The Truth About Cars » oil The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Thu, 24 Jul 2014 12:30:59 +0000 en-US hourly 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 (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 » oil Keystone Vote Looms Amid Iraq Implosion Mon, 16 Jun 2014 13:22:40 +0000 photo2-505x600

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 Thu, 24 Apr 2014 19:17:34 +0000 Back-440x350

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? Mon, 29 Jul 2013 12:49:21 +0000 lead9-2011-mazda-cx-7-review

Evan writes:


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) 


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 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? Mon, 22 Apr 2013 11:00:20 +0000

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??


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 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 Mon, 08 Oct 2012 15:17:22 +0000

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? Thu, 08 Mar 2012 16:56:18 +0000

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? Wed, 07 Mar 2012 12:48:33 +0000


Jim writes:


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,


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 . Spare no details and ask for a speedy resolution if you’re in a hurry.

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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? Tue, 15 Nov 2011 18:47:59 +0000  

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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In The Battle For The Post-Oil Auto, Big Investors Are Shooting The Moon Mon, 14 Nov 2011 23:15:07 +0000

As Bertel pointed out earlier today, peak oil is here: the graph above is not from some fly-by-night EV firm, but Toyota, an auto industry giant. What years of environmental and security arguments failed to communicate, economics is now explaining with little difficulty. Namely, that demand for oil is growing faster than supply, forcing developed economies to look beyond oil for future growth. And, as you might expect from a conservative player in a conservative industry, Toyota argues that the solution to this growing disconnect is a portfolio of drivetrain technologies. But what if, instead of trying to adapt an existing business model to the new oil reality, you built a new business model from the ground up? That’s exactly what Project Better Place is trying to do, and the contrast between its approach and that of Toyota is fascinating to anyone interested in the future of the automobile.

Toyota’s approach to a world of constrained oil supply in the incremental manner that one would expect from a giant company selling millions of cars each year. In the words of Satoshi Ogiso

To control this gap, we must go multi track. We must improve gasoline and diesel engines. We must increase the number of hybrid models. We must produce the plug-in hybrid. We must develop city commuter electric vehicles. We already started small production of fuel cell vehicles.  We must do all these improvements at the same time.

That approach seeks to serve the entire global marketplace for cars, and places a huge demand on R&D efforts, requiring a company of Toyota’s size to execute the strategy. Better Place’s approach on the other hand couldn’t be more different. Rather than taking a multi-technology approach, BP is focused on one technology: EVs. And rather than building cars itself, BP is focused on providing the services, infrastructure and grid management tools to make EVs viable for more than “city commuter vehicles.” In short, whereas Toyota seeks to evolve, BP is attempting to create the circumstances under which EVs are the natural choice of technology for all automakers.

These vastly different approaches to the same problem have, at their cores, a conflict over philosophy. Toyota, along with the rest of the car industry, is trying to maintain the market for cars as best it can, while slowly introducing new technologies at higher prices which will then trickle down throughout the lineup. As conditions evolve, the market will demand different technologies from Toyota’s toolbox in different amounts. On the other hand, markets are notoriously bad at foreseeing and managing energy price spikes, as witnessed by the crazy segment fluctuations during and after the Summer of 2008. In contrast, rather than promising a steady evolution towards oil independence, BP offers the opportunity for a quantum leap. Its basic mechanism is the government, rather than markets, which can better prepare a nation for the future rather than relying on often-painful,inefficient market mechanisms. And with demand unlikely to drop below supply any time soon, Better Place is the only option for governments with enough political consensus to preemptively force themselves through petroleum-based transport withdrawals.

But just because Better Place is more fundamentally dependent on government assistance than its alternatives in the auto business does not mean it’s another Solyndra. In fact, Better Place has raised some $750m in equity financing, including a $200m round that was announced at the end of last week. Its backers now include, HSBC, Vantage Point, Lazard, Morgan Stanley, UBS, GE, and Israel Corp… none of which are blue-eyed dreamers. And their fiduciary reasons for backing BP appear to be well-grounded: although the company is “pre-revenue,” its valuation (post money valuation on a fully diluted basis) is now $2.25b. That’s an 8x increase for the first round of investors, who would have been hard-pressed to find a stronger return over the 2007-2011 period. So, where does all this value come from if there are no revenues yet? According to the firm’s communications director, Joe Paluska points to

the uniqueness of our model (i.e., investor confidence that we can unlock a hyper growth category for affordable electric cars) and the major trend lines of oil forecast to go up and battery prices continuing to decline with the delta being our operating margin.

