Jones Beene wrote:
Total net electrical generation in May 2009 from all sources showed
a drop of 4.1 percent from May 2008. Some of that is due to
factories being closed, however. Coal production is expected to fall
by nearly 8 percent in 2009 to the lowest level in 8 years.
When you combine a drop in total demand with a significant switch to
renewables then there is a double burden placed on the price of
fossil fuels . . .
The market for oil is in automotive transportation with some
aviation, and the market for coal is nearly all electricity, with
some steel production. The two are like apples and oranges. The
economy affects both, but technology that affects one may have no
effect on the other. For example, Toyota is the world's largest auto
company, and they intend to convert all of their models to hybrid or
pure electric within the next few years, well ahead of schedule. The
other day, the Japanese government announced that they plan to reduce
overall carbon emissions 15% by 2020, and automobile fuel consumption
by some huge number by then -- I think it was 70% -- by mandating
that all cars be plug in hybrid or pure electric by 2020.
I assume their main goal is to save money; they are starting to see
major reductions in fuel consumption as cars improve and the
population ages and stops driving (and has actually begun to
decline). They have cancelled highway construction projects.
They are not "testing the waters" or planning demonstration projects:
they intend to convert their entire automotive industry in a few
years, and stop selling ordinary gasoline motor cars. This is similar
to their approach to indoor domestic lighting. Sometime around 1965 I
suppose it was, someone in MITI decided they were spending too much
on incandescent light bulbs, and one day every store in Japan sold
nothing but round fluorescent lights and fixtures. They still do; you
don't often see compact fluorescent bulbs. It is hard to find
incandescent bulbs. The only place I saw them, circa 1972, was in
bathrooms and hallways. Streetlights were then (and still are)
tubular fluorescent bulbs.
When Japan exports this technology this will permanently clobber
world-wide demand for oil. It will never recover, because the plug-in
hybrid is a stepping stone to the pure electric car. It will also
clobber what is left of the U.S. auto industry, unless Ford and the
"new" GM start selling plug-in hybrids and electric cars quickly. I
see little evidence they will do this, except for the GM volt, and
they have not sold a single one of these, whereas Toyota has sold
over a million Priuses.
Seriously, how is a U.S. compact car that gets 35 MPG going to
compete with a 98 MPG $15,000 Yaris? Who would consider buying
anything else? The clock is ticking. Cars like the Mini Cooper get 37
MPG highway and are made out of tin foil. The Smart Car gets 33 MPG
city, 41 MPG highway, which I find pathetic. It is only a little
better than my 1994 Geo Metro, and I have twice the space and can
carry 4 people, or 4 large dining room table chairs (yesterday). I do
not see these itty-bitty cars competing with a Yaris that gets nearly
3 times the mileage and has some safety features and lots more room.
And you can be sure that in 10 years or so there will be a plug-in
Yaris that effectively gets hundreds of miles per gallon.
- Jed
