Oil is close to $150 a barrel and there’s no relief in sight. The International Energy Agency (IEA) predicts that oil markets will remain tight until 2013. Consumers feel the pain in many ways. The cost of feeding the average family’s car with fuel is soaring all around the world, inflation is getting out of hand with two thirds of the earth’s population facing double digit inflation rates and consumer confidence is falling as people cannot spend money that they have to spend on exploding costs for energy on services or goods. Gasoline prices are well beyond $4 a gallon leading to resentment amongst U.S. drivers, most emerging countries that subsidize fuel to make it affordable for the people had to hike up prices several times this year as the price increase exacerbated their capability to influence the price and Europeans who generally pay a few times more for gasoline than Americans do (e.g. in Germany, the average price of fuel for one liter is close to 1.60€. This would be about € 6.07 per gallon, about $ 9.53 per gallon.) are also less eager of spending an ever greater part of their monthly pay on gasoline. But drivers are changing their behavior in response to high fuel prices. In most industrialized countries, fuel consumption decreased by several percent in the recent months. And as the long-time outlook is even worse, a major change towards mobility not powered by fossil fuels is about to happen. Oil will become more and more expensive until the price reduces demand. But demand is still growing, even outpacing supplies, thus, Goldman Sachs that predicts $200 a gallon for the near future may be right. There are many signs indicating that the SUV-era is over. With a 100% increase in gasoline prices and double digit decreases of car sales in the US, it’s foolish to deny any longer that gas-driven cars are getting out of style. American car makers will be paying the price for legging behind unless they focus on totally different product lineups. GM and Ford are making progress by shifting away from pickups and SUVs. GM considers getting rid of the Hummer and will launch an electric vehicle and a very fuel-efficient mini car in 2010. (Check out yesterday’s post)
Of course, the global energy crisis is on top of the agenda at the 2008 G8 summit in Japan. The host country Japan wants this summit to be a green summit presenting itself as the leader in efficiency and innovations. Toyota has enormous success with its hybrid cars, especially the Prius is doing pretty well all around the world. Other Japanese automakers are focusing on electric, hybrid and hydrogen fuel cell cars. Japan’s top seven automakers supply the green fleet for the guests of the G8 summit in Toyako. Some of these cars will go on sale as early as 2009 and according to Mitsubishi, the costs of recharging its electric mini cars can be as low as one ninth of the costs of a fill-up at the gas station. These green cars have several advantages as they help to decrease the dependence on imported oil, save money and save the environment by driving with zero emissions. And even if fuel cell cars are no viable alternative for now, they could be the long-term solution. Fuel cell cars have pretty much in common with electric cars as they both use electricity for power and an electric motor. The only major difference is that fuel cell cars use hydrogen as energy source while plug-in electric cars use batteries for storing the electricity. So, with batteries becoming more and more powerful, electric cars can go on sale now and bridge the time until hydrogen storage is effective and safe. The most outstanding advantage of vehicles with an electric motor is that the electric motor has a high efficiency factor which can be as high as 80% while the combustion engine loses most of the energy in the form of heat and has a quite low efficiency factor ranging between 20% and 30%. Another point is that an electric motor needs almost no maintenance. Only the batteries could require flexible solutions for the beginning period, but this problem will be solved and the batteries will become much cheaper with the start of mass production.
Yesterday, the electric car got some kind of endorsement from the EU energy ministers who abandoned at last their silly plan to force Europeans to consume gasoline with at least 10% of biofuel. Instead of using liquid biofuels to meet the target of transport powered by at least 10% renewables, the energy ministers agreed that producing electricity from renewables, e.g. solid biomass, and then using the electricity to power electric cars is the best way to save the climate without threatening millions of poor people to die of hunger. Using electricity to power cars is probably the easiest way to reduce emissions as electricity can be made from various energy sources, ranging from nuclear power to wind and solar power. As seven of the G8 leaders agreed that nuclear energy is the best tool to reduce CO2 emissions and to guarantee energy security (Only Germany is still on the wrong track and committed to its nuclear phase-out), the shift towards electricity-driven mobility is obvious.
And whoever killed the electric car in the 1990s, it’s on the comeback trail again. The oil industry that allegedly prompted GM to collect and destroy all of its EV1 electric cars will not be able to stop the revival of the electric car this time. And the Big Three car makers from Detroit that allegedly prefer gas-driven cars with combustion engines to electric cars as electric cars that would run multiple decades with virtually no maintenance and therefore would keep drivers from replacing their cars every few years, have no choice this time as Japanese competitors are outperforming them.
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