Category Archives: Environment

Research Paper “On the Threshold to a New Energy Age” and Survey Results

As part of the research for my research paper “On the Threshold to a New Energy Age“, I conducted a survey in order to find out how “prepared” people are for the transition to a new age of energy generation and use as well as to gather opinions on current trends in energy issues.

In the coming days I will publish the results of the question-by-question analysis. The questionnaire contained 14 questions. 73 people took part in my survey. More than three quarters of participants came from the United States. I interviewed the remaining quarter in Japan, Singapore, Germany and Portugal.

All questionnaires had been distributed and returned between April 2009 and September 2009.

You can find the survey results on the Main Menu page “Energy Survey”:

Check out the  ‘RP: New Energy Age’ Category for the downloadable version of my 50-page research paper and further commentary on the survey results:

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Filed under Auto Industry & Electric Cars, Economy, energy, Environment, Global Issues

California is running out of liquid resources, literally.

My comment on The Huffington Post article “Schwarzenegger Declares California Drought Emergency“:

California is running out of liquid resources, literally.
The “Golden State” fails to balance its budget and in addition, the worst drought in decades forces utilities to restrict water use. The Californian governments have failed to raise taxes where necessary and cut unnecessary spending. Now the state is in that dire financial straits that even schools have to scale back. That’s ashaming and undermining efforts to prepare American kids for the challenges of a 21st century global economy. While public spending in CA has got out of control in the last decade, the country’s water infrastructure is chronically overburdened and rusting away. Central Valley farmers will have to turn to smart irrigation technologies that could help to save immediately 40% of the water required today to maintain the soil productivity of the San Joaquin Valley.
While droughts and wildfires will occur much more frequently in the future due to the impact of global warming, California should turn to the sun for future growth. The energy technology sector is a unique opportunity for Silicon Valley. Thin-film solar panels could cover sky scrapers in L.A. as well as roof shopping mall parking lots. If outlets were installed at most retail parking lots in CA, the batteries of electric cars could be recharged while drivers are doing their shopping. President Obama recently made it clear that energy will be one of his top priorities.


Filed under Economy, Environment

giant solar power project in China


China has become a country with an apparently insatiable appetite for energy. Although China’s economy is slowing as the global meltdown crushes demand for Chinese goods, Chinese energy companies are busy importing ever more oil and coal and other commodities. Dependence on oil imports from politically unstable nations not only poses a threat to the U.S. and the Western world, but also to China. A supply interruption would have disastrous consequences for China’s stability and economic growth. This one of the reasons why China needs to embrace alternative sources of energy. Of course, China is being confronted with criticism from environmental organizations that it is doing too little to limit greenhouse gas emissions. But obviously, the Chinese government cares less about tree huggers than about economic and social stability as well as saving potential and future business opportunities. Solar power is the most promising source of energy we have and the solar industry will grow to a key industry over the next decade.

To ensure that China will have a stake in the future energy tech market and in order to diversify the energy generation process, China will build a giant solar power station in the Qaidam Basin, a very arid basin in Western China. The place is perfectly suitable to host the world’s largest solar power station as it has a high average of daily sunshine hours . In the first stage of the project, a 30 MW  solar power farm costing about $150 million is to be built by the China Technology Development Group and the Qinghai New Energy Group. Construction will begin this year.

The long-term power generating capacity goal is one gigawatt (1,000 megawatts) of solar power. The next largest photovoltaics project is a 0.5 gigawatt power plant in California.  (a modern nuclear power plant has a capacity of about 3,000 megawatts) 1,000 megawatts is really huge for a solar power plant. When and whether the construction of the second phase can start depends on the success of the first.

Environmentalists are unlikely to be satisfied with this step as they highlight that China’s investments in coal-fired power plants are way above those in clean energy, but there can be hope that once the Chinese government recognizes the profitability and opportunities of solar power, the investments into alternative energies will be scaled up. Chinese officials are well aware that a strong alternative energy sector is a necessity, not a waste of money to greenwash China’s image.

The announcement of this mammoth project helped to boost confidence within the solar industry which is suffering from the credit squeeze and recently lower energy prices. Most people seem to believe that the upcoming energy crisis is averted due to the lower energy consumption caused by the economic turmoil. However, the beginning of the supply shortage is just delayed. The more investments are being postponed, the more painful the rebound of energy prices will become.


