Posts tagged ‘electric cars’

Bringing Skepticism (and Math) to Electric Vehicle Fuel Numbers

Frequent readers of this blog will know that I am enormously skeptical of most fuel and efficiency numbers for electric vehicles.  Electric vehicles can be quite efficient, and I personally really enjoy the driving feel of an electric car, but most of the numbers published for them, including by the government, are garbage.  I have previously written a series of articles challenging the EPA's MPGe methodology for electric cars.

In just a bit, I am going to challenge some numbers in a recent WSJ article on electric vehicles, but first let me give you an idea of why I don't trust many people on this topic.  Below is a statement from Fueleconomy.gov, which bills itself as the official government source for fuel economy information (this is a public information, not a marketing site).  In reference to electric vehicles, it writes this:

Energy efficient. Electric vehicles convert about 59–62% of the electrical energy from the grid to power at the wheels—conventional gasoline vehicles only convert about 17–21% of the energy stored in gasoline to power at the wheels

The implication, then, is that electric vehicles are 3x more energy efficient than cars with gasoline engines.  I hope engineers and scientists can see immediately why this statement is total crap, but for the rest, here is the problem in short:  Electricity has to be produced, often from a fossil fuel.  That step, of converting the potential energy in the fuel to use-able work, is the least efficient step of the entire fuel to work process.  Even in the most modern of plants it runs less than a 50% conversion efficiency.   So the numbers for the gasoline cars include this inefficient step, but for the electric vehicle it has been shuffled off stage, back to the power plant which is left out of the calculation.

Today I want to investigate this statement, which startled me:

Factor in the $200 a month he reckons he isn't paying for gasoline to fill up his hulking SUV, and Mr. Beisel says "suddenly the [Nissan Leaf] puts $2,000 in my pocket."

Yes, he pays for electricity to charge the Leaf's 24-kilowatt-hour battery—but not much. "In March, I spent $14.94 to charge the car" and a bit less than that in April, he says.

This implies that on a cost-per-mile basis, the EV is over 13x more efficient than gasoline cars.  Is this a fair comparison?  For those who do not want to read a lot of math, I will preview the answer:  the difference in fuel cost per mile is at best 2x, and is driven not by using less fossil fuel (the electric car likely uses a bit more, when you go all the way back to the power plant) but achieves its savings by using lower cost, less-refined fossil fuels  (e.g. natural gas in a large power plant instead of gasoline in a car).

Let's start with his estimate of $14.94.  Assuming that is the purchased power into his vehicle charger, that the charger efficiency is 90%, and the cost per KwH in Atlanta is around $0.11, this implies that 122.24 use-able KwH are going into the car.  Using an estimate of 3.3 miles per KwH for the Leaf, we get 403 miles driven per month or 3.7 cents per mile in electricity costs.  This is very good, and nothing I write should imply that the Leaf is not an efficient vehicle.  But its efficiency advantage is over-hyped.

Now let's take his $200 a month for his Ford Expedition, which has an MPG around 15.  Based on fuel prices in Atlanta of $3.50 a gallon, this implies 57 gallons per month and 857 miles driven.  The cost is 23.3 cents per mile.

Already we see one difference -- the miles driven assumptions are different.  Either he, like a lot of people, don't have a reliable memory for how much he spent on gas, or he has changed his driving habits with the electric car (not unlikely given the shorter range).  Either way, the total dollar costs he quotes are apples and oranges.  The better comparison is 23.3 cents per mile for the Expedition vs. 3.7 cents a mile for the Leaf, a difference of about 6x.  Still substantial, but already less than half the 13x difference implied by the article.

But we can go further, because in a Nissan Leaf, he has a very different car from the Ford Expedition.  It is much smaller, can carry fewer passengers and less cargo, cannot tow anything, and has only 25% of the Expedition's range.   With an electric motor, it offers a very different driving experience.   A better comparison would be to a Toyota Prius, the c version of which gets 50MPG.  It is similar in most of these categories except that it has a much longer range, but we can't fix that comparison, so just keep that difference in mind.

Let's look at the Prius for the same distances we calculated with his Leaf, about 403 miles.   That would require 8.1 gallons in a Prius at $3.50, which would be $28.20 in total or 7 cents a mile.  Note that while the Leaf still is better, the difference has been reduced to just under 2x.  Perhaps more importantly, the annual fuel savings has been reduced from over $2200 vs. the Expedition that drove twice as many miles to $159 a year vs. the Prius driving the same number of miles.  So the tradeoff is $159 a year savings but with much limited range  (forgetting for a moment all the government crony-candy that comes with the electric car).

