April 14, 2009
How To Transition Away From Oil?

Chemical engineer, former oil field worker, and energy policy writer Robert Rapier comments about an Energy Information Administration Energy Conference press panel he recently appeared on. Rapier makes an argument I fully agree with: trying to cut down the oil industry before substitutes are practical is just asking for trouble.

A representative from (I believe) the California Independent Petroleum Association got up and made a statement that he felt that despite the important role the industry plays, they are being demonized and singled out for punitive taxes. I responded that I could empathize; that one of my greatest concerns is that we will discourage domestic oil and gas production, and then biofuels fail to deliver per expectations. In that case I think we become even more dependent upon OPEC.

Fellow panelist Eric Pooley disagreed and said we need even stronger incentives for moving away from oil. That really misses the point I was making, though. You can have the strongest incentives in the world, but they can't assure that technology breakthroughs will occur. So while you are promoting one industry at the expense of another, very successful industry that plays a critical role in the world, what is the contingency plan if the incentives don't pay off?

We can't replace most uses of oil in the next 10 years. Grain crops for biomass ethanol can't do it since we don't have enough land. Maybe cellulosic ethanol tech will mature. But if it does then say bye bye to lots more rain forests. Maybe biodiesel algae will mature and drop far enough in cost to become viable. I certainly hope so. But I don't think we should count on it. The problem might take 20 years to solve for all we know.

I happen to think we are pretty close to world peak oil production and urgently need to develop energy substitutes. But that's not an argument for heavily taxing the oil industry or restricting where they can drill. We are already in enough trouble. Why make it worse?

I'm such an enthusiast for electric cars and better batteries because to the extent that we can shift a portion of our transportation needs to electric power we reduce our dependence on liquid fuels. Our approaching energy crisis is really a liquid fuels crisis. We have lots more scalable ways to produce electricity than we do liquid fuels.

But electric vehicles have limits. As Alan Searchwell explains some usage patterns map better to what electric vehicles do well.

Electric drive systems should be able to gain some serious traction in the commercial vehicle market since electric drive in commercial vehicles is a more viable option NOW. One reason is that a large percentage of delivery vehicles operate on fixed routes and schedules so their use and charging cycles can be planned with more certainty than an individual's personal transportation. Smaller delivery vehicles also tend to do shorter range trips, so electric drive systems are a particularly good fit. Routes can be planned so that vehicles return to base long before they run out of juice. In addition, fleet operation bases can be equiped with high power fast charging stations or battery swap stations, if fast turnaround times are more important than the cost of spare battery packs. School buses, airport shuttles and other pasenger moving operations that frequently move people on routes that are less than 50 miles round trip also present opportunities.

For example, during a recent trip to the US, I spent some time at a car rental location and observed that there were a couple of shuttles making trips to Miami International Airport and back, a trip that I estimate takes less than half an hour to complete. Also at the location were several shuttles sitting idle. If these shuttles were electric, the idle ones could be plugged in while the shuttles were working. When the working ones need charging, they could be plugged in and one of the idle ones used to replace them.

We need to shift to electric (and to trains for that matter) where we can so that the remaining liquid fuels can be used in application where electric power isn't practical.

Share |      Randall Parker, 2009 April 14 08:21 AM  Energy Policy


Comments
Wolf-Dog said at April 14, 2009 10:34 AM:

One serious obstacle is the fact that a very significant segment of the US economy depends on the oil industry itself. There are a lot of drillers, refiners, etc. When the price of oil went down, many drillers, etc, started complaining.

David Govett said at April 14, 2009 12:55 PM:

Everyone move back to farms and raise sheep. That will cut demand for oil.

th said at April 14, 2009 4:57 PM:

"When the price of oil went down, many drillers, etc, started complaining."
A few years ago, $25 to 30 oil was a reason for the industry to celebrate, now thats closer to $70. The cheap stuff is gone, the expensive stuff will be found and sold just like the cheap stuff was, according to cambridge energy research, total world supply is 96 mmbbls/d, it will go to 114 by the middle of the next decade, still some out there they think.