Filed under Economy, Environment

WORLD ENERGY OUTLOOK 2008 – “What we need is nothing short of an energy revolution”


Energy is the topic of our times. Energy issues have an effect on every part of this planet and on every person inhabiting it. We need energy to run our cars, heat and cool our homes, use our computers, illuminate houses and streets and to do lots of other things we either cannot forgo or do not want to. We depend on energy. Consequently, rising energy prices hurt us. Most of the energy we use derives from fossil fuels. When we burn fossil fuels, we emit carbon dioxide gas into the atmosphere. This drives global warming. Climate change will have a devastating effect on many regions of the world. We are already seeing extreme weather events. Sea levels are rising and therefore threaten entire countries. The Maldives are at risk of being inundated in this century. Therefore, the new president of the island nations seeks new homeland for his people. He plans to set up a fund to buy new land on the shores of the Indian ocean.

On Wednesday, the International Energy Agency (IEA), an intergovernmental organization founded by the OECD (Organisation for Economic Co-operation and Development, its 30 members are almost only developed countries) in the aftermath of the 1973 oil crisis, released its World Energy Outlook 2008, an annual report containing energy analysis and projections for the medium and long term. The IEA which has a reputation for being rather optimistic and understating the scarcity of oil reserves sounded the alarm bells that oil’s days are numbered. Between the lines, they acknowledge that Peak Oil is not so far anymore, though they prefer to refer to Peak Oil as “plateau”.

Here’s the opening paragraph: (from the executive summary on

The world’s energy system is at a crossroads. Current global trends in energy supply and consumption are patently unsustainable – environmentally, economically, socially. But that can – and must – be altered; there’s still time to change the road we’re on. It is not an exaggeration to claim that the future of human prosperity depends on how successfully we tackle the two central energy challenges facing us today: securing the supply of reliable and affordable energy; and effecting a rapid transformation to a low-carbon, efficient and environmentally benign system of energy supply. What is needed is nothing short of an energy revolution. This World Energy Outlook demonstrates  how that might be achieved through decisive policy action and at what cost. It also describes the consequences of failure. 

Their figures from an analysis of more than 800 oil fields around the world shows that demand will severely outstrip supply in the future. The report highlights the urgency to take action as the growth outlook for global oil production was reduced compared with earlier WEOs.

The IEA projects that even if demand for oil remained the same as today, we would need 4 new Saudi Arabias by 2030 to meet demand.

Though the report says “global oil production is not expected to peak before 2030, production of conventional oil […] is projected to level off towards the end of the projection period”, this means that we are extremely likely to see an oil-supply crunch by 2030 or even earlier unless we discover a few gigantic new oil fields and/or reduce our consumption decisively.  The IEA expects that $26 trillion need to be invested by 2030, and most of that money is needed just to maintain the current production capacity. The aging energy infrastructure is extremely vulnerable. If nothing is done about that, it will keep rusting away. Besides, the IEA anticipates a massive contribution to future oil output from Canada’s tar sands and Venezuela’s huge reserves of extra heavy oil which cannot yet be processed economically. Sure, Canada’s reserves are gigantic, but to get high quality crude oil out of these sands, it takes lots of energy first what makes oil from Canada quite expensive. Another point is that with oil prices having plunged to below $60 a barrel for delivery in December, reduced investments in these tar sands will delay the grand-scale availability of new oil resources. The oil output estimates in the WEO are also based on the widespread use of enhanced oil recovery (EOR) techniques. This means that either gas or chemicals are injected into the ground in order to get more oil out of the wells. Finally, a considerable share of future oil production should come from yet undiscovered fields. In other words, if anything does not work out perfectly, the crunch will happen much earlier than 2030. The IEA’s assessment of the future development of global oil supplies is not as honest as it should be. With the reliance on sky-high investments, sensational discoveries and expensive new drilling techniques, the IEA estimate is a best case scenario.

More realistic are the figures on output decline. Output from oil fields that already reached their peak decline at an average rate of 6.7% annually. Just imagine what the impact will be when the Ghawar oil field in Saudi Arabia, the world’s largest known oil field reaches its peak! Ghawar is currently producing about 6.25% of the global output.


The problem is that the output decline at existing fields nullifies the contribution from all new discoveries. Unfortunately, most of the new fields are very small in comparison with the few gigantic fields that have been in production for more than 40 years and small fields tend to be declining much faster than bigger ones, once they reach their peak. Moreover, it takes much more energy to extract oil from fields recently discovered, as they’re often offshore or deeper in the ground. Thus, oil from new fields is inevitably much more costly.

You can take a look at the oil production chart on page six from the press conference: 

Obviously, the point in time when currently producing oil fields reach their peak is right about now. To maintain current levels, oil from fields yet in development and non-conventional oil will have to fill the gap.

Massive investment is needed to stabilize supplies at the current level, but given the impact of the financial crisis, many investments could be delayed, with severe consequences:

“In fact, the immediate risk to supply is not one of a lack of global reserves, but rather a lack of investment where it is needed.” As soon as the economy recovers, oil prices could go up to record levels again. Shortages could occur unless the adequate investment of more than $1 trillion per year is made. Another threat is that renewable energy projects are also delayed due to falling energy prices.