$159 is likely a real savings but could be swamped by differences in long-term operating costs.  The Prius has a gasoline engine to maintain which the Leaf does not, though Toyota has gotten those things pretty reliable.  On the other hand the Leaf has a far larger battery pack than the Prius, and there are real concerns that this pack (which costs about $15,000 to manufacture) may have to be replaced long before the rest of the car is at end of life.  Replacing a full battery pack after even 10 years would add about $1200 (based on discounted values at 8%) a year to operating costs, swamping the fuel cost advantage.

Also note that a 2x difference in fuel costs per mile does not imply a 2x difference in fuel efficiency.  Gasoline is very expensive vs. other fuels on a cost per BTU basis, due to taxes that are especially high for gasoline, blending requirements, refining intensity, etc.)  Gasoline, as one person once said to me way back when I worked at a refinery, is the Filet Mignon of the barrel of oil -- if you can find a car that will feed on rump steak instead, you will save a lot of money even if it eats the same amount of meat.    A lot of marginal electric production (and it is the margin we care about for new loads like electric cars) is natural gas, which is perhaps a third (or less) the cost of gasoline per BTU.   My guess is that the key driver of this 2x cost per mile difference is not using less fuel per se, but the ability to use a less expensive, less-refined fuel.

Taking a different approach to the same problem, based on the wells-to-wheels methodology described in my Forbes article (which in turn was taken directly from the DOE), the Nissan Leaf has a real eMPG of about 42 (36.5% of the published 115), less than the Prius's at 50.  This confirms the findings above, that for fossil fuel generated electricity, the Leaf uses a bit more fossil fuels than the Prius but likely uses much less expensive fuels, so is cheaper to drive.  If the marginal electrical fuel is natural gas, the Leaf also likely generates a bit less CO2.

Classic Partisan Thinking

Kevin Drum writes

On the right, both climate change and questions about global limits on oil production have exited the realm of empirical debate and become full-blown fronts in the culture wars. You're required to mock them regardless of whether it makes any sense. And it's weird as hell. I mean, why would you disparage development of renewable energy? If humans are the ultimate creators, why not create innovative new sources of renewable energy instead of digging up every last fluid ounce of oil on the planet?

I am sure it is perfectly true that there are Conservatives who knee-jerk oppose every government renewable energy and recycling and green jobs idea that comes along without reference to the science.  But you know what, there are plenty of Liberals who knee-jerk support all these same things, again without any understanding of the underlying science.  Mr. Drum, for example, only recently came around to opposing corn ethanol, despite the fact that the weight of the science was against ethanol being any kind of environmental positive years and years ago.  In fact, not until it was no longer cool and caring to support ethanol (a moment I would set at when Rolling Stone wrote a fabulous ethanol expose) did Drum finally turn against it.  Is this science, or social signalling?   How many folks still run around touting electric cars without understanding what the marginal fuels are in the electricity grid, or without understanding the true well-to-wheels efficiency?  How many folks still run around touting wind power without understanding the huge percentage of this power that must be backed up with hot backup power fueled by fossil fuels?

Why is his almost blind support of renewable energy without any reference to science or the specifics of the technologies involved any saner than blind opposition?  If anything, blind opposition at least has the numbers on their side, given past performance of investments in all sorts of wonder-solutions to future energy production.

The reason there is a disconnect is because statists like Drum equate supporting government subsidies and interventions with supporting renewables.  Few people, even Conservatives, oppose renewables per se.  This is a straw man.  What they oppose are subsidies and government mandates for renewables.  Drum says he has almost limitless confidence in  man's ability to innovate.  I agree -- but I, unlike he apparently, have limitless confidence in man's ability to innovate absent government coercion.  It was not a government program that replaced whale oil as an illuminant right when we were approaching peak whale, it was the genius of John D. Rockefeller.  As fossil fuels get short, prices rise, and people naturally innovate on substitutes.  If Drum believes that private individuals are missing an opportunity, rather than root for government coercion, he should go take up the challenge.  He can be the Rockefeller of renewable energy.

Postscript:  By the way, it is absurd and disingenuous to equate opposition to what have been a series of boneheaded government investments in questionable ventures and technologies with some sort of a-scientific hatred of fossil fuel alternatives.  I have written for a decade that I long for the day, and expect it to be here within 20 years, that sheets of solar cells are cranked from factories like carpet out of Dalton, Georgia.

Tesla Actually Strikes a Blow Against the Corporate State

Tesla Motors and Elon Musk, the folks who seem to perennially have their hands out for special government favors and taxpayer money, may have actually struck a small blow against the corporate state:

Tesla Motors Inc. says it’s won another round in its fight with established car dealers who want to stop the company from selling its electric luxury cars directly to consumers.

