Car Companies making more Electric Cars that people will not Buy

Posted by PITHOCRATES - March 9th, 2014

Week in Review

Auto makers are caving in to green paranoia.  Fooling themselves that electric cars are worth the investment (see Geneva Motor Show: Electric cars no longer the exception? by Theo Leggett posted 3/6/2014 on BBC News Business).

The Porsche Panamera S is quite a car. Sleek, powerful and aerodynamic, it’s capable of 167mph.

But that’s not all. The version on display here in Geneva is also able to travel for about 20 miles on nothing but battery power.

It is, of course, a hybrid. It has an electric motor sitting alongside a 3-litre petrol engine. It is fast, powerful and remarkably economical. Porsche claims it can drive for 91 miles on a single gallon of petrol.

Wow.  A whole 20 miles on battery.  A Ford Taurus with a full tank of gas will take you 522 miles on the expressway.  With heat or air conditioning.  In snow or rain.  Night or day.  That’s what the internal combustion engine gives you.  The ability to get into your car and drive.  Whenever.  Without worrying if you have enough charge in the battery.  Or whether you can risk running the heat or use the headlights when you’re running low on charge.   All you need is gasoline.  And when you’re low on gasoline you just have to spend about 10 minutes or so at a convenient gas station to refill your tank.  Something no battery can do.  For the fastest chargers (i.e., the highest voltage chargers) still require more than a half hour for a useful charge.

Now, under pressure from regulators around the world, carmakers have been working hard to reduce emissions and fuel consumption. So hybrids have become decidedly mainstream…

“There’s no doubt in our mind that it’s coming and it’s coming quickly and there is legislation supporting this in many cities.

“You can drive into London and pay zero congestion charge, for example. There are taxation incentives in the UK, but also in the US and Asia as well…

“We know our customers now,” he says, “and we remain totally convinced that electric cars have a strong, strong place in the market…”

Yet although sales of electric vehicles are growing rapidly, they remain a tiny fraction of the global total. For the moment, the internal combustion engine remains king.

The only thing causing electric cars to become mainstream is the coercion of government.  Legislation.  The only way you can make an electric car more attractive than a gasoline-powered car.  Also, just to get people to buy electric cars requires massive government subsidies.  No.  Hamburgers, fries and Coke are mainstream.  Because you don’t have to subsidize them or coerce people to buy them.  In fact they are so mainstream that some in government use legislation to try and stop people from buying them.

The internal combustion engine is king and will remain king until you can drive an electric car as carefree as a gasoline-powered car.  Until the electric car makers can give us the range and the ability to use our heaters and lights without sweating profusely as we sit in gridlock during a blizzard worrying whether we’ll ever make it home people just aren’t going to buy an electric car.  Because people want to know they will make it home safely.  And right now nothing does that better than the internal combustion engine.

www.PITHOCRATES.com

Share

Tags: , , , , , , , ,

California offers Tax Breaks to help sell $70,000 Tesla Model S

Posted by PITHOCRATES - December 22nd, 2013

Week in Review

Electric cars aren’t selling anywhere near enough to make them a profitable business.  Because they just won’t do for you what gasoline will do for you.  Let you carry lots of stuff over great distances.  Because the electric car is so less of a car as a gasoline-powered car governments bribe manufacturers to build them.  And people to buy them.  Just so rich people can have these toys (see California Is Giving Tesla Another Huge Tax Break. Good Move. by Will Oremus posted 12/19/2013 on Slate).

This is going to drive the Tesla-haters crazy. The luxury electric-car maker is getting a huge new tax break from California, SFGate reports. The state will let it off the hook for sales and use taxes on some $415 million in new equipment it’s purchasing in order to expand production of the Model S at its Bay Area factory. That amounts to a $34.7 million tax break to produce more of a vehicle whose sticker price starts above $70,000…

So, in fact, it isn’t Tesla per se that’s getting special treatment from the state. It’s the clean-tech industry in general, which California is very keen to promote…

More broadly, whatever sense a tax on the purchase of manufacturing equipment might once have made for California, it’s patently counterproductive in the context of clean-tech startups in the 21st century. Add to that some of the highest income and sales taxes in the nation, and it’s no wonder California is worried about companies like Tesla picking up stakes and heading elsewhere. Businessweek notes that new manufacturing jobs in the state have risen less than 1 percent since 2010, compared with nearly 5 percent nationally. Gov. Jerry Brown has been chipping away at the tax already, and Tesla is just the latest example.