Now, let’s take a closer look at the IEA’s “reference scenario”:

They expect a 1.6% per year demand growth between 2006 and 2030. This would mean a 45% increase at the end of the projection period. Half of that increase will come from China and India. The Middle East also is likely to have a strong demand growth. The bottom line is that 87% of the increased demand will come from non-OECD countries. Back in 2005, non-OECD countries overtook OECD countries in terms of oil consumption.

As most emerging nations need any source of energy available, coal’s share in global energy generation will also increase from 26% in 2006 to 29% in 2030. This is exactly how we can help climate change to feel comfortable and stay.

I find it quite surprising that despite the recent renaissance of carbon-free and inexpensive nuclear power, the share of nuclear power of the total global energy consumption will be lower in 2030 than it is today.

To no one’s surprise, renewable energies are anticipated to grow faster than any other source of energy – at an average rate of 7.2% annually until 2030. Solar, wind, geothermal and marine (tide and wave energy) are on the rise. I assume that the IEA experts didn’t consider the enormous progress that is being made in the solar industry and in other alternative energy areas. Thin-film solar panels, more efficient technology and mass-production will result in falling prices and a quicker spread of solar technology. Energy storage systems will also help to drive up solar energy generation much more quickly and cheaper than the energy experts from the IEA probably expect.

In the IEA scenario, most of the oil production increase should come from OPEC countries. as non-OPEC production is “at plateau” – I’d call it peak as it will decline fast, just as reported. By 2030, more than 50% of the global oil output will be controlled by the OPEC cartel. The oil fields which are declining the slowest are also located in the Middle East while those fields whose output is dropping fastest are in the North Sea. This should be a reminder to the Western world to make efforts to get away from oil as soon as possible  – without spending too much attention at how long we could afford lazing and doing nothing. The Middle East and the OPEC are set to become even more influential in the future and will be able to dictate prices. After all, alternative energy means money spent at home and jobs being created at home.

Natural gas is no powerful alternative either – as the reports wants to make us believe – because more than 56% of global gas reserves are in the hands of Russia, Iran and Qatar. They’re already considering to start a gas-OPEC to make sure they’ll be making a killing.

IEA figures suggest that proven oil reserves are between 1.2 and 1.3 trillion barrels (including 0.2 trillion barrels of non-conventional oil). These so-called “proven reserves”  more than doubled since 1980 and in most OPEC countries, oil reserves are a state-secret and some experts say that the official reserves are vastly exaggerated. Based on the numbers they obtained, the energy experts from the International Energy Agency say that the world has “enough [oil] to supply the world […] for over 40 years at current rates of consumption.” Even if this is true, it doesn’t mean that oil will be affordable for so long. The IEA chief economist Fatih Birol expects highly volatile prices and hefty fluctuations. Their price assumption for 2030 is $200 per barrel in nominal terms. They also say that the inevitable price hike will have “serious adverse implications for the economies of consumer countries.” Another adverse trend is that the largest share of oil reserves is in the hands of national government-controlled and inefficient oil companies who lack the skills and equipment necessary.

Sure, but who says that the United States, Japan and Europe will be that dumb and keep consuming expensive, unsustainable oil from a cartel that is looking forward to terrorize the Western economies in conflict situations?

As can be seen on the “fact sheet”, three quarters of the demand growth will come from the transport sector. Despite an improving fuel economy, more and more gasoline is consumed in cars since the global car fleet is rising from 650 million vehicles in 2005 to about 1400 million vehicles in 2030. The IEA says that they do not expect a shift away from conventionally -fuelled vehicles before 2030. That’s bullshit! A fundamentally wrong estimate. Gasoline prices will inevitably rise globally soon. Drivers in emerging countries are struggling to afford driving anyway. Without hefty government subsidies, the number of drivers in these countries were much lower.

In 2007, Iran and Russia both subsidized energy with more than $50 billion to artificially keep domestic energy prices down. China, Saudi Arabia, India and Venezuela also subsidize gasoline with enormous amounts of money for the same reasons. Altogether, more than $310 billion were spent in the 20 largest non-OECD countries in 2007. These subsidies must be removed to prevent artificially high oil demand and emissions. (take a look at China, India and other countries subsidizing gasoline to keep domestic prices down are forced to embrace electric cars)

The World Energy Outlook 2008 also calls for urgent action to combat climate change. The IEA projects a 45% rise in CO2 emissions given the global climate policy of inaction. Co-ordinated action is urgently needed. At the Copenhagen conference in 2009 where a post-Kyoto framework is to be established, emerging nations must be included as 97% of the increase in carbon dioxide emissions will come from non-OECD countries. That’s also the reason why the 2007 G8 summit in Heiligendamm, Germany, remained effectless. The G8 nations cannot bring about major changes anymore unless they’re pushing in the same direction with China and India.

