Another student is writing a research paper. Here is our interview on alternative fuel vs. oil published straight up from the email:
WOW!!! We've got a deadline so here it goes:
1. why is still gasoline is the first choice for motor vehicle?
It's cheap, widely available and powerful (high energy content).
It generates more money for companies and government (through taxes)
than well over half the world countries make each year.
There are quite a few business reasons,
so how about looking at this question from different perspectives:
automobile company, oil or gasoline company, consumer, airline industry
If you are an automobile company, make a non-gasoline engine is a huge financial risk. Your customer base drops from 2 billion potential drivers down to a few million with access to alternatives. It does not make short-term financial sense to design and manufacture a non-gasoline vehicle because of the investment and time it takes to bring a car or truck to the showroom.
Take the innovative EV-1 for example. It was a great car, people loved it, it didn't use any gasoline and if you had one today, it would be worth a million dollars. But why didn't it work from the standpoint of being an automaker. That's pretty simple, there were only a few hundred customers, compared to the 230 million Americans driving cars and trucks, and it lost GM more money that you can imagine. Try over $1,000,000,000.00 invested with more than 1,000 leased for hundreds each month, it lost millions each month. GM only brought in a million or so so it's easy to say that they lost a billion or so dollars, including an expensive black eye from the public, which leads me to the 2nd reason...
Until recently, making a non-gasoline vehicle was not cool, kosher, politically correct, etc. This is changing fast! Toyota is a great example. They developed the multi billion dollar Prius for the long-run. But they could afford to lose a billion for the first 10 years before they made any profits. Even today, rivals accuse Toyota of selling the Prius for below cost. This may be partially true, as the 650 patents in the hybrid drive cost an arm and a leg (1,000 engineers, lawyers, MBAs, multiple countries, etc.) but Toyota can afford to lose money for now.
So if you're an automaker, let's say like NUMMI over in the East Bay that has to pay PG&E $1,000,000.00 each month for electricity, do you think you can afford to take a chance on a non-gasoline vehicle? How would you keep the lights on?
Tesla does, and found $50,000,000.00 in free money to try and get a license plate on the first car in a few years. Incidentally, the battery pack has over 6,000 batteries and is estimated at $40,000 vs. a typical gasoline engine at hundreds times cheaper. Which would you build?
Oil or Gasoline Company
These companies are just the opposite of automakers in a way. They make all kinds of products from crude oil. Everything from the roads we drive on to plastics we use everyday to jet fuel that delivers the majority of our perishable foods to areas that don't grow it. They have no shortage of customers, unlike automaker. Why don't they make less gasoline?
Probably money and costs. Gasoline brings in plenty of profits, satisfies Wall Street with record profits for any company for all time, and the cost of making gasoline, distributing it, with thousands of gas stations ready to buy more without additional R&D, is like owning a gold mine and shutting it down to start mining for silver somewhere else. Why stop the money coming in?
Why should oil companies lose money to make less gasoline? Why do oil companies invest so little of their profits?
Maybe they would like to maximize the investment they've made, just like any other person or company.
Maybe oil will run out so far in the future, that it really doesn't matter on Wall Street (all the majors are publicly traded held by insurance companies and other financial houses that do thing like pay for our grandparents retirement) which tends to be very short sighted focused on quarterly earnings.
The proof is in the pudding. Most all biofuel, Ethanol, Biodiesel, and alternative fuel companies are losing money so far.
Alternatives will take off when they are cheaper
and at that moment, oil and gasoline companies
will probably start heavier investing...
PS An oil company owns the patents on hybrid batteries
so for every hybrid that sells, some money goes back
to an oil or gasoline company...
Again, it's all about the money, well mostly. There are a few drivers that will pay extra to make a statement, such as those driving $40,000 hybrids or flex-fuel vehicles, but the bottom line is that consumers can't afford to pay more for non-gasoline.
That could change QUICKLY!!! In fact, with E85 was first released it was more than 20% less than gasoline (the break even price point because E85 is 20% less powerful than gasoline = 20% less miles per gallon). But, with so many farmers selling corn to biofuel plants instead of tortilla factories, Coca Cola and soft drink corn syrup suppliers, beef, pork and chicken producers, etc. the price of corn has gone up... So has the price of food from corn chips to steaks!
