The Truth About Cars » energy http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Sat, 26 Jul 2014 01:30:09 +0000 en-US hourly 1 http://wordpress.org/?v=3.9.1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars editors@ttac.com editors@ttac.com (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » energy http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com President Obama Says New CAFE Standards Will Save Average Driver $8,000 a Year. http://www.thetruthaboutcars.com/2012/03/president-obama-says-new-cafe-standards-will-save-average-driver-8000-a-year/ http://www.thetruthaboutcars.com/2012/03/president-obama-says-new-cafe-standards-will-save-average-driver-8000-a-year/#comments Thu, 15 Mar 2012 15:23:37 +0000 http://www.thetruthaboutcars.com/?p=435096 Last week in a speech at Daimler owned Freightliner truck plant, President Obama said that the new 55mpg CAFE standards will save a typical American family $8,000 a year on gasoline. That would be great news to most American drivers if it were true but the president took political science and law courses in college, not math. Or maybe his math isn’t off.

“When I ran for office, I went to Detroit and I gave a speech to automakers where I promised that I was going to raise fuel standards on our cars, so that they’d go further on a gallon of gas.  I said we should do the same thing on trucks.  I have to tell you, when I said it, I didn’t get a lot of applause in the room, because there was a time when automakers were resisting higher fuel standards — because change isn’t easy.  But you know what, after three decades of not doing anything, we got together with the oil companies, we got together with the unions, we got together with folks who usually do not see eye to eye, and we negotiated new fuel economy standards that are going to make sure our cars average nearly 55 miles per gallon by the middle of the next decade.  That’s nearly double what they get today — nearly double.  (Applause.)

Now, because of these new standards for cars and trucks, they’re going to — all going to be able to go further and use less fuel every year.  And that means pretty soon you’ll be able to fill up your car every two weeks instead of every week -– and, over time, that saves you, a typical family, about $8,000 a year.”

A typical American family can’t save $8,000 a year on gas because a typical family in American doesn’t spend that much on gas a year in the first place. Using the president’s math, the average car gets 55/2=27.5mpg. The average driver drives about 12,000 miles per year, which works out to 436 gallons @ 27.5 mpg. Even at $4/gallon, that’s still only $1745/year. Cutting that hypothetical typical American driver’s gasoline bill in half will save $872.72 a year, not $8,000.

Reading over the transcript of the president’s remarks it’s possible the he simply misspoke. According to estimates, the new CAFE standards will save about $8,200 over the life of the vehicle, not in one year. Earlier in the speech Obama praised Freightliner’s participation in the federal “SuperTruck” initiative, whose target is saving $15,000/year per large truck. A big over the road truck travels so many miles in a year that a significant improvement in fuel economy could save that much. A typical American family, though, doesn’t drive their car 100,000 miles a year. So maybe the president confused savings per year with savings over the life of the vehicle and didn’t just make a bad math error.

On the other hand, there is one way that the president’s math works out. His recent press conference remarks about rising gas prices not being good for him politically are true. However, the president is talking about the savings that will take place in “the middle of the next decade”, meaning 2025, thirteen years hence, when he’ll be long out of office and earning six figure honoraria for his speeches. An average family could indeed save $8,000 a year if gasoline rises to $37/gal by 2025. While I believe that the president’s policies are aimed at making traditional energy more expensive in order to make alternative energy more financially viable, I sincerely doubt that even he would want a nine fold increase in the price of gasoline over the next decade.

Ronnie Schreiber edits Cars In Depth, a realistic perspective on cars & car culture and the original 3D car site. If you found this post worthwhile, you can dig deeper at Cars In Depth. If the 3D thing freaks you out, don’t worry, all the photo and video players in use at the site have mono options. Thanks for reading– RJS

]]>
http://www.thetruthaboutcars.com/2012/03/president-obama-says-new-cafe-standards-will-save-average-driver-8000-a-year/feed/ 180
Blind Spot: Obama No Longer Dreams Of Electric Cars http://www.thetruthaboutcars.com/2012/03/blind-spot-obama-no-longer-dreams-of-electric-cars/ http://www.thetruthaboutcars.com/2012/03/blind-spot-obama-no-longer-dreams-of-electric-cars/#comments Tue, 13 Mar 2012 00:00:31 +0000 http://www.thetruthaboutcars.com/?p=434742

“The electric things have their life too. Paltry as those lives are.”

Phillip K. Dick, Do Androids Dream Of Electric Sheep?

At the High School I attended, progress reports were never a good thing. Halfway through each term, students who were averaging a D or lower would receive a print-out of their grade accompanied by a line from the teacher explaining how the miscreant in question was failing to live up to expectations. True to form, the White House’s just-released “One Year Progress Report” [PDF] on President Obama’s “Blueprint For A Secure Energy Agenda” includes some devastating evidence of abject failure. But unlike my post-progress report conversations with the parental stakeholders, Obama has a lot more to explain to voters than a simple “insufficient homework turned in.”

