World’s Deadliest Animal August 31, 2006January 10, 2017 THE DEADLIEST ANIMAL Anthony: ‘The most deadly and most dangerous animal in Africa is not the hippopotamus or the lion, it is the mosquito. In fact in the entire world. Responsible for more deaths than all the mammals, reptiles, amphibians, fishes and birds combined. In fact you can throw in all the wars too. That is, if you will consider insects as animals.’ DRIVING HABITS Marilyn Perry: ‘I have to say that we can change our driving routines without suffering undo hardship. I used to drive to work daily in Detroit, 28 miles round trip. Since I moved to Houston, I use public transportation. The Metro bus stop is right on my corner and stops right outside the door of the building I work. The benefits have been: 1. I am much more relaxed upon arrival of either work or home. 2. I don’t spend money on gas; one full tank will last 6-10 weeks (Honda Civic). 3. I have a reduced rate on my auto insurance. 4. My car is now two-and-a-half years old and has 7,000 miles.’ GIVE ME A W! Nat Butler: ‘The Republicans are making a horrible mess of this country. And when I think George Bush and I were in the same Harvard Business School class, and that I met him when we were both teenagers, and cheerleaders at our respective rivals, Exeter and Andover, I feel that I have seen ‘up close’ a man who has caused a huge amount of devastation in this country and this world.’ HIS SIDE OF IT The President spoke with Brian Williams. I quoted a little of it yesterday. Here’s a link to the whole thing.
Palestinian Self-Criticism And a Few Words on the Tax Cuts We Have Sacrificed to Accept August 30, 2006March 4, 2017 Did you see President Bush on NBC last night? He was interviewed in New Orleans. He did not look well. It was unnerving. HECKOFA JOB ‘When it’s all said and done, the people down here know that I stood in Jackson Square, and I said we’re gonna help ya, and we delivered.’ IMAGE ABROAD ‘In terms of America’s image, of course I worry about American image. We’re great at TV and yet we’re getting crushed in the PR front.’ OUR SHARED SACRIFICE BRIAN WILLIAMS: ‘The folks who say you should have asked for some sort of sacrifice from all of us after 9/11 – do they have a case, looking back on it?’ PRESIDENT BUSH: ‘Americans are sacrificing. I mean we’re . . . we’re . . . you know, we pay a lot of taxes! Americans sacrificed when they, you know, when the economy went in the tank. Americans sacrificed when, you know, air travel was disrupted. American taxpayers have paid a lot to help this nation recover. I think Americans have sacrificed.’ ☞ I don’t even know where to begin. Supply your own commentary. A GOOD DAY FOR ALABAMA Gary Poe: ‘When I saw this news item – DEMS USE IGNORED RULE TO OUST GAY CANDIDATE; ALABAMA PARTY COMMITTEE DISQUALIFIES WINNER – I was just livid. How can the Democrat party accept this blatant discrimination? Please check this out and tell us the truth.’ ☞ On Saturday, the Alabama Democratic Party overturned that subcommittee ruling. Patricia Todd will be seated as Alabama’s first openly gay legislator. Her 59-vote victory was challenged on a technicality not because she is gay, but because she is white. This had originally been drawn as a ‘black’ district when redistricting was done to assure black representation. In the full executive committee meeting Saturday, one of the black committee members rose to say (paraphrasing), ‘This is what they used to do to us. We are better than that.’ Saturday was a good day for Alabama and America. PALESTINIAN SELF-CRITICISM If accurately translated, this is a remarkable statement that one desperately hopes will resonate with the Palestinian people – and throughout the Middle East.
