The Truth About Cars » oil http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Fri, 04 Sep 2015 13:00:54 +0000 en-US hourly 1 http://wordpress.org/?v=4.2.4 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 » oil http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com Iran Calls for Emergency OPEC Meeting Amid Oil Slide http://www.thetruthaboutcars.com/2015/08/iran-calls-for-emergency-opec-meeting-amid-oil-slide/ http://www.thetruthaboutcars.com/2015/08/iran-calls-for-emergency-opec-meeting-amid-oil-slide/#comments Sun, 23 Aug 2015 16:00:34 +0000 http://www.thetruthaboutcars.com/?p=1150985 Iran’s oil minister has said that an emergency OPEC meeting may be necessary to stem the tide of slumping worldwide oil prices, Reuters is reporting. Algeria has also called for an emergency meeting. A barrel of crude oil slid to its lowest price last week of around $40, the lowest in more than six years. […]

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Entrance_OPEC_Headquarter_Vienna

Iran’s oil minister has said that an emergency OPEC meeting may be necessary to stem the tide of slumping worldwide oil prices, Reuters is reporting. Algeria has also called for an emergency meeting.

A barrel of crude oil slid to its lowest price last week of around $40, the lowest in more than six years. Record low gas prices could closely follow, which would help American drivers and car buyers, however the broader economic impact may be tougher to discern. Worldwide markets sank on Friday, largely on fears that China would slow its economic growth and instability in Greece could hamper European economies.

Iran said an emergency meeting would be “effective” in slowing the oil slump. OPEC isn’t scheduled to meet until Dec. 4.

According to the Reuters report, an emergency meeting wouldn’t likely happen without Saudi Arabia, the largest member of OPEC. Saudi Arabia has indicated it could withstand lower oil prices, and analysts say the country isn’t likely to reverse its course anytime soon.

Americans have driven more in the first six months of 2015 than they ever have, according to the Federal Highway Administration. Many people say cheap gas and good economic conditions have led to more vehicle miles traveled.

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Who’s Ready to Party Like It’s 2008? http://www.thetruthaboutcars.com/2015/08/whos-ready-party-like-2008/ http://www.thetruthaboutcars.com/2015/08/whos-ready-party-like-2008/#comments Fri, 21 Aug 2015 18:00:10 +0000 http://www.thetruthaboutcars.com/?p=1149793 Break out the champagne and 7-liter engines. Have one on us, alright? The Wall Street Journal and Reuters are reporting that despite a mild increase in crude, oil is hovering around $40 a barrel and it’s expected to further dip in coming months to a six-year low on a global glut of oil. The national average […]

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Ford Mustang Receiving Gas Circa April 2015

Break out the champagne and 7-liter engines. Have one on us, alright?

The Wall Street Journal and Reuters are reporting that despite a mild increase in crude, oil is hovering around $40 a barrel and it’s expected to further dip in coming months to a six-year low on a global glut of oil.

The national average for a gallon of gas could drop to as low as $2, Green Car Reports says, which would be the cheapest its been since January, and could approach historical lows from 2008.

Brent crude (light, sweet oil that serves as a trading standard) dropped on worries that a slumping Chinese economy would further slide and European uncertainty about Greek’s flailing economy.

American crude reserves will likely increase in the short-term as refineries prepare for off-season maintenance, which would reduce demand for crude and drive prices down further.

In crude’s corner, worries about hurricane season — and that’s about it — kept the bottom from falling out.

Although stone-cold cheap gas seems like a good deal for drivers, it may not be the best for the economy and energy-sector jobs. This year, the Wall Street Journal excellently reported how super-cheap gas wasn’t exactly great in the 1980s either.

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Chevrolet To Z06 Owners: Change Your Oil, Stat! http://www.thetruthaboutcars.com/2015/08/chevrolet-telling-corvette-z06-owners-change-oil-500-miles/ http://www.thetruthaboutcars.com/2015/08/chevrolet-telling-corvette-z06-owners-change-oil-500-miles/#comments Fri, 14 Aug 2015 19:00:50 +0000 http://www.thetruthaboutcars.com/?p=1142305 Last time we checked in on the reportedly fussy Corvette Z06 engine, it was leaking vital fluids after Fox News reporter Gary Gastelu took it to the track.  Now it appears that Chevrolet has a fix for at least one of the Z06’s reported engine problems: change the oil, stat. According to a General Motors […]

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Last time we checked in on the reportedly fussy Corvette Z06 engine, it was leaking vital fluids after Fox News reporter Gary Gastelu took it to the track. 

Now it appears that Chevrolet has a fix for at least one of the Z06’s reported engine problems: change the oil, stat.

According to a General Motors spokesman, the catastrophic engine failures all seem to have three things in common: early production builds, oil contamination and low miles (under 2,000).

(Maybe that explains the one that bought the farm at 891 miles.)

According to Chevrolet, contaminants in the oil can cycle through the engine during break-in, causing all sorts of fun for owners. (We haven’t heard official word from some owners as to what exactly went wrong, but we’re efforting.)

On its own, Chevrolet said that it was upgrading its manufacturing process to minimize the risk of contaminating the oil. The cause could be thread shavings for the oil filter which may have made their way into the oil pan when the threads were tapped.

As a result, Chevrolet is asking owners to ditch the break-in oil quickly.

“We now encourage all owners to change their oil at 500 miles to remove possible contaminants created during the engine break-in process. And, as always, we encourage the use of Mobil 1 synthetic oil – which is a factory fill for all Z06 models, and Stingray Z51 models – and encourage owners to follow the engine break-in process detailed in the owner’s manual,” stated Monte Doran, spokesman for Chevrolet.

Owners are still reporting heat soak issues and intermittent power steering problems.

Chevrolet says less than one percent of the 9,000 Z06 models on the road have had engine troubles.

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Piston Slap: Reporting on The Oil Report http://www.thetruthaboutcars.com/2015/07/piston-slap-reporting-oil-report/ http://www.thetruthaboutcars.com/2015/07/piston-slap-reporting-oil-report/#comments Thu, 23 Jul 2015 11:00:03 +0000 http://www.thetruthaboutcars.com/?p=1123169   Greg writes: Sajeev, first let me thank you for your interesting article on Mazda rust last year. Ultimately I bought the Accord, which to me seemed to have the superior (and quite lovely) stick shift, even though the Mazda is reputed superior in that department. I decided for kicks and giggles to get my […]

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To change or not to change? (photo courtesy: www.noria.com)

Greg writes:

Sajeev, first let me thank you for your interesting article on Mazda rust last year. Ultimately I bought the Accord, which to me seemed to have the superior (and quite lovely) stick shift, even though the Mazda is reputed superior in that department.

I decided for kicks and giggles to get my oil tested by Blackstone, and I thought this might be a potential article for Piston Slap (not my adventure, but the practice of having it done).

It wasn’t as complete a report as one might hope, because my mechanic forgot to draw the sample and dumped the oil in the barrel. All I could forward to Blackstone was a few drops from the oil filter. But they were able to test that small sample, except for the flashpoint and viscosity.

Here’s the report in PDF form.

Of interest:

  1. The metals are about 10x the average level of metals (chrome, copper, aluminum, molybdenum, etc.) in most cars. Blackstone said this is the breaking in process, but this is the first time I’ve seen real data on the “wearing in” or “breaking in” of a car.
  2. The TBN (total base number) was 2.1, over the 1.0 minimum suggested by Blackstone, after 8,200 miles. Apparently engine oils are made to lean to the base side and as they get used the base number declines and in the extreme case will become acidic. I did some research on this and the TBN of the OEM Honda oil was apparently about 8.1 when new (just sleuthing around to see what Honda used) and the TBN of the Mobil 1 synethetic 0-20W is about 8.8. If you get the long-lasting or extended use formula (whatever they call it) it has a TBN of about 12 when new but you’re going up to something like 5-30, which is not the recommended oil for this Accord.

For $40 I think it was a useful thing to do. It put my mind to rest about my practice of changing my oil 2x a year, and it seems like something one should do in the first year or two of ownership and again in the car’s elder years when it can diagnose various kinds of engine degradation. Apparently oil testing is a competitive industry, but the usual customer is a fleet owner who is looking at a significant operating cost in oil changes.

Sajeev concludes:

I am glad these oil report services exist as they do make folks feel more comfortable and help ensure a healthy motor. As we’ve learned from many vehicles (here and here, for starters) over the last 15+ years, doing whatever the owner’s manual recommends isn’t necessarily the right move.

Blackstone’s recommendation to extend your oil change intervals to 9,000 miles makes sense, considering their analysis and the fact that this Honda isn’t known to be a sludge bucket.

Off to you, Best and Brightest!

Send your queries to sajeev@thetruthaboutcars.com. Spare no details and ask for a speedy resolution if you’re in a hurry…but be realistic, and use your make/model specific forums instead of TTAC for more timely advice.

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Consumer Reports Reveals New Cars’ Dirty Secret http://www.thetruthaboutcars.com/2015/07/consumer-reports-reveals-new-cars-dirty-secret/ http://www.thetruthaboutcars.com/2015/07/consumer-reports-reveals-new-cars-dirty-secret/#comments Thu, 02 Jul 2015 20:00:33 +0000 http://www.thetruthaboutcars.com/?p=1106329 Engines burn oil, but how much oil burn is normal is at the heart of a Consumer Reports study that examined nearly 500,000 new cars for how much oil they have to replace in their new car’s engine. It’s a dirty, dirty business. The report defined excessive oil consumption as adding more than one quart between recommended […]

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Engines burn oil, but how much oil burn is normal is at the heart of a Consumer Reports study that examined nearly 500,000 new cars for how much oil they have to replace in their new car’s engine.

