Cash for clunkers is the current raging political debate in the US.  Let’s cut away all the BS and look at what is happening: the cars being bought are on average about 10 mpg better than the clunkers (heard this on CNBC yesterday).  That means for an increase of about 40% for cars and 60% for trucks.  For a vehicle driving 20,000 miles a year, at 25mpg would use 800 gallons of fuel a year, saving about 600 gallons of fuel or 6 tons of CO2. If a car is used for 10 years (much more than average) the newer car would reduce CO2 emmissions by about 60 tons.

Yesterday, US carbon credits on the CCX traded for 40 cents, yes  $ 0.40, per ton.  So the US government is giving a $4500 rebate to protect the environment from $24 worth of CO2, about 200 times more than the market price.  So, if folks want to keep the program growing for the sake of ramping up car sales, that’s great.  Just don’t think the environmental benefit is worth the cost.

First off, my disclosure, i’ve lived my whole life within 50 miles of the headquarters of each of the Big 3, now the Detroit 3, first in Michigan and now in Ontario.  So, i have a vested interest in the US auto companies surviving, while at the same time, i want to solve global warming.  There is an inherent conflict between the goal of saving the planet and gasoline powered cars and trucks. The only way to achieve an environmentally friendly vehicle is to create only non-emitting vehicles, most likely the electric vehicles that are starting to be launched and announced over the last year.  The transition to electric vehicles is expected to take 20 years, in the mean time, governments are increasing fleet mileage requirments to help reduce emissions.

Higher mileage requirements are on the way, the state of California has legislated it, others states have joined the standard and President Obama has weighed in with his support of the same.  Is it any surprise that the Detroit 3, Michigan’s govenor, senators and congressional deligation are less receptive to these tougher standards.  Whenever it’s come to high mileage (translate that to small) cars, Detroit has repeatedly failed to succeed in the marketplace, so the reaction in auto country is understood.  But what if we can help put Detroit in (dare i say ‘The Driver’s Seat’) an adventageous position through legislation that helps auto makers meet these standards by rewarding them for alternative energy vehicles.

My proposal is simple, reward automakers for selling rechargeable electric cars, that can run at least 40 miles without charging, whether a 100% electric or a plug-chargeable hybrid.  The idea would be to take the EPA mileage rating of a plug-in hybrid on a single tank tank of gas and let automakers double it for the purpose of calculating an overall average fleet fuel mileage.  Say the new Chevy volt can be charged up, filled with 10 gallons of gas and driven 500 miles for a average of 50 miles per gallon of gas, GM could add the sale of 1 car with a 100 mpg (50 miles x 2) to their overal fleet.  If a car was fully electric, with no gas engine, the manufacturer could take the range of the vehicle, per charge and triple it. For a 100% electric car that had a 100 mile range, the auto manufacturer who sold it could count it as a 300 mpg vehicle.  This incentivizes all auto manufactures, not only the Detroit 3, to introduce electric cars to help reach higher mileage standards, without limiting the range of hydrocarbon fueled vehicles they offer.  In short, this let’s Detroit sell SUVs and Pickups, if they can sell enough green vehicles to keep their fleet averages about the government’s minimum.

Electric vehicles are inherently more efficient than the internal combustion engine, so less CO2 is generated for each mile driven.  Electricity can be generated from large traditional power plants which are efficent to operate and limits the number of pollution sources compared to 100s of millions of gasoline powered vehicle.  Finally electric has number sources of generation including a growing number non-emitting, renewable sources.

It’s hard to admit this to the world, but i think a lot less about driving today than I did in July and August when oil hit it’s all time high around $150 per barrel.  As gasoline prices moved past $5 a gallon, my trip to visit friends and family went from about $8 to over $15, just for gas.  When the reward for doubling up with the wife and taking one car on these visits approaches and surpasses the cost of a lunch at the nearest drive thru, it’s time to reconsider.  Giving up the convenience of being able to change plans, was worth saving $15. Today with the world financial system collapses and gasoline prices following suit,  I’m thinking more about saving green, as in US Dollars and less about going green.

Reconsider I have.  I have reduced trips and even bought a bike for both exercise and for the short 1-2km trip to the local shop.  It was important before gasoline hit $5, when it was easier to savor the reward of going green by reducing your use of single passenger fossil fueled vehicles.  If I could swap money for saving the planet while getting more exercise and using the car less, the choice is simple.  This is what I was convinced of in August and September.  Today it’s November 1st and truth be told, i’ve only used the bike once or twice to get to the store and it’s too uncomfortable for a trip longer than about 10 minutes each way.  Gas is down and some bad habits are back.