Once Again, A Positively Grand Time August 29, 2006January 10, 2017 KING OF THE JUNGLE Okay, so the hippo didn’t eat the dwarf. On the other hand, which do you think is the most dangerous animal in Africa? According to this (notes faithful reader Stewart Dean): ‘Surprisingly, it is not the ferocious lion or fearsome crocodile. In fact, more people are killed by the hippopotamus than any other wild animal, either by being trampled to death or having their boat capsized. These giant herbivores can weigh up to 3200 kilos.” ☞ Rhymes with: wouldn’t want it to sit atop of us. GRAND TIME From Sunday’s New York Times: ‘In coming weeks, the Internal Revenue Service plans to start siccing private debt collectors on people with up to $25,000 in unpaid income taxes – and laying off nearly half of the auditors who examine estate tax returns of the wealthiest taxpayers.’ ☞ Truly, it is a grand time to be rich and powerful in America. And if you had any doubt: GRAND TIME II From Monday’s New York Times: ‘The median hourly wage for American workers has declined 2 percent since 2003, after factoring in inflation. The drop has been especially notable, economists say, because productivity . . . has risen steadily over the same period.’ ☞ Workers are producing more per hour and getting paid less. We shareholders should be thrilled! (The long-term implications are terrible – a declining middle class is one more way America has become weaker in the last six years. But who says you have to anchor your yacht in an American port?) The Times continues: ‘ . . . wages and salaries now make up the lowest share of the nation’s gross domestic product since the government began recording the data in 1947, while corporate profits have climbed to their highest share since the 1960’s.’ Isn’t that great? ‘UBS, the investment bank, recently described the current period as ‘the golden era of profitability.” I am loving it! And as long as the current party rules, I think we need not worry. Republicans stand true to their core principles – as when, a few weeks ago, they refused for the tenth year running to hike the minimum wage (‘The buying power of the minimum wage is at a 50-year low,’ reports the Times) unless we completely eliminated the estate tax on billionheirs. If any of this strikes you as cruel, you have not been listening. This is compassionate conservatism. The president believes in a humble foreign policy. He and his allies in Congress are uniters, not dividers. And, most important to those of us who care about money . . . ‘by far, the vast majority of the help [from the tax cuts] goes to the people at the bottom end of the economic ladder.’ More good news from the same Times story: In 2004, the top 1 percent of earners got 11.2% of all the wage income, up from 6% three decades ago. RECONSTRUCTION And while we’re at it, there’s Paul Krugman’s devastating column from yesterday’s paper. (But wait – isn’t it time you subscribed to New York Times Select – both because it’s great, and because the world needs a healthy New York Times? You can start with a free trial; you can give subscriptions as gifts; if you’re a student or faculty member, you can get it even cheaper. Click!) So here is Paul Krugman: Last September President Bush stood in New Orleans, where the lights had just come on for the first time since Katrina struck, and promised ‘one of the largest reconstruction efforts the world has ever seen.’ Then he left, and the lights went out again. What happened next was a replay of what happened after Mr. Bush asked Congress to allocate $18 billion for Iraqi reconstruction. In the months that followed, congressmen who visited Iraq returned with glowing accounts of all the wonderful things we were doing there, like repainting schools and, um, repainting schools. But when the Coalition Provisional Authority, which was running Iraq, closed up shop nine months later, it turned out that only 2 percent of the $18 billion had been spent, and only a handful of the projects that were supposed to have been financed with that money had even been started. In the end, America failed to deliver even the most basic repair of Iraq’s infrastructure; today, Baghdad gets less than seven hours of electricity a day. And so it is along our own Gulf Coast. The Bush administration likes to talk about all the money it has allocated to the region, and it plans a public relations blitz to persuade America that it’s doing a heck of a job aiding Katrina’s victims. But as the Iraqis learned, allocating money and actually using it for reconstruction are two different things, and so far the administration has done almost nothing to make good on last year’s promises. It’s true that tens of billions have been spent on emergency relief and cleanup. But even the cleanup remains incomplete: almost a third of the hurricane debris in New Orleans has yet to be removed. And the process of going beyond cleanup to actual reconstruction has barely begun. For example, although Congress allocated $17 billion to the Department of Housing and Urban Development for Katrina relief, primarily to provide cash assistance to homeowners, as of last week the department had spent only $100 million. The first Louisiana homeowners finally received checks under a federally financed program just three days ago. Mississippi, which has a similar program, has sent out only about two dozen checks so far. Local governments, which were promised aid in rebuilding facilities such as fire stations and sewer systems, have fared little better in actually getting that aid. A recent article in The National Journal describes a Kafkaesque situation in which devastated towns and parishes seeking federal funds have been told to jump through complex hoops, spending time and money they don’t have on things like proving that felled trees were actually knocked down by Katrina, only to face demands for even more paperwork. Apologists for the administration will doubtless claim that blame for the lack of progress rests not with Mr. Bush, but with the inherent inefficiency of government bureaucracies. That’s the great thing about being an antigovernment conservative: even when you fail at the task of governing, you can claim vindication for your ideology. But bureaucracies don’t have to be this inefficient. The failure to get moving on reconstruction reflects lack of leadership at the top. Mr. Bush could have moved quickly to turn his promises of reconstruction into reality. But he didn’t. As months dragged by with little sign of White House action, all urgency about developing a plan for reconstruction ebbed away. Mr. Bush could have appointed someone visible and energetic to oversee the Gulf Coast’s recovery, someone who could act as an advocate for families and local governments in need of help. But he didn’t. How many people can even name the supposed reconstruction ‘czar’? Mr. Bush could have tried to fix FEMA, the agency whose effectiveness he destroyed through cronyism and privatization. But he didn’t. FEMA remains a demoralized organization, unable to replenish its ranks: it currently has fewer than 84 percent of its authorized personnel. Maybe the aid promised to the gulf region will actually arrive some day. But by then it will probably be too late. Many former residents and small-business owners, tired of waiting for help that never comes, will have permanently relocated elsewhere; those businesses that stayed open, or reopened after the storm, will have gone under for lack of customers. In America as in Iraq, reconstruction delayed is reconstruction denied – and Mr. Bush has, once again, broken a promise.
