Much of the debate surrounding the recent proposal to lower fuel economy standards focuses on the Environmental Protection Agency (EPA) and its effort to reduce greenhouse gas emissions from tailpipes. Read more →
Some of the brightest minds, and best ideas, come from the world of automotive design. We traveled to three mega-shows recently to seek out the coolest concept cars, and hear experts pontificate about how we’ll be moving in the decades to come. Read more →
When it comes to understanding complex regulations, there’s no better source than the experts on Fuel Freedom Foundation’s policy team. We sat down with President and CEO Joe Cannon, and Vice President of Policy and the Environment Robin Vercruse, to ask them to tell us more about the CAFE standards, why they’re important, and how they can benefit consumers. Video and transcript below:
In simplest terms, the Corporate Average Fuel Economy (CAFE) standards are where national security meets cleaner air. Read more →
The seven-month-long plunge in oil prices appeared to be enough to re-establish gasoline as the default fuel for motorists, while stunting the progress of replacement fuels.
But attendees at last month’s North American International Auto Show in Detroit would have thought differently. Prominently displayed were various alternative vehicles that have been making headway and are just building momentum in the auto market, so they may be able to shrug off the precipitous fall in oil prices.
Also exhibited in Detroit was the first generation of hydrogen vehicles from Japan, which are challenging both the gasoline monopoly and the electric car, which is much more popular in America and Europe. The Honda FCV concept car boasts a driving range of about 300 miles and a refueling time of just three minutes, marking another step forward for the hydrogen fuel industry. California, where the cars are to be introduced later this year, is already preparing its “hydrogen highway,” which will make the cars feasible for drivers. Toyota’s fuel-cell offering, the Mirai — which also runs on hydrogen — is also scheduled to hit showrooms this year.
Chevrolet has had middling success with its electric-gasoline hybrid the Volt, but the maker has another generation planned with its concept car, the Bolt. The car will be made of extremely lightweight material and will have an all-glass roof and aluminum wheels for further weight reduction. Its lithium-ion battery will give the car a range of 200 miles and a recharging time of 40 minutes for an 80 percent charge. The price of $30,000 is likely to expand the market for electric cars.
Analysts note that oil is not used much for electricity anymore. The 1980s are the benchmark and generally remembered as the “Valley of Death” for renewables. Wind and solar were undercut by falling oil prices and lost their place in the generation of electricity. At the time, oil was providing 17 percent of our electricity. Now it provides barely 5 percent, and wind and solar energy have not felt any effect from oil prices.
Of course, natural gas has largely replaced oil, and a drop in gas prices could cut into the advance of renewables. Gas prices have traditionally been between one-sixth and one-twelfth of oil prices but have uncoupled themselves in recent years. This could work both ways, since gas prices have not fallen by the same degree that oil prices have.
Gas still holds its edge, however, and this means the attempt to use natural gas as an oil substitute may not slow. T. Boone Pickens has had some success in switching long-haul trucks to compressed natural gas, and this effort may be slowed only a little by gasoline’s new low price. However, if natural gas prices fall as well, then it may be able to keep pace with lower oil prices. The possibility that cheaper natural gas might encourage the conversion to methanol as a gasoline substitute would also be encouraged by falling natural gas prices.
That leaves the big question of whether ethanol can survive in the face of falling gasoline prices. In the first place, low gas prices are not likely to last forever. Some analysts are predicting crude oil prices will probably bounce back to $75 a barrel in the near future. Second, ethanol is protected by the federal mandate that says each gallon must contain 10 percent ethanol. If falling gas prices encourage the purchase of more gasoline – which it already has – then ethanol consumption must climb as well.
Ethanol has been under fire recently from studies that say it competes with food resources. The latest is a report from the World Resources Institute in Washington, which argues that “There are other, more effective routes to get to a low-carbon world.” But the rapid development of cellulosic ethanol severely reduces the possibility that ethanol will compete with food crops. And the possibility that natural-gas-based methanol might begin substituting for ethanol makes the threat of competing with food crops even less.
Altogether, it appears that renewable energy and alternate vehicles are going to survive the dramatic fall in oil prices. Alternative vehicles and other related technologies are now too far along to be crushed by falling oil prices the way they were in the 1980s.
(Photo: The Toyota Mirai at the Los Angeles Auto Show in November. Credit: Vision Automotriz, Flickr)
Visitors to the North American International Auto Show in Detroit this week likely were awe-struck, along with critics, at the sight of the new high-powered Acura NSX and the Ford GT.
