Since 2009, oil prices have enjoyed a prolonged period of remarkable stability characterized by annualized volatility significantly below its long-term average. And though volatility has ticked up markedly in recent months due to the escalating conflicts in Russia and Iraq, oil prices haven’t risen much above $115 a barrel and have actually declined sharply in recent weeks.
PUMP the new documentary about America and oil to be released September 19th.
To read the newspapers these days, you’d think that all the innovation in energy is involved in bringing down the cost of solar panels or building even bigger blades for windmills. But innovation still continues apace in oil and gas, both in pulling them out of the ground and in finding new ways to use them.
“We haven’t been giving the big oil companies enough credit,” said Dominic Basulto in The Washington Post. “ Sure, we may see their print ads or watch as they tout their accomplishments on TV, but deep down, many of us believe that the brightest minds have moved on to something new in energy innovation. But that’s not true.”
That’s important because if we’re going to use our abundant natural gas supplies to wean ourselves off of foreign oil, we’re going to have to be sure the current superabundance of natural gas isn’t just a flash in the pan. Moreover, we’re going to need innovation in making the transition to methane-based liquid alcohol fuels easier as well.
As most people have heard by now, even our best technologies can’t extract more than about 10-20% out of an oil or gas reservoir from the earth. Simply doubling that rate would give us access to huge, new quantities of domestic fuels.
There’s also a concern that fracking wells will have a much shorter lifespan than traditional gas and oil wells. Then there’s all that natural gas being flared off in the Bakken. Ending that conspicuous form of waste will require some new technology.
All these problems are being tackled through innovation, however, and that’s what Basulto is talking about.
Although everybody knows about fracking — the technology of forcing sand and water into the rock to break it up — few realize that the real novelty that makes up the current upturn in production possible is horizontal drilling, which allows access to entire geological strata without making the territory look like a pincushion.
“Today, drilling rigs are so good that they can punch holes in the earth that are two miles deep, turn the drill bit 90 degrees, drill another two miles horizontally, and arrive within a few inches of the target,” said Robert Bryce, author of “Smaller, Faster, Lighter, Denser, Cheaper,” a book about innovation in the energy industry. But horizontal drilling hasn’t stood still. ExxonMobil has developed an “extended reach” technology that can push outward several miles further deep in the earth. “Extended reach reduces our environmental footprint and in offshore applications will limit our presence in the marine environment,” says the company’s website. It may have been developments like this that prompted President Obama to give a green light to exploration off the Atlantic Coast from Delaware to Florida last month.
The same innovations are occurring with natural gas fracking. Innovators have made an improvement called “sleeve technology” that surrounds the drill bit and allows highly accurate placement of stimulation treatments. The result is that wells can be drilled twice as fast as a few years ago, at a lower cost. With increased precision in both drilling and fracturing, wells are being made more productive as well. Erika Johnsen on Hot Air said, “Data from the Energy Information Administration’s Drilling and Production Report shows that a Marcellus Shale well completed by a rig in April 2014 can be expected to yield over 6 million cubic feet of natural gas per day (Mcf/d) more than a well completed by that rig in that formation in 2007.” That’s a huge improvement in the space of seven short years.
All this is good news for the effort of substituting natural gas-based ethanol or methanol for foreign oil in our cars. After all, one of the fundamental considerations is that there will be enough natural gas around to keep the price reasonable. With so many competing proposals for employing natural gas — electrical generation, the industrial revival, LNG exports, etc. — it’s crucial that we keep expanding production.
So it’s encouraging to hear the news from Clean Energy Fuels, T. Boone Pickens’ baby, which has been building a “CNG Highway” across the country to service long-haul tractor-trailers. CEF has just completed the first leg of this nationwide network, connecting Los Angeles and Houston.
But much of the nation still lies outside the reach of natural gas pipelines and CEF is figuring out a way to serve them, as well. Last month the company opened a filling station in Pembroke, New Hampshire that will be served by a “virtual pipeline” of high-tech tractor-trailers making round-the-clock deliveries. This will allow the station to pump 10 million gasoline-gallon-equivalents (GGE), twice the volume of CEF’s largest existing station. More important, it will open up large areas of the country that have not had access to CNG. This natural gas-based substitute will sell for 30% less than gasoline.