It’s a dirty, dirty business.

The report defined excessive oil consumption as adding more than one quart between recommended oil changes. The biggest offenders: BMW’s 4.8-liter and 4.4-liter twin turbocharged V8’s, Audi’s 2.0-liter turbo four and 3.0-liter V6. The report also said Subaru’s 2.0- and 2.5-liter fours and 3.6-liter flat six were lesser offenders.

According to Consumer Reports, the engines comprise only 2 percent of vehicles on the road, but that small sliver of the segment accounted for nearly 1.5 million cars. The offenders were particularly heinous in their oil consumption, as well — a new BMW 5-Series was 27 times more likely to need oil than an average new car.

Many new cars shouldn’t need additional oil between oil changes, the consumer group said, and oil consumption on vehicles with fewer than 100,000 miles should be the exception — not the rule.

Nonetheless, representatives from manufacturers such as BMW and Subaru said oil consumption for their engines isn’t out of the ordinary and could be dependent on temperature, driving style and transmission type.

The report highlighted the experience of one New York woman who said Subaru offered her $500 to offset the cost of new oil after she complained that her 2012 Impreza was burning too much.

Subaru’s Director of Communications Michael McHale said in a emailed statement that Subaru “doesn’t have a program in place but we do review each case on an individual basis.”

Out of court, some manufacturers have authorized repairing or even replacing an engine if it’s burning too much oil. In court, both Audi and Subaru are defendants in class-action suits regarding the problem.

Representatives from BMW did not immediately return requests for comment.

In some cases, automakers have settled the suits or extended powertrain warranties to cover any excessive oil consumption. In California, as part of a settlement, Toyota extended its powertrain warranties in some Camrys and Corollas to cover 10 years or 150,000 miles. Honda extended its warranty to 8 years on some of its 6-cylinder cars in 2013, after settling a class-action suit where hundreds complained about oil consumption.

BMW spokesman Hector Arellano-Belloc is quoted in the Consumer Reports story saying:

“BMW vehicles have long intervals between oil changes (10,000 miles). BMW engines (excluding the BMW M) may consume up to one quart of engine oil per 750 miles under certain driving conditions.”

Which sucks for me because my own personal 3 Series’ oil capacity is around 7 quarts — or about bone-dry halfway between regularly scheduled changes.

The report also underscores a small, but not insignificant, problem that manufacturers must do everything they can to combat the perception that cars are inefficient, environmentally irresponsible machines. Constantly pumping a car full of dead dinosaur juice may not help.

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While You Were Sleeping: Toyota Fortuner SUV for Oz, More Airbag Recalls and Stowaways Hide in Maseratis http://www.thetruthaboutcars.com/2015/05/while-you-were-sleeping-toyota-fortuner-suv-for-oz-more-airbag-recalls-and-stowaways-hide-in-maseratis/ http://www.thetruthaboutcars.com/2015/05/while-you-were-sleeping-toyota-fortuner-suv-for-oz-more-airbag-recalls-and-stowaways-hide-in-maseratis/#comments Fri, 22 May 2015 11:01:26 +0000 http://www.thetruthaboutcars.com/?p=1072562 In addition to the go-anywhere Toyota HiLux, it looks like Australia will get a Fortuner reprise. Here’s what happened overnight. Confirmed: Toyota Fortuner SUV is go for Australia (GoAuto) “We haven’t secured or announced anything, but it’s going to come.” Toyota Tundra subject of “enormous” Australian demand (CarAdvice) Aussies want bigger trucks. Mazda, Subaru, Mitsubishi […]

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2016 Toyota Fortuner Brochure Leak

In addition to the go-anywhere Toyota HiLux, it looks like Australia will get a Fortuner reprise.

Here’s what happened overnight.

Favorite Picture or Random Thing from Yesterday:

Garage

Posted on Hooniverse in Last Call: Blueprint for Success Edition. [Source: Go Away Garage]

 

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While You Were Sleeping: The K-Car Alphabet, Oil Prices Falling and Belarus Has a New Parade Car http://www.thetruthaboutcars.com/2015/05/sleeping-k-car-alphabet-oil-prices-falling-belarus-new-parade-car/ http://www.thetruthaboutcars.com/2015/05/sleeping-k-car-alphabet-oil-prices-falling-belarus-new-parade-car/#comments Mon, 11 May 2015 10:53:08 +0000 http://www.thetruthaboutcars.com/?p=1065586 Chrysler has built a lot of cars atop the K platform. BangShift has put together a handy guide to figure them all out. Is danger lurking in junkyards? (Automotive News) “American Honda estimates that more than 24,000 recalled airbag modules made by Takata are scattered among thousands of salvage yards and auto recyclers across the country.” Oil […]

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12 - 1986 Dodge Aries Down on the Junkyard - Picture Courtesy of Murilee Martin

Chrysler has built a lot of cars atop the K platform. BangShift has put together a handy guide to figure them all out.

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While You Were Sleeping: Jeep GC Pickup Render, Brilliance V3 Debut and Jobs, Jobs, Jobs (Or a Lack Thereof) http://www.thetruthaboutcars.com/2015/05/sleeping-jeep-gc-pickup-render-brilliance-v3-debut-jobs-jobs-jobs-lack-thereof/ http://www.thetruthaboutcars.com/2015/05/sleeping-jeep-gc-pickup-render-brilliance-v3-debut-jobs-jobs-jobs-lack-thereof/#comments Fri, 08 May 2015 10:11:11 +0000 http://www.thetruthaboutcars.com/?p=1064017 As trucks ride a heat wave of interest from consumers, I look at this Grand Cherokee render and think, “That’ll do.” Jeep Trailhawk (Theophilus Chin) Self-titled Automotive Manipulator Theophilus Chin has put together a compelling image of a Jeep Grand Cherokee pickup. Exclusive: Honda Australia pensions off Civic diesel (GoAuto) As car enthusiasts scream for diesel […]

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Jeep Trailhawk Truck Render

As trucks ride a heat wave of interest from consumers, I look at this Grand Cherokee render and think, “That’ll do.”

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Biggest Supplier of U.S. Foreign Oil Elects Democratic Socialist Government http://www.thetruthaboutcars.com/2015/05/biggest-supplier-u-s-foreign-oil-elects-democratic-socialist-government/ http://www.thetruthaboutcars.com/2015/05/biggest-supplier-u-s-foreign-oil-elects-democratic-socialist-government/#comments Wed, 06 May 2015 13:27:12 +0000 http://www.thetruthaboutcars.com/?p=1062762 Last night, it became official: Alberta, the largest producer of oil in Canada, ended the 40 year reign of the Progressive Conservatives in favor of the New Democratic Party (NDP), a democratic socialist party. This could mean big changes in the energy sector, from oil patch to gas pump. The Alberta NDP, under the leadership of […]

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Rachel Notley, Alberta NDP Leader

Last night, it became official: Alberta, the largest producer of oil in Canada, ended the 40 year reign of the Progressive Conservatives in favor of the New Democratic Party (NDP), a democratic socialist party.

This could mean big changes in the energy sector, from oil patch to gas pump.

The Alberta NDP, under the leadership of new premier Rachel Notley, campaigned on a promise to review energy royalties. With the previous government known for charging royalties far below average, it’s likely a review will find an increase favorable for Albertans. And, as is the case, customers will be footing the bill and the energy lobby has already come out swinging.

From CBC:

Altacorp Capital, a Calgary investment bank that is partly owned by the provincial government, expressed a similar view in a report earlier this week, before the election.

The report pointed out that energy investors, especially those based outside of Canada, have lots of options when it comes to investing.

“Unfortunately, with Alberta possibly heading for a third royalty change in eight years now, we believe global investors will add a degree of caution with the province’s ability to maintain a stable investable environment.”

Other platform promises including raising corporate income tax rates from 10 to 12 percent, increasing the minimum wage to $15 per hour by 2018, more tax brackets and higher taxes for making over $125,000 per year, and a ban on corporate and union political donations.

Canada is the largest outside supplier of petroleum to the United States at 3.39 million barrels per day, 37 percent of gross imports, more than all OPEC countries combined in 2014.

[Image source: Rachel Notley Facebook Page]

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US Once Again the Swing Oil Producer: Whither Gas Prices? http://www.thetruthaboutcars.com/2015/01/us-swing-oil-producer-whither-gas-prices/ http://www.thetruthaboutcars.com/2015/01/us-swing-oil-producer-whither-gas-prices/#comments Thu, 29 Jan 2015 23:00:24 +0000 http://www.thetruthaboutcars.com/?p=989498 Despite a collapse in oil prices of 50 percent since summer’s end, Saudi Arabia, whose vast production capacity has enabled that country to modulate world oil prices by adjusting its output, “effectively resigned from that role,” Daniel Yergin wrote in this past Sunday’s New York Times Week in Review. “…OPEC handed over all responsibility for […]

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Despite a collapse in oil prices of 50 percent since summer’s end, Saudi Arabia, whose vast production capacity has enabled that country to modulate world oil prices by adjusting its output, “effectively resigned from that role,” Daniel Yergin wrote in this past Sunday’s New York Times Week in Review. “…OPEC handed over all responsibility for oil prices to the market, which the Saudi oil minister, Ali Al-Naimi, predicted would ‘stabilize itself eventually.’”