The IEA suggests a “decarbonisation of the world energy sources” in order to prevent a catastrophe and irreversible damage to the global climate. “Governments have to put in place financial incentives and regulatory frameworks that support both energy security and climate-policy goals in an integrated way.”

As a conclusion, the last paragraph of the executive summary:

“The energy future will be very different.

For all the uncertainties highlighted in this report, we can be certain that the energy world will look a lot different in 2030 than it does today. The world energy system will be transformed, but not necessarily in the way we would like to see…[W]hile market imbalances could temporarily cause prices to fall back, it is becoming increasingly apparent that the era of cheap oil is over…It is within the power of all governments, of producing and consuming countries alike, acting alone or together, to steer the world towards a cleaner, cleverer and more competitive energy system. Time is running out and the time to act is now.”

IEA WEO 2008 fact sheet  IEA WEO 2008 executive summary  IEA WEO 2008 press conference

Check out the following posts for more information:

OPEC’s plan to cut oil output to keep prices from falling emphasizes the urgency for the western world to get independent from the cartel

Our prosperity hangs by a thread as it is based on a limited resource – oil


Filed under Environment, Global Issues, Politics

OPEC’s plan to cut oil output to keep prices from falling emphasizes the urgency for the western world to get independent from the cartel

Crude oil price chart

Crude oil price chart


A global economic cooldown is more and more likely with the United States and many countries of the European Union already in or close to a recession. The global financial crisis sparked by the burst of the housing bubble in America spreads hysteria, fear and confusion around the world. Stock markets around the world have gone crazy. We saw tremendous losses and short-term record gains on stock markets in recent weeks. Many large financial institutions have collapsed or needed to be bailed out by governments with tax payer money. Fears that the deeply routed problems in the financial as well as in the private sector could bring down the whole system, prompted governments around the globe to take action. In the meantime, trillions of dollars are used to stabilize the financial system. This unprecedented government intervention has, however, not yet restored confidence. Shares plummeted, trillions of dollars in share value have been lost. Markets almost imploded during the last few weeks. Unemployment in the U.S. has risen to a relatively high level. The situation is bad and its widely expected that we haven’t seen the bottom yet.

One consequence is that energy demand from industrialized nations has fallen which reduces demand for oil decisively. Consequently, we watched the price of oil falling by more than 50% since July’s record high at $147 a barrel. Crude oil is trading close to $70 per barrel right now. Though oil is still expensive in comparison with oil prices below $16 a barrel like in the late 1990s. But the plunge in oil prices is apparently causing fear in many oil exporting countries. Especially OPEC countries have become used to extremely high revenues from oil exports and populist leaders like in Iran and Venezuela increased government spending exorbitantly. Hugo Chavez of Venezuela uses most of the country’s oil revenues to build up socialism in Venezuela. This is how he managed to be an elected and legitimatized leader. But the annoying thing for these countries is that they depend on oil prices above $80 a barrel to balance their budget. If oil prices don’t recover, Iran, Venezuela as well as Iraq could see a budget deficit. Even Saudi Arabia has an interest in keeping oil prices high, as it needs $65 a barrel to pay its bills. Some countries like Iraq already revised budget projections downward and cut spending, but other countries, especially those who are lead by populists, are afraid that less generous public spending wouldn’t go down well with the people and threaten their power. That’s why OPEC will hold an emergency meeting on Friday at its headquarters in Vienna. They’re expected to decide on considerable output cuts in order to “stabilize prices”. In other words, they can’t get enough money and they don’t care about whether their customers actually could bear the burden at the moment. In the late 1990s, the situation was similar when oil-exporting countries saw urgent need for higher prices during the price slump caused by the Asian crisis. At that point in time, oil prices were approaching the $10 line. Now, the cut in oil production should shore up prices at a level that is much higher than back in the 90s. Nevertheless, it’s not certain whether an output cut can reverse the trend in oil prices immediately. However, there can be no doubt that oil prices will soar even above $150 a gallon in the medium-term, as oil production will peak inevitably within  the next decade. Global oil reserves are limited, and most of the oil that is easily accessible has already been pumped out of the wells. Fortunately, the current crisis gives us some extra time to prepare for a transition away from oil. The more time we have to come up with alternatives, the less brutal this transition will be. But we obviously have to hurry, though, as we do not anymore want to rely on OPEC’s good will beside from the enormous amount of money that is daily transferred to the Middle East. Energy independence is vital for national security, economic stability and growth. When we start to tap into energy sources that are accessible at home using technologies that are developed at home, millions of new jobs will be created and tax revenues will remain within the borders. In addition, we can reduce our carbon dioxide emissions and combat global warming.