Happy Planet August 28, 2006January 10, 2017 HAPPY PLANET INDEX It sounds like a Chinese restaurant – Happy Planet – but why not? Click here to see where various countries rank, how the index is calculated – and perhaps take the ‘survey’ to determine your personal score. HOW TO MAKE A MILLION WITH A BLOG Thanks to Jim Hickel for this comprehensive look at the blogo$phere. TRADING VERIZON FOR COMCAST Last September, I said I was selling the CMCSK I had in a taxable account for a small tax loss, to buy DD and GE (which have gone nowhere). Friday, I sold the CMCSK shares I had in my retirement account for a small profit and replaced them with VZ at essentially the identical price. A smart friend thinks Verizon’s $20 billion investment in fiber optic cable positions it to outperform Comcast and some of the other older cable companies.
You’ll Just Have to Feed the Hippo Something Else August 25, 2006January 10, 2017 HIPPO DOES NOT EAT DWARF Oh, thank God. Click here. DON’T SELL YOUR FMD Suggested here in March at $38 and change, the stock closed at $54.80 yesterday. My smart friend says: hang on. It could be a very good few years. DON’T BET ON A STRONG DOLLAR Randy Kirchhof: ‘Have a look at this, from the CIA World Factbook. Now find the United States on it.’ ETHANOL David D’Antonio: ‘Steve Baker says that a large chain of Canadian gas stations has converted to 10% ethanol. While it might not get to 40 below here in Eastern Massachusetts, stickers on the all the gas pumps I’ve seen have heralded the changeover from MTBE to (up to) 10% ethanol.’ Richard Factor: ‘Using my arguably excessive driving, Stephen Gilbert makes an important point. As he says, I ‘still used 632 gallons of gas in a 20 month period.’ But I also saved that amount simply by getting a Prius. To save most of the second 50% – the 632 gallons I did use – I would have stop going to work. (Would this wreck the economy? Not in my case!) This points up an interesting dichotomy: On the one hand, ‘Hey, Jack – this is America and I can do what I want.’ But on the other, consider that virtually every driver on the road – commuting, vacationing, delivering – is spending those minutes or hours or days WISHING HE WERE SOMEWHERE ELSE. If that doesn’t DEFINE ‘senseless waste of human life’ I don’t know what does. Maybe the most productive way to protect the environment is to seriously reconsider how much of this to-ing and fro-ing is really necessary. As you’ve mentioned, hybrids are wasted on those such as you who are able to work at home. Perhaps high-speed communications links, ‘telepresence’ equipment, and other innovative ways to avoid travel can be as much of a boon as is the hybrid vehicle in reducing pollution.’ ☞ Perhaps. Though for some people, I think there’s no place they’d sometimes rather be than in their cars between work and home, listening to the CD of a KISS tribute band (or Jersey Boys), away from the capricious boss, the insane coworkers, the angry customers, the screaming children, and the nagging spouse – although I would not know about any of that because I work alone, my partner never nags, and our dozen nieces and nephews are an unalloyed joy.