For those unfamiliar with Yergin, since at least the late 1970s, he has been a leading expert and author on oil and its intersection with international economics and politics. He writes that the Saudis’ motivation for relinquishing control—a decision which was far from unanimous among OPEC nations—included fear of losing market share if they turned off the spigots, particularly to Iraq, which they view as a satellite of Iran, and to Iran itself, should sanctions end, bringing that country’s million-plus bbls/day back onto the market.

Now, Yergin writes, the US, long ago the “swing producer” of oil, has been granted that status once again by virtue of Saudi Arabia’s abdication.

The US “was once, by far, the world’s largest oil producer and exporter,” Yergin writes. American production peaked in 1970 at 9.6 million barrels a day, but by 2008, had fallen by nearly half, while oil prices had climbed to $147/bbl (raising the specter of peak oil).

Then, technology came to the rescue, in the form of fracking and horizontal drilling. In 2010, writes Yergin, these nascent gas-harvesting technologies were unleashed upon oil, and by 2014 brought American oil production most of the way back to the 1970 peak. That, and slowing world economic growth brought prices from the stratosphere back down to more terrestrial levels of less than $50/bbl.

Yergin expects shale oil producers to find ways to “drive down costs” so that even if oil prices stay well south of $100/bbl, shale oil production will remain strong. He doesn’t speculate what prices will do beyond 2016, short of saying a growing economy may stimulate more demand. (We were unable to reach him for comment, as he was traveling overseas.)

Providing additional perspective in a New York Times “Upshot” column, the NYT’s David Leonhardt says the current nationwide average price of gasoline, $2.03/gallon, is actually more expensive than at anytime during the 1990s. From 1986 through 2002, the inflation-adjusted cost of a gallon averaged $1.87.

Nonetheless, if maintained, the current low fuel cost could lift some financial burden from the middle class on down. Leonhardt notes that political leaders from President Obama to three likely presidential candidates—Hillary, Jeb Bush, and Scott Walker “consider the wage slowdown to be the country’s most pressing issue.” The wage slowdown refers to the fact that American middle class wages have been so stagnant for the last several decades that our middle class is no longer the world’s most affluent.

Leonhardt asserts that energy costs were a major factor behind the wage slowdown. He writes that the beginning of the wage slowdown coincided with the end of cheap gas. But if gas prices hold to current levels, Americans will have an additional $180 billion their accounts this year, he says (that’s about $562 per capita).

(But maybe energy is not such a major factor: the $180 billion represents less than 1.5 percent of personal income. Tufts economist David Dapice blames the wage slowdown more on rising medical costs, globalization and the breaking up of unions, and slack in labor markets. And Harvard economist George Borjas says mass immigration takes a 3-4 percent bite out of income.)

But if gas remains cheap, rising demand could boost prices. Leonhardt notes in the early ‘80s, CAFE helped dampen demand for fuel. In the mid-‘80s, the best selling vehicles were the Chevy Celebrity, Honda Accord, Ford Escort, and Ford Tempo, “all modest size,” writes Leonhardt. But by the cheap oil era’s end, in 2002, the CAFE truck loophole had catapulted the Explorer, the Trailblazer, the Silverado, and the Ram to the top (See Derek’s article on that loophole.)

“Left to its own devices, the energy market will repeat this cycle,” Leonhardt warns, adding that SUV and pickup truck sales in December 2014 had risen 12 percent over December 2013, compared to just 5 percent for cars.

Avoiding this cycle is the logic behind taxing either gasoline or carbon enough to dampen demand, and rebating at least some of that money to consumers, in the form of tax cuts, as Larry Summers and Charles Krauthammer both advocated, and as the Energy and Enterprise Institute has been promoting. Thus, the external costs of both could be internalized without harming the economy.

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A Brief History Of The Oil Crash http://www.thetruthaboutcars.com/2015/01/brief-history-oil-crash/ http://www.thetruthaboutcars.com/2015/01/brief-history-oil-crash/#comments Fri, 16 Jan 2015 14:30:25 +0000 http://www.thetruthaboutcars.com/?p=984457 Reuters Energy analyst John Kemp has published a timeline of events that explain the latest crash in crude oil prices. As energy prices enter a new era, we’ll be focusing more and more on this sector, and how it relates to the automobile.

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Click here to view the embedded video.

Reuters Energy analyst John Kemp has published a timeline of events that explain the latest crash in crude oil prices. As energy prices enter a new era, we’ll be focusing more and more on this sector, and how it relates to the automobile.

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Ur-Turn: The Truth About Oil, Part Two – The Good, The Bad, And The Ugly http://www.thetruthaboutcars.com/2015/01/ur-turn-truth-oil-part-two-good-bad-ugly/ http://www.thetruthaboutcars.com/2015/01/ur-turn-truth-oil-part-two-good-bad-ugly/#comments Wed, 14 Jan 2015 21:25:08 +0000 http://www.thetruthaboutcars.com/?p=983225 David Obelcz is back with Part Two of his series on oil prices. Part One can be viewed here. In the 1966 Spaghetti Western classic The Good, the Bad, and the Ugly, the three principal characters come together in what is considered the most iconic standoff in cinematic history. Three parties hostile to each other […]

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David Obelcz is back with Part Two of his series on oil prices. Part One can be viewed here.

In the 1966 Spaghetti Western classic The Good, the Bad, and the Ugly, the three principal characters come together in what is considered the most iconic standoff in cinematic history. Three parties hostile to each other and the first one to shoot is the most likely loser.

At no time in modern history has the overall global economy been so good and the commodity price of oil crashed so fast, and so hard. As of this writing short contract West Texas Intermediate (WTI) is below $46 USD a barrel with no sign of price support. We are deep into market crash territory with pumping out of the ground tipping over into a money losing proposition. OPEC nations, state producers, and global multinationals have each other in check on the world chessboard, and no one wants to move their pieces.

Although there are plenty of conspiracy theories on why the price of oil has declined so fast, it is the simple economics of supply and demand. Production over capacity has bloated from 700,000 barrels a day this summer to 1.3 million barrels. Although there is a growing list of drilling rig contract cancelations, existing production sources are pumping more. Over supply will continue to grow because the three goliaths of oil production (OPEC nations, state owned and corporate producers) are fighting to cling to their existing market share at any cost.

Russia has increased production through 2014 despite a battered Ruble and the price of oil sitting at less than half of where it needs to be to support the Russian government. Russian producers are hoping to capture more market share, ironically from the same western European nations that Moscow is growing increasingly resentful of, to help bolster overall revenues. The Putin government position to the Russian people is the price decline is an economic assault on their nation. This message resonates well outside of major population centers, but dissatisfaction and fear of a 1998 grade collapse are growing.

Vladimir Putin has enjoyed high approval ratings because the standard of living has improved dramatically under his leadership. For Putin to maintain power, he has to keep the Russian economy out of collapse and cannot permit a repeat of 1994 and 1998. Eleven-percent inflation, 17% interest rates, and a three-trillion Ruble budget deficit projected for 2015 is a tough hill to climb. Although the General Motors strategy of, “we’ll make it up in volume,” is folly, it keeps people employed and revenue flowing.

Saudi Prince Alwaleed bin Talal has stated that Saudi Arabia will not reduce production regardless of the direction of the market, and that oil will never be $100 barrel again. The reason behind this is the wellbeing of the Saudi royal family and the viability of the Saudi government is interdependent on national prosperity.

Compared to their neighbors, Saudi citizens enjoy a higher standard of living, which makes the average Saudi less likely to want to overthrow the existing, western friendly government. During the oil crashes of 1986 and 1998, the OPEC cartel, led by Saudi Arabia, agreed to reduce production capacity to help stabilize oil markets. A number of OPEC nations cheated and didn’t cut production, causing Saudi Arabia to permanently lose market share after each correction. Although you can make a strong case that the Saudi government turns a blind eye to those who fund radical Islam in other parts of the world, they are showing little interest in allowing it to ferment inside their own borders. For the Saudi royal family, heads could literally roll if their influence in the global oil market is lost.

In the Powder River Basin, Eagle Ford, Bakken, and the oil sands of Canada, leveraged producers and corporate interests are looking for long term return on investment, and increasingly economic survival. A growing list of analysts are saying that Texas should prepare for a recession, and the gravy train of $30 an hour day labor jobs in North Dakota are coming to an end. Smelling blood in the water against the other large producers in the world, the strongest players believe they can keep the pressure up until someone cuts production, and capture the smaller producers as they consolidate.

In prior oil crashes, ExxonMobil, BP, Chevron, etc. have treated commodity weakness as buying opportunities. Because major oil corporations are morphing into energy companies, are vertically integrated, and have record cash reserves, they can carry out a long term war of oil price attrition. The contract drillers, their suppliers, rig operators, and the support network are already reeling from the price collapse, but with a dividend yield of more than four-percent for blue chip oil stocks, shareholders will remain patient, for now.

No one wants to give up market share because no one can afford to give up market share. If anyone cuts production, the risk is becoming irrelevant in this post oil crash market. Anyone who yields market share today, yields it forever.

To get an idea of how much global production has grown, the U.S. Energy Information Administration (EIA) has tables of data you can download for fun and profit. Since 2008 US oil production has almost doubled. From September 2010, when the Great Recession started to wind down, to September 2014, US oil production has increased 31%, making the United States the largest oil producing nation in the world.

 

Top Five Oil Producing Nations
Country Production (thousands of barrels per day) Four Year Increase/Decrease
United States 14,246 30.80%
Saudi Arabia 11,558 3.98%
Russia 10,564 3.65%
Canada 4,612 27.86%
China 4,470 -0.03%

Source, USEIA – http://www.eia.gov, as of September 2014

Of the top ten oil producing nations, only Iran has had a statistically meaningful decline in production during the last four years. Recent reports of United States oil production growth slowing to the lowest level in 5 years makes for great headlines, but when you’ve grown 90% since 2008, you reach a point where deceleration is inevitable.

