Transportation Politics
It’s now old news, but surprisingly underreported outside energy circles but….. former Vice President Al Gore acknowledged that his tie-breaking vote to deny an MTBE waiver, while promoting ethanol as the octane enhancement of choice, was “not good policy.” He noted that massive subsidies of unproven, first generation, fuels, was “too much,” Gore went on to say that his own support was tied to his presidential ambitions (duhhh) — “I paid particular attention to the farmers in my home state of Tennessee, and I had a certain fondness for the farmers in the state of Iowa because I was about to run for president.” While it has become evidence that corn-derived ethanol falls short of a beneficial renewable fuel on so many levels- energy efficiency, greenhouse gas ‘savings.’ scale economics, and its effect on food-related costs, it is unlikely that the subsidies, which expire this year, will not be continued at some level. Meanwhile, ethanol has raised, not lowered, the price of gasoline, and will comprise over 40% of US corn production this year – 15% of the global crop (no wonder movie popcorn is so expensive.)
Electric cars are the future – we think – and over 120 all or partly electric models will be on showroom floors by 2013. In general, the post subsidy premium price offers around a 5 year breakeven – with wide variation – for some hybrid-electric models in a $3.50- gasoline market (and $500/kilowatt retail battery costs)– roughly $100-110 oil market or, by my guess, 2012. However, the challenge for all electric offerings will be the end market charging infrastructure — a 40 kw battery ($20,000 market value on top of the rest of the car), drawing 30 amps, would take 10 hours to charge at 110 volts. That’s more than ‘overnight,’ and a fast-charge (450 kv) station could cost $40,000. For ‘return to base’ vehicles, this may make sense, although more policy-makers are looking at compressed natural gas, amidst Shale Mania.