Technology never stands still. Sometimes it forces us to give up things that have become familiar or even seemingly permanent. But as Robert Bryce said, the new technology is usually “faster, smaller, lighter, denser and cheaper.” And in the case of methane-based liquid fuels, it will mean freeing ourselves from foreign oil as well.
One of the greatest appeals of switching to an alternative-fuel vehicle — electric, compressed natural gas or hydrogen — is saving money and freeing yourself from the clutches of foreign oil. But another is being able to supply your own fuel from a garage filling station where you may even be able to generate some of it yourself.
All this takes on a certain air of necessity when you realize that most of the infrastructure for recharging or refilling is not yet in place. In many cases, the garage may be the best option right now. So let’s run down some of the different options available and see how they stack up as being economical and practical.
Let’s start with the easiest one — electric cars. There are three types of chargers available to owners of a Prius, Leaf or Chevy Volt. The first is a Level 1 “trickle” charger, which is just a basic 120-volt line that plugs into any three-pronged outlet. This is the standard plug-in for all EVs. The problem is the amount of time it takes for a complete charge. For the Leaf, it takes close to 21 hours, which means that you can’t even do it overnight. For hybrids there’s some leeway since you can always revert to the gas motor and do some brake recharging as well. But if you’re planning to rely completely on a home outlet, you’d better have a second car.
More favorable is a Level 2 240-volt circuit. If you have an electric clothes dryer in your house, you’re already equipped. If you don’t have a 240-volt system at home, installation is easy enough. It will require a 40-amp circuit breaker, which may need a permit from the local building department, but the job is simple enough. Recharging time will be cut to less than eight hours, enough for an overnight. Plugincars.com puts the price at $600 -$700, although vendors such as ClipperCreek lists some for less.
If you really want to go really high-tech, you can move up to a Level 3 480-volt power supply that can give you an 80 percent charge in half an hour. The whole package costs $30,000, but with federal tax breaks and some help from the car companies, you can get it down to $10,000. Nissan offers a unit for $9,900. You could probably recoup some of the costs by recharging EVs for your neighbors, but you might need a zoning variance.
So how about compressed natural gas? What are the options there?
The Honda Civic is the only CNG passenger vehicle being sold in the United States. (Most of the progress has been with delivery trucks and long-haul trailers.) There are currently 1,000 CNG filling stations across the country, but half of them belong to companies that are using them for their fleets. Only about 500 are available to the public. So, unless you’re traveling along an Interstate and can make it to one of Clean Energy Fuels’ new truck stops, you’re going to have a hard time.
Refilling at home, however, isn’t all that impractical. More than half the residences in the country are equipped with natural gas for home heating, cooking or hot water. The trick is to get a device that can compress this household gas to be used in your car.
Honda originally offered a home refueling kit, the Phill, which costs $4,500 and could do a refill overnight. Honda stopped making the offer after 2012; however, due to concerns about the widely varying quality of non-commercial gas and the possibility of home devices allowing moisture to collect in the fuel system. For those willing to take the chance, the Phill is still available from its manufacturer, BRC FuelMaker. The question is, “Why is it so expensive when the same pump would cost 10% if it filled air bottles?” There is a regulatory review needed to reduce the cost.
Seeking to promote the technology, the Department of Energy (DoE) handed out grants a few years ago to encourage companies to develop affordable home systems. Now one of them may have come through. The Eaton Corporation of Cleveland, already prominent in the field of electrical charging stations, announced in 2012 that it plans to market a CNG home refueling device by 2015. “The system will use liquid to act as a piston in compressing the gas,” says Chris Roche, vice president at Eaton’s Innovation Center. “We have also developed an innovative heat exchange technology that will improve efficiency and cut costs dramatically.” Eaton is aiming at production costs of $500, which means the device could sell for less than $1,000. GoNatural, a Salt Lake City company, has also promised to have a product available by 2015. “It could be a game changer,” said New York Times reporter Paul Stenquist, in profiling CNG home compressors last October.
So, what about hydrogen? Is there anything available there? Hydrogen is very difficult to deal with. It is the smallest atom and will leak through just about anything. It’s hard to store and transport and must be kept under high pressure.
The upside, however, is the possibility of generating your own hydrogen, particularly from renewable resources. This can be done with simple electrolysis of water, which only requires an electric current. If you can generate that current with wind or solar energy, then you are essentially powering your car for free.