At the same time of this unprecedented expansion in production and the complex geopolitical situation of radicalization and militarization, oil consumption growth has dropped to just 2/10 of a percent through 2013. More remarkable, although all the data isn’t available, it appears for 2014 global consumption increases has flattened to zero, and may have even retracted.

China is expecting to grow by a relatively tepid 7%, India has cut their growth forecast in half, Japan is expected to be flat, and Russia is expecting to contract by 3%. Although the United States is enjoying strong GDP and job growth, conservation programs and increasingly stringent CAFE standards are having a real impact on consumption. In the January 13, 2015 short-term energy outlook released by the EIA, global consumption is expected to grow 900,000 barrels per day through 2015, even when factoring increased US gasoline consumption forecasts.

Top Five Oil Consuming Nations
Country Consumption (thousands of barrels per day) 2012 to 2013 Increase/Decrease
United States 18,961 2.55%
China 10,116 1.37%
Japan 4,530 -3.49%
India 3,509 1.71%
Russia 3,320 -2.21%

Source, USEIA – http://www.eia.gov, as of 2013

2015 is shaping up to be the 1967 of this generation. We are in a golden age of power and efficiency. Three-hundred horsepower is commonplace and 500 reliable horsepower, or more, is obtainable to a wider demographic than at any other time. Buyers can choose from the Charger, Challenger, Mustang, Camaro, Corvette, or SS if they want to get their ‘Merica old school V8 rear-wheel-drive on. The Hellcat, Shelby GT 350, magnetic ride control and manual transmission equipped SS, and C7 couldn’t have come at a better time. Never mind an almost endless list of sedans, CUVs and SUVs with performance numbers that makes a 1967 GTO gimpy in comparison.

Many who didn’t learn to drive in the Detroit malaise and British Leyland era believe a traffic ramp sprint to 60 MPH (or 62 KPH if you please) that takes longer than eight seconds is dangerously slow. The fears of a performance Armageddon driven by stringent global fuel economy standards appears to have been completely unfounded (your author, guilty as charged). A growing list of states is raising interstate speed limits and consumers are enjoying at least a short term gain in disposable income.

The love affair North America has with fullsize trucks will continue unabated, and will accelerate this year. Manufacturers with strong CUV and SUV line ups can look forward to growing demand in 2015, while mainstream subcompact, compact, and midsize sedan sales will slow. Think Jeep had a good 2014, wait until you see 2015. The General Motor twins of the Colorado and Canyon, as well as the Chevrolet Trax are, for the short term, ill-timed. For Ford, 2.7 liter Ecoboost engines in aluminum fullsize trucks might not be as strong a selling point if gasoline had taken a path in the other direction. For the growing list of diesel powered cars, trucks, and SUVs that United States buyers can choose from, the timing couldn’t be worse. The premium both in Average Transaction Price (ATP) and at the pump for diesel means that the math simply doesn’t add up.

But what about those cars which aren’t powered by gasoline, or are only partially powered? Tesla continues to benefit as a boutique luxury brand, and should be immune from current conditions. The Toyota Prius line up will further decline year-over-year in 2015. Low gasoline prices coupled with low ATP on Camry and Corolla makes the Prii a tougher sale. Chevrolet Volt version 2.0 is appearing at the wrong time. The Toyota Mirai should be immune to market conditions because of its green credentials and the future is now hydrogen fuel cell driveline. Because of its early adopter cred, the Mirai is likely a bigger threat to Tesla Model S sales than gasoline under $2 a gallon.

So what about the price of oil? With consumption growth not outstripping production through 2015 barring some huge unforeseen event, the price can only go down. History indicates the lowest it could go is about $23.50 a barrel, which when adjusted for inflation, is at the 1986 basement. I see oil finding support at $28 a barrel in the summer of 2015, and gasoline future dropping below $1 a gallon USD. The Midwestern states which typically have lower motor fuel costs could see the average price of regular gasoline hit $1.50 a gallon by the start of the summer driving season.

If you were thinking about a cross country road trip in a Challenger Hellcat, this is the year to do it.

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It’s Official: Oil Is Now Cheaper Than Whisky http://www.thetruthaboutcars.com/2015/01/official-oil-now-cheaper-whisky/ http://www.thetruthaboutcars.com/2015/01/official-oil-now-cheaper-whisky/#comments Mon, 05 Jan 2015 20:09:40 +0000 http://www.thetruthaboutcars.com/?p=971586 As of 3:03 P.M., a barrel of West Texas Intermediate crude oil is sitting at $49.90 USD. For $42.48, you can get a fifth of Wiser’s Legacy Canadian Whisky – decent stuff, but nothing fancy. If you’ll excuse me, I’m off to buy myself a Hellcat.

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As of 3:03 P.M., a barrel of West Texas Intermediate crude oil is sitting at $49.90 USD. For $42.48, you can get a fifth of Wiser’s Legacy Canadian Whisky – decent stuff, but nothing fancy. If you’ll excuse me, I’m off to buy myself a Hellcat.

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Piston Slap: Improper Engine Warm Up Procedure? http://www.thetruthaboutcars.com/2015/01/piston-slap-improper-engine-warm-procedure/ http://www.thetruthaboutcars.com/2015/01/piston-slap-improper-engine-warm-procedure/#comments Mon, 05 Jan 2015 13:40:20 +0000 http://www.thetruthaboutcars.com/?p=970561   TTAC Commentator Arthur Dailey writes: Sajeev, Thanks very much for posting my question. Your answer and the comments from others were most informative. How about another? We now have only 2 licensed drivers in our home. We do however have 3 licensed cars in the driveway. Please do not ask about the project car […]

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(photo courtesy: chuckmanchicagonostalgia.wordpress.com)

TTAC Commentator Arthur Dailey writes:

Sajeev,

Thanks very much for posting my question. Your answer and the comments from others were most informative. How about another?

We now have only 2 licensed drivers in our home. We do however have 3 licensed cars in the driveway. Please do not ask about the project car in the garage. 2 of the cars are our ‘daily’ drives, the 3rd is used primarily on weekends. We live less than 3 minutes from a 400 series highway in Ontario. That means that the cars can be required to reach highway speed before they are ‘warmed up’.

My normal practice last winter was to get up, start all the cars, turn off all possible drains on the batteries. Then take the dog to the park across the street, stretch our legs and let him do his business. After about 10 minutes we return. I then turn on the heater/defrost on the 2 cars that we will be driving and scrape/brush them. When this is completed, I turn all 3 cars off and go back into the house to get myself ready for work. You may all remember what last winter was like and the upcoming winter is supposed to be similar.

Now I understand that idling is environmentally irresponsible. And possibly against by-laws in some areas. That however is a discussion for another forum.

My questions are:

  1. Is this OK for the cars?
  2. Am I better off warming up/idling our weekend car like this or leaving it all week and hoping that it is OK to start on the weekend.

Please do not suggest:

  1. A trickle charger
  2. Engine block heaters

I would love to have those as options, however none of the cars have block heaters installed and there are no electrical outlets available for either of the above suggestions (thanks to the project car).

Thanks,
Arthur Dailey

Sajeev answers:

Okay!  I will not mention your Project Car, nor your need for conventional starting aids in cold conditions. Even if your engine warm up procedure absolutely demands otherwise!

In general, start-up a cold motor and drive it ASAP in a modest, moderate manner.  What does that mean?

Perhaps that means not accelerating past the motor’s torque peak, unless necessary for merging onto a freeway. If you own a torque-less, rev-intensive motor à la Scion FR-S, the torque peak notion is invalid. No matter, avoid heavy throttle application until oil temperature is up to normal: think about your unique engine type/driving condition and apply common sense.

Thanks to advancements in fluid technology and the widespread use of synthetic-blended oil, it’s gotta be disturbingly cold (handy chart here) to do otherwise. On to your questions:

1. Why are you turning off the cars after warming them up? No! Do your stuff while they idle/thaw (when needed) and then drive!  You are only hurting them more by letting the fluids cool down again. Change your morning routine ASAP.

2. There is no reason to start-up your weekend car just to charge the battery.  If the weekend car is impossible to start after 5 days, get a battery blanket (Oops! No power right?) and disconnect the negative cable to minimize drain.  Or just give up and yank the battery, leaving it somewhere isolated from the ground, like a wood table.  More work, but if you can physically handle that heavy of a load, the exercise won’t kill ya.

No matter what, you gotta change your warm up procedure.

Bonus!  A Piston Slap Nugget of Wisdom:

Remember that oil temp isn’t measured on the (coolant) temperature needle on your dashboard. Oil takes longer to warm up, so if you aren’t fortunate enough to have a sub-menu showing oil temp, or you don’t have an app for that, wait a little while after the temp needle is happy. That makes the oil happy too.

 

Send your queries to sajeev@thetruthaboutcars.com. Spare no details and ask for a speedy resolution if you’re in a hurry…but be realistic, and use your make/model specific forums instead of TTAC for more timely advice.

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Ur-Turn: The Truth About Oil http://www.thetruthaboutcars.com/2014/12/ur-turn-truth-oil/ http://www.thetruthaboutcars.com/2014/12/ur-turn-truth-oil/#comments Mon, 01 Dec 2014 16:00:08 +0000 http://www.thetruthaboutcars.com/?p=954385 TTAC reader (and Pontiac G8/Holden conversion owner) David Obelcz gives us his thoughts on the current situation in the world of crude oil – and how that will affect car enthusiasts. Over the Thanksgiving holiday in the United States, Saudi Arabia blocked a proposed production cut by OPEC, sending oil prices plummeting around the world. […]

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TTAC reader (and Pontiac G8/Holden conversion owner) David Obelcz gives us his thoughts on the current situation in the world of crude oil – and how that will affect car enthusiasts.