Just over a year ago,  in his 2011 State Of The Union, President Obama unveiled plan to stimulate “One Million Electric Vehicles By 2015,” arguing that

“With more research and incentives, we can break our dependence on oil with biofuels, and become the first country to have a million electric vehicles on the road by 2015″

Shortly thereafter, his Department of Energy released a report that touted wildly-optimistic production goals for several pure-electric cars, concluding that

Reaching the goal is not likely to be constrained by production capacity. Major vehicle manufacturers have announced (or been the subject of media reports) that indicate a cumulative electric drive vehicle manufacturing capacity of over 1.2 million vehicles through 2015.

Strong incentives, research and development, and assistance in establishing manufacturing and infrastructure is underway or planned. These activities directly support consumer demand of these technologies, and mitigate some of the uncertainty associated with the large-scale adoption of electric drive vehicles.

That argument became conclusively moot this year, when production of the Chevrolet Volt was stopped for the third time in its short lifetime, as unwanted cars piled up on dealer lots. Though the Volt has been defined as a symbol of GM’s bailout, it is even more politically significant as a component of Obama’s bold million-plugin plan. In last year’s report, the Department of Energy estimated that 120,000 Volts would be put on the road in the US this year, when the Volt hs actually only just broke 1,000 units sold per month for the first time in February. That 90% discrepancy between expectation and reality is crucial to Obama’s pledge, as the “1.2m production capacity through 2015″ that the DOE took for granted included some 505,000 Volts (at 120k/year from 2012-2015). With the Volt selling at 10% of DOE estimates, the entire goal falls apart (the next-closest vehicle, Nissan’s Leaf, isn’t estimated to hit 100,000 units per year until 2014).

Having seen the Volt’s underperformance coming, I’ve been wondering when the Obama Administration would recognize reality and admit that its goal was out of reach. But this being politics, you can’t just hand ammunition to your opponents. Admissions of failure must be couched in obfuscation and swaddled in unrelated good news. Which brings us to the just-released “Progress Report,” which is something like the polar opposite of landing on an aircraft carrier festooned with “Mission Accomplished” banners.

A sunny, upbeat document, the “Progress Report” introduces itself with wide-eyed optimism:

On the one-year anniversary of your Blueprint for a Secure Energy Future, which outlined your goals for American energy, we wanted to present a report on the significant progress we have made. During the last year alone, we established new incentives to increase safe and responsible domestic oil and gas production; proposed the toughest fuel economy standards for cars and trucks in history; provided millions of Americans with efficient and affordable transportation choices; launched new programs to improve energy efficiency in our homes, buildings, public transit, aviation and roadway systems; and took unprecedented steps to make the United States a leader in the clean energy
race.

But if we skip ahead to the section regarding EVs, we find that all the sugary good news is just helping mask the rank scent of failure. So, how does a sitting president admit failure? It’s as easy as writing

“By 2015, the United States will be able to produce enough batteries and components to support one million plug-in hybrid and electric vehicles.”

Notice the key difference: then, the argument was that government action would put a million EVs on the road, now the argument is that the infrastructure will be in place to meet the goal. Oh, and in case you’re a fellow ADD-sufferer, remember that the DOE determined just one year ago that

Reaching the goal is not likely to be constrained by production capacity.

In essence this report repeats the exact same thing. The difference is simply that a year ago, the President could pretend that the market would simply soak up whatever number of EVs the car companies (most of whom had received some form of government support) said they would build. Now even the most hardened partisan can’t maintain such obvious self-delusion, as the demand for EVs (the Volt in particular) has been proven to be well below expectations. This failure is made explicit in the Progress Report, which notes that

in March 2012, the President launched a clean energy grand challenge to make electric-powered vehicles as affordable and convenient as gasoline-powered vehicles for the average American family within a decade.

In short, the message has gone from “thanks to government intervention, the future is now” to “thanks to government intervention, the future might be here in a decade.” Or, to quote a certain former presidential candidate, “whoops!”

Some might argue that this is a textbook example of government wasting money trying to affect the market, and a clear sign that the market is going to do what it wants regardless of our publicly-funded exercises in futility. Instead, President Obama is “doubling down” by requesting a billion dollars be spent on a “Community Deployment” scheme aimed at boosting demand for “advanced technology vehicles” through local partnerships, and tax credits for advanced technology vehicles be bumped to a maximum of $10,000. To be fair, the retreat from EVs is reflected in the new “technology neutral” approach, which doesn’t limit subsidies to EVs but

allow[s] communities to determine if electrification, natural gas, or biofuels would be the best fit.