Making it happen is probably a long way off, although people are working on it. HyperSolar, Inc., a Santa Barbara company, has announced “proof of concept” of a method for generating solar hydrogen. “Using our self-contained particle in a low cost plastic bag, we have successfully demonstrated our ability to mimic photosynthesis to produce renewable hydrogen from virtually any source of water using the power of the Sun,” said CEO Tim Young while making the announcement. Horizon Fuel Cells, a Singapore company, released a “desktop” hydrogen generator in 2010 that generates hydrogen through electrolysis from any power source. It sells for $250 on Amazon. Although the company is targeting much smaller fuel-cell devices, it could eventually scale up to handle quantities needed to run a hydrogen fuel cell car
Altogether for cutting loose from the local gas station, electric vehicles are the best bet for now. But natural gas in its many forms — including methanol — are moving up and renewable hydrogen may be on the horizon. With home-generating devices proliferating, it is not hard to see all this eventually making a dent in our consumption of fossil fuels.
“USA, USA, USA, USA.” No, I didn’t just come from watching the U.S. playing in the 2014 FIFA World Cup. But after reading the glowing, cheerleading, overly enthusiastic, often-nationalistic media accounts of the U.S. overtaking the Saudis in oil production, the win-lose aspects of the soccer chant somehow became embedded in my persona (like counting sheep or gas pumps at night when I can’t sleep). We beat the Saudis at their own game — oil. We’re number one…wow! Next, will we emulate the Saudis and place onerous and discriminatory restrictions on women drivers and, unlike the Saudis, argue that it’s a conservation measure? Of course not! We don’t have to be number one in everything. But oil does make strange bedfellows, and equally strange behavior, as well as policies.
Unfortunately, most of the media stories avoid analysis of what the new oil prominence of the U.S. means to the nation and world. Yes, increased production likely means less dependence on the Middle East, particularly Saudi oil. Indeed, we now import about 33% of oil needs, the lowest percentage in years.
But oil independence remains a myth. Oil interests are pushing for a reduction of regulations concerning exports of U.S. crude oil and have always exported considerable refined oil products allowed by the law. Their motives, despite frequent public comments to the contrary, are generally to sell to the price, which means to the buyer who offers the most return. He, she or it frequently is a global purchaser. Independence is a slogan that often blurs motive and reflects good politics but bad substance and contrary to reality.
The U.S., as the most powerful western nation, irrespective of any mathematical domestic surplus, will continue to extend its role as defender of the global supply chain from the Middle East or elsewhere. While we may be less dependent on foreign oil, U.S. leaders have, in the past, and likely will in the future, use a combination of diplomacy and military threats and action to defend and sustain the flow of foreign oil to allies or assumed allies. In this context, the role we play in the world extends our dependency. Unfortunately, wars will be fought and U.S. soldiers will die because of this felt dependency.
Most of the “USA, USA, USA” chants in the media coverage of our new oil prowess, implicitly neglects the difficult juxtaposition between increased oil production and supplies and higher gas prices. Less dependence hasn’t brought the reduction, or even stabilization, of gas prices promised by the oil industry. Gasoline in California is now generally well over $4 a gallon for regular, and averages over $3.60 a gallon across the nation. Why? We have a surplus, don’t we? Oil companies want to export more, and it appears that they will be able to do just that, soon. As Dr. Pangloss asked in “Candide,” is this the “best of all possible worlds” (let me add, for the U.S.)?
Clearly, the cost of oil at the pump is not strongly linked (at the present time) to the amount of U.S. oil that shows up on EIA calculations and projections. Both price and supply are going up simultaneously. Yes, there is uncertainty, given events in the Middle East and yes, uneven growth around the world has increased demand in some areas and suppressed it in others. The link between high prices and the Middle East is difficult to measure precisely. Consumer costs per gallon are likely affected more by investors, as well as speculation on Wall Street, than the actual numbers concerning increased production of U.S. oil.
So, apart from prayer and penitence, what can we do to get a better deal for consumers, and to prevent gasoline from becoming a negative factor concerning U.S. GDP growth and the environment? How can we help assure that being number one means robust economic growth, more income in the wallets of Americans (particularly low-income Americans), increased security and fewer dirty emissions?