Over the Thanksgiving holiday in the United States, Saudi Arabia blocked a proposed production cut by OPEC, sending oil prices plummeting around the world. As I write this the price of oil and gasoline futures are in collapse. West Texas Intermediate (WTI) futures are down over 10% to $66.15 a barrel on the near-month (January 2015) contract, Brent is at $70.15, and gasoline futures are down to $1.90.

To put this in some perspective, on January 3, 1986 a barrel of WTI was $26.00 – that would be $56.33 a barrel today, adjusting for inflation (remember this number, it will be important later). This was at the start of the 1986 oil crash, where the price for WTI would bottom out at $10.83 on July 23, 1986. Today as the Great Recession fades behind us, you can drive through the fringes of Phoenix, Las Vegas, or along the Treasure Coast of Florida and find grass growing through the cracks of subdivision roads for homes never built. In 1996 you could do the same in Houston, with blighted neighborhoods spotted with abandoned homes falling into ruin. The Gulf Coast economies were devastated, and it took Houston and the surrounding area more than a decade to recover financially. When prices crashed again in 1998, the Gulf Coast had a much more diversified economic base, so the blow wasn’t as hard.

As United States oil production skyrocketed post World War II, along with consumption, the easily tapped reserves coupled with swelling imports from the Middle East fueled the greatest economy in the world. In that era the big threat was all things Communism and nuclear annihilation. If we kept the Middle East countries rolling in cash for their oil, the United States could keep Soviet influence to a minimum. We drove GTOs, General Motors feared being declared a monopoly, men walked on the moon, and we watched the Indy 500 on our color TVs.

United States oil production peaked in 1970. Three years later in response to the Yom Kippur War, OPEC, along with Egypt, Syria, and Tunisia, declared an oil embargo that lasted from October of 1973 to March of 1974. The embargo caused the price of oil to quadruple, collapsed the United States stock market, plunged the country into its third worst recession in history, and planted the seeds that grew into today’s modern post-Soviet oil industry. In addition we got malaise era cars, an under 200 HP Corvette, the rise of the Japanese automakers, the 1979 Chrysler bailout, and Ford almost going bankrupt.

The 1979 energy crisis had an even bigger impact on today’s energy landscape. Although global oil production dropped just four-percent with the collapse of Mohammad Reza Pahlavi’s Iranian government, wide spread panic happened. In addition, President Jimmy Carter started the deregulation of oil prices in April of 1979. A year later the price of oil had almost tripled to $39.50 a barrel – that would be $114 today. History shows that the 1979 energy crisis was more manufactured, than the result of a true crisis in supply. With the damage done, there was another major recession.

The price of oil then started a near 20 year decline with peaks and valleys, including the 1986 oil shock valley, several peaks during the Iran/Iraq war when tankers were treated as military targets, followed by another oil price crash in 1998, then another price spike during the first Gulf War, and the latest price spike that happened before the Great Recession.

But something changed in 2005, United States total energy consumption peaked. A weak US dollar created a new normal in the price of a barrel of oil, and over the next decade Americans got use to the price at the pump.

In the 2007 State of the Union Address, President George W. Bush made what is called the “Twenty in Ten Challenge,” to reduce United States gasoline consumption 20% in 10 years. The same year the Energy Independence and Security Act was passed. Five years later US energy use had plummeted from 25% of global consumption, to 20%.

Just seven years after George W. Bush issued the challenge in his State of the Union address, total US energy consumption has dropped 20%, US oil consumption has dropped 14%. Even with expanding job growth, growing GDP, and growing exports – it wasn’t all about the Great Recession. The gasoline consumption picture isn’t quite as rosy, but it is down 6% from 2007 to 2013.

These improvements in the United States are largely due to dramatically improving fleet fuel economy in light vehicles, heavy trucking, and aircraft. Secondarily, energy consumption is down due to big improvements in appliance efficiency. Air conditioning remains the number one consumption device for electricity in American homes – cable TV set top boxes are now number two.

The point of this long background is that in 2015 the rules of how the price of a barrel of oil impacts the United States economy has changed. In 2014 total OPEC imports are projected to be at 1985 levels, and less than 40% of total US imports. In October of 2013, the United States reached a major tipping point, producing more oil than it imports. Refined petroleum products has been the largest US net export in terms of dollars, since 2011. When I consulted for Conoco in the 90s there was a lot of talk about shale oil reserves, but how it was not cost effective to tap them. Fracking has changed that, and the United States is currently in an unprecedented oil boom. In North Dakota if you have a pulse, you can work 80 to 100 hours a week, make $17 an hour at Walmart, and yet, there still remains a serious labor shortage.

China is now the largest car economy in the world, and we are seeing the impact from this in the United States. From tax friendly (in China) engines under 1.5 liters in American cars and CUVs, to interior and exterior design and features made for Chinese consumers carried over into other markets. Our declining dependency on foreign oil, and our concurrent shrinking consumption is a blessing, and a curse.

At $70 a barrel, fracking operations profitability start to become problematic. We know from over 70 years of history, that if pricing reaches a point where a certain production source becomes too costly, these sources are turned off, supply tightens, price increases, profitable sources are turned back on. We’ve seen this cycle of boom and bust multiple times since 1972. For a lot of complex reasons, the price of oil does not follow a rational price curve during these peaks and valleys, and both are dangerous to the economy. In the Gulf of Mexico, oil producers are already stacking offshore rigs, because the cost of production at some deep water sites is too prohibitive at current market prices.

At $70 a barrel, most OPEC nations can’t fund their governmental operations effectively. When this happens, OPEC has historically dialed production back, raising prices, but that didn’t happen. Only Kuwait and Qatar are in the black. But what is of bigger concern is at $70 a barrel, crude from the Canadian Oil Sands is unprofitable along with United States ethanol, found in 10% quantities at a gas station near you.

There are those who will say that the market is being manipulated to put the squeeze on Russia, Iran and ISIS (or ISIL or IS if you prefer). However Russian oil operations are still profitable at $50 a barrel, and Iran’s oil operations are unprofitable at almost any oil price point that the global economy can sustain, and remain healthy (Iranian crude is very heavy, very sour, hard to refine, and not preferred by buyers).

The Russian economy is definitely being squeezed by the plunging global oil prices, with the Russian economy generating 60% of its revenue from energy sales, 50% of that from oil exports, there is little motivation for Russian leadership to cause too many problems in Ukraine, or declare a Western Europe embargo. For now, the fear of the full Stalin treatment has kept the Russian elite quiet in their public criticism of Putin’s actions, but sanctions are taking their toll.

Saudi Arabia tipped their economic hand yesterday. They’ve declared a war on the price of oil and are willing to put their $576 billion in cash reserves on the table to slow down North American oil production. Economists predict that Saudi Arabia can fight a two year financial war of attrition in an attempt to slow down advancing United States, Canadian, and Mexican production.

You must always remember, oil is a global commodity. American buyers (meaning you and me) are cheap and we actually enjoy lower prices than most of the globe (if you eliminate third world Hell holes and banana republics). But oil and gas companies are not charities, they answer to shareholders. Fracking operations can be profitable down to as low as $45 a barrel, for existing wells. There is the technicality – existing wells. At $70 a barrel it is questionable that new wells will be profitable, and fracking wells have a short production life. If the producers become convinced that this isn’t a seasonable valley, decisions will be made based upon the quarterly balance sheet, and new wells won’t be created. With Saudi Arabia declaring financial war, don’t be surprised if you see new fracking operations slow down.

Supply will tighten, jobs growth in North Dakota, which is unsustainable, will level off, and eventually the price will start to climb back. Employment in the Oil and Gas Sector has grown 40% nationally since 2007, representing the lion share of all private sector job growth in the United States economy since the Great Recession.

There is the double edged sword. If the price of oil drops to under $60 a barrel, and US production is curtailed, the typical improvement in the US economy from each American getting a boost in disposable income, could be blunted with the loss of jobs in our booming energy sector. Think 1986.

For now, China is quite content growling at its neighbors over oil rights in the South China Sea, and letting western interests secure their oil contracts in the Middle East. They will also happily slurp up every drop the United States chooses not to use either through fuel economy improvements, or economic decline.

A serious oil bump is coming (I won’t say crash – yet , but bump) – and that’s problematic for the United States in particular. The economies of North Dakota and Wyoming have “bubble economy,” written all over them, and the benefits of the booming US oil industry have rippled through all sectors of the US economy.

Keystone XL has taken on an additional sense of urgency for Canada, because Keystone XL is not about reducing American oil imports from the Middle East and Venezuela by 40% (Middle East imports are already in freefall and Chavez is dead) or creating  American jobs. It’s about Canada getting its relatively expensive tar sand oil to markets willing to pay the price in Asia and South America. If American purchases of their more expensive oil declines in favor of cheap OPEC crude, the Canadian economy and the companies surrounding the industry will get hurt. That is what Saudi Arabia is banking on. If Saudi Arabia can hurt the economy of Iran in the process, and slow down the growth of religious extremism outside their borders, even better.

The real reality is this. The price of gasoline at American pumps will never return to late 1990s levels. It is an economic impossibility because the overall cost structure for production won’t support those price points anymore. In inflation adjusted dollars, another 18% drop in WTI futures prices will put us square into 1986 oil crash price points. Economics 101 and the laws of supply and demand always take control.