Nor is the deal likely to burden the state’s taxpayers. Tesla’s Model S is in huge demand, and the company has been scrambling since its launch to ramp up production.

No.  The Model S is not in huge demand.  Demand may be up for the car.  But if the demand was ‘huge’ like every other popular car that sold well you wouldn’t need subsidies or tax breaks to build and sell them.  For cars in high demand are often the cars with the greatest profit in their selling price.  Because people want them so much that they are willing to pay these higher prices.  SUVs and pickup trucks were these kinds of vehicles.  And before gas prices spiked they were the lifeblood of manufacturers.  Because people paid more for these than they would for the sedans at the time.  Which is when the imports took over that segment.

People like SUVs and pickup trucks because they are big.  They carry a lot of people.  And a lot of stuff.  Even pull campers and boats.  The ideal vehicle for the family vacation.  Something the electric car just sucks at.  For any extra weight just sucks away charge time.  Limiting your range.  Which takes all the fun out of going on vacation.  And makes it a little scary.  For there is nothing worse than having a car that doesn’t move anymore in a strange place far from home.

But if you’re still convinced that tax breaks to big manufacturers are unfair and wrong, you might want to train your ire on a state a little further north, which just offered an all-time record $8.7 billion in tax breaks to a company that manufactures perhaps the least-green transportation technology of all. The worst part: Boeing might just move out anyway.

There is a bit of a difference between Tesla and Boeing.  Boeing employs a great many more people than Tesla.  And they’re all union workers ‘further north’.  Hence part of the reason for the tax breaks.  To help them compete with their high labor costs against the heavily subsidized Airbus.  Also, Boeing leads U.S. exports.  And is about the biggest component in U.S. GDP figures.  So while tax breaks and subsidies are abhorrent at least Boeing gives us something for theirs.  Unlike clean-tech industries.  That receive huge government subsidies and tax breaks.  Only to go bankrupt (Solyndra, Fisker, etc.) a short time later.  Tesla is the exception to the rule.  Because its founder, Elon Musk, is a billionaire who spends his own money.  A lot of it.  Unlike the other failed clean-tech start-ups.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , ,

A Diesel Car is a better value than an Electric Car

Posted by PITHOCRATES - December 22nd, 2013

Week in Review

People aren’t buying electric cars.  Because they are too expensive.  And because of their limited range.  Governments (federal and states) are trying to encourage people to buy cars they don’t want by offering subsidies to both manufacturers and buyers.  Which is getting some people to buy these cars.  But not many.  For even with those subsidies they’re still expensive.  And still have limited range.  Unlike these alternative cars (see These Diesels From Audi, BMW and Mercedes Cost Less To Own Than Your Gas-Powered Luxury Car by Hannah Elliott posted 12/19/2013 on Forbes).

Automakers have long lamented the American public’s reticence to embrace diesel technology as wholeheartedly as have Europeans…

But those who have adopted diesel love it. Audi head Scott Keogh routinely tells me his company sells out of each TDI model they make; Detlev von Platen at Porsche  told me at the LA auto showst month that diesel technology will continue to play an “increasingly significant” role for its fleet, especially the best-selling Panamera.

The truth is that while there is a price premium (roughly $5,300 on average) associated with the initial purchase cost of diesel vehicles, they typically get 30% better gas mileage and flaunt superior torque numbers and reliability ratings. The automotive analysis firm Vincentric estimates that driving a diesel car will save $2,117 in fuel costs over one year assuming annual rate of 15,000 miles.