These are not easy questions, and they do not lend themselves to simple ideological responses. Clearly, as renewable fuels and vehicles that meet the incomes and desires of most Americans become available, both will play a vital role in America’s future. But reliance on coal-fired utilities for power in some areas of the nation, battery costs, mileage limitations from single battery charges, and lack of infrastructure impede their ability to have a significant positive impact at the present. The market for renewable fuels and vehicles is relatively small and will remain so until technological advances catch up with potential demand.
Where is the Greek philosopher Diogenes when we need him? We have a path in front of us that would buy time toward a better American future, one that could offer competition to gasoline — competition that would be good for the economy, the consumer and the environment. Increased availability of replacement fuels, particularly natural gas-based ethanol, combined with large-scale conversion of older cars to flex-fuel vehicles (FFVs) and increased production of new FFVs by Detroit, would give gasoline a run for the money, if gas-only stations become fuel stations and provide consumers with a choice. According to the Renewable Fuels Association, less than one percent of all gas stations in the U.S. that are branded by the big oil companies offer E15 or E85.
I remain an optimist that more freedom will reign soon at the pump. The noted people’s philosopher, Charles M. Schulz, creator of “Peanuts” comic strips, lessened my fears about the future when he said, “Stop worrying about the world ending today. It’s already tomorrow in Australia.” USA, USA, USA. Fuel choice, fuel choice, fuel choice!
I have been a fan of Resources for the Future (RFF) since my early days in Washington many years ago. While the organization’s reports won’t keep you awake at night nor can they easily convert into a Bollywood movie, they generally provide sound nonpartisan analyses of resource and environmental issues. In this context, the Fuel Freedom Foundation (FFF) retained RFF to independently study the potential economic, environmental and national security gains from replacing a portion of domestic gasoline use in the light-duty fleet with various natural gas-based fuels such as ethanol or methanol.
The request reflected the relatively large price differential between the growing supply of natural gas and gasoline and FFF’s assumption that natural gas-based fuels (ethanol and methanol) could not only offer the U.S. security benefits, they would be cheaper and cleaner than gasoline. If FFF’s assumption was right, public and private sector strategies to encourage the conversion of older vehicles to FFVs and to increase the production of new FFV vehicles in Detroit would seemingly be in order. Similarly, finding financially feasible ways to produce, develop, distribute and successfully market natural gas-based alcohol fuels would appear quite sound.
RFF’s study was completed last September and is available online.
I have read the document many times. It is compelling because it honestly portrays gaps in information and uncertainties concerning public policy and regulation, technology, geography, price trends, competition, and availability as well as access to natural gas-based fuel. Indeed, embedded in the report is the fact that policymaking in public, nonprofit or private sectors or predictions concerning consumer behavior is never perfect. As complexity increases, decisions often require reliance on perfectibility over time, rather than perfection in the present time.
Apart from RFF’s marshalling of available, relevant data and its related analysis, the study’s conclusions are supportive of leadership groups and leaders who seek an “alternative path” in support of the use of natural gas-based fuels and the conversion of older cars to flex-fuel vehicles.
What RFF concluded is that the only replacement fuel currently available to the more than ten million FFV E85-capable vehicles “does not have a cost advantage at the pump over conventional gasoline.” But assuming companies like Coskata, Inc. and Celanese are able to deliver on their financial modeling, live tests and price predictions concerning the production and distribution of natural gas-based ethanol, owners of FFVs, including owners of new and older converted vehicles could see cost benefits near $1 per GGE (gasoline gallon equivalent) in the very near future.
This is no small benefit. It will be particularly important to low and moderate-income folks, permitting them more choices when it comes to jobs, housing and other basic needs. It will also reduce the strain caused by reduced economic and income growth on middle class households. RFF also indicates, with somewhat less certainty as to how much, that there will likely be environmental benefits.
Making this new replacement fuel path viable will require the EPA to lower the costs of certification of kits that help convert older cars to FFVs, and to sanction relatively simple software adjustments, particularly for newer FFVs and their twins (not the human kind but automobiles whose engines reflect FFF characteristics. This path will also need the EPA and advocates of natural gas-based ethanol to work together to develop a vehicle-testing procedure for older cars that is both cost efficient, sound and hopefully, relatively quickly. Finally, it will necessitate a fuel market that reduces, if not eliminates, the almost monopolistic conditions generally imposed by oil companies and often supported, at least implicitly, by government policies and regulations.
