Coyote Blog

I will be on the Fox and Friends morning show tomorrow morning at about 8:50ET  (though of course these things are always subject to change right up to the last minute).  I will be talking Fisker Karma.

This will make the third time I have been on national TV — one talking about park management, one talking about the minimum wage and this one talking about MPG calculations for electric cars.  At least I am not in a rut, though I think my pundit brand identification is probably confusing.

Apparently Obama is claiming:

“[Energy] Secretary [Steven] Chu has assured me that within five years, we can have a battery developed that will make a car with the equivalent of 130 miles per gallon.’”

The irony is that if you grade the equivalent mpg of electric cars by the methodology outlined by Chu’s own energy department, the number would be about a third of that.  Only by the EPA’s flawed methodology do we get equivalent MPG’s for electric cars anywhere near 130.

I wrote about this whole sordid mess of inflated MPG numbers for electric cars here.

Vermont Tiger raises a great point about the Volt:  (ht Maggies Farm)

The Volt comes with a manufacturer’s suggested retail price of $40,280 and a rebate from Uncle Sam of $7500. GM only plans to make 10,000 Volts this year; and there aren’t enough of them to go around. So, naturally, dealers are marking them up – some by much more than the retail amount. One Florida dealer is asking $65,590 (see Motor Trend for details). You might be able to get one on eBay for around $48,000 – after rebate that gets you right back to list price. Hmmm….

No car dealer or manufacturer would offer a rebate on a product that is in backorder status for the foreseeable future. But that’s exactly what your government is doing. Even if you believe that there is a compelling reason for the government to want us all to shift to partially electric cars, it’s clear that no incentive is required to sell all 10,000 cars available this year since people are buying them at markups which counteract the incentive. In this case the rebate dollars go to dealer margin. Note deficit cutting opportunity.

$75,000,000 down the drain to subsidize upper-middle-class people who want to make a statement about themselves.  Yet another public investment in the self-esteem of the wealthy and our rulers.  In ancient Rome they built coliseums.  In the middle ages they built cathedrals.   In communist countries they built giant statues of their leaders and tractor plants.  Today we subsidize quasi-electric cars and windmills.  None of it makes much sense as way to spend the average person’s money, but it makes the elite feel really, really good about themselves.  One wonders what the cumulative historic bill has been for ego maintenance of our rulers.

The Thin Green Line reports that Renault recently fired a number of employees for espionage related to electric vehicles.  The site concludes:

The stakes are high: The French automaker, now partnered with Nissan, is betting its future on the popularity of the electric vehicle. It plans to introduce no fewer than three electric cars in Europe this year: a sedan, a light commercial vehicle, and a city car.

Unless the espionage thwarts its plans, Renault’s gamble is probably a good one. Also last week, the judges of the Detroit auto show gave all their top awards to EVs and hybrids — proof, according the Guardian, that “analysts [are] bet[ting] on rising oil prices and wider acceptance of electric cars.” Nissan’s Leaf took second place to the Chevy Volt.

As I wrote in the comments, electric cars are a huge opportunity – there are tens of billions of dollars of corporate welfare from countries around the world to be captured. When it is the Left that is actively supporting huge transfers of funds from taxpayers to large corporations, that is an unprecedented rent-seeking opportunity that European companies, already well-schooled in how to be successful within a corporate state, are sure to avidly pursue. Not since corn ethanol has there been a similar gold-rush for taxpayer funds.

Aptera apparently wants to build electric cars using our tax dollars.  They are looking for a manufacturing plant location.   They seem to be homing on an one of the last locations on the planet I would build a new manufacturing facility:

At least we learn that the company is might soon be closing in on a new production facility as a result of a new application to the DOE’s AVTMP [advance vehicle technology manufacturing program]. The loan application asks for a 10-year facility plan, which meant Aptera needed to actually come up with such a plan. Aptera’s production schedule “calls for more than 10,000 units in the first 3 years and more than 300 employees,” so it is looking for a new place to build the cars somewhere in Southern California, specifically somewhere in San Diego County.