So unfortunately, E85 is an example that looked really good at first, but the price has come up higher than gasoline on an equivalent energy content comparison. Right up the street from my apartment, the gas station always sells E85 for only 10 cents less than gasoline, even though both prices change everyday. If you use simple math and take the 10 cent difference and divide by the 20% less energy, the break even point at my local gas station is 50 cents per gallon. So if gasoline was 50 cents per gallon and E85 was 40 cents per gallon, they would be the same price.
Anything more than 20% price premium is too expensive for the consumer. What's more, the price is being held low by politicians giving our tax dollars to farmers and biofuel plant operators. So in theory, E85 on the West Coast is much much more expensive than gasoline.
So why would a consumer or driver or customer buy non-gasoline?
To pay more to make a statement.
Otherwise, gasoline is the first choice!
Although other transportation industries such as trucking can switch over to bio-diesel (and will so long as it's cheaper), the airline industry can't. There are no planes that run on lower octane alternatives. Planes last much longer than vehicles; it's easy to find a 50s plane at any airport in perfect condition. Planes are also owned by the upper class. Millionaires aside from green celebrities can afford to buy gasoline until the end.
The good news is that visionary entrepreneurial millionaires like Richard Branson care and see biofuels in a different light. Just like the Indy 500 guys and girls filling up every race with moonshine. Why, because it's powerful and they have to buy the gasoline anyway. So again, it's attempt to reduce major costs with a feel good fringe benefit.
We can stop driving but the airlines HAVE TO keep delivering
us, our mail, our food, our goods, etc.
I'm not an expert on jet fuel, but I know it's one of the most expensive components of running an airline and there are no alternatives today!
Gasoline may the first choice until the end of the oil or airlines.
Where does a barrel of oil go?
Half to gasoline for now,
the cheapest, most available,
easy to transport and powerful fuel...
Nothing can replace gasoline!!!
We will have to be shocked into using something else
when gasoline gets up around $10 per gallon and airplane flights are triple.
If our oil civilization collapses,
let's save the gasoline for delivering
food to parts of the world that can't afford oil anymore...
2. why do we need an alternative source of energy?
I will say this twice or three times because it's not what you read elsewhere:
because the daily demand for oil is accelerating at the same time the daily supply is flattening
in other words we will soon not be able to pump enough oil every day,
in more words, the potential growing gap between DAILY supply and demand is
a MUCH BIGGER problem than global warming or cheap electricity getting less cheap.
Why? We can barely keep up today with only 800 miliion cars and trucks
or about 1 in 15 people on the planet. The number or cars and trucks
is growing daily, 2,000 new ones hit the streets of Beijing EVERYDAY!!!
Imagine 2,000 new cars and trucks in your city tomorrow,
and then 4,000 the next day, and then 12,000 on Day 3,
we're talking about as many cars and trucks in the world
that took 100 years to get to, getting rolled out into our
streets for the first time in history, all over the next few decades!!!
That's why traffic cops die in their 40s in Beijing
and everyone on the street is wearing a mask.
The worldwide fleet is expected to double and then triple soon!!!
How much oil will we need everyday, if there are a few billion cars or trucks???
There might be enough in the ground, such as the Canadian oil sands,
but those are like having a million dollars in the bank and only being
able to go to the ATM everyday and withdraw a 20 dollar bill.
Many argue that there's plenty of oil, but does it matter?
I don't think so, does 10 extra or 20 extra years matter?
Not in terms of the shock point: when the daily demand
accelerates away from the daily supply!!!!!!!!!!!!!!!!!!!!!!!
We need an alternative source of energy that can reduce the
DAILY DEMAND for oil. A source that can accelerate fast,
like plugging in 100 million cars at night to a socket and saving
millions of gallons of gasoline every day of the week we are not
allowed to buy gas, like in the 70's, not experimental cars that
cost millions and can only serve a few millionaires here and there.
We will not run out suddenly, we will have to ration suddenly,
and society will slow down, so alternatives are required
if we expect to continue the growth path we're on...
We need to find alternatives because of fundamental flaws in economic theory.
Under the assumption that all suns supernova
and humans will still be living here until it does:
Free trade is not free, i.e. solar energy (slow energy) is finite and NOT renewable.
All resources approach zero as time goes to infinity.
i.e., there are no renewable energy sources.