Better Place also has another secret weapon that’s sure to attract investors: its CEO, Shai Agassi. The former software maven who created Better Place after being passed over for CEO of SAP, Agassi is one of those rare people who can communicate an idea as complex as Better Place’s network of battery swap stations, its decoupling of the EV and its battery, its under-covered grid management capabilities, and the macroeconomic backdrop that he insists will make it all work. Having met a number of brilliant and intimidating luminaries of the auto industry, it’s safe to say that none of them made quite the impact on me that Agassi did when I met with him earlier this fall. Between the sheer scope of his ideas, and his flinty, intellectual-street-fighter demeanor, it’s safe to say that Agassi is the closest to a truly historical figure that I’ve met in my years covering the auto business. And with the auto industry stuck in the model of slow technological evolution exemplified by Toyota, Agassi embraces the revolutionary approach that a clean break from the past is not only possible, but necessary.

When I ask Agassi if he wanted to “destroy the auto industry,” a charge often leveled against him by industry executives, he smiles and answers with another question:

Did Jeff Bezos want to destroy the publishing industry? Because that’s what he did. But he did it because he saw the potential for an entirely new business model with the Kindle. In effect, the world’s biggest bookseller killed off its existing business, selling paper books, in order to create an entirely new business in digital media.

No wonder then, that Better Place faces such resistance from the established forces in the auto industry, despite the market’s clear optimism for his approach. Thus far, only Renault has signed on to partner with BP; elsewhere, Agassi says the industry is deeply resistant to the idea that infrastructure can make electric cars viable for the majority of the auto market. He sketches a quick graph showing total cost of ownership over 300,000 miles: the cost of a car, gas and maintenance on one side, and the cost of a car, several batteries and electricity on the other. With battery prices near $500/kWh and headed downwards while gas heads upwards, he points to the difference and says

I don’t want to destroy the car industry, I want to destroy the oil industry. I want to share this money with the car companies. When was the last time they got a check from the oil companies?

It’s a question that’s as provocative as Better Place’s business plan, and the fact that it doesn’t convince the automakers shows how deeply conservative the industry is. But then, why get in bed with a plan that aims to kill off your entire gas-powered business when Better Place can’t even prove that there’s a market for their model?

That’s the challenge Better Place faces right now. Its first networks, in Israel and Denmark, are being built up as we speak, ahead of a slow rollout next year of the Project’s services and vehicles. And says Agassi, the first year will be slow and there will be problems. Like what kind of problems? Agassi smirks slightly and says

We’re going to find out. Imagine the first guys to install gas stations… you think they didn’t run into a few unexpected problems?

But it seems that Better Place’s problems thus far have little to do with implementation and everything to do with the fact that big ideas are scary and draw knee-jerk reactions. For example, take a recent Wall Street Journal [sub] piece which cites the concerns of one Moni Bar, chief executive of Budget Rental Cars Israel-Domicar Ltd. For example:

Mr. Bar said that he fears vehicles with switchable batteries might lose as much as 70% of their original value in four years

An interesting complaint, but one one that seems borne of paranoia rather than reality. After all, one of Better Place’s key advantages is that you don’t buy an EV battery, but just the car. The battery is owned by BP, which you then buy a mileage plan from, allowing you to swap batteries at will and insulate yourself  from the 70%-range depreciation that will afflict EVs where you do have to buy the battery. Though BP does not have a buy-back scheme to maintain resale values, it insists that the 70% depreciation number is way off. And with its new Fluence EVs selling for less than the Mazda3 (Israel’s most popular car) and offering a 20% improvement in Total Cost of Ownership (including gas and maintenance), it’s not too surprising that 400 of Israel’s largest corporate fleet owners have signed up to switch their fleets over to Better Place (the majority of new car sales in Israel are made through fleets). As Agassi puts it

We don’t have a demand issue, we have a rollout issue. The first year we are going to take care to have a carefully controlled rollout.

Getting that rollout right is the major challenge for better place, a it is not evolving an existing product to changing times, but is rather attempting to change entire parts of the world all at once. Today it’s Israel and Denmark, next it will be Australia (which Agassi describes as “two and a half Israels, linked by a freeway). Perhaps someday it will be the San Francisco Bay Area, a market Agassi also compares to Israel. Like everyone else, Better Place needs to build scale in order to bring prices down to the point where unlimited-range, limited-depreciation EVs can compete on pure economics; unlike everyone else, BP can be patient while it rolls out its first networks. After all, it doesn’t need to spend huge amounts researching multiple solutions… it just needs for gas prices to march ever upward and battery prices to keep dropping. And when the next big gas price spike arrives, you can bet that a number of governments with overnight mandates to solve, not “work towards solving” oil dependence, will be calling up Agassi. After all, if you want to “shoot the moon” in the race free private mobility from oil dependence, Better Place seems to be the only option out there.