As reducing the power of the oil cartel and shifting to alternatives is in our and the planet’s best interest, there’s no reason to hesitate!

What we can do:

This car is hot! – Tesla Motors’ electric sportscar

The electric car revolution is about to happen


Filed under Economy, Environment, Global Issues, Politics

This car is hot! – Tesla Motors’ electric sportscar

updated version on my new blog:

Nowadays, almost everybody is talking somehow about energy issues. Be it the majority of drivers squeezed at the gas pump or environmentalists worrying about the consequences of our exuberant energy consumption: greenhouse gas emissions and global warming. Others worry about the threat our dependence on oil imports poses to our security. With the United States and all other major economies being addicted to oil, what President Bush publicly admitted in his 2006 State of the Union address: “Keeping America competitive requires affordable energy. And here we have a serious problem: America is addicted to oil, which is often imported from unstable parts of the world.” There’s not only reason to be concerned of the security of our oil supplies but also about the hefty fluctuations we’ve seen recently.

Fortunately , there are some creative minds that want to break our addiction, or at least reduce it. Unfortunately, these creative minds cannot be found anywhere in Washington D.C., nor in the automotive capital Detroit. But that’s not surprising. We will experience some kind of revolution in the not too distant future. Energy technology will become a crucial industry. And when looking back, we see that the giants of the last revolution, big companies like  Google and eBay and many others started out as small Silicon Valley start-ups. What can we expect now with Silicon valley having started to build cars? Will we see cars becoming twice as fast and twice as cheap every year just as computers?

Wait and see! The now 48-year old Martin Eberhard founded Silicon Valley’s first carmaker – Tesla Motors – in 2003. Eberhard named his company after the famous physicist and inventor of the electric motor. Eberhard, showing great concern for the environment and becoming aware of the advantage and potential of the electric motor, decided to build the car of the future. He was thinking of a car that was friendly to the environment, this means with zero tailpipe emissions AND fun to drive. Totally convinced of his idea and highly motivated, he started looking for investors. Next to venture capitalists, former eBay President Jeff Skoll and Google founders Larry Page and Sergey Brin, the entrepreneur, multimillionaire and PayPal co-founder Elon Musk invested millions of dollars. Today, Tesla Motors has its headquarters in San Carlos, California. Besides, Tesla Motors has an assembly plant in England, motor production in Taiwan and a research and development facility in Michigan which is close to Motor Town Detroit where they can get experienced automotive experts from struggling competitors.