Consumers, clearly, would benefit from more competition at the pump and from more pumps devoted to replacement fuels. Auguste Comte, the great 19th century philosopher and founder of positivism, never saw a gasoline station, but his simple motto, “Love as a principle [need for increased natural gas-based flex fuels and need for flex-fuel cars], the order as a foundation [development of policies and infrastructure for natural gas-based fuels and increased FFVs] and progress as a goal [extend consumer choice]” nicely frames RFF’s narrative. In turn, RFF’s study, while recognizing the value of renewable fuels, supports an alternative, natural gas-based replacement fuel as well as a vehicular pathway to help achieve national, regional and local economic, social welfare and environmental benefits. It’s near July Fourth. Let’s move toward freer increased choices among fuels and increased vehicular capacity to use them.
Early on I wrote a column about an unanticipated Thanksgiving dinner conversation with a special operations soldier who had served in Iraq. His comment, in response to a question I asked about whether he and his buddies knew why they were sent to Iraq, was brief and blunt: “oil and U.S. security.” He would have none of what he thought was b.s. about “freedom and democracy” or “weapons of mass destruction.” Before I asked the question I actually already knew what his answer would be, but a glass of wine, a wonderful piece of turkey and good company suggested that my inquiry would lead to an opening for a longer repartee on the Middle East and U.S. policy. It did, and again oil and oil politics were the dominant theme.
I suspect that many of the writers of today’s headlines and op-ed articles anticipated Republican Eric Cantor would win. They are now arguing, in sometimes misleading reference terms concerning democracy, inter-sectarian harmony and morality, for a more aggressive U.S. policy toward the invasion by Sunni radicals of parts of what once on a map called the nation of Iraq.
But the real issue for many “experts,” I again suspect, is oil — a fear, whether factual or not, that if Iraq collapses, the world oil supply (already close to equilibrium concerning demand and supply) will relatively quickly reflect shortages and much higher prices per barrel of oil ($150 a barrel) and oil’s product, gasoline ($5 and more).
Should we be sending kids to fight for our apparent God-given right to Middle Eastern oil? Although I think a lot about the ethics of public decision making, I am not an ethicist. But as long as there are alternatives to supply, my hard-nosed policy advice would be against war or the steps that might lead to war. Iraq has not been the noble state that welcomed America in to rescue it ostensibly from Saddam Hussein. Its form of democracy has been limited, corrupt and sectarian.
What should our calculations be, concerning alternative supplies of oil? First, we ought to really think through whether a full or partial shutdown of Iraqi oil wells will mean a damn. Iraq alone supplies a small share of U.S. oil imports. Most of the often-shrill economic coverage of the radical Sunni invasion and its potential impact on U.S. oil seems to relate more to perceptions, not empirical evidence, about shortages and prices. Commentators “perceive” what the oil markets might or will do — really what oil speculators and investors will or will not do — based on what is currently happening in Iraq, not on facts on the ground. Neil Cavuto of Fox Business said, “Oil is a commodity, a global commodity, and like any stock in almost any market, it often trades on issues having little to do with basic fundamentals, and more to do with simple fear.”
Assuming, however, there is a real worldwide shortage of oil as a result of a closure of Iraqi wells, or that fear drives the prices up so much that there is a strain to the economy, the Saudis, probably, among all the OPEC nations, are the only ones with sufficient oil in the ground to make an immediate difference concerning supply. But will they? They have shown some flexibility in the past to U.S. petitioning. They have also, at times, despite their security relationship to the U.S., turned us down. This time around the Saudis could well be more than a bit sensitive, particularly if it looks like the radical Sunnis might win. The Kingdom is vulnerable with respect to a radical brand of Sunniism. I bet they also fear a potential Shiite effort to push the radicals back, particularly one led by Iran. Life is never simple for the House of Saud.
Okay, where are we? Oil is sold in an international marketplace. No matter which side you are on regarding the Keystone XL pipeline, if approved and completed, it will not have a major impact on U.S. gas supply or prices. Ask your friendly oil refinery or oil company executive where he or she believes Keystone-supplied oil will be going. Most of the assumed supply will be traded internationally for the highest global price. The predicted increased supply of U.S.-produced gasoline will probably help diminish price increases slightly, but don’t make a bet on how much. Today, a price of a gallon of regular unleaded gasoline is well over $4 in California and U.S. production is at a very high level.