Note the one thing conspicuous by its absence.  The word ‘subsidies’.  For people will pay a premium for a diesel.  Because there is value in a diesel.  They have superior torque.  Giving them greater pulling force than comparable sized gasoline-powered cars.  Better reliability.  And best of all they get a 30% better fuel mileage.  Which gives them greater range than a gasoline-powered care with a comparable sized fuel tank.  Giving them a greater range between fuel-ups than with a gasoline car.  And a far, far, far, far, far greater range than an electric car.  Giving the diesel an excellent value for the money.  Something you don’t have to bribe people to buy with subsidies.

www.PITHOCRATES.com

Share

Tags: , , , , , , ,

Timberlake loves the Pontiac GTO even though His Presidential Candidate wants to put us in Electric Cars and Hybrids

Posted by PITHOCRATES - October 6th, 2012

Week in Review

Justin Timberlake is an incredible talent.  One of the best hosts of Saturday Night Live ever.  He’s a true triple threat.  He can sing, dance and act.  And he’s funny.  He probably could go far on Dancing with the Stars.  And no doubt be a huge ratings getter for them.  His talent has made him super rich.  Which is okay.  He earned it.  The only thing to take issue with him is in his political endorsements.  He supports President Obama.  Despite his love for things the Obama administration and the Democrat Party want to take away from ordinary Americans (see Justin Timberlake falls for old Pontiac GTO by Bryan Alexander posted 10/5/2012 on USA Today).

Eastwood drives a classic Ford Mustang in the flick, while Timberlake drives a 1967 Pontiac GTO convertible. Their happy expressions inside the vehicles isn’t just acting. Timberlake loved his so much, that he just had to have it.

“I kept driving that car around, and driving it around and finally I just said, ‘yeaaaaahh,’ ” Timberlake tells USA TODAY.

Yeah, that’s a feeling a lot of Americans have had with their love of muscle cars.  But, alas, most Americans can no longer indulge in these passions.  First of all, the federal government has an all out war on cars with big engines.  And, secondly, they’re running up the price of gasoline so high that only rich people can enjoy these toys anymore.  Instead they push us into electric cars and hybrids that we don’t want.  While the super rich, like Timberlake, and other Democrat supporters in Hollywood and in the entertainment world and the mainstream media, can enjoy the cars they tell us not to drive.  Something isn’t right about that.

Americans should be able to enjoy cars like Justin Timberlake can without being as rich as he is.  Like our fathers did by working a job after high school so they could put gasoline into their beloved muscle cars.  That’s the America we want.  Not what the Left wants to impose on us.  We just want to enjoy the simple things.  Like Timberlake can.  Driving the open road with the top down.  With the noise of the engine playing sweeter music than any sound system has ever played.  But these sweet instruments are lucky to get 12 miles to the gallon.  Which makes it expensive to drive them when Democrat policies have raised gas prices up to $4 a gallon.  Or more.

The Democrats say they are for the working man.  But their policies definitely favor the super rich.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , ,

President Obama’s Green Energy Investment into Electric Cars is a Failure According to CB0

Posted by PITHOCRATES - September 22nd, 2012

Week in Review

Saving the planet with electric cars is a costly endeavor.  Part of the problem is that no one wants these cars.  Even with fat government subsidies.  Because people would rather have big SUVs, trucks and full-size sedans.  Vehicles that are useful.  Safe.  And have big gasoline engines in them that will always get you home.  Which is why the government’s green energy investment into the electric car industry will never deliver any of its promises (see U.S. electric car policy to cost $7.5 billion by 2019: CBO by Bernie Woodall and Deepa Seetharaman posted 9/20/2012 on Reuters).

U.S. federal policies to promote electric vehicles will cost $7.5 billion through 2019 and have “little to no impact” on overall national gasoline consumption over the next several years, the Congressional Budget Office said in a report issued on Thursday.

Consumer tax credits for buying electric vehicles, which can run as high as $7,500 per vehicle, will account for about 25 percent of the $7.5 billion cost, the CBO said.

The rest of the cost comprises of $2.4 billion in grants to battery makers and projects to promote electric vehicles as well as $3.1 billion in loans to auto companies designed to spur production of fuel-efficient vehicles.

“The more electric and other high-fuel-economy vehicles that are sold because of the tax credits, the more low-fuel-economy vehicles that automakers can sell and still meet the standards,” according to the report.

As a result, tax credits will have “little or no impact on the total gasoline use and greenhouse gas emissions of the nation’s vehicle fleet over the next several years.”