Tesla Motors’ most outstanding model is the Tesla Roadster, an all-electric sportscar with a top speed of 125 mph (201 km/h) accelerating from 0 mph to 60 mph (97 km/h) in just 3.9 seconds. The driving range of the car is 244 miles (393 kilometers) on a single charge including the energy need for air conditioning, seat heating and other accessories. The battery pack is composed of about 6800 laptop lithium-ion batteries which have a high energy density and weigh 450 kilograms. Recharging the batteries takes about three and a half hours and costs about $3. What a bargain! Though its maintenance costs are extremely low and running it is almost for free with the Roadster’s incredible efficiency of 105 mpg (2.4 liters/100km), this very desirable car might not be affordable for everyone. The purchase price is about $100,000.
Nevertheless, demand is huge for these stylish breakthrough cars. Google co-founder Sergey Brin also ordered one Roadster. So did George Clooney who already received his electric powered sportscar in 2007. The sales numbers must be a bit below 1,000, but I didn’t find exact numbers.
Tesla Motors also has several other models in the pipeline:
The production of the high performance electric sedan Tesla Model S, whose price will be about $50,000, will start by the end of 2010 at an assembly plant which will be built in San Jose, California.
Until now, Tesla’s cars are high performance, high quality cars and they’re essential for branding. After having established Tesla as an innovative and quality car brand, a much cheaper plug-in electric car, currently being codenamed “BlueStar”, should be produced and hit the market in 2012 according to Wikipedia. The price could be in the $20,000 to $30,000 range. Tesla Motor’s sales expectations are beyond 10,000 units. With Tesla’s chairman Elon Musk owning a company providing solar power systems, some models could be topped with photovoltaic panels and generate the power to run the car for 50 miles on solar power.
Silicon Valley is known for its ideas that can quickly change the world. Eberhard is convinced that clean-tech will be the next big business. Generally, we are very likely to see energy technology rise to a 21st century key industry. Eberhard was not thinking of a car that was the most technologically advanced, but he was thinking of an intelligent way to realize an alternative to gasoline-driven cars as soon as possible at an affordable price.
Electric cars are in fact nothing new. In 1895, an electric car participated the Paris-Bordeaux car race.
Nevertheless, gasoline seemed to be the better way to power cars for more than a century.
In 1990, California’s Zero Emission Mandate, aimed at reducing air pollution, forced car makers to bring zero emissions vehicles to the market. But unfortunately, this promising mandate was first weakened and finally eliminated by the big car makers. Lobbyists succeeded in changing the bill so that sufficient demand was necessary to force car makers to provide these cars. Allegedly, big car makers like GM had advertisements aimed at keeping demand down. (according to the documentary Who killed the electric car?) A few thousand of General Motor’s EV1s were disposed of by the automotive giant afterwards. Next to bad advertising, the reasons why demand for these early electric vehicles was low were probably the small driving range and cheap gasoline. In addition, the car industry, backed by the Bush administration, filed a lawsuit against the State of California. They succeeded and California had to drop this wise mandate. Just imagine how technologically advanced and how much more affordable electric cars could be today given all the experience and development that could have been going on in the last ten years. Detroit’s automakers would probably not be in such a deep and threatening crisis and they would not lack behind Toyota and other rivals in technology leadership. The United States were less dependent on foreign oil, mobility were more affordable and greenhouse gas emissions would be lower. GM ceased its production of the EV1 in 2000, shortly after acquiring the Hummer brand. Today, the once largest car maker in the world is struggling to survive and its survival is based on the success of an electric car, the Chevrolet Volt. How ironic!
The German maker of luxury cars, Mercedes-Benz was also developing an electric car model which is now known as the A Class, a rather unsuccessful compact car running on gasoline. Daimler Chrysler stopped its electric experiment when the California zero emission mandate was weakened. Daimler Chrysler was betting on hydrogen fuel cells, which is still decades away and extremely expensive, as the fuel of the future.
This time, however, conditions appear to be much better for electric vehicles as they’re a solution to several of our problems. With their price coming down gradually and gasoline prices rising in the medium and long-term,  they’re becoming more and more competitive with conventional cars. With the increased awareness for the environment and the threats of climate change, electric cars with zero tailpipe emissions are a mighty tool to combat global warming. Besides, electric cars can be fast and save energy at the same time – gasoline-powered cars can’t. Furthermore, the electric motor doesn’t need energy when standing in a traffic jam, there is no gearbox, no clutch, no plugs, no tailpipe, no oil, not many parts that require maintenance.
Finally, Tesla Motors even plans to take on Toyota whose hybrids are enormously popular nowadays.
Ian Wright, a former partner of Eberhard, now a competitor also wants to produce electric and hybrid cars on a large scale, but his company, Wrightspeed has a different philosophy. They plan to produce high performance electric supercars outperforming anything else in their class where they see the greatest saving potential. Mr. Wright is right that halving the gasoline consumption of a S.U.V. truck has a bigger effect than replacing a subcompact car with an electric one. It’s probably also easier to introduce this still expensive technology to vehicles in the upper segment.

It will still take a couple of years until convenient, stylish and powerful all-electric cars are available in large numbers. But we already know that electric cars can be as cool, as fast and as convenient as any other car. When thinking of electric cars, people will no longer imagine the small so-called neighborhood electric vehicles (NEVs) in which you probably feel quite uncomfortable when standing next to a pickup truck in heavy traffic. The new electric car models will be snazzy, safe and competitive with gasoline-powered cars. Advancing battery technology is making them more and more viable, they’ve finally reached technical maturity. The next step is building up a recharging infrastructure which would not be too expensive. Charging points could be found in a couple of years at all shopping mall parking lots, at fast-food restaurants as well as in front of office buildings. To solve the infrastructure mess, the California-based startup Project Better Place will build an infrastructure of battery swapping stations in Israel, Denmark and Portugal.

Read also these posts for more information on the global energy crisis and electric cars:

Our prosperity hangs by a thread as it is based on a limited resource – oil

The Air Car could revolutionize transportation – an electric car without an electric motor


Filed under Economy, Environment

Our prosperity hangs by a thread as it is based on a limited resource – oil

Undoubtedly, oil is – next to water – the most vital resource for today’s economies. We depend on its energy in almost any regard ranging from transportation to heating and cooling to power generation to chemistry. Without it, the economy would come to a standstill and our prosperity would sink steeply. In consideration of this, we must be mad to rely on our very vulnerable oil supplies on such a grand scale. A disruption of oil supplies would immediately have disastrous consequences for everyone.