What would likely help keep gasoline prices from spiking significantly and, at the same time, lessen the amplitude of the cycles is a commitment to competition in the fuel marketplace. Let Adam Smith reign! Allow safe, cheaper, environmentally better replacement fuels, particularly natural gas-based ethanol (and someday soon, methanol) to compete with gasoline. Encourage the conversion of older vehicles to flex-fuel vehicles! Push for renewable fuels and related vehicles that appeal to a larger market than at present, given costs and design constraints! Reduce our dependence on imported oil! Make love, not war! Drive (excuse the pun) for strategic solutions!
Remember when Japan’s Ministry of Economy, Trade and Industry (METI) used to sit atop the Japanese industrial complex, steering it like some giant Godzilla hovering over the entire world?
Those were the days when Japan’s government-industry partnership was supposed to represent the future, when Michael Crichton wrote a novel about how Japan would soon devour America, when pundits and scholars were warning that we had better do the same if we hoped to survive – before, that is, the whole thing collapsed and Japan went into a 20-year funk from which it has never really recovered.
Well those days may be returning in one small part as METI prepares to direct at least half the Japanese auto industry into the production of hydrogen-powered fuel-cell cars.
“Japanese Government Bets the Farm on Fuel Cell Vehicles” ran one headline earlier this month and indeed there’s plenty at stake for everyone. The tip-off came at the end of May when Jim Lentz, CEO of Toyota’s North American operations, told Automotive News that electric vehicles are only “short-range vehicles that take you that extra mile…But for long-range travel, we feel there are better alternatives, such as hybrids and plug-in hybrids, and, tomorrow, fuel cells.” The target here, of course, is Tesla, where Elon Musk appears to be making the first inroads against gasoline-powered vehicles with his $35,000 Model E, aimed at the average car buyer. Toyota was originally in on that deal and was scheduled to supply the batteries until it pulled out this spring, ceding the job to Panasonic.
But all that was only a preview of what was to come. In early June, METI announced it would orchestrate a government-private initiative to help Toyota and Honda market fuel-cell vehicles in Japan and then across the globe. Of course that leaves out the other half of Japan’s auto industry, Nissan and Mitsubishi, pursuing their version of the EV, but maybe the Japanese are learning to hedge their bets.
The hydrogen initiative will put the fuel-cell vehicle front-and-center in the race to transition to other forms of propulsion and reduce the world’s dependence on OPEC oil. Actually, hydrogen cars have been in the offering for more than twenty years. In the 1990s soft-energy guru Amory Lovins put forth his Hypercar, a carbon-fiber vehicle powered by hydrogen fuel cells. In 2005, California Gov. Arnold Schwarzenegger inaugurated the “Hydrogen Highway,” a proposed network of hydrogen filling stations that was supposed to blanket the Golden State. Unfortunately, only ten have been built so far, and there are still no more than a handful of FCVs (hydrogen fuel cell vehicles) on the road. Mercedes, BMW, Audi and VW all have small lines but none are marketed very aggressively in the United States.
This time, however, there may be a serious breakthrough. After all, Toyota, Honda and METI are not just in the business of putting out press releases. Toyota will begin production of its first mass-market model in December and Honda will follow with a 5-passenger sedan next year. Prices will start in the stratosphere — close to $100,000 — but both companies are hoping to bring them down to $30,000 by the 2020s. Meanwhile, GM is making noises about a fuel-cell model in 2016 and South Korea’s Hyundai is already unloading its hydrogen-powered Tucson on the docks of California.
What will METI’s role be? The supervising government ministry promises to relax safety standards, allowing on-board storage of hydrogen at 825 atmospheres instead of the current 750. This will increase the car’s range by 20 percent and bring it into the 350-mile territory of the internal combustion engine. Like the ICE, hydrogen cars can “gas up” in minutes, giving them a huge leg up on EVs, which can take anywhere from 20 minutes with superchargers to eight hours with household plugs. METI has also promised to loosen import controls so that foreign manufacturers such as Mercedes-Benz can find their way into Japan. And, of course, it will seek reciprocal agreements so Toyota and Honda can market their models across the globe.
So will the one-two punch of government-and-industry-working-together be able to break the ice for hydrogen vehicles? California seems to be a particularly ripe market. Toyota is already the best-selling car in the state and the California Energy Commission is promising to expand the Hydrogen Highway to 70 stations by 2016. Still, there will be stiff competition from Elon Musk if and when his proposed Gigafactory starts turning out batteries by the millions. Partisans of EVs and fuel-cell vehicles are already taking sides.
