Nostradamus, Predictions, Oil, and Alternative Fuels: 2014
Everyone’s doing it, doing it, doing it. Probably the last good prediction maker was Nostradamus and even he was probably more lucky than clairvoyant. Last year’s political predictions in retrospect did not turn out to be confidence builders. Predictors of less, or indeed more, tension in the Middle East seem to have run up against the unpredictability of events and the actions of leaders. So called experts, who predict the ups and downs of the stock market, were seemingly immune to history and many times seem to provide more entertainment than accurate crystal balls.
Permit me to go where some angels seemingly have feared and still fear to tread; where only humans who claim absolute wisdom or clairvoyance and more often than not reflect neither function repetitively, if they still have income. Permit me to make a few 2014 predictions about energy and alternative fuels. I claim no special advantage concerning knowledge of the future than most, if not all, of my colleagues, friends, family, significant others, other Americans, Israelis, Saudis, Iranians, Chinese and my next door neighbors and their children etc. I only claim the time to think about recent studies by respected analysts and to participate in conversations with bright folks concerned with America’s energy policies (or non-policies) and the development of alternative fuels to compete with gasoline.
Here I go-no safety net!
1. Despite pleas from environmentalists and many in the energy business, because next year is an election year, efforts to make sense of the current hodgepodge of policies and programs affecting America’s energy future and to develop a comprehensive energy natural policy will likely go nowhere.
2. The president will continue to speak about the need to wean the U.S. off of oil and gasoline. His speeches will frame issues in terms of reducing dependency on foreign oil, lessening greenhouse gas (ghg) emissions and other pollutants, increasing America’s security, improving the economy–fewer dollars spent oversees for oil will mean jobs here at home– providing lower priced fuel for consumers.
3. Many political, business, environmental and academic leaders will increasingly see natural gas and natural gas based fuels like ethanol and methanol as worthy alternative transitional or bridge fuels until electricity based and or hydrogen fuels are ready for prime time. They are not perfect but they are better for the environment, the economy, America’s security and you and me than gasoline. Opening up the fuel market from constraints imposed by the oil companies and by, sometimes, little examined government regulations will become, for some, a nonpartisan leadership and diverse constituent battle cry.
4. Recent efforts by states such as Colorado, working with the environmental community and industry, to strengthen drilling, storage, refinery and distribution regulations responsive to ghg, methane and pollutant leakage will be exported to other states. Governors and state legislatures will use lessons learned to respond strategically to fracking and other environmental concerns. The Federal government will encourage states to look at Colorado and other states with similarly strong but fair regulations. Based on Colorado and the experience of other states, EPA will consider amending and strengthening their regulations.
5. Oil prices will likely hover around present levels in the short term. But assuming modest economic growth in the U.S.(2-2.5 percent gnp) and Asia as well as renewed tension in the middle east associated with difficulties in securing a final agreement with Iran on its nuclear program and an agreement between Palestinians and Israelis, oil and gas prices will again trend upward around mid-2014.
6. The gap between natural gas and oil prices when converted to fuel-gasoline, ethanol and methanol, at the pump, will increase but only slightly. Put another way, the price of oil during the latter part of the year will increase a bit faster than the price of natural gas.
7. Electric cars will continue to reflect modest growth and increased market penetration. But the scale up will be relatively small. EV’s will constitute approximately 1.5 to 2 percent of the new car market by the end of next year.
Hopefully, by year’s end, electric car makers will have extended the miles per charge based on modified lithium batteries or a newly designed battery with alternative chemistry. Tesla joined by the larger auto companies will increase the range and lower the overall costs of electrically powered vehicles.
Hydrogen fueled cars will likely not register concerning market penetration. Hybrids of one form or another will secure a larger market share than electric vehicles.
8. Detroit will increase its production of flex fuel automobiles, but the number compared to the total number of cars produced will be relatively modest. Detroit’s wariness to clearly make customers aware of the advantages of flex fuel cars concerning choice of alternative fuels will limit the ability to easily expand consumer options at the pump.
9. Conversion of existing cars to flex fuel vehicles using relatively inexpensive conversion kits will increase this year. But the anticipated number of conversions related to the total number of older cars will not generate sufficient competition with gasoline to lower its price, reduce ghg and other pollutant emissions. What will be required to stimulate use of alternative fuels in older cars, and may come this next year, will be federal government certification of more than one conversion kit. Approval of a number of kits will reduce the price considerably and expand consumer fuel choices. Eliminating oil company restrictions that impede the sale of alternative fuels at most gas stations will probably take more time and require concerted advocacy by consumers, business , natural gas and environmental groups, and government. Maybe we will see progress by the end of 2014.
2015 is just around the corner. Invite me back next year to do 2016? Predictions of what likely will be can help us, if we understand at least some of the variables involved, think through what can be done, even if limited by our own actions as citizens, by the organizations we respect and work with, and by our government to influence outcomes.
Happy New Year! May the projections of your life be only good ones! May you and yours build some wonderful memories in 2014!