Economic growth assumes resources do not approach zero,
so economic growth will also approach zero
and wealth, money and everything tied to the
economy will also have to correct to zero.
Bottom line, without energy, there will be no economies.
If oil is finite, we need alternatives to keep an economy.
Without oil or alternatives, there will be no economy.
3. What are some ways for hydrogen to compete with oil in global market?
Hydrogen is not the same thing as oil. Oil is banked energy just sitting there.
Oil has a high energy content and more importantly we can make hundreds or
even thousands of products from oil.
What can hydrogen make? Expensive electricity
Where is it sitting? Compare drilling to catching ghosts
Physics tells us that energy can never be made and can only be transferred.
Every transfer costs energy in the form of heat or friction.
An example, natural gas and tremendous electricity and water
transfers into hydrogen while losing 50% on the electrical transmission lines
and a lot of heat into the water. So we lost a lot to get to hydrogen.
Then we have to turn the hydrogen back into electrical energy
because MOST ALL hydrogen vehicles are HYBRID-ELECTRICS!!!
Why did we change the electricity two times???
So the only way for hydrogen to compete is efficiency
which will bring the costs down.
Hydrogen transportation will have to become more efficient than oil and fuels.
Hydrogen distribution will have to become more efficient than gasoline and diesel.
The fuel cell or engine will have to become more efficient than above!
If the infrastructure beats the estimated
85% gasoline and 80% efficient diesel supply chains,
hydrogen has a chance.
But take Arizona public fleet for an example:
the natural gas starts in Canada to form hydrogen
then liquified using tremendous electricity
then filled in large tanker cars and finally shipped to Arizona
then it awaits filling into buses a minus hundreds of degrees...
Compare that with the gasoline pipeline from Long Beach harbor (one of the biggest ports in the world with oil tankers avail everyday)
to Las Vegas that feeds just about every gasoline station and fueling company. Just pump the gasoline and out it comes 350 miles away.
The hydrogen infrastructure will have to get to 90% efficient,
and that is not possible without pipelines and slow energy.
What taxpayers and companies will pay the billions for that?
California has been trying for 10 years and there's only a few pumps and a few trucks
out of tens of thousands of gasoline pumps and 230 million cars and trucks in America!
4. what can government do to convince to buy hyfrogen powered vehicle?
Government taxes us and spends the money in exchange for politician votes or support.
So they could use tax dollars to make hydrogen vehicles look cheaper.
Maybe if it increased votes or lobby dollars,
but I doubt hydrogen can become sexy like hybrids.
We're trying to convince people to buy E85
and it looked cheaper because we all paid for the corn and stills.
Hybrids are a good and bad example.
They were made cheaper with tax credits, free parking, free commuting lanes, free bridge tolls, etc.
in other words, us tax payers paid for hybrid driver benefits...
Did politicians make a difference?
According to my research, of the dozens of hybrids buyers I studied,
two main reasons came up over and over:
Saving on taxes or free parking or free tolls was NEVER a PRIMARY REASON
for buying a hybrid, even after the govt convinced us the breaks mattered.
So for hydrogen, there would have to first be main reasons such as
1) mileage or cost
then with those in place, govt could stimulate additional sales through incentives...
There's no sense in spending tax dollars
to lower the price of a HYDROGEN VEHICLE
from $1,000,000 to $900K with tax breaks is there?
The wild card might be govt getting into the grey areas of conversions,
such as plug-in hybrids or hydrogen conversions on regular gasoline cars and trucks...
But in the end it won't really make a dent in the 230 million vehicles America is in love with!
5. How important do you think it is for U.S. to reduce its dependence on foreign oil?
That's a loaded question because it focuses on the U.S.
as if the U.S. is the only customer for foreign oil.
Take Japan for example, it's been importing 99% of its oil for decades,
and runs an estimated 40% nuclear. France runs 70% plutonium I believe...
Everyone is dependent on foreign oil in the industrialized world.
Brazil and Iceland are outliers that I don't have time to talk about,
but it can be done, much like a addict goes on medication.
For Brazil it's destroying the rain forest for sugar cane Ethanol
and for Iceland I believe there's natural geothermal accelerating
due to global warming, which is basically geographical luck,
like the Middle East sitting on the largest free bank accounts
in the history of our civilization!