In the end, however, the most likely winners will be consumers who will now have a legitimate choice between hydrogen vehicles and EVs. It may be a decade or more before either of these technologies makes a significant dent in our oil consumption, but in the end it will be foreign oil providers that will be feeling the pain.
The electric car depends on batteries, and before EVs become a large chunk of our automotive fleet, there are probably going to be some changes.
Right now, Elon Musk is betting he can produce millions of small lithium-ion batteries not much bigger than the ones you put in your flashlight and string them together to power a $35,000 Tesla Model E over a range of 200 miles at speeds of up to 70-80 mph. The Model E also will also need an infrastructure of roadside “filling stations” and home chargers, although the best superchargers still take more than 20 minutes to achieve 80 percent capacity.
But there is another way to store electricity, long familiar to the designers of electrical circuits. It’s the capacitor, a device that stores a small current by static electricity rather than a chemical reaction. Capacitors sit in all of your electrical devices, from radio circuits to the most sophisticated laptops, and are essential to providing the steady electric current needed to run such electronics. But what if the concept of capacitors could be scaled up to the point where they could help power something as big as an electric vehicle? Granted, it’s a long, long way from the 1.5-volt capacitor in your iPad and powering a 4,500-pound Tesla along the Interstate, but researchers are out there probing and are already thinking in terms of a breakthrough.
Right now there’s a huge separation between the things that batteries can do and the things that capacitors can do. In a way they are complementary — the strengths of one are the weaknesses of the other. But researchers are working toward a convergence — or perhaps just a way of using them in tandem.
A battery employs chemistry by splitting ions in the electrolyte so that the negative ones gather on the cathode and the positive on the anode, building up a voltage potential. When they are connected externally an electric current flows. Batteries have a lot of energy density. They can store electricity up into the megawatt range and release a flow of electricity over long periods of time. The process can also be reversed, but, because the reaction is (once again) chemical, it can take a long time.
Capacitors store electrons as static electricity. A thundercloud is a great big capacitor with zillions of electrons clinging to the almost infinite surface area of individual raindrops. And as everyone knows, this huge stored capacity can be released in a “bolt of lightening.” Capacitors can be recharged almost instantly but also they release their energy almost instantly, rather than the even flow of a battery. One of their major uses is in flash photography. But their capacity for storing power is also limited. On a pound-for-pound basis, the best capacitors can only store one-fifth to one-tenth the equivalent of a chemical battery. On the other hand, batteries can start to wear out after five years, while supercapacitors last at least three times as long.
Back in the 1950s, engineers at General Electric, and later at Standard Oil, invented what have come to be called “supercapacitors.” Basically, a supercapacitor changes the surface material and adds another layer of insulating dielectric in order to increase storage capacity. Surface area is the key and engineers discovered that powdery, activated charcoal vastly increased the capacity of the storage plates. Dielectrics were also reduced to ultra-thin layers of carbon, paper or plastic, since the closer the plates can be brought together, the more intense the charge. Since then they have begun experimenting with graphene and other advanced materials that may be able to increase surface area by orders of magnitude. All of this means that much more electricity can be stored in a much smaller space.
But the problem of low energy density remains. Even supercapacitors can only operate at about 2.5 volts, which means they must be strung together in series in vast numbers in order to reach voltage levels required to power something like an electric car. This creates problems in maintaining voltage balance. Still, some supercapacitors are already being employed in gas-electric hybrids and electric buses in order to store the power siphoned off from braking.
Researchers in the field now see some possibility for convergence. Most exhilarating is the idea that the frame of the car itself could be transformed into a supercapacitor. Last month, researchers from Vanderbilt University published an online paper entitled, “A Multifunctional Load-Bearing Solid-State Supercapacitor,” in which they suggested that load-bearing materials such as the chassis of a car or even the walls of your house could be transformed into supercapacitors to store massive amounts of electricity on-site. Combined with advances in evening the flow of electrons from supercapacitors, this opens up whole new avenues of approach to the electric car.
All of these developments are a long way off, of course. Still, supercapacitors support the possibility of pulling out of your driveway in the morning and returning at night in your EV without needing to gas up with foreign oil at your nearest filling station.