So auto makers are selling electric vehicles for two reasons.  Government subsidies.  And so they can sell more lower-fuel-economy and higher-polluting profitable vehicles.  The kind of vehicles the people want to buy.  And will buy without any government subsidies.  No one wants to buy the electric cars.  And the automakers can’t make any money selling the electric cars.  The only way any sales of electric cars happen is by transferring a large chunk of their cost to the taxpayers.  Against their will.  But, then again, that’s what government is for these days, isn’t it?  Going against the will of their constituents.

While drivers of these electric vehicles use less gasoline and emit less greenhouse gas such as carbon dioxide, the cost to the government can be high, the CBO found. The U.S. government will spend anywhere from $3 to $7 for each gallon of gasoline saved by consumers driving electric vehicles…

The CBO said an average plug-in hybrid vehicle with a battery capacity of 16 kilowatt-hours is eligible for the maximum tax credit of $7,500.

“However, that vehicle would require a tax credit of more than $12,000 to have roughly the same lifetime costs as a comparable conventional or traditional hybrid vehicle,” the CBO said.

And, the bigger the battery the greater the cost disadvantage for buyers of plug-in vehicles and conventional vehicles, the CBO said.

What happened to that laser-like focus on creating jobs?  That’s what President Obama said back in 2009.  And here we are in 2012 still suffering in the Great Recession.  Despite their Recovery Summer back in 2010.  The president is spending a lot of money.  Some $500 billion or more to the solar panel maker Solyndra now in bankruptcy.  As well as other green energy investments.  Including the investment into electric cars to wean us off of expensive gasoline.  While the cost of the subsidies for these electric cars will basically double the price of gasoline the rest of us pay (the price of the subsidy costs us as much as what gasoline costs us).

We’d be better off just paying for the expensive gasoline to put into the cars we want to buy.

But it’s worth the price to save the planet.  That’s what they say.  But I can’t help but notice that the planet has never been in worse shape since we started trying to save it.  We know volcanic eruptions can lower the earth’s temperature with the amount of smoke, soot, ash and sulfur dioxide they put into the atmosphere.   Periods of global cooling correlate to active volcanic activity.  So that’s a given.  We know it for a fact.  So is it any coincidence that when we started putting scrubbers onto our coal-fired power plants to remove these same things from our smoke stacks that global temperatures began to rise?

Once upon a time we all burned coal in our houses for heat.  Coal-fired locomotives transported people and freight.  And every factory had a coal-fired steam engine.  We covered our cities in smoke, soot and ash from all the coal we burned.  But there was no global warming then like we have today.  Why?  Can it be that burning coal releases the same stuff volcanoes release when they erupt?  And cool the planet?  Perhaps.  If the global warming alarmists were right then the attack on coal and all the emission controls they mandated on our cars should have made the planet a chilly place.  Shortening our growing seasons.  And given us a famine or two along the way.  But that hasn’t happened.  Because the global warming alarmists have been warning us that the end of the world was only 3 years away for the last 30 years.  How much longer are we to quake in our shoes from their nonsense?

The earth is fine.  We need to stop listening to these people.  Because all they’re doing is transferring enormous sums of money from the private sector to the public sector.  To play their games.  And live comfortably.  While those of us paying the taxes and buying the things they make ever more expensive have to sacrifice our quality of life so these talentless alarmist hacks can live a comfortable elitist life at our expense.  And they’re laughing at us all the way to the bank.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , , , , , , , , ,

Making Electric Cars work with Radio Frequency Monitoring and Credit Card Payments for Electricity

Posted by PITHOCRATES - May 12th, 2012

Week in Review

They’re working out the bugs of electric cars.  Figuring out a way to charge their drivers for their electricity.  And to monitor you.  So they can balance these new loads on the electric grid.  And figure out how to direct advertising at you.  Like the advertising you see at the gas pump.  Only without collecting information on you.  Especially if you pay with cash (see Electric car drivers left hanging in charger wars by Eric Evarts posted 5/11/2012 on Consumer Reports).

Naturally, charging networks install electric car chargers in people’s homes and in public places, such as parking lots and airports. For public chargers, they provide an RFID (Radio Frequency Identification) key tag to customers to activate the charger and authenticate payment. Some charging network providers say it’s important to them to collect authentication information even if they’re providing free charging, because it helps them track where future chargers should go, what kind of electric car you have, and how to manage loads on the power grid.