MY Readers (and a Housing Note) August 24, 2006January 10, 2017 MY READERS PLAY BRIDGE WITH BILL GATES AND WARREN BUFFETT Let’s hear you say that, genericcompetitiveblog.com. Click here for the story. MY READERS PERFORM IN ATLANTIC CITY Adam “Mini Peter Chris” Engst: ‘I’m not sure if you are familiar with San Francisco’s Gay Pride Parade, but if not, let me assure you that they put on quite a show. So much so that my fellow band members and I went unnoticed as we walked through the streets to get to our gig. This may seem like no big deal, but I must tell you that (click here:) I am the drummer for MiniKiss, a KISS tribute band comprised entirely of little people. I would like to invite your readers to our upcoming show in Atlantic City. We perform at the Borgata casino on Sunday, September 3rd.’ ☞ Be there or be square. UNTIL WE GET ELECTRIC CARS . . . Steve Baker: ‘In Canada, where it gets very cold in the winter (40 below without wind chill), a large national chain of gas stations has converted to 10% ethanol, which requires no special cars, engines or modifications. It also runs cleaner and prevents gas line freezing in winter. Now wouldn’t it make sense to reduce overall gasoline consumption by 10% immediately?’ Stephen Gilbert: ‘Today’s remarks from Richard Factor show the seriousness of the energy problem we face. Factor no doubt thinks he’s doing his part for the environment, but he continues to drive an automobile more that 18,800 miles a year. Compared to other Americans, he may be economizing, but he still used 632 gallons of gas in a 20 month period. The environment doesn’t ‘care’ how many miles per gallon you get; it cares how much gas you burn.’ ☞ Hey, don’t look at me: I never leave my keyboard. Michael Kern: ‘Elon Musk writes: ‘However, let’s assume for the moment that the electricity is generated from a hydrocarbon source such as natural gas, the most popular fuel for U.S. power plants in recent years.’ This statement is false, and it strongly biases his conclusions. It is true that much new generating capacity has been gas turbines, and to a lesser extent gas co-generation. But this is for peaking capacity – what you use on a hot summer day. The base load is now and likely will be for a long time carried by coal – a much worse greenhouse gas emitter than gasoline; and by nuclear, which has no greenhouse problems but is nevertheless not loved by environmentalists.’ HOUSING NOTE According to Grant’s Interest Rate Observer, which credited Yale University economist Robert Schiller for this information, U.S. residential real estate prices rose – in real terms, after inflation – by 66% from 1890 to 2004, or four-tenths of one percent a year. But between 1997 and 2005, the gain was 52% above inflation, which works out to 6.2% a year. ‘Many contend that a sustained pullback in house prices in unthinkable,’ Grant writes. ‘But the unthinkable – or, at least, the highly atypical – has already happened. In 2001-05, prices levitated.’ He goes on to say that ‘a return to the post-1968 trend-line would imply a drop of 22%. Which, of course, for these real estate-centric United States, would imply disaster. We do not predict disaster, but we do expect a pullback severe enough to inhibit the leveraged American consumer and to stunt the growth of the U.S. economy.’
$2.42. Here – Take It August 23, 2006March 25, 2012 So it’s official: the claimed Borealis tech wonders are worth less than nothing. Here’s how I know. Think of Borealis (BOREF) as a wallet with a bunch of things in it: an electric motor the size of a water melon that can drive a jumbo jet around like a golf cart . . . a hoped-for revolutionary way to make cheap solar panels . . . and on and on. One of the things in the Borealis wallet is 5.4 million shares of stock in a company called Roche Bay Mining. When it last traded, a share of Roche Bay (RCHBF) fetched $11.50. (The ask, yesterday, was $13.60 if you were buying; someone was bidding $11 for shares if you were selling.) Borealis was $10 a share (or $9.50 if you were selling). Borealis is divided into exactly 5 million shares. Depending on what you got on you math SATs, this may be starting to come into focus. Right? Each of the 5 million Borealis shares in effect ‘owns’ 1.08 of the 5.4 million Roche Bay shares (in much the same way that three kids would each own