Tesla CEO Elon Musk says, via Twitter, that a New York judge has tossed out a suit brought by New York auto dealers who challenged Tesla’s direct sales model as a violation of the state’s franchise laws.

Mr. Musk spent Wednesday in Texas making the case for a legislative proposal to change the law to allow direct sales of electric vehicles by U.S.-based manufacturers.  Texas car dealers have opposed the measure, saying it would open the door for other car makers to sell electric cars direct to customers –  which could undermine the value of their franchises.

Government protections of middle men in the auto business (states generally do the same in the liquor business) are a classic example of crony capitalism.  Car dealers tend to have a lot of sway with politicians, not to mention with local media for who they are generally the largest advertisers, so they are able to engineer special privileges for themselves.  Congrats to Tesla for taking this on.

Precautionary Principle in One Chart

The ultimate argument I get to my climate talk, when all other opposition fails, is that the precautionary principle should rule for CO2.  By their interpretation, this means that we should do everything possible to abate CO2 even if the risk of catastrophe is minor since the magnitude of the potential catastrophe is so great.

The problem is that this presupposes there are no harms, or opportunity costs, on the other end of the scale.  In fact, while CO2 may have only a small chance of catastrophe, Bill McKibben's desire to reduce fossil fuel use by 95% has a near certain probability of gutting the world economy and locking billions into poverty.  Here is one illustration I just crafted for my new presentation.  As usual, click to enlarge:

precautionary-principle

 

A large number of people seem to assume that our use of fossil fuels is an arbitrary choice among essentially comparable options (or worse, a sinister choice forced on us by the evil oil cabal).  In fact, fossil fuels have a number of traits that make them uniquely irreplaceable, at least with current technologies.  For example, gasoline has an absolutely enormous energy content per pound of fuel.  Most vehicles - space shuttles, and more recently electric cars - must dedicate an enormous percentage of their power production just to moving the weight of their fuel.  Not so in gasoline engine cars, something those who are working with electric cars must face every day.

By the way, if you want to see the kick-off of version 3.0 of my climate presentation, it will be at my son's school, Amherst College, this Thursday at 7PM.  More here.

Update: By the way,  I was careful in the chart to say the two " are correlated".  I actually do not think one causes the other.  In this case, I think there are a third, and fourth, and fifth (etc.)  factors that cause both.  For example, economic development leads to (and depends on) increased fossil fuel use and CO2 emissions, and it leads to longer lives.

When I use this slide, my point is to get folks thinking about Bill McKibben's plea to reduce fossil fuel use by 95%.  I was looking for one slide to say, hey, maybe if CO2 emissions go away, some other stuff goes away with it.  Like technology, hospitals, agriculture, development ... and long lives.   McKibben paints this picture of virtually costless energy transformation, which is naive to the point of being malpractice committed against the poor of developing nations.

Rename the Chevy Volt to the Chevy Bastiat

Quick - in your last fill up, how much did you pay for gas?  About how many gallons did you use?

If you are like most people, you can probably come pretty close to this.  I paid somewhere just north of $4.00 for about 18 gallons.

OK, second set of questions:  On your last electric bill, how much did you pay per KwH?  How many KwH did it take to run your dishwasher last night?

Don't know?  I don't think you are alone.  I don't know the answers to the last questions.   Part of the reason is that gas prices are posted on every corner, and we stare at a dial showing us fuel used every time we fill up.  There is nothing comparable for electricity -- particularly for an electric car.

I understand some inherent appeals to electric cars.  They are fun to drive, kind of quiet and stealthy like KIT from Knight Rider.  They are really torquy and have nice acceleration.  There is no transmission and gear changing.  All cool and awesome reasons to buy an electric car.

However, my sense is that the main appeal of electric cars is that because we don't see the fuel price on the corner, and because we don't stare at a spinning dial as electrons are flowed into the car, we pretend it is not costing us anything to fill up.  Out of sight is out of mind.  Heck, even experienced car guys who should know better take this attitude.  Popular Mechanics editor Jim Meigs wrote to Glenn Reynolds, re: the Volt:

Others might like the notion of going a month or two without filling the tank

This drives me crazy.  Of COURSE you are filling the freaking tank.  You are just filling the lead-acid (or lithium-ion) one with electrons rather than filling the hollow steel one with hydrocarbon molecules.  The only difference is that you don't stand there watching the meter spin.   But that should not mean that we pretend we are not filling the car and paying a cost to do so.

By the way, if you have read me before, you know I also have a problem with the EPA equivalent mileage standards for electric cars, which basically inflate the numbers by a factor of three by ignoring the second law of thermodynamics.  This fraudulent mileage number, combined with the EPA's crazy-high new mileage standards, represents an implicit subsidy, almost a mandate, for electric cars that gets little attention.  And that will have zero effect on energy usage because the numbers are gamed.