Mercy Vetsel said at April 14, 2009 8:01 PM:

We could go off oil in 10 years, but the important question is "at what cost". Here are the options from most to least expensive:

Currently battery technology costs between $10 and $20 per gallon of gas worth of energy for a lithium ion car that is driven 12,000 miles per year and has a range of 40 or 80 miles (40 mile range = $10/gallon, 80 mile range = $20/gallon). Because li-ion batteries have such high material costs and already enjoy economies of scale pricing, a "game changing" breakthrough would be required to make them economically feasible. In economic terms, even with full economies of scale, it will cost twice as much to drive a Volt as a similarly-sized car.

Next comes hydrogen. Hydrogen can be produced from electrolysis for about $4 per gas of gallon (GGE) assuming that you use the normal industrial price of electricity ($0.05 kwh). When produced from natural gas, it's even cheaper. With H2, you have two options: Use it in a plain old internal combustion engine or use a fuel cell. With an internal combustion engine, a GGE is a roughly a GGE, so it's safe to figure that H2 could replace oil at a cost of $6 per GGE without any fancy fuel cells. However, with a fuel cell, you get more bang for the buck so a GGE of H2 is really 2.55 GGE provided that you use a fuel cell. That brings the cost down to $1.62 per gallon plus whatever extra the fuel cell costs. Unlike batteries, there seems to be some genuine progress being made with fuels cells.

Finally, there is natural gas. That's pretty easy because it can be priced. A GGE of natural gas costs about $1.50 so I'm surprised it isn't more popular, but natural gas is partially correlated with the price of oil and it's not worth the trouble to save just a tiny bit.

So, to summarize, here's where we are for a vehicle that's driven 12,000 per year and has a range of at least 60 miles in cost per equivalent gallon of gas:

Method.......Current-tech..5-year projection (evolutionary tech)
-----------..------------..--------------------------------------
natural gas..$1.50.........$2.50
gasoline.....$2............$3
H2...........$6.(burned)...$5..(fuel cell)
li-on batt...$15...........$12

-Mercy

Allan said at April 14, 2009 10:27 PM:

Mercy - you left out methanol. It's a lot cheaper and easier to produce than ethanol. It costs about 50 cents a gallon to make methanol from coal tho it can be made from almost any biomass or even recycled trash. Methanol has about half the energy of gasoline, so that's about one dollar per gasoline equivalent gallon.

Engineer-Poet said at April 14, 2009 11:15 PM:

Obviously, any country trying to transition away from oil should discourage all oil (foreign and domestic) equally.  It makes no sense to tax domestic oil production while ignoring imports.

What the USA really needs is European-level taxes on petroleum.  Unfortunately, I think this is the last thing on anyone's agenda.

Nick said at April 15, 2009 1:21 AM:

Very interesting post,

I agree with you that we shouldn't cut down the oil industry, that would be truly dangerous (even though some green activits would want to, but it doesn’t make sense). ideally I think things should happen naturally i.e. 'green techs' take over because they are cheaper, after some point. but the problem is that oil prices are oscillating constantly (although increasing, overall on the long term, see 'peak oil'). so it makes it hard for these green techs to flourish now—you need some investment and the results are not immediate (you might have a few months of low oil prices once in a while), and you need to make sure that those efforts will pay off and your product will really work when oil prices are high. in other words, from what I've seen, moving away from oil seems more a matter of economic life (setting up companies and dealing with these oscillations of oil prices) more than raw science/innovation. it's hard to do set up those companies now, but if we fail to, our economy will become obsolete like the big car companies are today.

the impression I get is that much of the science is 'there' as prototypes or even just ‘very doable ideas’ (like solar panels/crystals for house roofs, solar panels covering large regions, bio-engineered bacteria that secretes oil, or even things like companies that better isolate buildings and make you save money), but we need the companies to refine these prototypes/ideas and produce them at a market scale, and that can only happen if enough ppl see profits on the long run, and invest. I'm guessing the race has started, and a few businessmen see the opportunities of green techs. I guess you need really bold/smart/informed people to go into that. smart techies and businessmen. it's tough to pick the really valuable plan/idea that's going to live up (I wouldn't bet on a stationary-bicycle-powered electric house system lol). but it seems like some interesting stuff is already happening:

by coincidence I've watched this TED talk tonight:

Shai Agassi: A bold plan for mass adoption of electric cars

the talk is very interesting from 10:16 on (he talks about the oscillating oil prices and the problem it creates for switching to electric cars).