Forgive me for going on about this, i’m sure most have considered these issues over the last year, but i wanted to focus on today.  Today gasoline prices are back under $3 per gallon and i already have found myself ready to make a trip in the car, much more rapidly than just 2 months ago!  Fortunately I’ve been able to keep myself from running out and still bundle my trips together. It’s amazing how much the price of oil seems to affect not just my attitude towards the resource and the environment, but also my behavior. Don’t give up the fight to conserve. Using less resources that emit CO2 is helping the planet and it’s likely helping you save some money too.

What’s up at UPS, the United Parcel Service, regarding going green?  Well the latest news from the company that likes to be know as “Brown” announced their order for the first 7 “Hydralic Hybrid” delivery trucks.  The “Hydralic Hybrid” stores power by pressurizing hydralic fluid, instead of sending electricity to a bank of batteries.  The early testing in metro Detroit have shown that these trucks can reduce fuel usage by 45 to 50% and CO2 emissions by 30%, when compared to conventional diesel engines. 

This new technology began development October 2001 a R&D project between Eaton Corp and the US EPA laboratory in Ann Arbor, Michigan.  The vehicles that are delivered to UPS will be powered by a high efficiency diesel engine that periodically recharges pressure in the hydraulic store, rather than sending power to the wheels.  This technology is seen as a cost savings solution for large trucks, a way to reduce oil use and a way to reduce CO2 emissions from large vehicles.  It is estimated the the fuel savings will pay for the cost of this solution within 3 years.

The vehicles are being built by Navistar, using the Eaton technology.  Navistar’s participation is based on their ability to offer their customers “performance and reduced emissions with dramatic improvements in fuel economy,” said Steve Guillaume, Navistar General Manager, Medium Trucks.  UPS expects to take delivery of these vehicle in 2009 and 2010.  UPS noted in their press release that they are already the largest “green fleet” or more than 1600 vehicles growing to 2100 as the company ads another 600 vehicles this year.

Eaton’s press release:

http://www.eaton.com/EatonCom/OurCompany/NewsandEvents/CT_190984

UPS’ press release:

http://www.ups.com/pressroom/us/press_releases/press_release/0,0,5052,00.html

If you watch television you’ve seen the ads with oilman Boone Pickens promoting switching our vehicles to run on natural gas/renewable fuels.  If not, the plan is based on 1 fundamental point: that relying on foreign oil is dangerous to the US economy and it’s position in the world.  In short, we should switch to natural guess to power vehicles instead of using oil.  The plan itself is under attack for substituting one carbon based fuel for another, when CO2 levels need to be reduced.  Further the is under attack because it’s creator/backer, 80 year old oilman T. Boone Pickens, has substantial investments in the various components of the plan.

The Good

The plan is about reducing dependence on oil and the transfer of wealth from the US to oil producing countries.  Keeping our energy spend at/near home is something that i support with my environmental, nationalist and capitalist values.  Environmentally the plan calls on substituting natural gas for gasoline that is mainly made from imported oil and substituting the electricity that is generated by natural gas, with wind power. This is a net gain for the environment. First, natural gas generates 30%+ less CO2, per mile than gasoline.  Further switching to wind from natural gas power plants eliminates the emissions from 16%+ of the power generation and about 11% of overall emissions for electrical generation (nat gas generates 33% of the CO2 of coal plants) due to it’s cleaner burn.

The Bad

The Pickens’ Plan encourage changing the entire US truck fleet to natural gas, since trucks use 25% of all gasoline.  Pickens owns Clean Energy Fuels corp. a company that runs natural gas filling stations.  Pickens’ plan calls for wind power to replace natural gas generated power, to make the fuel available for transportation.  Pickens has ordered over $2 Billion worth of wind turbines to help produce that electricity.  The plan calls for the government allow emergency use of eminent domain to create right of ways for high voltage links between wind farms and electric users; Pickens is seeking to have power lines built to his wind farm.  While the plan may help the country, it is Pickens, more than any other individual, who will benefit from his plan.

The Ugly

Boone Pickens has been around for years and has acquired a number of friends and enemies.  Many enemies in the environmental movement base their stand on the effects of his business on the environment.  We all know about the environmental issues of an oil based economy and as a the ultimate Texas wildcatter, Mr. Pickens has made his fortune(and lost it and made it back) in the Oil and Gas industry.  More recently, Mr. Pickens has acquired the majority of water rights, for his Mesa Water, in his county in texas and intends to pump ground water for sale to Dallas, which is over 200 miles away.  Not only does he intend to pump water to sell, he intends to do so at a rate which empty the aquifer in 20 to 30 years.  In June he manage to get his ranch declared a public water district which gives him considerable power in using eminent domain to take property need for his 200+ mile pipeline.  Finally is you are a democrat and/or some one angry over the Swift Boat ads directed at John Kerry in 2004, it was Boone Pickens that spent over $7 million to bankroll the activity.