Perhaps the most important reason for charging networks is to collect and aggregate payments. Unlike buying gas, when you charge up an electric car, the cost amounts to just a few dollars. Charging our Nissan Leaf test car at our test track in Connecticut, for example, cost less than $4.50. And that figure is a worst-case scenario. (Our area has among the highest electric rates in the continental United States, and that cost is based a completely drained battery, which ideally should never happen.)

At the modest energy costs for recharging, credit-card processing fees take a significant bite out of providers’ profit margins. Companies are exploring more creative approaches to ensure profitability, such as aggregating payments from different tenants in an apartment garage. This business model may evolve over time.

Charge people for plugging in?  Collecting information?  Wasn’t just simply buying gas with cash simpler?  Do we really need another place for people to hack into our private lives? 

Guess that electricity isn’t free.  Still, $4.50 a charge isn’t so bad.  It may get you about 100 miles.  Probably less if you use the heat or headlights.  If you only charge once a day seven days a week that comes to about $31.50 a week.  Of course, if you have to recharge at work to make it back home and maybe drive a little further on the weekend to a nice restaurant or too see a movie that can easily take you to two charges a day.  Taking you to $63 a week.  It adds up, doesn’t it?  And how many miles would $63 in gasoline buy you in a week?  Well, if gas is at $3.75 a gallon and your car gets about 24 miles per gallon that comes to about 57.6 miles per day for one week (63/3.75*24/7).  Which is about one hour’s driving time on the expressway going 60 miles an hour.  Without worrying about using your heat or headlights.  With one fill up during those 7 days.  A bit more convenient. 

But what about those charges away from home?  Let’s say you take your electric car on vacation.  At the end of a long day’s driving you pull into a motel.  Plug your car in.  Go into your room.  And turn the AC on to cool off.  Take a good look at that air conditioner/heater poking through the wall of your room.  Or imagine looking at one.  Your typical unit plugs into a 20 amp circuit at 240V.  If the motel installs a 30A, 240V fast charge battery charger to get your car charged up for the next leg of your trip in 4 to 5 hours (instead of the 10-12 hours of a 120V charger), that charger will draw more power than the room air conditioner.  And to provide for all of those electric cars in the future the motel will have to more than DOUBLE their electrical service to meet this additional demand.  As electric utilities will have to do everywhere if EVERYONE uses an electric car.  A burden our aging electric grids just can’t handle.  Not with a lot of rolling brownouts and blackouts.  Not without building new electric generation and distribution grids.  And the last time I looked that wasn’t cheap.  Not to mention all of those carbon emissions they’ll throw up into the atmosphere.  Because neither wind power nor solar power will be able to double our electric generation.  That will have to come from our good old reliable fossil fuels.

Of course this is a silly example.  For no one will be able to drive a long day in an electric car.  Unless there’s a fast charge station every 100 miles or so.  And people don’t mind waiting 4-6 hours for that fast charge at each of those fast charge stations.  Or subscribe to some battery leasing program that can change your battery every 100 miles or so.  As long as there is a battery changing facility every 100 miles or so.  Or you can carry a spare battery or two.  But all of that weight will reduce your driving distance.

Before we go ‘all in’ with these cars of the future we really should be looking at the big picture.  For that big picture will ultimately have a very large price tag.  For a world that won’t be as good as the one it replaced.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , , ,

Electric Car Sales and Range are Still Anemic but their Prices are Not

Posted by PITHOCRATES - April 7th, 2012

Week in Review

Electric cars are the technology of tomorrow.  The savior of the planet.  Especially the all-electric ones.  For they don’t pollute when they drive.  Of course, they pollute more when they charge thanks to those fossil fuel-fired electrical power plants.  But they’re here.  And we’re saved.  Thanks to the new electric cars sweeping the nation.  Here’s a look at 7 of those cars (see 7 electric cars for the future by Anne VanderMey posted 4/2/2012 on CNN Money).