Nick G said at April 15, 2009 3:34 PM:

Mercy,

"Currently battery technology costs between $10 and $20 per gallon of gas worth of energy..."

How did you calculate this? I'd say that the cost is between $2-$3/gallon.

Mercy Vetsel said at April 15, 2009 7:12 PM:

Allan,

Thanks for the suggestion. I don't really know anything about methanol -- do you have a site that explains why it's not in wider use? At 1$ per GGE, there must be a reason to explain lack of adoption.

Nick,

The high cost for battery cars and fuel cell H2 comes from capitalizing the cost of the equipment. I actually follow exactly the reasoning that Shai Agassi uses.

Here are my assumptions and calculations:

kWh/GGE: 12.7 (1 gallon gas = 36.4kwh but gasoline is only 35% efficient)
li-ion price/kwh: $1000
li-ion price/GGE: $12,733 (this is the killer -- each gallon of li-ion "gas tank" costs $12,733 and weights 200 pounds)
miles/year: 12,000
mpg: 30
Vehicle range (miles): 60 (again if you're lucky, the Volt goes 40 and only uses 2/3 of battery)
GGE/year: 400
kwh/year: 5093.2
electricity retail price/kwh: $0.10
electricity price/year: $509.32

Total battery cost (60/30) * $12,733 = $25,466
Battery life cycle: 7 years (if you're lucky)
Finance rate: 7%
Annual battery cost: $6,300.40

Total annual cost (battery & electricity only): $5234.62
or $13.09/GGE

Battery swap cost (50 swaps x $4/swap): $200
On site charging cost less electricity ($2/day): $500

Total annual gasoline replacement cost: $5,934.62
or $14.84/GGE

Notice that I generously assume 100% efficiency in charging and discharging. One could quibble with the battery cost, but the GM Volt approach -- cheap off-the-shelf cells that are then discharged only 2/3rd still results in a cost that's close to $1000 per usable kwh.

-Mercy


Nick G said at April 16, 2009 4:03 PM:

"I actually follow exactly the reasoning that Shai Agassi uses. "

Ah, that helps explain it: he's a competitor, and is providing misinformation.

First, these assumptions are wrong:

The Volt Li-ion is likely to cost $300/KWH in 2-4 years, not $1,000*.

The average US vehicle gets 22 MPG, not 30.

2nd, this is a very difficult way to calculate comparable costs. Let's do it differently:

For a conventional vehicle: $1.10/gallon / 22 MPG = $.05/mile.

For an EV: $300/KWH x 10% capitalization factor (to take the time value of money into account)= $30/KWH/year battery cost.

$30/KWH/year / 250 uses per year / 5 miles/KWH = $.024/mile.

Of course, you can compare to a Prius to make the tradeoff even, and use $4.40/gallon to make it 4:1 in favor of the EV.


*A recent study Carnegie Mellon University argued that "plug-in" hybrid-electric vehicles, like the Chevy Volt, are too expensive. Are they right?

No. They assumed that the battery would cost $16,000 (or 1,000/KWH). As GM says, that's way too high. (Oddly, they also conclude that a plug-in with a 10 mile range would be better, because drivers would stop and charge every 10 miles!)

Similarly, $10,000 for the Volt's battery has been widely reported in the media, but we shouldn't rely on mass media! Really, no one knows how much the batteries cost. The $10K figure is purely speculation. Here's an example, in the CS Monitor. We see that it doesn't say $10K. Here's what the article says: "the race isn't over making a Chevy Volt battery designed to run 40 miles on a single charge that could (emphasis added) cost as much as $10,000." We can see that the reporter doesn't have a firm source for this cost figure.

Elsewhere, the article says: "Still others say that the cost of new battery power for PHEVs may drop faster and already be lower than what has been widely reported at perhaps $500 per kilowatt-hour or even less, says Suba Arunkumar, analyst for market researcher Frost & Sullivan.

"I do expect the price will come down to perhaps as low as $200 per kilowatt-hour when mass production begins in 2010 and 2011," she says."