High land prices?  Hugely expensive land use and environmental regulations?  High taxes?  Really high local wages?  Perfect, lets build an auto assembly plant!

Update:  230 MPG turns out to be, as I suspected, total BS.  Make sure to check out update at bottom

Apparently under new methodology, the Chevy Volt got an MPG rating of 230.

we’re told that the Volt has snagged a staggering 230 MPG rating in the city, but we should caution you that it’s not as cut and dry as GM would have you believe. The EPA has released “a new methodology for determining a draft fuel economy standard for extended-range EVs like the Volt,” and it’s that murky measurement system that has blessed Chevy’s wonder child with a triple digit MPG rating.

Forget for the fact that the whole terminology is meaningless, as the vehicle only burns liquid fuel for a portion of its energy needs, so “miles per gallon” is an odd concept.  But one could imagine that one could look at the miles per electrical charge, and then look at the equivalent gallons of gasoline-equivalent BTU’s it took to deliver that electricity, and create an equivalent MPG.  In fact, that’s the only approach that makes any sense to me.

If so, these numbers imply that it is 10x more efficient to burn hydrocarbons in a large utility plant boiler or gas turbine, convert the combustion energy to electricity, transmit that electricity hundreds of miles, charge up a set of car batteries, and then drive an electric traction motor from the batteries than it is to burn hydrocarbons directly in an internal combustion engine in the vehicle.

If this is really the case, then I have been selling electric cars short and we will all soon be buying them (I prefer the performance of an electric engine so this kind of fuel savings is just icing on the cake).  However, I have my doubts.  While certainly a large power station is much more efficient in using all the BTU’s in a fuel than is an internal combustion engine, when one considers losses in the electrical generation and line losses, I find it very very hard to believe the difference is 10x.

But I am sure there is no conflict of interest here, and that it is pure coincidence that GM is owned by the same people who created the new methodology and did the testing, and given that the new methodology was created by the same people who have been pushing electric cars as a policy alternative.

Update: The 230 MPG figure is even more BS than I thought.  Apparently, MPG while running on batteries is treated as infinite!  In other words, electricity is treated as “free” and not costing anthing in terms of fuel. Check out how the math is done

When gasoline is providing the power, the Volt might get as much as 50 mpg.

But that mpg figure would not take into account that the car has already gone 40 miles with no gas at all.

So let’s say the car is driven 50 miles in a day. For the first 40 miles, no gas is used and during the last 10 miles, 0.2 gallons are used. That’s the equivalent of 250 miles per gallon. But, if the driver continues on to 80 miles, total fuel economy would drop to about 100 mpg. And if the driver goes 300 miles, the fuel economy would be a just 62.5 mpg.

This is entirely consistent with the bizarre way electric cars have always been treated by environmentalists and politicians, as if the electricity is free and they have no  hydrocarbon use or CO2 production.  Which is weird, since we get harangued for our incandescent light bulbs destroying the world when we plug them in but plugging in a whole car does not?

That being said, if one really wanted to move away from hydrocarbon fuels, the smart approach is probably to go with electric cars and then attack electricity generation rather than transportation.  I will feel good plugging in my car because the juice will come from a big honking zero-emissions nuclear plant.

Though I disagree with McArdle on the magnitude of potential warming, I think her assessment of Waxman-Markey is dead on:

But the real question, I think, is whether the low cost is a feature or a bug.  The only way a bill is going to have an impact is if it causes real financial pain to American households–enough to get them to change their behavior.  Waxman-Markey obviously is not going to do that.  And indeed, the projections of its effect on global warming are entirely negligible.

So the reason to get this mad about Waxman-Markey is either that you think it provides a framework for future action, or that you think it will persuade China and India to get on board.  The latter is, I think, entirely wishful thinking on the part of American environmentalists.  China is not going to let its citizens languish in subsistence farming because 30 years from now, some computer models say there will be some not-well-specified bad effects from high temperatures. Nor is India.  Global warming isn’t even high on the list of environmental concerns they’ll want to attack as they get rich; local air pollution is far more pressing.  Thinking that we’re somehow going to lead them by example is like thinking that poor rural teens are going to buy electric cars because Ed Begley jr. has one.