Expensive cars.  And some pretty sad stats.  Number sold.  For all two cars.  And those range numbers.  The Nissan Leaf delivers a whopping 73 miles on a single charge.  Which is about an hour’s drive on a freeway.  Maybe.  Without headlights, heat or air conditioning no doubt.  Or a loud sound system.  Not very useful.  Or enjoyable.  Unless you like freezing or sweating (depending on the time of year) while driving blind in the dark with nothing to listen to but the sound of your battery draining.  And the kicker is you just can’t pull off the freeway and top off your battery.  Depending on the voltage of the charging system you could be stopped from 20 minutes to an hour.  Even overnight.  No wonder no one is buying these cars.

Now contrast that with the Chevy Impala.  A full-size four-door sedan with a V-6 engine that burns gasoline at a rate of about 30 miles per gallon.  With the 17 gallon tank that gives a range of about 510 miles on a full tank.  Or about 7 hours of driving on the freeway.  And And when you run low on gas all you have to do is pull off the road and top off the tank at a conveniently located gas station.  Which shouldn’t take more than 5 minutes if you pay at the pump.  And then you have another 510 miles to go.  With, I might add, headlights, heat, air conditioning and a kick-ass sound system.

Which kind of makes the choice between all-electric and gasoline-power easy.  Which is why they sell about 18,000 Impalas.  Each month.  And you can get a pretty nice one for under $30,000 that can seat six.  And a huge trunk.  A car just made for cruising down the highway with the family.  Going where the road takes you.  And bringing home a lot of souvenirs.  Something you just can’t do in your all-electric car.

www.PITHOCRATES.com

Share

Tags: , , , , , , , ,

FT110: “You can’t blame our dependence on foreign oil for high gas prices AND say that producing more domestic oil won’t lower gas prices.” -Old Pithy

Posted by PITHOCRATES - March 23rd, 2012

Fundamental Truth

The Combination of Low Demand and High Supply caused Oil Prices to Fall over 70% by 1986

The Organization of the Petroleum Exporting Countries (OPEC) is a cartel.  Made up currently of Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.  Their purpose is to set oil quotas for their oil-producing members.  To limit the amount of oil they bring to market.  To reduce supply.  And increase oil prices.  At least that’s the idea.  It’s been hard to keep the individual OPEC members from cheating, though.  And a lot do.  Often selling more than their quota.  Because when oil prices are high selling a few percentages above their quota can be very profitable.  Unless everyone else does so as well.  Which they usually do.  For their choice is either not to cheat and not share in any of those ‘excess’ profits (beyond their agreed to quota).  Or cheat, too.  Thereby increasing supply.  And lowering oil prices.  Not something any oil producer wants to do.  But it’s the only way to share in any of those ‘excess’ profits.

But that’s not the only problem OPEC has.  There are a lot of oil producers who aren’t members of OPEC.  Who can bring oil to market in any quantity they choose.  Especially when they see the high price OPEC is charging.  OPEC’s high price allows non-OPEC suppliers to sell a lot of oil at a slightly lower price and reap huge profits.  Which puts pressure on the OPEC target price.  Forcing them to lower their target price.  For if they don’t lower their price they will lose oil sales to those non-OPEC producers.  Which is exactly what happened in the late Seventies.  While OPEC was cutting back on production (to raise prices) the non-OPEC nations were increasing production.  And taking over market share with their lower prices.  Causing OPEC to reverse policy and increase production during the mid-Eighties.  Giving us the 1980s oil glut.

Of course, this rise in non-OPEC production was a direct result of the 1973 Oil Crisis.  Many of the OPEC members are Muslim nations.  Who don’t like the state of Israel.  In response to the West’s support of Israel in the Yom Kippur War (1973) OPEC announced an oil embargo on those nations who helped Israel.  Giving us the 1973 oil crisis.  Where this sudden reduction in supply caused the price of oil to soar.  Making the oil business a very profitable business.  Causing those non-OPEC producers to enter the market.  Then the Iranian Revolution (1979) disrupted Iranian crude production.  Keeping Iranian oil off the market.  This reduction in demand caused oil prices to rise.  Then Jimmy Carter broke off diplomatic relations with the Iranian state.  And boycotted their oil when it returned to the market.  Further encouraging the non-OPEC producers to bring more oil to market.  Meanwhile U.S. demand fell because of those high prices.  And our switch to smaller, 4-cyclinder, front wheel drive cars.  Saying goodbye to our beloved muscle cars of the Sixties and Seventies.  And the V-8 engine.  The combination of low demand and high supply caused oil prices to fall over 70% by 1986.  Giving us the oil glut of the 1980s.  When gasoline was cheap.  Enticing the V-8 engine back into the market.