Enjoy the cheap gas for now, eventually it will go back up and when it does, it will go up fast and hard under the wails of peak oil, drill baby drill, and those pesky Chinese are using up the supply. Oh, it will likely put the globe back into another recession.

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Piston Slap: Less Slap, More (oil) Control http://www.thetruthaboutcars.com/2014/08/piston-slap-less-slap-oil-control/ http://www.thetruthaboutcars.com/2014/08/piston-slap-less-slap-oil-control/#comments Tue, 26 Aug 2014 12:57:41 +0000 http://www.thetruthaboutcars.com/?p=898410 Pete writes: Hey Sajeev, I got one for you. Several engines nowadays are set up to operate on half their cylinders under light-load conditions. Would the design considerations for piston rings vary from those normally used for such cylinders that are only used part-time? The question arises in the context of a 2009 V6 Accord […]

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(photo courtesy: autozone.com)

(photo courtesy: autozone.com)

Pete writes:

Hey Sajeev, I got one for you.

Several engines nowadays are set up to operate on half their cylinders under light-load conditions. Would the design considerations for piston rings vary from those normally used for such cylinders that are only used part-time? The question arises in the context of a 2009 V6 Accord that is currently in the Honda dealer’s shop to have the piston rings replaced at the manufacturer’s expense to cure a continual oil consumption and spark plug fouling problem.

Sajeev answers:

We learned from a previous Piston Slap that General Motors answered your query:  the displacement-on-demand (DoD) 5.3L truck motor (and its sister, LS4-FTW?) needs new and redesigned piston rings to cut oil consumption in the four deactivated cylinders. The motors still (supposedly) performs as intended with strong compression from the compression rings, oil burning is only a shameful side effect. Not to make a molehill out of a mountain, but that’s it.

Or perhaps turn off DoD with a computer re-flash, since there’s no free lunch in this business: if you want fuel economy, buy a lighter, trimmer and smaller engined vehicle. But I digress…

Honda, operating under the same Laws of Physics (Thermodynamics?) has the same DoD problem. In theory, the design of the “oil control” piston rings is crucial: more info is in this insanely detailed article. Definitely great bedtime reading for the Pistonhead.

Honda’s Class Action lawsuit doesn’t seem to hurt Odyssey or Accord resale values, so dump it if you wish. Or regularly check your oil level and spark plug condition, doing so lets affected V6 Honda products live a long and happy-ish life. Heck, this much oil consumption (1-3 quarts per high mileage oil change) was once the norm (during old school 3000 mi intervals) and that’s without DoD’s inherent fuel savings.

But that fact remains: save fuel or save oil? Pick one, son.

 

Send your queries to sajeev@thetruthaboutcars.com. Spare no details and ask for a speedy resolution if you’re in a hurry…but be realistic, and use your make/model specific forums instead of TTAC for more timely advice.

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Keystone Vote Looms Amid Iraq Implosion http://www.thetruthaboutcars.com/2014/06/keystone-vote-looms-amid-iraq-implosion/ http://www.thetruthaboutcars.com/2014/06/keystone-vote-looms-amid-iraq-implosion/#comments Mon, 16 Jun 2014 13:22:40 +0000 http://www.thetruthaboutcars.com/?p=844745 Global oil prices are on the rise as the crisis in Iraq contributes to market instability. Large chunks of Iraq’s oil production infrastructure have fallen under militant control, leading to a sharp drop in output. Meanwhile, Canadian officials are upset with the Obama administration’s handling of the Keystone pipeline. They contend that the inaction on […]

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Global oil prices are on the rise as the crisis in Iraq contributes to market instability. Large chunks of Iraq’s oil production infrastructure have fallen under militant control, leading to a sharp drop in output. Meanwhile, Canadian officials are upset with the Obama administration’s handling of the Keystone pipeline. They contend that the inaction on Keystone is keeping millions of barrels of Alberta crude from reaching more profitable markets.

Bloomberg reports that market analysts are divided on how much the Iraq crisis will influence crude prices in the future. This isn’t particularly surprising, given the number of variables in that still-developing situation. However, all observers expect that the price will only go up. The price of Brent crude on the London exchange has already crested $113 a barrel as of June 13; this is the highest level since last September. In the United States, West Texas crude is near $107, also the highest price since the previous September. Most forecasters expect oil to reach around $120 a barrel by the fourth quarter, when rising demand will also drive up prices. Longtime oilman T. Boone Pickens told CNBC that a complete shutdown of Iraqi production could drive oil into the $150-200 range by destabilizing world markets.

Part of the problem is attributable to the OPEC oil cartel’s difficulties in increasing supply. Since the Libyan revolution, oil production in that key OPEC member has declined precipitously to barely 10% of previous output. Meanwhile, fluctuating production in Nigeria and other OPEC members has introduced more volatility into the supply and demand curve. A report issued by the International Energy Agency last week states that Iraq could provide up to 45% of all growth in global oil output through 2020. As militants from the hyper-violent Islamic State in Syria and Iraq (ISIS) group overrun ever-larger swaths of the country and curb down production, that future is looking cloudy.

The latest Iraq crisis comes just as negotiations surrounding the embattled Keystone XL pipeline are finally coming to a head. The U.S. Senate Energy and Natural Resources Committee will likely vote this week to approve the pipeline. The bill under consideration is an attempt to sidestep the regulatory approval process, which critics say the Obama Administration has intentionally drawn out. The bill is unlikely to make it far in the Senate, due to general gridlock as well as the opposition of several key Senators.

The government of Canadian Prime Minister Stephen Harper is displeased with the Obama administration’s perceived stalling on the pipeline. Finance Minister Joe Oliver and Natural Resources Minister Greg Rickford have both criticized Obama, stating that continued delay of the pipeline is hurting the Canadian economy. Currently, crude from the Alberta oil sands is undervalued due to a transportation bottleneck, leading to lower prices. The Canadian Chamber of Congress estimates that this bottleneck is costing the Canadian economy as much as $50 million a day in lost revenue. Therein lies the contradiction at the heart of the dispute.

Environmental concerns and global warming have long been cited as the Obama administration’s reasons for drawing out the Keystone approval process. In reality, the economics of the pipeline are heavily skewed in Canada’s favor, to the possible detriment U.S. consumers. Keystone is the most visible manifestation of the long-term goal of Canadian energy companies to find markets outside the U.S. As the Wall Street Journal explains, and the Canadian Chamber of Commerce and Harper government freely admit, Keystone’s biggest benefit will be to Canadian oil producers, not American consumers. Keystone will enable them to export oil outside of the low-priced American market to higher-priced markets in Asia, Europe, and the developing world. Keeping Canadian crude from hitting world markets is in the best interests of the U.S., but not the Canadians. Of course, it’s not exactly kosher to say that out loud, considering that the United States is still getting about half its oil imports from Canada.

Given that, the “solution” to the Canadian oil price problem is probably going to be built entirely on Canadian soil. Oil companies are already developing a “Plan B” system of trans-Canada pipelines, should Keystone not be approved. Even so, the long-term viability of the Alberta oil sands depends on a relatively high minimum price floor. The highly adulterated quality of that oil, and the resulting expense of processing and refining it, means that Albertan production can only be profitable when the price of oil is relatively high.  This reason combined with new technology is the explanation for why Canadian tar sands haven’t been highly productive until recently. A worldwide decline in the price of oil, such as what happened in the 1980s and 1990s, could still be devastating to tar sands production.

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Chrysler Vans Sitting Idle As Oil Boom Robs Rail Capacity http://www.thetruthaboutcars.com/2014/04/chrysler-vans-sitting-idle-as-oil-boom-robs-rail-capacity/ http://www.thetruthaboutcars.com/2014/04/chrysler-vans-sitting-idle-as-oil-boom-robs-rail-capacity/#comments Thu, 24 Apr 2014 19:17:34 +0000 http://www.thetruthaboutcars.com/?p=809450 Several hundred Chrysler minivans are stuck indefinitely on a piece of prime Detroit real estate, unable to be transported across America. The reason? The fossil fuel boom in Canada and the United States is hogging much of the available rail capacity needed to transport the vans. Citing a report by the Associated Press, the Windsor […]

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Several hundred Chrysler minivans are stuck indefinitely on a piece of prime Detroit real estate, unable to be transported across America. The reason? The fossil fuel boom in Canada and the United States is hogging much of the available rail capacity needed to transport the vans.

Citing a report by the Associated Press, the Windsor Star reports that railway capacity – which is normally transport new vehicles – is being eaten up by deliveries of oil from both the Alberta Oil Sands and the Bakken shale formation in the United States. According to the AP, just 9,500 railway carloads of crude were being transported in 2008, but that number exploded to 434,032 in 2013. In addition, ethanol shipments have exploded nearly fivefold since 2005, with up to 325,000 carloads being shipped last year.

One of the biggest players in energy shipments is CP Rail, a Canadian railway company that is also the major player in the Windsor, Ontario region, where Chrysler’s minivan plant is located. Aside from capacity issues, a CP spokesman told the Star that the extreme weather has created supply chain issues that still linger at CP’s Chicago hub.

A Chrysler spokesman told the Star

“We have experienced delays of delivery of our finished vehicles due to rail car shortages…We are using alternative modes of transport and alternative routes where possible to move around the biggest problem areas.”

Inventories of the two vans have fallen sharply in the last month. As of April 1st, Chrysler had 50 days worth of Town & Country vans, and 37 days worth of Caravans, down from 75 days and 50 days respectively on March 1st.