No, I think the argument has to rest on the notion that Waxman-Markey gives us a framework to advance.  And it might.  But then again, Europe’s much-vaunted system has had multiple spectacular failures, and the only reductions it has actually achieved seem to come largely from controversial offsets with large auditing problems.

Despite years and hundreds of millions of dollars of effort on electric vehicles, competitors are coming out of the woodwork to beat it to market with an all-electric sedan — and, from the specs, seem to be beating it on price and features as well.

Miles Electric has confirmed that it’s working on a family sedan-sized all electric car for release in North America sometime next year. The car — which will be released under a different, unknown brandname — will be a first for the company, which specializes in neighborhood cars that only go up to about 25 miles per hour. The sedan will have a top speed of around 80 miles per hour, and a 100 mile range. It will also require 8-12 hours to fully recharge its dead lithium-ion battery. Miles is currently running the vehicle though crash tests, and expects to see about 300 of them on the road in California sometime next year. The going rate for one of these? About $45,000.

Radical shifts in technology often obsolete first mover and scale advantages.  The winners in the market for diesel electric locomotives (GM and GE) were totally different players from those who dominated the steam locomotive market (Alco, Baldwin, Lima and others).  It will be interesting to see if such a change occurs in the auto market.

If you have watched the Olympics at all, you have likely seen the Obama commercial promising:

"The hands that install roofs can also install solar panels. The hands
that build today’s cars can also build the next generation of
fuel-efficient vehicles. Barack Obama [will] … create 5 million jobs developing homegrown energy technologies."

A few reactions:

• Private individuals, not politicians, create jobs
• Job promises like this are never incremental, nor can they be.  If the hands that build current SUV’s can build electric cars instead, then we haven’t added any new hands, we’ve just changed what they are working on.
• It strikes me that this is the broken windows fallacy writ large.  In effect, Obama promises to make much of our perfectly-serviceable transportation and electrical generation installed base obsolete, requiring an enormous effort to replace it.  But the resources to fund this huge new investment have to come from somewhere.  Industries that flourish and grow under this government enforced shift in capital will be offset by those that are starved.  Every other part of the economy will slow due either to higher taxes or higher prices (or both) that subsidize this effort.  But since it is harder to find and count the latter than the former, it makes for a good, un-auditable political pledge
• I’ll bet that 5 million number focus groups really well, but does it make any sense at all?  Here are some current employment numbers for the US as of January, 2008:

OK, so the total employment of all these industries that might be related to an alternate energy effort is about 2.28 million.  So, to add 5 million incremental jobs would require tripling the size of the utility industry, tripling the size of the utility construction and equipment industry, tripling the size of the auto industry, tripling the size of the aircraft industry, and tripling the size of the shipbuilding industry.  And even then we would be a bit short of Obama’s number.

Over the coming months and years, you are going to see a ton of stories like this for somehow storing or reprocessing CO2:

 

If two scientists at Los Alamos National Laboratory are correct,
people will still be driving gasoline-powered cars 50 years from now,
churning out heat-trapping carbon dioxide into the atmosphere — and yet
that carbon dioxide will not contribute to global warming.

The scientists, F. Jeffrey Martin and William L. Kubic Jr., are
proposing a concept, which they have patriotically named Green Freedom,
for removing carbon dioxide from the air and turning it back into
gasoline.

The idea is simple. Air would be blown over a liquid solution of
potassium carbonate, which would absorb the carbon dioxide. The carbon
dioxide would then be extracted and subjected to chemical reactions
that would turn it into fuel: methanol, gasoline or jet fuel.

This process could transform carbon dioxide from an unwanted,
climate-changing pollutant into a vast resource for renewable fuels.
The closed cycle — equal amounts of carbon dioxide emitted and removed
— would mean that cars, trucks and airplanes using the synthetic fuels
would no longer be contributing to global warming.

Although they have not yet built a synthetic fuel factory, or even a
small prototype, the scientists say it is all based on existing
technology.