Improved Fuel Economy AND Increased Oil Supplies can Reduce the Price at the Pump

So, yes, Virginia.  The amount of oil entering the market matters.  The more of it there is the cheaper it will be.  As history has shown.  When less oil entered the market prices rose.  When more oil entered the market prices fell.  And anything that can affect the supply of oil making it to market will affect the price of oil.  (And everything downstream of oil.  Jet fuel.  Diesel.  And gasoline.)  Wars.  Regional instability.  And governmental regulation. 

So what are things that will bring more oil to market?  Well there’s the obvious.  You drill for more oil.  This is so obvious but a lot of people refuse to accept this economic principle.  As supply increases prices fall.  The 1980s oil glut proved this.  Even John Maynard Keynes has graphs showing this in his Keynesian economics.  The economics of choice for governments everywhere.   Yet there are Keynesian politicians who avert their eyes to this economic principle.  So there’s that.  More drilling.  You can also make the permitting process easier to drill for oil.  You can open up federal lands currently closed to drilling.  And once you find oil you bring it to market.  As quickly as you can.  And few things are quicker than pipelines.  From the oil fields.  To the oil refineries.  (And then jet fuel, diesel and gasoline pipelines from the refineries to dispensing centers).  So before oil fields are ready to produce you start building pipelines from those fields to the refineries.  Or you build new refineries.

Improving fuel economy did help reduce our demand for imported oil in the Eighties.  As well as lowered the price for that imported oil.  But it wasn’t fuel economy alone.  The non-OPEC nations were increasing production from the mid-Seventies through the mid-Eighties.  Without that oil flooding the market oil prices wouldn’t have fallen 70%.  And they won’t fall again if we ONLY try to reduce our demand for foreign oil.  For reducing demand is marginal at best in reducing oil prices. 

Only if we Drill and Build Pipelines can we Reduce the Price at the Pump

For there are no electric airplanes.  The cost to electrify all railroad tracks is too prohibitive to consider.  The capital costs to build that electrical infrastructure.  The maintenance costs to maintain it.  And the electricity costs from the increased demand for electrical power while supply remains the same.  Or falls.  Because excessive regulation inhibits the building of new power plants.  And speeds up the shutdown of older plants.  Especially coal-fired because they pollute too much.  And hydro power.  Because of the environmental impact of dams.  Severely straining our electric grids.  And moving into electric cars will stress our electric grids even further.  Leading to brown outs.  And rolling blackouts.   Or worse.  Causing wires to overheat and sag, coming into contact with trees.  Shorting out.  Causing cascading blackouts as power plants disconnect from the grid to prevent damage from the resulting current surges.  Like they did in the Northeast Blackout of 2003.

You can’t replace oil with electricity.  In some cases there is just no electric equivalent.  Such as the airplane.  Or the cost of moving from oil to electricity is just prohibitive.  Such as updating the nation’s electrical infrastructure to meet an exploding demand.  Which leaves oil.  We need it.  And will keep using it.  Because there is no better alternative.  Yet.  So we need to produce it.  And do everything we can to help bring that oil to market.  Not fight against it.  And it all starts with drilling. 

We must drill.  Bring that oil up from under the ground.  Put it into a pipeline.  And pump it to a refinery.  If we do this enough we will be less dependent on foreign oil.  And have more control over the price at the pump.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Vancouver building Charging Stations for Electric Cars that aren’t there to use Them

Posted by PITHOCRATES - February 25th, 2012

Week in Review

Vancouver is going all in on electric cars.  Even when no one is buying them (see City to build 67 more electric car-charging stations by 2013-Vancouver by Tara Carman posted 2/23/2012 on the Vancouver Sun).