But the proposed changes to the consumer tax credit [PDF] have some very vague and confusing stipulations, namely that

(1) the vehicle operates primarily on an alternative to petroleum; (2) as of the January 1, 2012, there are few vehicles in operation in the U.S. using the same technology as such vehicle.

The vagueness of those rules makes them hard to interpret, but it seems that clause (1) excludes high-efficiency, small battery plug-ins like the Prius Plug-In while clause (2) could well exclude natural gas vehicles (there were well over 100k NGVs on the road as of 2010). In which case, this policy is merely a continuation of the attempt to create a market for EVs (and since we’re talking disappointing technologies, possibly hydrogen cars). The community deployment scheme seems more technologically neutral, but is flawed in the extent that it assumes that local solutions will be more broadly applicable. Besides, most local governments with strong “green car” demand potential are already incentivizing public EV charging stations and the like. And don’t get me started about the fact that the government is even pretending that biofuels are a serious solution to either environmental or energy security concerns.

As gas prices go up, we could see EV and plug-in sales improve, but it’s clear that there won’t be one million EVs on American roads by 2015. Especially with policy appearing to shift towards a more “technology neutral” mode, there is a very real threat that the huge oversupply of natural gas could create a short term market for NGVs that could doom EVs for another decade or more. If the goal of Obama’s energy policy were to improve energy independence or help the efficient use of resources, this would be good news as it’s much easier and cheaper to build (and therefore, subsidize) NGVs than EVs (even without considering the low cost of natural gas itself). Unfortunately, we have already made a significant national investment in EV/battery technology, which satisfies yet another political constituency: environmentalists.

Without clearly communicated goals, government policies will never gain the credibility with markets they need to impact. And given President Obama’s track record so far, it’s clear  he needs to more clearly admit that his EV initiative has failed and express a clear set of goals for America’s transportation and energy sectors. Unfortunately, the fact that that he’s chosen to admit that the EV dream is over in such an oblique manner indicates that expecting such forthrightness would seem more than a little naive. All of which simply confirms that this issue, like so many others facing the nation, is no longer a question of policy, but of politics.

]]>
http://www.thetruthaboutcars.com/2012/03/blind-spot-obama-no-longer-dreams-of-electric-cars/feed/ 55
U.S. Congress Stops Ethanol Subsidies & Tariff on Brazilian Imports http://www.thetruthaboutcars.com/2011/12/u-s-congress-stops-ethanol-subsidies-tariff-on-brazilian-imports/ http://www.thetruthaboutcars.com/2011/12/u-s-congress-stops-ethanol-subsidies-tariff-on-brazilian-imports/#comments Tue, 27 Dec 2011 20:24:36 +0000 http://www.thetruthaboutcars.com/?p=423476 After spending thirty years and $45 billion dollars encouraging the use of ethanol the United States Congress has adjourned for the year without extending tax subsidies to the to ethanol industry. The subsidy currently costs taxpayers $6 billion a year. A related import tariff on Brazilian ethanol was also allowed to expire. With a wide group of critics, cutting across political and ideological lines, the tax break had become unpopular in Washington. Business interests in the food and cattle industry as well as environmentalists opposed the law which paid 45 cents per gallon to fuel blenders to subsidize their costs for producing E10 gasoline/ethanol blend. The subsidy resulting in corn being diverted from feedlots and food processors to ethanol production, raising the cost of many foodstuffs. The environmental movement now opposes corn ethanol as a fuel it because it considers the fuel and its production to be “dirty”, in the words of Friends of the Earth.

Ethanol trade groups have said that the industry would survive the loss of the subsidy, now that the US ethanol production industry has become established. The industry is still protected by congressional mandates that call for 15 billion gallons of renewable fuels by 2015 and 36 billion gallons by 2022.

The ethanol issue involves a number of powerful players, corn growers and affiliated industries on one side and food interests, automakers and engine builders on the other. Then there’s the EPA to consider. The EPA has approved the use of E15, an 85/15 gasoline/ethanol blend, for use in post 2001 cars. Manufacturers say that without modifications, E15 will damage engines. In February, in a bipartisan move the House voted 285-136 to block the EPA from moving ahead with E15 regulations.

While ending the subsidy would seemingly discourage ethanol’s use, the end of the 54 cents per gallon tariff on imported Brazilian ethanol might do more to encourage that use than the subsidies did. Brazil is one place where it makes sense to use ethanol as a fuel because of Brazil’s huge sugar industry. The ratio of energy needed to produce it vs the energy obtained in the fuel for ethanol made from corn is barely greater than one, 1.3:1, compared to 2:1 for using sugar beets and 8:1 for sugar cane, the feedstock for Brazil’s ethanol. It costs half as much to make Brazilian cane ethanol as it does to make American corn ethanol. According to one academic study transportation costs to US ports eliminate that competitive advantage, but if that was a certainty, Brazilian sugar cane producers wouldn’t have threatened to start a trade war if the tariff wasn’t ended.