So if we are focusing JUST ON THE U.S. then we have to think about
the U.S. in terms of geopolitical terms. We have a lot of natural gas,
we make half our electricity from coal, we have less than 1% overall
solar and wind after 25 years of welfare and development, etc. etc.
We also have 230 thirsty addicted cars and trucks than need
gasoline or diesel EVERY DAY, TODAY, TOMORROW, DAY AFTER,
NEXT MONTH, ETC. that's about 3 of 10 cars and trucks in the world.
So we've got one of the largest fleets in the world,
one of the largest demands for electricity in the world
and we have the largest military in the world.
We also have the world's most powerful economy.
If you believe in survival of the fittest,
the U.S. will be the last country that
will be able to control and consume
foreign oil. Who will stop us?
How important is that? Depends if your American or not...
So reducing our dependence is more of a political show right now,
and you've got politicians mistakingly placing global warming above oil.
That's like cutting out a lung cancer and smoking a pack through the hole in your throat.
I'm saying the problem is the GLOBAL daily supply and demand,
the cigarettes, not the sick lungs...
It's like there's one milk to go around for each school lunch,
but suddenly, there are twice then three times more students,
as one to two billion worldwide and global citizens buy their
first TVs, VCRs, PCs and they plug in... Then they buy their
first cars and trucks and go down the gas station and fill up...
The U.S. is the biggest bully in the cafeteria,
we pay the cheapest price for gasoline in the industrialized world,
so why should we reduce our oil dependency,
when we pay the least and spend the most?
When it becomes a moral issue!
If our oil dependency kills people, in other words if you believe
that deaths in IRAQ or asthma deaths in Long Beach from
kids breathing the ports and trucks emissions is related to
our foreign oil dependence, then we have to do something!
I think it's VERY IMPORTANT to reduce our oil dependency
if it's directly related to killing human beings.
As far as global warming and other reasons,
are polar bears more important than American kids
dying early from lung problems due to breathing foreign oil byproducts?
Death is a very important reason to reduce dependency on foreign oil.
6. is it possible for U .s. to be free from oil?
It's more possible for the U.S. than other countries.
We have more money and more power and more guns.
If there was something out there more valuable than oil,
let's say the diamond planet they discovered larger than Earth
as a fun example, the U.S. would probably get there 1st,
if diamonds could fill up our gas tanks that is...
9 of the Top 10 Global Fortune 500 companies ranked in terms
of money coming in every year are either oil or car companies.
The 10th is Wal-Mart which has the largest truck fleet around.
These companies make much more money than more than half the countries in the world.
If you made as much money as a country,
would you give that away to corn or hydrogen?
We are very lucky to have the cheapest gasoline prices in the modern world,
and in fact, I believe that is why we maintain the strongest economy in the world.
The only way to free ourselves from oil is to find a co-addiction,
something either cheaper and worse than oil
or better and more expensive.
Could it be Back to the Future space ships powered by
banana peel reactors and Lithium batteries?????????
Probably not in our life times, so we should probably focus
on the one or two billion cars and trucks coming online soon
as most first time buyers can't afford non-gasoline vehicles
and want the same things we have, a car and a mobile phone.
A cheap clean vehicle for every grandchild
is just as important as leveling off our oil demand.
In fact, if we don't start making cheap alternative fuel vehicles,
even if we manage to get off half the oil, we're going to need
three times as much for the rest of the world anyway...
One thing is for sure,
electricity is making a run for oil.
Look at Tokyo for a glimpse of the future,
99% imported oil, don't need a car or truck,
electric trains are connected to everything,
but 40% nuclear and bad air and water...
Oil is too powerful and too cheap to be replaced,
only shock treatments can change our behavior now.
We (U.S.) will start to slowly move away from oil at 10 dollars per gallon,
but the one or two billion people that are buying their first car or truck
can't really be stopped from buying a cheap gasoline vehicle
unless we "radically rethink the automobile!"
by Prof. Gerdes at Stanford's CarLab.
I say focus on the new cars and trucks NOW,
remember that hybrids have already saved
500,000,000 gallons of gasoline already!
How much oil have hydrogen or electrics saved?
Running out of oil is probably the only way to be completely free of it as a civilization,
as I said before, airplanes may never be free from oil.
We can work together to
free parts of our society,
interested in freedom from oil.
I heard cars and trucks maybe be banned
in some large cities around the world soon...
- ► 2009 (54)
- ▼ December (8)