The Conclusion?

I think it’s a good idea to switch transportation to natural gas, from oil, but to put a bunch of government subsidies to make this switch when we are just a few years from plug-in rechargeables with reasonable cost and range isn’t wise.  Better we should subsidize, non-carbon technology with government money or tax credits.

Anthony Rubenstein discusses the plan and California Prop 10 at his site www.AnthonyRubenstein

I’ve been shocked by a recent Toyota commercial airing on Canadian TV. The ad, basically is trumpeting Toyota’s green credentials.  As in all Toyota commercials these days, it features their Hybrid vehicles and technology.  I wrote about the amazing cost of the CO2 displaced by a Toyota hybrid here: http://sunpowereddreams.com/2008/08/17/the-hybrid-hype-overpaying-for-co2/.  What shocked me was a statement at the end of this commercial - “Our goal? A car that actually cleans the air..”

Well it’s certainly a bold promise for a company that still doesn’t have an all electric vehicle.  What’s even funnier than the statement itself, is that Toyota USA is advertising about “striving for” zero emmissions and zero waste.  Frankly the Canadian ad reeks of an ad agency gone overboard.  What’s next? A car that prevents you from aging, or that cooks lunch?  Why would you put this “pipe dream” into your ad? It might not be green washing  but it’s way past a rational goal and very much on the way to the utopian thinking.

I think it’s way too much for a car company that still runs on the internal combustion engine.

If you’ve been watching the talking heads on TV, not only will hybrid autos and trucks help solve the problems of foreign oil but free of from the grips of global warming.  Politicians, business leaders and even environmentalists have joined together to sing the praises of Hybrid technology.  But it’s all a big lie!

Read for yourself on Toyota’s website:               http://www.toyota.com/about/news/product/2008/05/15-1-prius.html

I was watching the Olympics and heard/saw a Toyota ad saying they have sold and shipped over 1 million hybrids and reduced CO2 emissions by 4.5 Million tons.  According to my results at the Toyota “Build Your Own” site, the hybrid 2009 Camry is $26,569 while the base 4 cylinder gas model is: $19,640.  That is nearly a $7000 difference per car, for a 4.5 ton reduction of CO2 emmissions.  The simple point is that a hybrid cost of over $1,500 per ton of reduced CO2.  The market price of UN Certified Carbon offsets, in London (the most expensive offsets Dec 2013, required by law in EU) closed on August 15, 2008 at: $44, while US voluntary offset credits which sell for $3.80 a ton. 

If you do the math on the hybrid you are buying to fight global warming, you’ll see you are over paying.  In fact, you are paying 34 times more than the highest CO2 price in Europe and nearly 400 times the cost of the of CO2 in the US market for each ton not emitted by your hybrid.  Now i’m assuming that the car itself does emit much less CO2, but that Toyota also accounted for the CO2 that went into building the hybrids, which is an honest representation.  This doesn’t necessarily mean “Don’t buy a hybrid”, it means don’t buy a hybrid to fight global warming, it’s way too expensive

What would $7000 buy? A 1 kilowatt Solar cell system for your home, installed.  That’s about $5000 of cells and a $2000 for tying into grid.  if that system generated 1 kw just 4 hours a day (about 1500 kwh a year) you save 1.5 tons of CO2 (1 ton per megawatt of coal generated electricity) each year of about twice what the Prius saves over a 5 to 7 year lifetime of the car. Meanwhile solar panels have an expected lifetime of 20 to 30 years.

Buy solar power, a windmill or an electric car if you want to fight global warming and leave the hybrid for those who can’t do the math.

Andy Grove former chairman and CEO of Intel and one of the pioneers in the semiconducter industry spoke out today on the need for electric transportation and the widespread awareness of this coming up thru society.  Grove spoke recently with AP reporter Ken Thomas where he expressed his view of society needing to shift its focus to electric transport as a way of dealing with ever increasing oil prices.

Grove explained his goal. “The most important thing I would like to do is light that almost half-assumed truth up in neon lights: Electricity in transportation has to be done. It is urgent. It is important that everything else is secondary”.  Grove continued to explain, “The drumbeat of the electrical transportation is accelerating like nothing I’ve ever seen in my life”.  That is a pretty powerful statement by the man who helped intel control the CPU market much like microsoft has done with software.  Grove is banging the drum on the development of these new electric transport technologies as a way of rescuing our economy from the affects of oil price increases.