But this might be the show where hydrogen-powered vehicles finally graduated from the drawing board to the public consciousness.
Much buzz was created in the Motor City when Honda unveiled its FCV (for fuel-cell vehicle) concept car, which is expected to go on sale in the United States in 2016. The car is an answer to Toyota’s Mirai FCV, which is expected to be available in the U.S. later this year (Japanese prime minister Shinzo Abe became the first person in the world to get one last week.)
The cars join the Hyundai Tucson and the Mercedes F-Cell in the hydrogen ranks. Hyundai reportedly has decided to lower the price of its vehicle (said to be about $139,000) to increase its competitiveness with its rivals.
Cost could be a big issue with consumers: The Mirai costs about $62,000, roughly the same as the Honda FCV.
Refueling access is another issue: There are only 13 hydrogen stations in the U.S., 11 of them in California. But the state is investing more than $46 million to build 28 new stations.
FCVs combine hydrogen, from a tank or cell, with oxygen that powers an electric motor. The key benefit is the short refueling time: Honda said its FCV could be fueled in about 3 minutes (at about 10,00 pounds per square inch). The vehicle has a range of roughly 300 miles, an improvement over the 240 achieved by Honda’s first-generation fuel-cell vehicle, the FCX Clarity. The Mirai also has about a 300-mile range.
One person unimpressed with all the attention hydrogen-powered cars were getting in Detroit was Tesla founder Elon Musk. As MLive reported:
“I just think they’re extremely silly,” he told reporters at Automotive News’ annual World Congress.
Musk argued that hydrogen acts as an energy storage unit, not a source of it, making it impractical for powering vehicles. He called drawing hydrogen from water “an extremely inefficient” process.
“If you’re going to pick an energy storage mechanism, hydrogen is just an extremely dumb one to pick,” Musk said.
Toyota is undaunted, saying it will share the 5,680 patents that went into its hydrogen fuel cells. Musk announced last year that Tesla would make its patents available to other carmakers.
Time reported:
“Hopefully by sharing these patents with others, these new fuel systems can be refined and improved,” said Toyota Senior Vice President Bob Carter, “to attract a larger market of buyers.”
The Mirai is starting with a small batch of 700 vehicles in 2014 with the goal of growing to tens of thousands by the 2020s. “We believe hydrogen electric will be the primary fuel for the next 100 years,” Carter said.
(Photo: Honda FCV, via Honda.com)
General Motors CEO Mary Barra has sent a strong message to the auto industry: It’s serious about producing electric cars for the middle class.
One of the most talked-about vehicles unveiled Monday at the North American International Auto Show in Detroit was GM’s Bolt, an all-electric concept car that could go on sale in 2017, the Detroit Free Press reported. The company also officially unveiled its redesigned Volt, a plug-in electric-and-gasoline hybrid that got a first glimpse at CES in Las Vegas last week.
The Bolt’s price tag is $30,000, including the $7,500 federal tax incentive, GM North America president Alan Batey said. It would get about 200 miles on one battery charge.
As the Detroit News reported, GM is positioning the Bolt as an affordable EV option:
“This is truly an EV for everyone,” Barra said. “For most people, this can be their everyday driver.”
Batey said the Bolt isn’t aimed at Tesla, noting Tesla’s current average transaction prices are above $100,000.
“They are for the rich and famous. This is for the people,” Batey said of the Bolt. “I would probably counter and say I haven’t seen Tesla with anything like this.”
Despite what Batey said, Forbes took the unveiling as a direct challenge to Tesla:
The Bolt is a clear shot at upstart rival Tesla, which has said it is working on a less-expensive version of its $70,000+ Model S. Dubbed the “Model 3,” it would cost somewhere between $30,000-$40,000, a clear attack on the most popular segment of the automobile market.
Barra is clearly looking to meet the challenge. The Bolt, she said, would be an “all-electric vehicle for the real world.” Tesla CEO Elon Musk is scheduled to appear at a related auto industry conference in Detroit on Tuesday afternoon.
As for the revamped Volt (with a “V”), the biggest news is that the battery range has gone up to 50 miles. At that point, the gasoline engine, a 1.5-liter “range extender,” kicks in, pushing the limit to 400-some miles before the vehicle needs a charge or a fill-up. With the electricity and gas range combined, mpg on the highway is about 41. In all-electric mode, however, it’s 102 for a gallon-of-gasoline equivalent, thanks to the new 18.4-kilowatt-hour lithium battery.