 

Electric Vehicle Mileage Fraud

I am glad to see that other sites with more influence than I are focusing attention on the electric vehicle mileage fraud.   The Green Explored site writes, via Q&O:

The EPA allows plug in vehicle makers to claim an equivalent miles per gallon (MPG) based on the electricity powering the cars motors being 100% efficient. This implies the electric power is generated at the power station with 100% efficiency, is transmitted and distributed through thousands of miles of lines without any loss, is converted from AC to DC without any loss, and the charge discharge efficiency of the batteries on the vehicle is also 100%. Of course the second law of thermodynamics tells us all of these claims are poppycock and that losses of real energy will occur in each step of the supply chain of getting power to the wheels of a vehicle powered with an electric motor.

Finally!  For months I have been writing about this and have started to believe I was crazy.   I have written two Forbes pieces on it (here and here) and numerous blog posts, but have failed to get much traction on it, despite what appears to be near-fraudulent science.  I wrote

the government wants an equivilent MPG standard for electric cars that goes back to the power plant to estimate that amount of fossil fuels must be burned to create the electricity that fills the batteries of an electric car.  The EPA’s methodology is flawed because it assumes perfect conversion of the potential energy in fossil fuels to electricity, an assumption that violates the second law of thermodynamics.   The Department of Energy has a better methodology that computes electric vehicle equivalent mileage based on real world power plant efficiencies and fuel mixes, while also taking into account energy used for refining gasoline for traditional cars.  Using this better DOE methodology, we get MPGe’s for electric cars that are barely 1/3 of the EPA figures.

The linked articles provide much more detail on the calculations.  As a result, when the correct methodology is applied, even in all-electric mode the heavily subsidized Fisker Karma gets just 19 MPG-equivalent.

Do you want to know the biggest energy advantage of electric cars?  When you fill them with energy, you don't stand there at the pump watching the cost-meter spin, as you do in a gas station.   It's not that the energy cost is lower, it's just better hidden (which is why I suggested the Fisker Karma be renamed the Fisker Bastiat, after the French economist who wrote so eloquently about the seen and unseen in economic analysis).  It's why, to my knowledge, no electric car maker has ever put any sort of meter on its charging cables.

Update on the EPA's Electric Vehicle Mileage Fraud

I have written several articles (here and here) outlining why the EPA's method of giving electric cars an equivalent or eMPG is outright fraudulent.  I calculated for the average driver, for example, that the Nissan Leaf's 99 eMPG was actually closer to 36.  Why?  Well, in the EPA's methodology, the science-based Obama administration pretends the 2nd law of thermodynamics does not exist.  Specifically, they assume perfect conversion of the chemical potential energy in fossil fuels to electricity.  They also assume zero transmission losses.  To rework the calculation, I actually used a Clinton-era Department of Energy methodology called well to wheels.

So here is something I thought I would never write:  It turns out the Union of Concerned Scientists agrees with me.  Apparently they have used a similar methodology to rework electric vehicle MPGs based on the fuel mix of the power in different cities, rather than an average national fuel mix as I did it.  I am not sure how they did the analysis - did they use average fuel mix or the marginal fuel, and if the marginal fuel did they assume the marginal fuel at night or during the day?   For example, certain California cities look good with solar use but that does not do anything for typical night time car charging.

Anyway, the problem is hard and I could quibble with how they did it.  But the results are telling - everywhere they looked, even in the hydro-powered Pacific Northwest, the eMPG they got was lower than that of the EPA's.  And in many cases much lower.

If corporations were using the EPA's eMPG methodology, they would be busted by the FTC for false advertising.  It's time to fix this calculation so Fisker Karma drivers can't continue to fool themselves into thinking they are doing something positive for the environment.

Coyote on TV

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.

130 MPG?

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.

Government Rebates for Superbowl Tickets

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.

Rent-Seeking Gold Rush

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.

Only A Company Living Off of Government Pork Would Make This Decision

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!

230 MPG?

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.

230-mpg-chevy-volt

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.

Waxman-Markey

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.

GM's Design Problems in a Nutshell

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.

The Hands That Currently Produce Things People Actually Want Can Also Fix Broken Windows

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:

Construction of power generation facilities:           137,000
Power generation and supply:           399,000
Production of power gen. equipment           105,000
Production of transportation equipment (planes, trains, autos, boats,
etc)
        1,637,000
        2,278,000

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.

First Question: Ask About the Energy Balance

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.

 

Virtues of a Carbon Tax

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.