Just imagine what would happen if global oil supplies were reduced by 6 % from one day to the next. A 5% decline in global oil supplies is enough to push the entire global economy into a severe recession. Probably an unprecedented global recession affecting both, people in rich and in poor countries. Oil prices would at once head towards $300 to $400 dollars a barrel and higher. Gasoline would become unaffordable for large parts of the population. Nevertheless, shortages would occur. It is almost impossible to ration the oil reserves. Cars would become unsalable. Rental prices in cities would also hit record levels. People were forced to move close to their workplace. Airlines would go bankrupt and cease operations with the exception of a few flights for the super-wealthy. Public transport would become the major mean of transportation and ticket prices would also increase decisively. Unemployment could reach 25% and higher. In other parts of the world, the situation would spark violence and destabilize many countries. Aid organizations could hardly do their job. Food riots would break out. Oil fields would be occupied by rebels and government troops. The army would have to protect refineries and gas stations. But is this scenario an inevitable disaster? Is this likely to happen? How could this happen?

First, such a scenario is possible. Second, Whether it would be a disaster or not depends on how dependent we will be at the point of time this happens. If we were hit without warning, we are likely to exprience such a disaster. And finally, how could this happen? There are many incidents that could cause a sudden oil production decline. An omnipresent threat to the stability of oil supplies is the fact that most of the world’s oil reserves are located in politically unstable regions. A revolution in Saudi Arabia could have disastrous consequences for the rest of the world. Politically motivated supply reductions could be the consequence of a deeper polticalstandoff between Iran and the United States. Besides, Iran threatens to disrupt sea traffic in the Strait of Hormuz in the case of an attack by Israel or the U.S. With 40% of the global oil supplies passing through this strategic hotspot, the consequences can be extremely painful. (Check out Has the bubble popped? ) But beside all the political fragility, an accident in the world’s largest known oil field has also the potential to derail the world economy.

Ghawar Oil Field

The Ghawar oil field in Saudi Arabia which is by far the largest oil field in the world is currently producing about 5 million barrels a day which is the equivalent of 6.25% of the global production. More than 60% of the Saudi oil production between 1948 and 2000 came from Ghawar. Though Ghawar is gigantic, we don’t know much about the remaining oil reserves. Some oil experts say that Saudi Arabia is greatly exaggerating its oil reserves. This is aimed at first, causing western countries to stop worrying about scarce oil and second, to be able to pump out more oil as OPEC limits its members’ production based on the proven reserves. There are experts who expect that Ghawarhas already peaked and is dying. We don’t know whether this is true or not, as the Saudis would keep it a secret as long as possible. Anyway, oil reserves are a state-secret in Saudi Arabia. But we already know that Saudi Aramco, the state-owned largest oil corporation in the world is eagerly exploring new and unprofitable oil fields. Besides, they make a tremendous effort to get the oil out from below the desert. They’ve been injecting water into the oil fields in order to force the oil out. Seawater is pumped underneath the oil. The resulting pressure makes the oil come out more easily. But increasingly, what they’re bringing up is more water than oil. In 2004, the “watercut” was 55%. Saudi Aramco is injecting more than 7 million barrels of seawater per day into the Ghawar field. This shows the risk of an accident disrupting the oil flow. If one day, the injected water rose quicker than the  oil, when the water surpasses the oil on the way up, this could mean that no more oil would come out of the well. If one day the engineers of Saudi Aramco realize that they’re just pumping out water of the ground, this is very bad news for all of us.

The oil would never again flow out of the ground naturally. New drilling would be necessary and it would take years for Saudi Aramco to resume oil production at the Ghawar field. Ghawar is extremely important to the world’s well-being, but it an accident could kick it out of production. Even without an accident, the production rate will decline and Ghawar will die inevitably. At the same time, many oil fields all around the globe where oil can be pumped out easily are declining. Peak oil does not mean that there’s no more oil from one day to the next, but it does mean that we’re running out of cheap oil. The energy industry insider Matthew Simmons predicts the peak of Ghawar and he doubts that Saudi Arabia is able to maintain its production at current rates.


Though officially, the Saudi Arabian government wants the oil community to believe that its reserves will still last for decades, they are pouring billions of dollars into the exploration of new and old smaller oil fields that were considered not worth operating due to the bad quality or high amount of energy necessary to extract the oil. Next to the efforts to maintain the production capacity, an enormous amount of money is spend to strengthen the private sector. With the oil industry accounting for 45% of Saudi Arabia’s GDP and 90% of the country’s export earnings (according to Wikipedia), Riyadh’s ruling family tries to diversify the economy. A few mega projects are underway which should jump start the diversification process. Six so-called “economic cities” are planned to be launched in many parts of the country.