]]>
http://www.thetruthaboutcars.com/2011/12/u-s-congress-stops-ethanol-subsidies-tariff-on-brazilian-imports/feed/ 74
Lack Of Stable Power Brings Japan’s Industry To Its Knees http://www.thetruthaboutcars.com/2011/04/lack-of-stable-power-brings-japan%e2%80%99s-industry-to-its-knees/ http://www.thetruthaboutcars.com/2011/04/lack-of-stable-power-brings-japan%e2%80%99s-industry-to-its-knees/#comments Mon, 04 Apr 2011 12:22:37 +0000 http://www.thetruthaboutcars.com/?p=389730

The Japanese tsunami impacts everything, from cars to toilet paper. Most Japanese car makers were closed since after the catastrophe and will remain closed at least until mid April. Many paper mills are in the affected area, and all paper, from glossy stock to the softer kind, is in short supply. Publishers of Japanese illustrated pulp fiction have canceled the printed version and direct their readers to the Internet instead. Tokyo corporations battle a wave of toilet rolls vanishing from their restrooms, from where they find a way to the toire at home. While these may be temporary outages, the lack of stable electrical power emerges more and more as the biggest impediment to the recovery of the Japanese industry. It will affect you and your car, in one way or the other.

Bloomberg figures that “the earthquake and tsunami destroyed 21 million kilowatts of electrical generating capacity, or about the amount that would be generated by 10 Hoover Dams.”

Last weekend’s Heard on the Street column in the Wall Street Journal puts it more succinctly:

“The region around Tokyo, which accounts for 40% of the nation’s economy, most of Japan Inc.’s head offices and a third of the population, can barely meet peak demand now. In the event of a hot summer, there may only be enough electricity to supply three-quarters of demand. Shortfalls could last months, or years.“

A handy graph, based on data supplied by troubled TEPCO, shows only four out of 17 nuclear reactors producing power. Two of the four are scheduled to be brought down for maintenance in August.

It could be a long time until the shut reactors come back up. “Four years after a 2007 quake, three of seven reactors in the Kashiwazaki Kariwa nuclear plant operated by Tokyo Electric Power Co. still aren’t generating power,” says the Journal.

In this odd twist of fate, electric power, hailed as the savior of the automotive industry, is bringing the industry to its knees. Stable power is essential for the making of many products, from castings to copper foil for printed circuit boards. There are a lot of those in a car, populated by many chips. Chips need stable power even more. Writes Hans Greimel in Plastic News:

“And because the worst-hit suppliers are in the electronics and chip-making sectors, getting them back up to speed is a big hurdle. Vehicle assembly lines are relatively easy to stop and restart, but chip-making equipment is far more sensitive and can get really messed up by an unscheduled shutdown.

After those lines stop it can take up to three days to recalibrate them. And the restart process must begin again from scratch if it is interrupted by a power outage or aftershock — both of which continue to plague Japan. Simply scheduling a sustained restart around the blackouts is hard.”

Also, now we know why the plans of voluntary shutdowns — say Toyota on Monday, Nissan on Tuesday, Wednesday is Honda day – were a non-starter, and why Japan’s majors vehemently denied such plans: This kind of industry coordination would be against the law.

Negotiated shutdowns “could be deemed as forming a cartel to adjust production volume, banned under the Anti-Monopoly Law,” writes The Nikkei [sub].

Even setting the thermostat of the office A/C to more moderate degrees could collide with labor laws or building maintenance regulations.

According to The Nikkei, the Japanese government will ask its industry watchdog, the Japan Fair Trade Commission, to lie down for a while. The government will also temporarily revise ordinances setting enforcement rules. With this in place, the industry can finally sit down and come to a sensible power-sharing arrangement.

Another step is to allow companies to set up their own power generation. Currently, “installing power generation equipment in open spaces on a company’s premises could breach land usage and air pollution laws,” says The Nikkei.

The Japanese government is expected to ease enforcement rules and to allow the installation of generators.

Speaking of generators: There aree none to be had in Japan.

Distributors were sold out three days after the quake. Now, genset makers are scrambling for – parts.

According to the Bloomberg report, “Honda has secured enough parts to partially resume production of large generators at a factory in Kumamoto, southwest Japan, though the company doesn’t know how long it may take to start making portable units.”

]]>
http://www.thetruthaboutcars.com/2011/04/lack-of-stable-power-brings-japan%e2%80%99s-industry-to-its-knees/feed/ 21