Auto Blog notes:
To compare, today’s four-seat 2015 Volt has a 38-mile range from a 17.1-kWh battery in a powertrain that offers 37 mpg and 98 MPGe. So, across the board, there are notable improvements.
The blog has much more about the dashboard improvements, and the Verge has a bunch more photos.
The Volt is expected to be in showrooms in the second half of 2015 as a 2016 model.
(Photo: General Motors)
Every time I get depressed about the world — and there is plenty to get depressed about — API (American Petroleum Institute) issues a silly press release that, in its confusing presentation and content, brings back a romantic song from my past. Because of API, over the last few years I have been reunited with Berlin, Gershwin and Bernstein, etc.
API has done it again. Its press release accusing the EPA and the administration of playing politics with RFS guidelines concerning ethanol, a release published even before the EPA has released its amended proposals, is nothing short of clairvoyant. I knew API had strange powers and was funded by the oil industry that, itself, has often been accused of confusing magic with facts.
API’s most recent press release brought joy to my heart. Without recognizing that I was doing so, while trying to sleep, I started to remember, paraphrase and sing a memorable tune from a top-ten best song list, published in the early sixties, “What kind of fool am I” (Leslie Bricusse et al.) to hope for wisdom from API. It has often run counter to facts and analysis concerning the benefits and costs of alcohol fuels and instead reflected the organization’s support from its patron oil company, Medicis.
API now contends that EPA is about to increase the renewable fuel targets for ethanol. Wow, a revolution! Call out the National Guard! To API, EPA’s action, if it occurs, would defy market place experience. E15 and E85 is not selling well. Oh, E15 and assumedly E85 is harmful to car engines. EPA’s assumed new rules would result in wasted resources and skew the market away from their favorite American-made product, gasoline (over 30 percent of which is not made in the U.S., but is imported). Not only would America be ruined but Adam Smith would turn over in his grave. Previous API releases indicate, in rather shrill tones, that ethanol is harmful to marriages, causes cigarette smoking and sexual dysfunction (just kidding).
It’s hard to respond to API’s release (or releases). Yes, the market for E15 and E85 has been relatively slow to develop, but API’s funders — oil companies — have been a, if not the, key factor causing the gap between demand and expectations. Not only has the industry tried to kill the chicken, it has also tried to kill the egg. Let me count the ways (sorry, Elizabeth Barrett Browning):
1. Oil company franchise agreements rarely allow the franchise to locate an E85 pump in their stations. If they do, many times, it must be situated apart from the other pumps in the side of the station. At the present time, there are only 3,354 E85 stations in the nation. So much for the supply side.
2. Oil companies have not been fans of open fuel legislation. They have used their lobbyists and their own political power to help kill it every time it comes up in the Congress. So much for their collective belief in consumer choice.
3. Until recently, the carmakers in Detroit — historically, the allies of the oil industry — have been slow to respond to consumer and policymaker interest in flex-fuel cars — cars that can use more than gasoline and the conversion of existing cars to FFV status. While Detroit is now producing more flex-fuel vehicles every year, the oil industry still remains a backbencher and a naysayer with respect to producing or supporting alternative fuels and conversion options, new or old. So much for competition.
4. API’s research concerning the impact of ethanol on vehicle engines, funded, again, mostly by the oil industry, has not qualified it for applause and extended readership regarding methodology or content. Its relatively recent analysis of E15 was panned, justifiably, by the EPA and other researchers because of insufficient sample numbers and lack of relevant sample characteristics. But it apparently did what it was supposed to do: put fear in the minds of drivers concerning ethanol use. So much for independent and thorough research.
5. API seems to suggest that the RINS subsidy built in to the RFS is anti-market and anti-God and country. Maybe we should look at all subsidies granted fuels by the U.S. government and complete something like zero-based budgeting process to see which ones fit the public interest and which ones primarily line the pockets of the receivers. Government help, whether direct or indirect, whether visible or imputed, should be premised on articulated and transparent public objectives and should not substitute for private sector resources which would be available without subsidy. In this context, the range of oil subsidies, now on the books, clearly needs review and justification. They far outweigh the dollars that assist newer ethanol companies. Given resource constraints, perhaps we should put oil and ethanol support on a transparent evaluation table, and, after a fair debate, allow the public to decide. Et tu, oil companies and API!