two slices of a six-slice pizza, only in this case it’s 5 million kids and a 5.4-million-slice pizza). So each Borealis share – which you can buy for $10 – owns $12.42 worth of Roche Bay shares. (That is: 1.08 shares at $11.50 each). Which makes all the other stuff in the Borealis wallet worth . . . minus $2.42. That’s not a high price to pay for a stake in what could conceivably be revolutionary new technologies. If Roche Bay is valued right (a big if), the market is in effect giving you $2.42 to take a chance on the rest. Note, first, that there is absolutely no practical value in knowing any of this. If these stocks were like real stocks – stocks that trade tens of thousands or millions of shares every day – you might consider buying Borealis shares and shorting a like number of Roche Bay shares, in the hope that, over the long-run, you would likely come out ahead as the prices came back into whack. (Of course, as the geniuses at Long-Term Capital learned [and they really were geniuses], being right over the ‘long run’ doesn’t help if you get busted by market perversity before the long run arrives.) But these stocks are not like real stocks that trade lots of shares every day. They are Pink Sheet stocks with giant spreads and very low volume. So forget it. Note second, that the market could conceivably be right in its estimation. The stock prices may actually be in whack. You could have a situation where Roche Bay itself did nicely – maybe even paid out big dividends. But where Borealis took those dividends on its 5.4 million shares and siphoned them down the rat hole. But that said, here’s what I’m thinking. I’m thinking, first, that according to Boeing and Air Canada’s chief pilots, they really did produce a prototype electric motor that moved the plane – so, yes, these guys may be dreamers with zero practical business experience, but they may also be honest. And then I’m thinking, well, if they’re honest, maybe they really do have the giant iron ore deposit they claim to have on the edge of Eastern Canada. And if they do, there’s a not entirely crazy chance it will be worth billions of dollars. Even at $1 billion, that could be $100 per Roche Bay share. (Right now, there are about 8 million Roche Bay shares outstanding, but more would presumably have to be issued to finance development of their mine.) So it’s a nutty, risky speculation and I may lose my money. But I ain’t selling my Borealis for $10 a share.
Electric Cars II August 22, 2006January 10, 2017 Richard Factor: ‘I have nothing but admiration for Elon Musk (yesterday’s column). I even used him as an example when I gave advice to Warren Buffett a month or so ago. I’m extremely impressed by his Roadster and follow-on plans. It’s people like him who, at their own expense, prove to the world that great advances are possible. Or perhaps not – obviously some skepticism is warranted in a big project like this. I wish him the best of luck, and may get on line for version 2, or even version 1 if I’m feeling flush. But, I would like to take issue with one brief and gratuitous statement in his article: ‘As a friend of mine says, a world 100% full of Prius drivers is still 100% addicted to oil.’ Perhaps so, but it would be a world addicted to HALF AS MUCH oil, at least as far as transportation is concerned. No more imports! Not to mention a greatly reduced price of gasoline, excess refinery capacity, and the political benefits of not being held hostage to the countries that supply our habit. And I would be irresponsible if I didn’t mention the other benefits of the Prius, as detailed at www.PriUPS.com: ‘Energy independence’ for individual homeowners along with potential benefits for the electric grid in case of terrorism or natural disasters. Of course neither the Prius scenario or an all-electric one will happen overnight. But we know for a fact that hybrids have enormous benefits, and I for one am hopeful that Elon Musk can prove his electric car is both viable and as beneficial as he says.’ ☞ If you didn’t already guess it, Richard loves his Prius. ‘I routinely get about 50 mpg in mine, in a land where we have winter, and on a commute where there is an elevation change from end-to-end, both of which tend to reduce one’s mileage. Under even better conditions, people report 55 mpg.’ You can see a log of his mileage here.