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Will The Leaf Save Hawaii From Oil Dependency? Ho Brah … Smokin’ Da Kine? Thu, 09 Dec 2010 17:08:15 +0000

Equal time: While Prez. Obama test-sat the Volt’s European sibling, the Ampera, in Lisbon, Nissan had its own celebrity test driver for the Leaf EV. “John Roos, U.S. ambassador to Japan, test-drove Nissan’s “Leaf” electric vehicle in Yokohama one afternoon in mid-November, just before the APEC summit got under way,” reports The Nikkei [sub]. Then the Ambassador deeply inserted his foot in his mouth. He said he was particularly intrigued by the way the Leaf was able to charge its battery with solar power, a feat he saw at a “smart-city” exhibition sponsored by the Yokohama city government. Roos then asked officials running the demonstration whether the technology could help reduce oil dependence in Hawaii. Oops, wrong question.

If there is one place where an EV makes the least amount of sense in terms of reducing the use of crude, then it’s Hawaii.  According to Newsweek, the island state draws “about 90 percent of its energy from imported crude.”  Sure, they want to wean themselves from the oil habit, but there is only so much you can do with sunshine and scenic waterfalls. And range anxiety? I wouldn’t want to brave the road to Hana in a Leaf,

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Ask The Best And Brightest: Can We Talk About Dexos1 And API Testing Standards? Tue, 19 Oct 2010 12:14:09 +0000

We smell a trademark fight

This Autoweek article gave me a college flashback: when UT Austin’s Petroleum Engineers offered me a scholarship, but the Mechanical Engineers said no dice.  Mostly because high tech, high mileage oil talk is rather boring.  Much like discussing a cutting edge, long-life coolant before the Dex-Cool fiasco. So let’s open a can of worms for the Best and Brightest, and hit the high points of General Motor’s Dexos1, a somewhat revolutionary engine oil with a distinct lack of testing from the American Petroleum Institute.  As per Autoweek, matters stand like this:

The main difference between Dexos1, which is a GM-licensed brand, and GF-5 oils is testing. To be certified as GF-5, the oil needs to pass a variety of chemistry and engine tests set by the American Petroleum Institute.

But GM’s testing for Dexos1 uses some tests mandated by the ACEA, the European automobile manufacturers association, in place of the American Petroleum Institute tests. For example, Dexos1 oil has to pass Mercedes-Benz’s sludge and fuel-economy tests and Opel’s test for the ability to work under foaming conditions, known as aeration.

I wonder if Dexos1 shall pass VW and Toyota’s sludge tests. I mean, those two gotta have some standards by now. But I digress.

GF-5-certified oils that do not undergo the same tests are subjected to the American Petroleum Institute’s equivalent to be certified.

Right. So should we even care about API’s GF-5 test?  I think I know GM’s answer. And I can hear lawyers foaming at the mouth, formulating their (hyped) class-action lawsuits already. Conversely, everybody loves (GM’s awesome blend of) synchromesh much like our love of the TV show starring Ray Romano. Perhaps we won’t know the real truth without 5 years of real world testing under our collective belts.

Government regulations that call for lower exhaust emissions and higher fuel economy are the drivers behind the new generation of engine oil. GM’s powertrain fuel and lubrication engineers began working on Dexos1 in 2006. The goal was to set an oil specification that met the requirements of all GM vehicles and powertrains globally.

So why bother with regional oil certifications? As platforms consolidate globally, engineering standards should (could?) combine the extreme needs of all continents. Then again, according to my wrench-turning sources, the original Opel/Cadillac Catera’s heat-averse timing gear would beg to differ. One size fits all is a scary proposition.

Have at it, Best and Brightest. We want to hear your slickest comments.

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Yummy: Algae In Your Tank, Cooking Oil In Your Tires Sat, 22 May 2010 15:22:11 +0000

The conversion of vegetables into car fuel continues. In Japan, the Agriculture Ministry teams up with Toyota, Denso, the Chuo university in Tokyo, the Kyoto university and others with the goal of producing fuel from produce. From algae, to be exact. Are algae food? In certain parts of the world, they are. As I’m in Tokyo, dried algae are in the snack tray next to the computer, and they begin to infest the keyboard. The green stuff that wraps sushi is dried and pressed algae.