You must remember the famous community activist who once asked, “To be, or not to be, that is the policy and behavior question; whether ‘tis nobler in the mind to suffer the slings and arrows of outrageously high, constantly shifting gasoline prices or to take arms against a sea of troubles generated by monopolistic fuel markets and open them up and end them.” I’m paraphrasing, of course.
Unfortunately, Shakespeare, now that we need him, is no longer available. But his question, articulated by his political friend Hamlet, still needs to be answered. I suggest we respond to his query in the context of another question: Is competition in the market for vehicular fuel a public good and in the public interest? Ah ha, you ask, why must we ask this question? Don’t we live in a capitalist or quasi-capitalist nation? Gosh, ever since we all were kids, were we not brought up on the wisdom of free markets and their ostensible link to freedom and democracy, a trifecta holy grail?
Sure we were! But the presented wisdom apparently didn’t mean all markets, and most important for this article, the market where most of us purchase fuel. By and large, the market for fuel is limited to a single, generally similar, primary product — gasoline. Competition, when it exists, generates from relatively small price differences, more often than not. Overblown value propositions in advertising concerning engine performance benefits from brand X or Y notwithstanding.
Consumers who, many times, assiduously read the papers or go online to find out where different brands of tires are cheapest or travel miles to visit dealers to get a perceived “good deal” on a car are frequently constrained to their neighborhood gas stations or the stations located near the nearest shopping center or big box store. While price may be a key factor in driving their decision as to which station will fill up their tank, absence of diverse fuel alternatives results in a relatively narrow band of prices per gallon and a competitive floor on consumer savings and costs.
Opening up gas markets will be tough. The oil industry controls or strongly influences over 40 percent of the stations and holds a big, profitable stick concerning what can be sold and how it can be sold at its franchised facilities. Prices are set low enough to scare independents into selecting less-than-favorable locations, or pricey enough to give them some room to keep their own costs relatively high.
To date, state pilot or demonstration programs concerning alternative fuels like ethanol and methanol have had mixed results. Why? Their costs of production and their environmental/GHG costs are lower than gasoline. Are we Americans just dumb? No. Initiatives to date have had to surmount problems including: consumer access to fuel stations with flex-fuel pumps (their costs range from $50,000 to over $100,000); a growing but still relatively small percentage of flex fuel autos compared to the total number of vehicles; the lack of consumer information concerning their own flex-fuel vehicle’s ability to use ethanol; the fear generated by some interest groups often related to the oil industry about the impact of alternative fuels on engines; the seeming ability of the oil industry to manage local prices; and the decisions by supply chain participants, particularly retailers to raise alternative fuel prices to capture immediate profits (reducing their intermediate and long-term ability — as the new kid on the block — to compete with gasoline.)
Evidence from Brazil suggests that demand emanating from an educated public, combined with a commitment to increase the pool of alternative-fuel vehicles and readily accessible fuel stations with ethanol pumps will cause a reduction in gasoline prices. Juliano J. Assunção, Joao Paulo Pessoa and Leonardo Rezende noted in a December 2013 London School of Economics publication, “Our estimates suggest that the model prediction is correct and that as the percentage of flex cars increase by 10%, ethanol and gasoline energy equivalent prices per liter fall by approximately 8 cents and 2 cents, respectively. Considering the volume of sales and size of the flex fuel fleet in 2007, a rough estimate suggests consumer savings to the order of 70 million Reais in the Rio de Janeiro state that year. Our estimates also show that the price gap as well as the price correlation between the two fuels has increased with the increased penetration of flex fuel cars.” Other studies have suggested similar positive impacts.
A U.S. recipe appears clear and consistent with America’s assumed belief in letting the market decide most resource allocation issues connected to the production of non-social welfare related goods and services. Ingredient one: Amend laws and regulations to encourage individual owners to convert older cars to flex-fuel automobiles; ingredient two: mix the resulting converted cars with newer flex-fuel vehicles to create a large flex-fuel pool; ingredient three: liberally sprinkle in enough information to inform consumers and potential-ethanol-supply-chain participants, including potential blenders and retailers, of the potential demand for ethanol as a fuel; ingredient four: add real, solid seasoning to the mix by fostering development, distribution and the sale of natural-gas-based ethanol to achieve significant increased environmental and cost benefits. Julia Child couldn’t build a better dish for the nation as it simultaneously tries to expand the viability of renewable fuels, and Shakespeare’s friend, Hamlet, would not need antidepressants.