The City of Vancouver is taking an “if you build it, they will come” approach to electric vehicles, announcing an $800,000 pilot project to expand the number of charging stations in the city…

Less than one per cent of Canadians have purchased an electric vehicle, according to Brian Murphy, a senior man-ager at J.D. Power and Associates. One of the reasons is likely the price of the vehicles, which typically run more than $40,000, plus the $2,000 it costs to purchase and install a charging station in private homes…

Another discouraging factor about electric vehicles is “range anxiety” about having to take trips that are 200 kilometres or more, Murphy said. A full charge will take the Nissan Leaf, for example, about 160 kilometres, depending on the terrain and weather conditions.

The article includes a photo of a man in what appears to be a gas station for electric cars.  Happily plugged in.  And charging up his battery.  Luckily for him it appears to be a nice day.  It’s daylight.  And he’s not wearing a coat.  So he should have no problem standing there for 5 hours or so until his battery charges.

This is the dark side of range anxiety.  If you don’t make it back home on your charge you are stranded.  Because batteries don’t charge as fast as you can fill a tank with gasoline.

www.PITHOCRATES.com

Share

Tags: , , , ,

The Solution to the Bungling Bureaucracy that gave us Solyndra is to add more Bureaucracy

Posted by PITHOCRATES - February 11th, 2012

Week in Review

Big Government has failed.  So to fix Big Government those in government say the solution is to make government bigger (see Energy Loan Oversight Is Needed, Audit Finds by JOHN M. BRODER posted 2/10/2012 on The New York Times).

The Department of Energy’s loan guarantee program for alternative energy projects, which produced the ill-fated loan to the solar panel maker Solyndra, needs more rigorous financial oversight and stricter performance standards for recipients to reduce the chance of future defaults, according to an audit conducted by the White House and released Friday.

So the way to fix this bureaucratic mess is to add more bureaucracy.  Grow the size of government.  Spend more taxpayer money to provide more oversight on worthless taxpayer-financed investments.  Interesting.  Only in government.  Where they fix failures by doing even more of the same.

But it doesn’t end with Solyndra.

Solyndra and Beacon are not the only loan recipients to find themselves in trouble. Fisker Automotive, an electric car maker in Irvine, Calif., has missed some milestones that were written into its loan agreement, so the Energy Department has cut off credit. As a result, Fisker has stopped work on the conversion of an old General Motors factory in Wilmington, Del., that is supposed to produce an electric sedan, and laid off more than 60 employees and contractors.

Spokesmen for Fisker and the Energy Department both said that the terms of the loan were confidential and they would not say precisely what milestones were missed, but Roger Ormisher, a spokesman for the company, said, “We admitted very openly we were late to market with the Karma,” the company’s $102,000 sporty sedan. Fifteen hundred have been built and “a few hundred” sold, he said. Progress was slowed by a safety recall.

It wasn’t just an electric sedan.  But a sporty sedan.  And a fairly luxurious one at that coming in at $102,000.  But will people buy it?  Probably not.  You see, the biggest problem electric cars have that prevents the masses from buying them is range.  They just don’t go far on a single charge.  Especially if you use the headlights or heater.  And you can’t recharge them quickly.  Which means if you run out of charge you can’t have a friend drive out a gas can full of charge to pour into the tank.  You run out of charge on the road and you’re paying for a tow home. 

And making any car ‘sporty’ just compounds the problem.  Because if you’re accelerating quickly you drain the battery faster.  And this is the car the government is subsidizing.  Of course this is going to be another Solyndra.  No one’s going to buy this car.  Unless the government subsidizes the bejesus out of it to bring that $102,000 down to something closer to $15,000.  Where people may put up with the inconvenience of driving nothing but one short trip a day.  At least, until they get their electric bill.  Because electricity isn’t free.  And if you’re charging up a battery than can make are car zoom sportily along, it’s going to have some big batteries.  And long charge times.  Making big electric bills.

If they are going to add oversight they need to add it at the level where they decide to back these losers.  Before the money goes out.  Or, better yet, they should just stop investing in these losers.  If a company can’t get investment capital there’s a reason.  They don’t have a good idea.  At least, not one anyone will risk their own money on.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , ,

« Previous Entries