You are going to see a ton of stories like this from academia because academics respond to incentives like everyone else — faced with billions of dollars available for funding research into carbon-neutral technologies, they are going to publicly promote their ideas in an attempt to garner this funding.

The first question you should always ask is about the energy balance.  I am sure that this is technically possible.  Today we can create hydrogen fuel from sea water, but it is atrociously expensive from an energy standpoint.  The problem, then, is whether it makes any sense from a cost and energy balance point of view.  This is a good hint that it does not:

Even with those improvements, providing the energy to produce gasoline
on a commercial scale — say, 750,000 gallons a day — would require a
dedicated power plant, preferably a nuclear one, the scientists say.

We have to be suspicious that the carbon benefits come from the nuclear plant they require, not the process itself.  In fact, one is left to wonder why we would go through so much effort at all rather than just charge electric cars directly from the nuclear plant.  My sense is we are much closer on battery technology than on this stuff.

Michael O’Hare and Matt Yglesias (via Megan McArdle subbing at Instapundit) makes this very good point about carbon taxes:

Tragically, if you tell people you’re going to tax their ft ossile
fuels, they freak out and your political career dies a swift and
merciless death. But if you tell people you’re going to subsidize alternative energy sources
the people will like that. Functionally, however, these are basically
the same thing, except for the fact that the tax method works much,
much better.

This is unfortunately true.  As I have posted a number of times, I am skeptical that man-made global warming and the net of the problems (and opportunities) it brings will be bad enough to justify the economic cost of slowing or reversing CO2 emissions.  However, I can imagine being convinced that efforts to limit CO2 emissions are necessary.

Regulations on emissions, whether to the air or into shared waterways, is one of the few areas of government action that actually facilitate the smooth operation of strong property rights.  As I explained before, one could easily imagine a world of strong property rights bogged down in constant suits and counter-suits, as any property owner could rightfully sue over molecules of emissions that crossed their property line from another.  Certainly I can imagine private solutions and agreements that could have developed in the absence of government to sort this out, but government emissions restrictions, when done well, are not an unreasonable approach.

Of course, there are a lot of bad ways to manage emissions, and the government has tried about all of them.  New source controls, which are still debated and, incredibly, supported, represent all the worst of government hubris in trying to micro-manage solutions and technologies rather than just defining the desired outcome.  If anything, new technology subsidies (think ethanol) have been even worse, acting more like political pork and rent-seeking than intelligent pollution policy.

However, the government, especially the environmental lobby which tends to be full of technocrats and statists, greatly prefer the government micromanagement approach.  The impossibility of the task should be clear.  Take CO2 reduction — to micromanage the reduction, the government would have to sort through every source of CO2, every available technology, and come up with a prioritized plan for investment to get the most reduction for the least $.  And even if the tried, they would be wrong, because this is a problem with a billion variables.  And even if they happen to get it right, they would not implement it, changing their plans the minute the Archer Daniels Midland lobbyist walked in the door. 

To understand the complexity, take one example: electric cars.  Hey, everyone loves the idea of electric cars — they are zero emissions, right?  Well, sort of.  Actually they are emissions outsourcing devices, shifting emissions from the individual car’s tailpipe to the power plant where the electrical charge is coming from.  Now, that power plant is a lot more efficient at burning fossil fuels, so often the net is better, but what if the marginal electricity production is coming from coal?  Does that net reduce CO2?  And, if electric cars reduce carbon emissions, does $10,000 investing in electric cars reduce more or less carbon emissions than $10,000 in solar?

These decisions are impossible to make, but we don’t have to.  Every day, markets and price signals help individuals make such tradeoffs rationally.   That’s why a carbon tax, that raises the price of CO2 emissions fairly directly, would be a much more efficient approach to managing emissions.

Update: People have asked about emissions trading.  Emissions trading schemes are OK, in that they help push emissions reductions towards the people who can do it most efficiently.  What I don’t like about them is they are a government form of incumbent subsidy – basically industry incumbents get a tradeable asset of value, while new and future entrants do not.