The Electric Car in Your Future August 21, 2006March 4, 2017 So you know I’ve been pushing ‘An Inconvenient Truth.’ (If they made a movie about YOUR HOUSE, would you go see it? Well, they have.) And you may recall I’ve also been pushing the harder-to-find ‘Who Killed the Electric Car?‘ (Not only would GM not allow its lessees to renew their leases or purchase their cars outright . . . after they took back their cars and crushed them, they shredded them.) Well, Mark Anderson gave me permission to cut and paste this fascinating piece from his Strategic News Service web site. I don’t understand all the energy conversion factors (I thought rich women wore mega joules), but the gist is pretty clear and very cool. If only Ford had been thinking this way, they could be hiring 20,000 employees. THE ELECTRIC CAR (A CONVENIENT TRUTH) By Elon Musk Introduction My day job is running a space transportation company called SpaceX, but on the side I am the chairman, primary financial backer, and assist with product and strategy at Tesla Motors. The initial product of the company is a high-performance electric sports car, called the Roadster, but the intent is to build electric cars of all kinds, including low-cost family vehicles. (See video here, by Autoblog: http://www.youtube.com/watch?v=Vt1AdfgcNiQ.) The overarching purpose of Tesla is to help expedite the move from a mine-and-burn hydrocarbon economy towards a solar electric economy, which I believe to be the primary, but not exclusive, sustainable solution. As July’s unveiling of the Tesla Roadster demonstrated, reports of the death of the electric car have been greatly exaggerated. Moreover, this is a vehicle that defies all conventions associated with environmentally friendly cars, particularly those of a purely electric nature. My apologies for the brief commercial, but to understand what is possible, I must present the facts of the vehicle: * 0 to 60 mph in 4 seconds * 250 mile EPA highway range * 135 mpg equivalent, per the conversion rate used by the EPA * $2.50 for a full charge, assuming Northern California PG&E off-peak rates * Fully DOT-compliant: crash tested, with airbags, crash structures, etc. * $89,000 price (as low as $83,000 with rebates) The Tesla Roadster is designed to beat a gasoline sports car like a Porsche or a Ferrari in a head-to-head showdown and, by the way, it happens to be electric with twice the energy efficiency of a Prius. In other words, it is a great sports car without significant compromises. Now, some may question whether this really does any good for the world. Are we really in need of another high-performance sports car? Will it actually make a difference to global carbon emissions? Well, the answers are No and Not much. However, that misses the point. Almost any new technology initially has high unit cost before it can be optimized, and this is no less true for electric cars. The strategy of Tesla is to enter at the high end of the market, where customers are prepared to pay a premium, and then drive down market as fast as possible to higher unit volume and lower prices with each successive model. Without giving away too much, I can say that the second model will be a sporty four-door family car at roughly half the above price point, and the third model will be even more affordable. In keeping with a fast-growing technology company, all free cash flow is plowed back into R&D to drive down the costs and bring the follow-on products to market as fast as possible. When someone buys the Roadster sports car, they are actually helping pay for development of the low-cost family car. Emissions Elsewhere, a.k.a “The Long Tailpipe” A common rebuttal to electric vehicles as a solution to carbon emissions is that they simply transfer the CO2 emissions to the power plant. An obvious counter is that one can develop grid electric power from a variety of means, many of which, like hydro, wind, geothermal, nuclear, etc., involve no CO2 emissions. However, let’s assume for the moment that the electricity is generated from a hydrocarbon source such as natural gas, the most popular fuel for U.S. power plants in recent years. The H-System combined cycle generator from General Electric is 60% efficient in turning natural gas into electricity. (Combined cycle is where the natural gas is burned to generate electricity, and then the waste heat is used to create steam that powers a second generator.) Natural gas recovery is 97.5% efficient, processing is also 97.5% efficient, and then transmission efficiency over the electric grid is 92% on average. This gives us a well-to-electric-outlet efficiency of 97.5% x 97.5% x 60% x 92% = 52.5%. Despite a body shape, tires, and gearing aimed at high performance rather than peak efficiency, the Roadster requires 0.4 MJ per kilometer or, stated another way, will travel 2.53 km per mega-joule of electricity. The full cycle charge and discharge efficiency of the Tesla Roadster is 86%, which means that for every 100 MJ of electricity used to charge the battery, about 86 MJ reaches the motor. By the way, the Tesla Lithium-Ion battery pack is landfill-safe, although dumping it would be pointless, since it can be sold to recycling companies (unsubsidized) at the end of its 100,000-mile design life. Moreover, the battery isn’t actually dead at that point; it