API is an easy target. They shouldn’t be. With uncertainty concerning demand and price of oil and its derivative gasoline, I would think its bosses from the oil industry would put them to work reviewing the nation’s future menu of fuels and possible partnerships with alternative fuel companies and advocates. Apart from possible pro-forma benefits, many Americans who view the oil industry and its representatives through negative filters might begin to change their mind and see the industry as increasingly pro-choice, better on the environment, pro-consumer and pro-security. Hope springs eternal. The oil industry, up to now, has been living in a fool’s paradise for a long time — cheap oil, high demand and income growth. It’s the American way. But, given a changing economy, tight oil and relatively slow and uneven U.S. and global growth, continued reliance on an old oil industry monopolistic model will cause nightmares for wise men and women. API, what’s my next song? How about “I Can Dream Can’t I” or “High Hopes!”?
Paul Harvey was a conservative icon in radio news during the mid to end of the 20th century. While I often differed with the substance of his commentary, he was a welcome travel partner when driving, particularly on a long trip. What I liked most about him was that he generally articulated his views without being malicious, and his voice was just wonderful. He sounded like a symphonic rap musician, using iambic pentameter.
One of Harvey’s favorite phrases was here’s “the rest of the story.” Remembering it, gives me a wonderful opening for this column.
This week there were several optimistic articles on natural gas growth this past week . One article in particular caught my eye. The piece described the expanded, but still relatively low, market penetration of natural gas as a transportation fuel. Given the cost and environmental benefits of natural gas, I was pleased to read the content and see the numbers and quotations. But in Paul Harvey’s terms it did not tell “the rest of the story”!
Yes, natural gas is making inroads into the trucking industry, even among buyers of new cars, asserts the article. “The boom in natural gas production in the U.S. has ignited a revolution in the auto sector that could reshape the way Americans fuel their vehicles, market participants and analysts said in a week-long special on FOX Business.” ClearView Energy Partners, the Newport Beach, California company that is building fuel stations along major interstate trucking corridors, will likely facilitate the growth of natural gas as a fuel in trucks. It will provide one of the missing pieces that have impeded natural gas’ popularity — fear of running out of fuel. “About 25% of the truck market could convert to natural gas by 2020, according to a report by Citigroup…eight in 10 new trucks Waste Management brought in 2012 were powered by natural gas.” Your friendly bus driver’s bus is increasingly likely to run on natural gas.
“Only a tenth of a percent of natural gas consumed in U.S. last year was used for fuel in vehicles, according to the Energy Department. Of the more than 15.2 million natural gas vehicles on roads across the globe, [only] about 120,000 are in the U.S.” Natural gas clearly hasn’t taken off yet as a transportation fuel in the U.S. Kevin Book, ClearView’s managing director of research indicates that, “I think you look at locomotives, also a very interesting and potentially large market, and also some of the marine applications before you start talking about smaller passenger cars.” I suspect his negative perceptions of natural gas as a competitive fuel in cars stems from the present costs of CNG passenger vehicles and the present absence of CNG fuel stations — a possible temporary problem if ClearView’s commitment to develop a natural gas highway could extend to private automobiles. We have had many successful freedom movements in this country. There would be only relatively marginal costs to extend the capacity of the natural gas highway’s fuel stations to include CNG availability for all consumers of natural gas vehicles and to assure availability of natural gas derivative fuels like ethanol. If you build it, many of the 17 million FFVs now on the road will come and more will follow, given what’s presently on the (near term) horizon.
Here is more of “the rest of the story,” à la Paul Harvey. One of the most innovative programs to stimulate the use of natural gas, CNG, was initiated by Gov. Hickenlooper and Gov. Fallin. Under their nonpartisan umbrella, 22 states have agreed to replace older cars, when they are due to retire, with CNG cars. Their commitment will create a large pool of CNG purchases over the next few years. Detroit has agreed to work with the states and both the governors and carmakers want to use the effort to produce a less expensive CNG car for American households.
But there is more! Two companies, Coskata, Inc. and Celanese have had success in converting natural gas to ethanol and are both striving to commercialize and define strategies to market their product. If they are successful, other companies will follow in light of historical “copycat capitalism.” The result will be a fuel that will be environmentally better and clearly cheaper than gasoline. The result will also be increased demand for fuels like E85, which will generate consumer purchases of FFVs and the conversion of existing, older cars. It may also open up the pockets of investors concerning the support for future E85 pumps. If ethanol becomes popular because of price and environmental objectives, can methanol be far behind (excuse me, Percy)? Freedom to choose what you drive and what fuel you use on the high and bi ways of this nation would be consistent with the American way and creed.