So far, edible algae are safe from ending up in your tank. The Japanese group hopes to extract oil from the usually uneaten Pseudochoricystis algae and turn it into car and jet fuel within 10 years. If successful, algae-based bio-fuel could meet 10-20 percent of Japan’s demand for refined crude, writes The Nikkei [sub]. For years, the process had been registered as a patent by Denso. The green stuff  reduces the carbon footprint in two ways. One by reducing the amount of oil. Two by munching on CO2 emissions from factories or power plants. The CO2 is introduced into water, the algae feed on it. Add some sun, and voila, gobs of algae.

Meanwhile in France, Michelin uses sunflower oil to produce their Primacy MXM4 tire, reports Tire Review. The patented “Helio Compound” incorporates sunflower oil in order to offer improved handling in both wet and snowy weather.

Using greens for cars is as old as the hemp car that was developed by Henry Ford in the 1930s. It had plastic bodywork made with hemp and used hemp oil as fuel. Would it have been successful, then “smoking the other guy” would have taken on a whole other meaning.

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Crude Oil And Lazy Workers: Details About Chavez’s Threat To Oust Toyota Fri, 25 Dec 2009 11:52:18 +0000

The Christmas season would be a reason to be merry, would it not be for Hugo Chavez. More details about his expropriation threats emerge. Turns out, Chavez did not just threaten to kick out Toyota for being lackadaisical in the production of “rustic” vehicles.

“President Hugo Chavez told foreign automakers Wednesday to share their technology with local businesses or they will be told to leave the country,” writes the Boston Globe. Chavez gave the ultimatum in wholesale fashion to Ford, General Motors, Toyota and Fiat. Implied, the ultimatum is also meant for Fiat-controlled Chrysler, for Mitsubishi, Mack and Fiat-owned Iveco. All of the above have production facilities in Venezuela. All are at risk of instant deportation.

Their options are either to “share their technology with local businesses” (a half-expropriation) or get out (a full expropriation.) Chavez usually doesn’t do nationalizations in piecemeal fashion. He tends to nationalize whole industry sectors. The metals, cement, oil, coffee and electricity sectors are all being owned by the people of Venezuela, or Hugo Chavez, depending how one looks at it.

The auto sector appears to be next in line. Chavez is no fool, and he knows that building cars is not as simple as pumping crude, or baking limestone to make cement. Without foreign technologic know-how, Venezuelan’s roads will soon resemble Cuba’s highways. Hence the offer “share, or go.” If the foreigners go, other foreigners could be invited in: Automakers from Russia, Belorussia, or especially China.

Today’s Nikkei [sub] sees even more sinister dealings afoot: Oil and China. Says the Nikkei: “The takeover threat and possibility of turning control over to the Chinese comes on the heels of two days of bilateral talks with China that ended Tuesday. The Chavez administration said in a statement after the talks that it now considers China its ‘main strategic alliance.’”

Venezuela currently sells 1 million barrels a day of Venezuelan crude to the U.S. Chavez wants to reduce this co-dependency, and focus on China instead. Venezuela currently ships 400,000 barrels a day to China. Chavez wants to raise that to a million per day, damn the distance from Puerto La Cruz to Qingdao.

Chinese cars could be a nice icing on that trade cake. According to the Nikkei, Great Wall Motors begun selling cars in Venezuela in 2006. Chery had plans to open an assembly plant in Venezuela, but nothing came of it – yet.

US and Japanese makers dominate the market in Venezuela. GM leads the market with 45,523 vehicles sold so far in 2009, Ford is second and Toyota is third. Sales are down 49 percent this year, but not because of a lack of buyers. Demand far outstrips the low supply of cars in Venezuela. A gallon of gasoline costs about $0.07 in Venezuela. The land of the “21st Century Socialism” would be a driver’s paradise, if only the roads would be paved and if only cars would be there to be bought.

Indigenous production is hampered by strict currency controls that prevent automakers from getting the dollars to import auto parts they need to meet production goals. Auto makers also have to contend with a “high level of absenteeism, disobedience, aggression and lawlessness of some of the workers,” says the Nikkei. Mitsubishi had to shut down its plant for 30 days in August, because the workers didn’t show up. In May, a Toyota union leader was shot dead. He had led a month-long strike last year that paralyzed the Toyota plant in the eastern city of Cumana. In September, murder charges were brought against a man, but the motive remains a mystery.

Says the Nikkei: “It appears many auto workers hope their company is nationalized so they can become de facto government workers and enjoy the extra job security that comes with it.”