just has a lowered capacity. Bringing the math together, we get the final figure of merit of 2.53 km/MJ x 86% x 52.5% = 1.14 km/MJ. Now, let’s now compare that with the Prius and a few other options normally considered energy-efficient. The fully considered well-to-wheel efficiency of a gasoline-powered car is equal to the energy content of gasoline (34.3 MJ/liter) plus the refinement and transportation losses (18.3%), multiplied by the miles per gallon or km per liter. The Prius, at an EPA-rated 55 mpg, therefore has an energy efficiency of 0.56 km/MJ. This is actually an excellent number compared with a “normal” car like the Toyota Camry at 0.28 km/MJ. Note, the term “hybrid” as applied to cars currently on the road is a misnomer. They are really just gasoline-powered cars with a little battery assistance, and, unless you are one of the handful who have an aftermarket hack, the little battery has to be charged from the gasoline engine. Therefore, these cars can be considered simply as slightly more efficient gasoline-powered cars. If the EPA-certified mileage is 55 mpg, then it is indistinguishable from a non-hybrid that achieves 55 mpg. As a friend of mine says, a world 100% full of Prius drivers is still 100% addicted to oil. The CO2 content of any given source fuel is well understood. Natural gas is 14.4 grams of carbon per mega-joule, and oil is 19.9 grams of carbon per mega-joule. Applying those carbon content levels to the vehicle efficiencies, including as a reference the Honda combusted natural gas and Honda fuel-cell natural gas vehicles, the hands down winner is pure electric: Car Energy Source CO2 Content Efficiency CO2 Emissions Honda CNG Natural Gas 14.4 g/MJ 0.32 km/MJ 45.0 g/km Honda FCX NG Fuel Cell 14.4 g/MJ 0.35 km/MJ 41.1 g/km Toyota Prius Oil 19.9 g/MJ 0.56 km/MJ 35.8 g/km Tesla Roadster NG Electric 14.4 g/MJ 1.14 km/MJ 12.6 g/km The Roadster still wins by a hefty margin if you assume the average CO2 per joule of U.S. power production. The higher CO2 content of coal-vs. natural gas is offset by the negligible CO2 content of hydro, nuclear, geothermal, wind, solar, etc. The exact power production mixture varies from one part of the country to another and is changing over time, so natural gas is used here as a fixed yardstick. Now, I should mention that Tesla will be co-marketing sustainable energy products from other companies along with the car. For example, among other choices, we will be offering a modestly sized and priced solar panel from SolarCity, a photovoltaics company (where I am also the principal financier). This system can be installed on your roof in an out-of-the-way location, because of its small size, or set up as a carport, and will generate about 50 miles per day of electricity. If you travel less than 350 miles per week, you will therefore be “energy positive” with respect to your personal transportation. This is a step beyond conserving or even nullifying your use of energy for transport – you will actually be putting more energy back into the system than you consume in transportation. As an addendum, I will drill into two alternative solutions to the energy problem, one that used to be a lot more fashionable and one that is swiftly becoming so: Hydrogen Fuel Cells: Always a Bridesmaid, Never a Bride For half a century, stretching from the Gemini space program in the early ’60s to the present day, fuel cells have seemed to hold great promise only just out of reach. The claim would be made that as soon as such-and-such technology goes into production, the world will experience the wonder of hydrogen fuel cells. Well, the truth is that even with impossibly optimistic assumptions, physics is not on your side when it comes to mobile fuel cells, although some stationary applications can make sense. The most efficient way to produce hydrogen in practice is from natural gas, which has an efficiency of 52% to 61%. The upper limit of a PEM fuel cell for producing electricity is 50%, and we can assume the same 2.78 km/MJ vehicle efficiency as with the battery-powered car. This results in a theoretical (perfect technology) maximum figure of merit for our hydrogen fuel cell car of 2.78 km/MJ x 50% x 61% = 0.85 km/MJ. This is still worse than the Li-Ion battery powered car, but not bad when compared with gasoline vehicles. However, real-world fuel-cell cars have never gotten close to this good. The best fuel-cell car is the Honda FCX, at 0.57 km/MJ x 61% = 0.35 km/MJ – not even as good as its gasoline-powered equivalent. Moreover, using natural gas to obtain hydrogen means we are still dumping vast amounts of CO2 into the atmosphere. Although one can attempt to make hydrogen with a zero CO2 source of electricity, the poor efficiency of electrolysis means you end up even worse at 0.12 km/MJ, which is about one-tenth as good as a Li-Ion electric car. The superiority of Li-Ion for storing electricity is empirically supported by the fact that, apart from isolated experiments or government-driven use, almost no one uses fuel cells in mobile applications. The value of extra energy in the ultra-competitive cellphone or laptop market is enormous, and many consumers would pay a significant premium for something better, yet we use Lithium-Ion batteries. Ethanol, Ethanol, Everywhere, Nor Any Drop to Drink Ethanol (a.k.a. alcohol) will