“USA, USA, USA, USA.” No, I didn’t just come from watching the U.S. playing in the 2014 FIFA World Cup. But after reading the glowing, cheerleading, overly enthusiastic, often-nationalistic media accounts of the U.S. overtaking the Saudis in oil production, the win-lose aspects of the soccer chant somehow became embedded in my persona (like counting sheep or gas pumps at night when I can’t sleep). We beat the Saudis at their own game — oil. We’re number one…wow! Next, will we emulate the Saudis and place onerous and discriminatory restrictions on women drivers and, unlike the Saudis, argue that it’s a conservation measure? Of course not! We don’t have to be number one in everything. But oil does make strange bedfellows, and equally strange behavior, as well as policies.
Unfortunately, most of the media stories avoid analysis of what the new oil prominence of the U.S. means to the nation and world. Yes, increased production likely means less dependence on the Middle East, particularly Saudi oil. Indeed, we now import about 33% of oil needs, the lowest percentage in years.
But oil independence remains a myth. Oil interests are pushing for a reduction of regulations concerning exports of U.S. crude oil and have always exported considerable refined oil products allowed by the law. Their motives, despite frequent public comments to the contrary, are generally to sell to the price, which means to the buyer who offers the most return. He, she or it frequently is a global purchaser. Independence is a slogan that often blurs motive and reflects good politics but bad substance and contrary to reality.
The U.S., as the most powerful western nation, irrespective of any mathematical domestic surplus, will continue to extend its role as defender of the global supply chain from the Middle East or elsewhere. While we may be less dependent on foreign oil, U.S. leaders have, in the past, and likely will in the future, use a combination of diplomacy and military threats and action to defend and sustain the flow of foreign oil to allies or assumed allies. In this context, the role we play in the world extends our dependency. Unfortunately, wars will be fought and U.S. soldiers will die because of this felt dependency.
Most of the “USA, USA, USA” chants in the media coverage of our new oil prowess, implicitly neglects the difficult juxtaposition between increased oil production and supplies and higher gas prices. Less dependence hasn’t brought the reduction, or even stabilization, of gas prices promised by the oil industry. Gasoline in California is now generally well over $4 a gallon for regular, and averages over $3.60 a gallon across the nation. Why? We have a surplus, don’t we? Oil companies want to export more, and it appears that they will be able to do just that, soon. As Dr. Pangloss asked in “Candide,” is this the “best of all possible worlds” (let me add, for the U.S.)?
Clearly, the cost of oil at the pump is not strongly linked (at the present time) to the amount of U.S. oil that shows up on EIA calculations and projections. Both price and supply are going up simultaneously. Yes, there is uncertainty, given events in the Middle East and yes, uneven growth around the world has increased demand in some areas and suppressed it in others. The link between high prices and the Middle East is difficult to measure precisely. Consumer costs per gallon are likely affected more by investors, as well as speculation on Wall Street, than the actual numbers concerning increased production of U.S. oil.
So, apart from prayer and penitence, what can we do to get a better deal for consumers, and to prevent gasoline from becoming a negative factor concerning U.S. GDP growth and the environment? How can we help assure that being number one means robust economic growth, more income in the wallets of Americans (particularly low-income Americans), increased security and fewer dirty emissions?
These are not easy questions, and they do not lend themselves to simple ideological responses. Clearly, as renewable fuels and vehicles that meet the incomes and desires of most Americans become available, both will play a vital role in America’s future. But reliance on coal-fired utilities for power in some areas of the nation, battery costs, mileage limitations from single battery charges, and lack of infrastructure impede their ability to have a significant positive impact at the present. The market for renewable fuels and vehicles is relatively small and will remain so until technological advances catch up with potential demand.
Where is the Greek philosopher Diogenes when we need him? We have a path in front of us that would buy time toward a better American future, one that could offer competition to gasoline — competition that would be good for the economy, the consumer and the environment. Increased availability of replacement fuels, particularly natural gas-based ethanol, combined with large-scale conversion of older cars to flex-fuel vehicles (FFVs) and increased production of new FFVs by Detroit, would give gasoline a run for the money, if gas-only stations become fuel stations and provide consumers with a choice. According to the Renewable Fuels Association, less than one percent of all gas stations in the U.S. that are branded by the big oil companies offer E15 or E85.
I remain an optimist that more freedom will reign soon at the pump. The noted people’s philosopher, Charles M. Schulz, creator of “Peanuts” comic strips, lessened my fears about the future when he said, “Stop worrying about the world ending today. It’s already tomorrow in Australia.” USA, USA, USA. Fuel choice, fuel choice, fuel choice!