The King Abdullah Economic City which is due to completion in 2020 is the first planned city in Saudi Arabia which is being constructed in an undeveloped but centrally located area on the shore of the Red Sea. The city is set to become a commercial hub attracting domestic and international investments. Next to the planned largest seaport in the region, King Abdullah Economic City will also be home to a major financial center for the region. Quality of life was a major consideration during the planning stage and thus, parks and green spaces as well as many other public amenities are to make it a good place to live for the 500,000 people which are expected to move there. The city will also play a major role in the country’s aspiration to raise the educational level to international standards. Featuring several universities and R&D parks, international companies are supposed to find a qualified workforce.

The Economic Cities currently planned in Saudi Arabia are partly similar to the Masdar carbon-free city in the United Arab Emirates and the Dongtan eco-city in China.

So, what is the bottom line? If Saudi Arabia and other oil exporting countries make an effort to become less dependent on oil (exports), we have to get away from oil as it is our best interest! That’s why it is absolutely irresponsible for a presidential candidate to say that we just need some offshore drilling and the problem is fixed. John McCain even called for a “gas-tax holiday” earlier this year. This shows that he has obviously no idea of how serious the situation is and that the has no plan what needs to be done. I agree up to a point that it’s not a bad idea to explore the North American continental shelf and to evaluate whether drilling for oil is profitable there. But this should not be aimed at reducing prices at the gas pump! High prices indicate scarcity, that’s how the market works. This should prompt everybody to save gasoline wherever possible and to switch to alternatives. The longer we wait, the more painful will the impact of rising oil prices and dependence be. Even if we started offshore drilling right now, this wouldn’t have a considerable effect on gasoline prices. Moreover, it’s stupid to waste precious domestic oil by overcooling buildings or by driving inefficient SUVs withcombustion engines. We don’t have to hurry with offshore drilling. It’s good to know that there is oil in case we need it one day.

From; a depleted oil field in Azerbaijan:

Right now, high prices can help to encourage investments and research in the field of energy technology. At the moment, we need to reduce the insatiable demand for oil, not only to save money, but also to combat global warming. This requires some innovative changes in the way we live, work and travel. As the energy expert Matthew Simmons demands, we need to liberate the workforce to eliminate long-distance commuting. Next to reducing unnecessary driving, we ought to stop consuming oil wherever possible. Electric cars are likely to revolutionize transportation in just a few years from now. We will see many of them hitting the market in 2010 from all major car makers. The “reinvention of the automobile” Rick Wagoner, the CEO of GM, mentioned is absolutely necessary.

 Energy efficient buildings and intelligent heating and cooling systems can also help to cut consumption and costs. 

Whatever can be done to reduce our oil consumption has to be done. Oil prices will rise to new record levels in the medium and long term. The so-called “energy return on investment” ratio which compares the energy that goes into the process to the energy that comes out in the form of oil or natural gas, etc. has been declining steadily since the beginning of the 20th century. Whereas in the early 1900s, it took only the energy of one barrel of oil to get 100 barrels, today it takes the same amount of energy to get just 15 barrels of oil. This decline is due to the intensity of drilling. The production costs will keep rising,  the E.R.O.I. ratio will keep declining and global demand for oil will keep rising with the emerging economies’ strong growth rates. 

That means that the era of cheap energy is over. This does not necessarily mean that our living standard has to decline. Far from it! As soon as alternative energy sources are available at home, the transfer of wealth from western countries to oil-exporting countries will come to an end and such potentates as Hugo Chavez from Venezuela will face harder times.

Energy independence is vital for western countries and the death-blow for the OPEC cartel which recently decided to cut its output in order to prevent oil prices from falling below $100 per barrel. Instead, new industries will be created at home, millions of new jobs can be created and our carbon dioxide emissions can be reduced. Furthermore, alternative energy technologies can help to reduce price fluctuations. On top of that, e.g. the price of solar power wil come down with solar technology advancing and solar panels being mass produced.

The transition into a self-sufficient society has just began with the disillusionment of those who believed and acted as if energy were inexpensive and inexhaustible. However, the market alone cannot fix the problem itself. The problem is that there is the need to replace a technology that is already existent and cheaper. And it takes government intervention to make the price of the new technologies competitive. Europe is ahead in this regard as hefty taxation pushed gasoline prices to levels which are more than twice as high as in America. Though paying more at first is painful, it’s better to spend the money at home than to pour the money into the budgets of unreliable partners.

Check out to get an insight into the art of calculating oil reserves.

Read also Crude oil below $100 a barrel – should we stop worrying about energy efficiency, energy dependence and all the eco-stuff?

A Crude Awakening – The Oilcrash Movie:


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