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Piston Slap: Inject Fuel Directly into…Oil? http://www.thetruthaboutcars.com/2013/07/piston-slap-inject-fuel-directly-into-oil/ http://www.thetruthaboutcars.com/2013/07/piston-slap-inject-fuel-directly-into-oil/#comments Mon, 29 Jul 2013 12:49:21 +0000 http://www.thetruthaboutcars.com/?p=497213 Evan writes: Sajeev, I have a piston slap question for a friend at work. She drives an ’11 Mazda CX-7 2.3. For over a year she has had an issue with fuel in the oil. Enough that the oil level has been as much as 1″ above the full mark on the dipstick as a […]

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Evan writes:

Sajeev,

I have a piston slap question for a friend at work. She drives an ’11 Mazda CX-7 2.3. For over a year she has had an issue with fuel in the oil. Enough that the oil level has been as much as 1″ above the full mark on the dipstick as a result (oil level was checked after service, and frequently between services). This is noticed within weeks of service/oil change.

The issue seems to be worse with more short trips, and the car has been serviced as recommended by Mazda (or more frequent oil changes when warranty fixes attempted). The dealer has had the car repeatedly over the last year, and now continuously for over 2 months. They have replaced the HPFP 6 times as well as replacing the injectors twice. Leakdown and compression tests show no issues. Canada has no lemon law (just horrible binding arbitration), or the car would probably be a buyback by now.

The dealer has spent over 13k in repairs trying to fix it. They are at a loss, and Mazda forums haven’t helped, so I come to you and the B&B hat in hand. Also, even if they can fix it how much damage will so much fuel dilution cause? Should they demand and reasonably expect some sort of engine warranty extension?

Sajeev answers:

I am totally bummed to hear about your lack of Lemon Law-ing ability in this case.  O, Canada! 

I would seek more information on arbitration and contact Mazda Canada formally (AND via Social Media) to see if they’ll do anything. Sell this Mazda after the (possible extended engine) warranty expires…unless you’re thinking what I am thinking.  Ya know, an LS4 swap.

Mmm, LS4-FTW…that would be so awesome.

(cue harp strings, dream sequence) 

ls4shirtfinal

OH YEAH!  Front wheel drive…with BALLS!  Zoom-ZOOM-Zoom!

Ahem, now where were we?

Finding conclusive information on why fuel-oil dilution exists is tough via Google, but this SAE paper might contain the truth. Too bad I’m too cheap to buy it, too lazy to read and summarize for everyone’s benefit. Maybe some engineers with active SAE memberships can chime in here?

What say you, Best and Brightest?  Time to get a lawyer?

 

Send your queries to sajeev@thetruthaboutcars.com. Spare no details and ask for a speedy resolution if you’re in a hurry…but be realistic, and use your make/model specific forums instead of TTAC for more timely advice.

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Piston Slap: A Fear of Falling? http://www.thetruthaboutcars.com/2013/04/piston-slap-a-fear-of-falling/ http://www.thetruthaboutcars.com/2013/04/piston-slap-a-fear-of-falling/#comments Mon, 22 Apr 2013 11:00:20 +0000 http://www.thetruthaboutcars.com/?p=485794 Michael writes: I am a longtime TTAC reader, but do not comment very often. However, I have a question that perhaps you and the B&B can help me with. I am the owner of a 2011 Kia Soul +, 14,XXX miles. Been a great vehicle so far. My issue is that my workplace happens to […]

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Michael writes:

I am a longtime TTAC reader, but do not comment very often. However, I have a question that perhaps you and the B&B can help me with. I am the owner of a 2011 Kia Soul +, 14,XXX miles. Been a great vehicle so far.

My issue is that my workplace happens to be located DIRECTLY off of a major street/highway. This means that from the time I put the car in gear and pull out of the parking lot, I need to be up to 60mph within about 10 seconds or get run over. No side streets to take and no time to gently warm up the car under load.

Even in the oppressive Houston heat, the car would take several minutes to warm up by idling in the parking lot. I have not been doing this, but if I need to, so be it.

So, am I killing my engine by getting it up to such speed on a cold engine? The car does warm up within a couple minutes once on the street, but I do not want to do any damage in the meantime. What says you??

Michael

Sajeev answers:

A good rule of thumb in Houston: one of the worst things you can do is idle a cold motor instead of driving it, putting a load on it. Not necessarily true in places where engine block heaters are necessary, but definitely true here.

So, relatively speaking…

Unless you’re full throttle, wringing it out to redline, etc. you’re warming up the motor well enough.  I was in your place when I wrote about the Dodge Attitude for a surprisingly cold December in Houston. My new job was in an office building on US 59, plenty of throttle was needed when leaving. Mostly because it was a somewhat high speed, limited visibility merge to the feeder road.  I cringed when I wound out my (low-ish revving) Lincoln Mark VIII to 3500-4000rpm sometimes, but it really didn’t matter.

Even if I stuck around there, I am sure my 175,000 mile Lincoln would still be just as happy as it is today.  Too bad I wasn’t happy and the Cutting Crew CD in my stereo was not only broadening my musical horizons, it possessed a song that encapsulated my fears: mostly about the job, but kinda about that freeway merging from the parking lot, too!

Click here to view the embedded video.

What you are experiencing is a Fear of Falling, but I digress…on a KIA Soul, two bits of advice:

1. Use synthetic oil, a full synthetic.  You should have no problems switching at this mileage, so just do it.

2. WHEN POSSIBLE: accelerate onto the feeder with enough throttle to say near your torque peak, which is 4,200 RPM.  If you can remain in that area for the majority of your runs back home, you’ll never have a problem at all.

Do those two things (the second one as much as safely possible) and you’ll be just fine. Go ahead, jump.  No fear here.

Send your queries to sajeev@thetruthaboutcars.com. Spare no details and ask for a speedy resolution if you’re in a hurry…but be realistic, and use your make/model specific forums instead of TTAC for more timely advice.

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Peak Oil, Meet Plateauing Demand http://www.thetruthaboutcars.com/2012/10/peak-oil-meet-plateauing-demand/ http://www.thetruthaboutcars.com/2012/10/peak-oil-meet-plateauing-demand/#comments Mon, 08 Oct 2012 15:17:22 +0000 http://www.thetruthaboutcars.com/?p=462998 TTAC is no stranger to the topic of Peak Oil, but the theory has fallen by the wayside with the recent explosion in unconventional oil and gas. A study by the British think tank Chatham House argues that the biggest issue facing oil and gas producers in the coming century isn’t Peak Oil, but Peak […]

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TTAC is no stranger to the topic of Peak Oil, but the theory has fallen by the wayside with the recent explosion in unconventional oil and gas. A study by the British think tank Chatham House argues that the biggest issue facing oil and gas producers in the coming century isn’t Peak Oil, but Peak Demand (summary here).

The crux of Chatham House’s argument rests on the reformation of the transportation industry – a desire for fuel-efficient automobiles, the expanding use of biofuels and government regulation mandating reduced carbon emissions has all led to a slackening demand for oil.

Those factors, combined with the rise in “unconventional” supplies, like shale gas could have drastic effects on the oil and gas industry. In 2009, 95 percent of energy used in the global transportation sector came from petroleum. In 2030, Chatham House estimates this number could be as low as 60 percent. One interesting component of this actually comes from China. Chatham House argues that because their fueling infrastructure isn’t so tied into “legacy” fuels like gasoline, there is significant potential for them to be on the leading edge of alternative fuel adoption.

The report cites the increasing adoption of fuel-efficient vehicles like hybrids, Generation Y’s reluctance to drive cars and the potential for CNG powered automobiles as some of the largest drivers of peak demand phenomenon. Among the unintended consequences of reduced driving would be a significant drop off in tax revenues for municipalities that levy a gas tax. Reduced sales of fuel would naturally reduce revenues.

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Will Natural Gas Prevent Us From Reaching A Better Place? http://www.thetruthaboutcars.com/2012/03/will-natural-gas-prevent-us-from-reaching-a-better-place/ http://www.thetruthaboutcars.com/2012/03/will-natural-gas-prevent-us-from-reaching-a-better-place/#comments Thu, 08 Mar 2012 16:56:18 +0000 http://www.thetruthaboutcars.com/?p=434384 A brief piece in the Wall Street Journal’s “Dealbook” discussed the potential of natural gas powered vehicles, largely as a way to stop falling prices for natural gas. One hope for many natural gas producers reeling from collapsing prices is wider adoption of natural-gas-powered cars. The biggest hurdle so far: lack of infrastructure to refuel […]

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A brief piece in the Wall Street Journal’s “Dealbook” discussed the potential of natural gas powered vehicles, largely as a way to stop falling prices for natural gas.

One hope for many natural gas producers reeling from collapsing prices is wider adoption of natural-gas-powered cars.

The biggest hurdle so far: lack of infrastructure to refuel them.

But Steven Mueller, CEO of Southwestern Energy, says if 10% of passenger cars were powered by natural gas, gasoline prices would fall by $1.60/gallon and gas producers would get 4 billion cubic feet/day in demand.

The global supply of natural gas is way up, thanks to shale deposits in the United States and other locales. Currently, the Honda Civic GX is the best-known CNG vehicle on sale currently. Buses, taxis and other commercial vehicles have been running on CNG for years, but Dodge is set to introduce a Ram Tradesman that can run on CNG – other work trucks have been converted to run on natural gas by their owners (at significant expense), but this looks to be one of the first OEM-engineered work trucks with this capability.