certainly grow as a business and serve as a partial solution to our energy problem, particularly given that it is now taking the place of the gasoline additive MTBE. However, even if large-scale cellulosic ethanol technology is perfected, I don’t believe it will become the primary solution to the world’s needs. The often-used example of Brazil does not apply to most parts of the world and may not even apply to Brazil if they see high economic growth with its attendant energy demands. Brazil is in the tropics with an all-year-round growing season and an enormous amount of arable land relative to its population food requirements and the number of cars on the road. In contrast, domestic ethanol as the primary solution will definitely not work for the world’s most populous countries, such as Japan, China, India, Pakistan, Indonesia, etc. Those countries are either breaking even on domestic food production or are net importers. If you argue that ethanol is to be grown elsewhere and shipped, where are these vast tracts of unused arable land? And, bear in mind, the caloric requirements of cars are much higher than those of humans. Another way to think about it is that plants are basically just a very inefficient way to convert sunlight into stored chemical energy. Their net efficiency is about 1/2% or so, compared with commercially available photovoltaics at 20%. That means you need about 40 times the land area in crops than you do in photovoltaics. Complicating the issue is that crops require arable land, which will apply great pressure to unplanted wilderness areas around the world. In contrast, photovoltaics can be installed on your home or business rooftop, efficiently delivering energy right where it is consumed and taking up no extra land at all. If you want to use plants most effectively as an energy source for transportation, the best way is to burn them whole (no processing needed!) in a combined cycle biomass electric generator at 60% efficiency and use the output to charge electric vehicles. That requires no technology breakthroughs, uses the full energy content of the plant, and is vastly more efficient than refining a small part of the plant (or even the whole plant, using cellulosic technology) into ethanol to power cars directly. QED No matter your preferred means of energy generation, electric cars are the answer: a hydrogen-fuel-cell car is simply an electric car with hydrogen as a poor energy storage technology. The most efficient way to use biomass or any chemical energy source is not to pour it in your tank and burn it at 20% efficiency, but rather to convert it into electricity in a combined cycle power plant at 60%, then charge your electric car. Moreover, the separation of source and use enabled by the electric car allows for zero emission (in operation) energy technologies, like wind, solar, geothermal, tidal, etc. Lithium-Ion batteries are the most efficient way to store electricity today, but I suspect we will find that there are even better technologies down the road. In fact, my original reason for moving to Silicon Valley about a dozen years ago, before I got distracted by the Internet, was to do a Ph.D. at Stanford in the physics and materials science of high-energy density capacitors, specifically for electric vehicle applications. Capacitors have the advantages of a quasi-infinite cycle and calendar life, extremely low charge / discharge losses, and charge times measured in minutes for a car-size pack. If the capacitor energy density problem is solved, the gasoline vs. electric contest goes from a fair fight to gasoline getting the WWF Smackdown. Noteworthy References * For a more detailed review of electric vehicles vs. other modes of propulsion, please see the white paper written by Martin Eberhard and Marc Tarpenning, available on the Tesla website. * EPA mileage numbers are derived from www.epa.gov/fueleconomy. * The GE H system generator, an example of beautiful engineering: http://www.gepower.com/corporate/ecomagination_home/h_system.htm * Efficiency of Hydrogen Fuel Cell, Diesel-SOFC-Hybrid and Battery Electric Vehicles, 20 Oct 2003, Ulf Bossel ________________ About Elon Musk Elon Musk has been the primary funding source for Tesla Motors, from when Tesla was just three people and a business plan to the present day, having led the Series A and Series B and co-led the Series C. Electric vehicles have long been one of Elon’s primary interests, stemming from his days in the early ’90s working on high-energy density capacitor technology in Silicon Valley. Elon is known for co-founding PayPal and Zip2 and founding SpaceX, which is in the business of developing and launching the world’s most advanced rockets for satellite and later human transportation. As chairman of the board of Tesla Motors, Elon helps develop the company’s business and product strategy, and assists with knowledge of composite and metallic structures, domestic manufacturing, and navigating federal regulations. __________ Copyright 2006 Strategic News Service LLC and Elon Musk. Redistribution prohibited without written permission. http://www.stratnews.com
Hilton Internet Connection August 18, 2006March 25, 2012 Is very slow tonight . . . and as you know, today is a national holiday — someplace, I’m sure — so I’m taking a long weekend. See you Monday.