Should it really come to the Chinese taking over Venezuela’s auto plants, then the workers may be in for a rude surprise. Chinese factory managers are not necessarily known for their subtle style when it comes to labor relations. GM, Ford, and Toyota should send their union leaders on an all expense paid study tour to the suburbs of Shanghai, or to frigid Changchun, and they’ll quickly change their minds.

The matters are being complicated by the US and Japan being major trading partners of China, and by GM and Toyota having major joint ventures in China and buying lots of parts from Chinese manufacturers. China will gladly buy Venezuela’s oil and build them some ports to go with it. But they won’t put their booming auto business at risk for some 100,000 “rustic” cars built in Venezuela.

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Piston Slap: G.E.T. Outta Here Wed, 16 Dec 2009 20:26:16 +0000 Is this even trying?

TTAC Commentator dastanley writes:

I saw an ad in a magazine for G Oil a biodegradable motor oil. Green Earth Technologies (GET) makes and sells this biodegradable motor oil from American sourced beef tallow (or so they claim). GET claims that the API has certified this oil with an “SM” rating. They also sell a full line of other automotive and lawn and garden products that they say are earth friendly.

Do you have any info on this? Is this the real thing or just beef tallow bullshit?

Sajeev answers:

Unlike some of our Best and Brightest, I am no expert on petroleum. But I’ll get the ball rolling, putting two and two together. First, GET’s oil meets or exceeds requirements of API SM, so it doesn’t completely suck. This sets the performance “floor” for an oil, a less than reassuring concept for any (non-leased) car powered by a remotely modern engine design.

More to the point, it’s a floor and not a ceiling: kinda like state-mandated standardized testing thresholds for high school students. So even if you make the grade, you’re probably not Ivy League material. For better or worse, of course.

And the OEM’s know it: Wikipedia notes that several automakers diverged from API’s low ball standards back in the early 1990s. Try VW’s high mileage service intervals on beef tallow-based oil: forget about sludging problems, the oil pan would be lined with metal shavings well before that!

Buyer beware: avoid a “green oil” until an OEM approves it for use in their cars. Not that I hate the environment, but protecting the “Federal Green” in your wallet is no laughing matter. Which is why I do what I do.

(Send your queries to

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Piston Slap: Karma, Idiot Lights and the 100k Warranty Mon, 30 Nov 2009 17:36:53 +0000

Anonymous writes:

I have a 2008 Kia Sorento with the 3.3L, about 11k miles.  The other day, I took it to my local mechanic for an oil change. Drove it all over town during the course of the following couple days.  Then, last night, as I am about 3/4 mile from home, my low oil pressure light goes on.  At that point, I roll down my window to listen to the car and can hear a grinding type noise (valves sticking?) on acceleration.  I limp the rest of the way home and turn off the engine.  This morning, I call the mechanic and they send the service manager right over.  No oil on the dipstick whatsoever.  He adds oil to the engine and drives it down the street to the shop.  They inspect, and tell me it is a bad o-ring on the cone filter that caused all the oil to leak out over the course of 2 days, and that it is possible that they had not tightened it sufficiently when the changed the oil.    They said no other damage had been done, replaced the o-ring, changed the oil and filter and sent me on my way.

So my question is this…what is the possibility that other (long term) damage could have been done?  Should I have the vehicle checked out by another mechanic, or even the Kia dealership?  Should I not even inform the dealership, as they may use it as a way to deny future warranty claims?  The vehicle is no longer making the grinding type noise, and seems to be fine.  I may drive it lightly the next few days just to be sure.

Sajeev replies:

Piston Slap’s mission is to look out for our contributor’s best interests, but Karmic forces may beg to differ this time ‘round.  Put another way: you should see no evil, hear no evil. And hope for the best.

Here’s why: running with low oil pressure is a recipe for top-end engine damage, even more so on top-heavy overhead camshaft designs.  And that’s if you’re lucky, more serious engine component failures is likely.  I suspect that at some point oil consumption, noise, or performance will be a concern. I’d start by monitoring the oil level on your dipstick on a monthly basis, and continue until you’re ready to sell the car.

Then again, you have a properly serviced machine (according to your paperwork) with a 100k warranty, right?  You can stick it to da (Kia) man when the bad news arrives, but feel guilty about it.  When an oil light comes on, a Pistonhead gets off the road and stops dead in their tracks.

There’s no limping home.  Do not pass go. Do not collect $200.

Consider yourself lucky you have a warranty and the motor isn’t damaged to the point of obvious negligence on your mechanic’s part:  that shop owes you big time, otherwise you’d be suing them while Kia washes their hands of it. Things coulda been much worse.

(Send your queries to

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