An NPR report (sponsored by a natural gas lobby group) touched on President Obama’s visit to a big rig factory, some of which were powered by natural gas. Obama proposed – you guessed it – tax incentives for alternative fuel vehicles, including natural gas. Natural gas vehicles aren’t that popular around the world, but have a certain following – Brazilian Fiat Siena taxicabs, LPG powered Volvos and the famous Panther platform Crown Vics and Town Cars that serve as taxi and livery cars in Toronto all exist, albeit in very small numbers.

Natural gas could potentially be a “black swan event” for the auto industry, a cheap, clean-burning fuel that could allow for both domestic energy independence and the continued hegemony of the internal combustion engine. Drivers wouldn’t have to worry about foreign oil, range anxiety or battery bricking.

The obvious problem is the lack of infrastructure. Natural gas filling stations are scant, to put it mildly. But there are rumblings (so far unsubstantiated – but keep watching TTAC for more info) that building filling stations, be it for hydrogen or other fuels, is easier and cheaper than trying to develop serious long-range, quick charging, sustainable and affordable battery technology. If this turns out to be true, then it suggests that electric cars will be forever relegated to “second car/commuter car” status.

A final note: Israel, home of Better Place and their battery swapping stations, is said to have enormous shale oil and gas deposits (so much for the joke about the Israelites wandering for 40 years and finding no oil). Aside from the obvious geopolitical implications, what kind of future would that leave for the Better Place program?

 

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Piston Slap: Seeing the Forester for the Trees? http://www.thetruthaboutcars.com/2012/03/piston-slap/ http://www.thetruthaboutcars.com/2012/03/piston-slap/#comments Wed, 07 Mar 2012 12:48:33 +0000 http://www.thetruthaboutcars.com/?p=433620   Jim writes: Hi, I hope you are well. I have several questions regarding my 2011 Forester (5 speed): a) I drive 8 to 10K annually and change the 5w-20 every 6 months.  Is this sufficient? b) Subaru keeps sending me extended warranty offers.   This tells me that I likely don’t need it.  What […]

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Jim writes:

Hi,

I hope you are well. I have several questions regarding my 2011 Forester (5 speed):

a) I drive 8 to 10K annually and change the 5w-20 every 6 months.  Is this sufficient?

b) Subaru keeps sending me extended warranty offers.   This tells me that I likely don’t need it.  What do you think?    My favorite moment when purchasing the Forester: The F & I rep mentioning “If people want to drive around without the extended warranty, it is not my problem.”

I have been surprisingly happy with this car.  It handles well, is quick and I’ve been getting 23mpg city and 28 to 30 on the highway. I found this to be a much more enjoyable drive than a CR-V, RAV4 (not great at all) or the old Escape.

Best wishes,

Jim

Sajeev answers:

I am well, thank you so much for asking!  If my googling is correct, Subaru has a somewhat complicated service schedule for 2011 models. To wit:

  • 2011 Outback, Legacy, Tribeca, Impreza, (exc turbos): Some owner’s manuals will recommend using synthetic but not require it. Owners manuals printed around March 2011 presumably indicate all Subarus require synthetic oil.
  • All 2011 models use 5w-30 except the Forester X which uses 0w-20

Oops. This leads me to believe you are using the wrong oil (20 weight), and indirectly justy-fies (get it?) the North American Subaru Impreza Owner’s Club’s sub-forum for warranty problems. That said, I think your oil change interval is acceptable, based on your letter and my first hyperlink.  You could extend your oil change intervals to whatever the dashboard may tell you, but I don’t see the utility in it.

On to your warranty question:  most Subies fare quite well if they receive regular maintenance and are NOT owned by the stereotypical clutch-murdering, turbo-overboosting WRX owner. The mere fact that you wrote a nice letter with good detail implies you will take good care of this vehicle and will love it.  As such, no need for the warranty.

And go back and hug that F&I person for “not caring”, reminding them that this level of indifference is precisely what the automotive retailing industry needs to restore its regularly-tarnished image. Or not.

My last point: if you didn’t ask me how I was doing and wrote about owning (not leasing) damn near anything from Europe made in the last decade, well, that would be a different story.

 

Send your queries to sajeev@thetruthaboutcars.com . Spare no details and ask for a speedy resolution if you’re in a hurry.

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Gas Prices Crest Above $5/Gallon In California http://www.thetruthaboutcars.com/2012/02/gas-prices-crest-above-5gallon-in-california/ http://www.thetruthaboutcars.com/2012/02/gas-prices-crest-above-5gallon-in-california/#comments Thu, 23 Feb 2012 20:10:52 +0000 http://www.thetruthaboutcars.com/?p=432480 And this is only the start… Photo courtesy Paul Kedrosky

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And this is only the start…

Photo courtesy Paul Kedrosky

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Anwyl: Should We Be Preparing For The Next Gas Price… Collapse? http://www.thetruthaboutcars.com/2011/11/anwyl-should-we-be-preparing-for-the-next-gas-price-collapse/ http://www.thetruthaboutcars.com/2011/11/anwyl-should-we-be-preparing-for-the-next-gas-price-collapse/#comments Tue, 15 Nov 2011 18:47:59 +0000 http://www.thetruthaboutcars.com/?p=418312   The big news around here yesterday came from Bertel’s interview with Toyota’s Chief Engineer, in which it became clear that Toyota takes the developing world’s growing demand for oil very seriously. With global demand already outstripping supply, the giant automaker’s embrace of a petroleum-constrained business model seems to make it clear that gas prices […]

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The big news around here yesterday came from Bertel’s interview with Toyota’s Chief Engineer, in which it became clear that Toyota takes the developing world’s growing demand for oil very seriously. With global demand already outstripping supply, the giant automaker’s embrace of a petroleum-constrained business model seems to make it clear that gas prices will play a significant role in the future. But markets are, by their natures, both difficult to predict, and shaped by predictions. And Edmunds CEO Jeremy Anwyl reckons that, although gas prices are high and could well go up in the short term, fears of a runaway gap between supply and demand may not materialize over the longer term. He writes:

Here’s the twist: As I said, the consensus belief (or story) on future oil prices is that they will be higher. And short term, this may be the case if and/or when the global economy recovers and/or demand grows in emerging markets.

But there is a longer-term story as well. This story suggests that peak oil may be nigh and the future holds shortages and sharply higher prices. Buying into this story, companies, acting individually, will see profit in expanding exploration, developing sophisticated new extraction technologies, etc.

The aggregate result of all these individual activities is that the future supply of oil will improve and prices will actually drop.

In fact, we have seen this paradox play out before. Through the Seventies, we were first shocked by rapid price increases and then conditioned to believe they would continue. And, of course, oil prices collapsed in the Eighties.

Anwyl butresses his argument by pointing to an NYT story on exploration of promising new reserves of hydrocarbons, arguing that new finds could stave off the kind of undersupply that has Toyota and others so worried.

From the high Arctic waters north of Norway to a shale field in Argentine Patagonia, from the oil sands of western Canada to deepwater oil prospects off the shores of Angola, giant new oil and gas fields are being mined, steamed and drilled with new technologies. Some of the reserves have been known to exist for decades but were inaccessible either economically or technologically.

Put together, these fuels should bring hundreds of billions of barrels of recoverable reserves to market in coming decades and shift geopolitical and economic calculations around the world. The new drilling boom is expected to diversify global sources away from the Middle East, just as the growth in consumption of fuels shifts from the United States and Europe to China, India and the rest of the developing world.

“Use whatever hackneyed phrase you want, like tectonic shift or game-changer,” said Edward L. Morse, global head of commodity research at Citigroup. “These sources will dramatically change the energy supply outlook, and there is little debate about that.”

The major complaint with these new “unconventional” hydrocarbon sources is that they are more carbon intensive than oil, an argument that some will find more convincing or troubling than others. But the reliance on this critique shows that unconventional hydrocarbon sources hold the potential to undermine the major impetus for the “new peak oil,” which is based solely on the economics of growing emerging-market demand outstripping global capacity increases. If these hydrocarbons prove economically viable at a price point that holds off a challenge from battery technology, we could well see the industry slow-rolling parts of its high-efficiency toolbox. After all, the last few years have proven that American consumers respond to sharp upward changes in oil prices more than the actual price. If these new reserves can keep oil closer to $100/barrel than $200/barrel, we’ll see the market evolve slowly, with efficiency improvements driven more by CAFE regulation than market demand.

On the other hand, it’s not clear how much oil prices constrain development in the fastest-growing economies around the world. If gas prices soften on the strength of these new discoveries, there’s little reason to believe that these young but strong economies won’t turn up the wick on growth, eating up new gains in production. Furthermore, “game changing” automotive technology is worth developing simply because energy markets still rely on a semblance of order in chaotic parts of the world. With chaos always one suicide bomb away and global pressure on oil supply mounting, the short-term possibilities of a dramatic spike in gas prices makes rapidly-deployable, high-efficiency technology (for example, Nissan’s unmatched investment in global Leaf EV capacity, or Toyota’s ability to hybridize most of its vehicles) a worthwhile investment policy. Even if Nissan gets a few years of panic-fueled bumper EV sales before new “unconventional” reserves (generally from friendlier, more stable regions) come online, it will have made a huge leap over unprepared competitors. And after such an event, the EV market will not go away (as the hybrid market has not completely gone away since the Summer of 2008).

Of course nobody has a crystal ball, and if anyone knew for sure what was going to happen with oil prices over the short, medium and long terms, they wouldn’t tell anyone (or, more likely, they wouldn’t be believed by anyone). But there definitely seems to be more angst about energy prices among auto industry types than we’ve seen in several years. And with billion of dollars riding on every market fluctuation, that’s the only thing about this discussion that isn’t at least a little surprising.

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