NRC report on CAFE.

Two more points. If light-truck standards were made class based, american companies, notably GM is likely to benefit, as it leads in fuel economy in several of those categories.
Secondly, Mr. Shosteck's statement that if all vehicles were made heavier, it would have a positive impact on safety, is nuts. We would all be safe if we all drove buses.

Tuesday, May 04, 2004

Toyota and Nissan accelerate in U.S.

Oil, Oil!

I wanted to follow up yesterday's post about Dr. Chalabi getting it wrong (in my opinion). So, I ended up here. Very interesting presentation. Too bad, I have no time to blog about it. Very soon, the May Madness® here will be over, and I will have more time to post actual comments :-)

Monday, May 03, 2004

Wrong Commentary?

I was not going to post about it, because Dr. Chalabi seems to have gotten it wrong.

Your (Environment) Friendly Local Taxi Service...

Sunday, May 02, 2004

Switch to hydrogen presents challenges: Coal-mining states could reap benefits

That was the headline in the courier journal of Louisville!

A hydrogen economy "could fundamentally transform the U.S. energy system," said Robert Hirsch, senior energy program adviser at Scientific Applications International Corp., speaking at an industry conference on coal and hydrogen in Clearwater, Fla., recently.

... Hydrogen-from-coal techniques are being developed, including one under study by the University of Kentucky-led Consortium for Fossil Fuel Science. The consortium project uses a catalytic process to convert either coal-bed methane or gasified coal into hydrogen and microscopic carbon tubes.

A key goal of the hydrogen initiative is to reduce the release of greenhouse gases, which some scientists say cause global warming. That's a particular issue for coal, which is about three parts carbon for one part hydrogen. Other technologies envision separating carbon dioxide from gasified coal, and then keeping it locked away underground.

Remember that Hydrogen from Coal is a BAD IDEA, unless accompanied by carbon sequestration. At the current state of the art and rate of improvement, carbon capture and storage is 10-20 years away from being able to be deployed sucessfully on a large scale.

Disclaimer: All opinions are personal and in no way affiliated to any other person, group or an institution.

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