Grove pushes for government support/incentives to support the electric car movement, with a particular eye on retrofiting existing gasoline cars.  He continued to expand on his point when he compared the emergence of the PC with the current electrical transport industry.  “The personal computer … went to individuals first before it went to corporations. The conversion goes to individuals,” Grove said. “Electric cars … the corporations are sitting, wishing this whole friggin’ thing to go away. Which is exactly what the computer companies’ attitude was to personal computers.”

I’ll start this article with the disclosure that i own shares in Amerityre (AMTY) the company i feature in this article.  This company was suggested to me as a longshot, green investment by a friend out west who is into trading stocks (i’m into investing for a period of a year or two).

So, Amerityre manufacturers foam polyurathene tires, the sort that might be found on electric mobility devices and powered wheelchairs.  They make solid tires used in agriculture, they make “tire fill” to go into solid and “run flat” tires.  Most recently they’ve been working on pneumatic (air filled) tires to replace the traditional rubber tires used on cars and trucks.  So, why is this company suddenly on my Solar/Green blog?  Because this company fights global warming.

 Let’s start with the product that is still under development, the automotive, pneumatic tires.  The first test indicate that the Polyurathene tires were getting less traction than rubber tires, but also had a lower rolling resistance than rubber, enough to increase gas mileage by 5 to 10%.  So, if you just look at the final product, a tire on a car, this new concept can help reduce the use of gasoline and it’s CO2 output and is a greener product than rubber.  Yet the greatest value of the product is gained, not when it’s mounted a car, but during manufacturing.  To vulcanize rubber and create tires, you must use heat and pressure on the rubber to harden it.  In contrast the heat and pressure, which is a huge cost in terms of energy and CO2 is absent from the Amerityre process.

A second product, being shipped today, is a tire fill.  That is a material used to fill rubber tires that are used for construction or “run flat” and have a rubber outside and some solid form of fill. The “Amerifill” is a lightweight alternative to traditional fill, once again, helping remove weight from vehicles helping save fuel in the shipping and use of these tires.

 Is this a great investment? Will be soon driving on Polyurathene tires? I don’t really know, but it shows another business that is going to make money in the green revolution by causing the evolution of tires into to a product with a lower carbon and energy footprint.

Whenever oil prices are cheap, there is no discussion of oil being a limited resource or a cause of pollution or as a source of greenhouse gases.  As prices begin to climb, the voices of conservation, environment and technology, are once again heard.  This latest increase in the price of oil (the last several years) have, excuse the pun, fired the discussion right up.  Terms like $100 oil and Peak Oil, combined with projections of increasing scarcity do to politics around the world, has had the effect of increasing intrest and more importantly implementation, of alternate sources of energy.  In a world so committed to fossil fuels, price is likely to be the most important factor in leading to a switch to renewable energy. This is no suprise to dyed in the wool capitalists, but still hasn’t sunk in with the general public.

The solution to human generated Carbon Dioxide is in the marketplace, as it has always been.  When the price of oil, gas and coal are expensive enough, that alternate energy production becomes feasible, not just possible.  In so much of the industrialized world, there is a shortage of generation and distribution for extreme peak periods, threatening blackouts, somewhere, each summer.  In the industrializing world, read that India and China, there is a serious shortage of power.  Companies that need to work in the world markets, must provide backup power and communications, to prevent regular brown outs and black outs to overcome these obstacles. 

As the world economy and population grows, the need for oil rapidily increases. As demand increases, price increases unless there is additional supplies available to meet the demand.  So $70 a barrel oil is this expensive because of simple “Supply and Demand” models.  Well, not entirely, there are also bad news events that put future, expanded oil capacity online.  Hurricanes in the Gulf of Mexico, Venezuela’s revolution and a 35% drop in oil output, Iran’s production dropping.  When combined with violence in the middle east, nigeria and indonesia production capacity is dropping and the major international oil companies to have been force leave/sell assets to government monopolies in what was once a number of promising new sources.

Finally the last concept, the one that is most controverisal of all factors affecting the oil market specifically and the energy market generally, is the “Peak Oil” theory.  Simply stated, “Peak Oil” states, that 1) Oil is limited resource, it will run out someday.  2) The oil output is now peaking as all the oil that can possibly be pumped out of the ground is now being pumped out at maximum capacity.  I don’t necessarily believe that we have reached that point, but when we do, it should result in a steady, unstopple increase in prices, until demand drops below the production capacity at that time.

So, it summary, there are political worries,  increased demand and a decrease in new major oil fields that are combining to push up oil prices.  As these prices rise solar and wind solutions become increasing affordable.  So while petroleum prices are rising the cost of solar and wind generating deployments are decreasing, the world moves to alternate energy as a response to the marketplace.  Had someone told me back in 1980 capitalism would be the best way to spread the move to alternative power, the “socialist” me would have rolled my eyes in amazement.   And yet…..