Wednesday, May 11, 2011

THE ELECTRIC CAR & THE GASOLINE MARKET

I have been reading up on the NISSAN LEAF, the first mass produced family-type, fully electric car to come on the market.  I did not realize how incredibly energy efficient electric engine technology is, or maybe rather how inherently inefficient the traditional internal combustion engines is.

The Leaf's energy consumption is 0.34 kWh per mile (0.21 kWh per km) and is capable of a top speed of 100 mph.  A typical conventional gasoline-powered car on the American market, getting 25 miles to the gallon (9.4 liters per 100 km), will consume the equivalent of 1.41 kWh per mile, or 0.88 kWh per km, more than four times as much energy per distance driven as the all-electric Nissan Leaf.  Even if the electricity consumed would be generated from coal, the Leaf  is certainly a great deal more environmentally friendly than its gasoline equivalent, as well as cheaper to operate.

However, the battery packs needed to power those electric cars are heavy and still expensive.  The Leaf batteries are reported to cost Nissan $13,000.  The manufacturer guarantees them for 100,000 miles and claims a working life of five to ten years, depending on driving and recharging conditions.  Frequent use of quick-charge options reduces battery life.  Average driving range between charges is said to be 75 miles (120 km), again depending on driving conditions.  Battery technology has improved by leaps and bounds and prices have come down, a trend that is likely to continue.

Here is the other side of the equation.  There are currently about 250 million cars and light trucks in circulation in the United States, being driven an average of 35 miles per vehicle/day while on the average consuming 1.56 gallons of gasoline.  That comes to 143 billion gallons of gasoline per year, or 540 billion liters.  To put this in perspective, with 5% of world population the United States consumes 43% of the world's gasoline!

This disproportionate consumption of gasoline has its origin in the fact that the United States is a country where practically nothing is within walking distance, nor within easy reach of (mostly inexistent) public transportation.  Its sprawling demographics is a direct consequence of relatively inexpensive automobiles, traditionally powered by cheap gasoline, as well as the fact that Americans like things big and comfortable, not least their cars.

Crude oil is not a uniform commodity, but varies greatly in quality from one source to the other.  The proportion of light hydrocarbons - from which gasoline is produced - can be as high as 97% in weight from some fields, and as low as 50% in heavier oils and bitumens.  While the rest of the world in the aggregate refines just short of 20% of its total crude oil consumption into gasoline, in the United States that proportion is 45%.

Anybody who has seen an oil refinery knows that it is a capital intensive, complex and dirty process, and refineries are designed and built to optimize the specific needs for hydrocarbons of its particular market environment.  Once built, there is little leeway to jiggle its hydrocarbon output mix.  Thus, U.S. refinery capacity has traditionally been built to handle light crudes, which are cheaper to refine but more expensive and progressively more scarce on the world market.  The United States represent about 25% of total world consumption of crude oil, but light crudes represent less than half - and falling - of all currently known crude reserves.  This is an added factor of vulnerability to the United States in an intensifying world struggle for crude oil supplies.

Eventually, Americans will have to get used to driving smaller cars using less gasoline.  This is probably one reason why oil majors are in a hurry to get out of the refining business and selling at distress valuations.  Now costing $4.00 per gallon at the pump - still a bargain in European eyes - the average U.S. household is spending close to $15.00 per day on gasoline, a social and political hot potato. Driving much less is hardly an option, unless American demographics could be totally rearranged overnight.

Electric and hybrid-electric cars will play a role in this process, but not a very significant one for a long, long time.  The American household owns on average 2.2 cars which remain operative for over 15 years.  The oldest and least fuel efficient cars tend to be owned and driven by the poorest segment of the population, least able to cope with high fuel prices.

The public and politicians are already clamoring for President Obama to "do something" about gasoline prices, and that something is definitely not a price increase in the form of European style carbon taxes.  Watch the sequel.

2 comments:

  1. The amazing thing about the electric motor is there is almost no limit to its power output. There is now a Moto GP bike that is all electric that can hit 120 in first gear. With few moving parts, no heat, and almost 90% efficiency the sky is the limit as to performance.
    But....as you stated powering this "motors" is bit of a problem. The hybrid route is fine for now and works as a nice transition for the skeptics. The full fledged battery on the other hand is bit of a utopian dream with a bunch of rats in the cellar. Range is always the point that people bring up and this will obviously get better as the technology progresses.
    What is often overlooked is the production aspect of these cars. Batteries are heavy, very heavy and in order to keep the car efficient as possible lighter materials must be used on the body and interior. In this case we have a couple choices. Aluminum is nice and light but mass production is difficult and as anybody with an Italian race car from the 40's and 50's will tell you, oxidation is a huge can of worms. Carbon Fiber is another option but frankly only .5% of the US population can afford anything made of the stuff. Lastly there is plastics. While manufacturing is cheap and extremely efficient the end product is impossible to get rid of. Recycling of plastics takes huge amounts of energy and they can only be repurposed into a few specialized things. So what happens when we hit the 100k lifespan of this car or the American psyche kicks in and they trade the car in after 2 years. We are going to have landfills of plastics and batteries.
    The problem with the whole "eco-car" argument is that these are all just simple bandages being put over an even larger problem. We need to move away from this ridiculous suburban culture and re-engineer our cities to be more friendly towards pedestrians, cyclists and mass transit. While this is a long term goal, its a logical one. We have amazing models for such reform in places like Portland, Copenhagen, and Amsterdam. Small things like financial incentives by businesses for employees to commute by bike. Once people use/want the infrastructure for alternative transportation it will be produced. But simply sitting on our hands and building toy cars is not a long term goal.
    Rome wasn't built in a day, or a year for that matter.

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  2. Helge,
    Your comments are well taken. I agree that in the long run U.S. demographics will have to be organized away from suburban sprawl and into intelligent urban clusters like Portland, Copenhagen and Amsterdam. And, how wonderful, it would be the end of Wal-Mart!

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