Tesla's cost is $400/KWH - it's very likely that GM will pay $200-$300 in volume. The batteries won't be produced in large volumes for several years. They'll use less expensive materials than 1st Gen batteries; the larger format is much less expensive; and they'll have very, very large production volumes relative to most 1st-gen li-ion. Large production volumes reduce costs very quickly.

GM is pricing the Volt high purely to capture the early-adopter premium and the federal rebate - their official justification is that they're pricing in 100% replacement of the battery under warranty, which really isn't credible. We can expect the Volt to cost less than $30K with large volume production.

Is the battery too large?

Yes, they're only using 50% of the battery - a 50% depth of discharge (DOD) is very conservative. That means they have to use a 16 KWH battery to get an effective 8 KWH's. They could be more aggressive (and probably will be in the future), but they're very sensitive to the bad publicity that early battery failures would create.

Could they use a battery that allowed a deeper DOD?

No, there aren't any batteries on the market that are more durable as measured in charge cycles. Tesla's batteries aren't expected to last more than 400 cycles, and the Volt will do 5-10x as many. In theory, the Volt could have a smaller battery. That would mean a shorter range, which would still accomodate many drivers. That might more perfectly optimize costs, but then it wouldn't feel like a big step forward. It wouldn't feel like a real EV, with generator backup - instead, it would feel like an incremental hybrid. Both GM (for PR) and buyers want a large, step forward, I think.

Mercy Vetsel said at April 16, 2009 6:44 PM:

How am I a competitor of Shia Agassi? He's certainly not providing much competition for anyone in the terms of critical thinking and as a taxpayer, I'm on the opposite side of those begging the government for poorly conceived energy handouts.

> $30/KWH/year / 250 uses per year / 5 miles/KWH = $.024/mile

This doesn't make a lick of sense. What is a use? Is the .024/mile the cost for a SINGLE kwh of battery capacity? That's not even half the cost of the electricity alone to move a car that gets 22 mpg. You never disclose key assumptions like the GGE equivalent of electrical power or even the cost of electricity.

I'll use your approach to help you figure out you are losing your way:

22 mpg = 1/22 gpm
1/22 gpm * 12.7 kwh/GGE = 0.577 kwh/mile

To go sixty miles you need 60 miles * 0.577 kwh/mile = 34.62 kwh

This is the first place where you may have driven off the cliff. 5 miles/kwh equates to 60 miles/gallon. You may be comparing a 5-seat Jaguar S-type to a go-kart.

Next, if you use cheap batteries for $400/kwh you need twice the capacity just to have a shot at 7 solid years of life (GM's approach), so that gets us to a 69 kwh hour battery or $800/kwh for a 35 kwh battery if you prefer.

Under ideal conditions li-ion batteries lose 5% per year in capacity instead of 20% per year, but I'm feeling generous and I'll overlook this point and just assume that battery car drivers will be happy with the very best case scenario, where they only lose 1/4 of their driving range in 5 years.

So that get us to the second point where you drive off the cliff. 10% capitalization factor? For a battery that lasts seven years in the best case scenario? Perhaps you'd be interested in financing my next laptop battery. At 7% over 7 years, the cap factor is 19%, but I'll be super generous again and give you 4% financing for 8 years: 15%.

So let's redo the calculation:

15% cap * 69 kwh * $400 / 12000 miles = 34.5 cents/mile
or half a penny for each kwh of battery capacity per mile


That's just for the battery. The electricity will cost you too:

1/22 GGE/mile * 12.7kwh/GGE = 0.577 kwh/mile
0.577 kwh/mile * $0.10/kwh = 5.7 cents/mile

So the battery and electricity cost for an average sized car with 25% of the normal range is 40 cents per mile or a gasoline equivalent price of $9/gallon without tax. That's lower than the $15 that I calculated, but I'm using more realistic assumptions about the price/year of batteries and including costs for the battery swapping network and recharging stations.

Li-ion batteries have enjoyed economies of scale for years and 85% of the cost of production is material costs. Despite all of the investment and the obvious multi-billion dollar price that a magic battery patent would fetch, prices have barely moved over the last two years.

-Mercy

Nick G said at April 17, 2009 11:12 AM:

"How am I a competitor of Shia Agassi? "

No, no, I was saying that Agassi is a competitor of vehicles like the Chevy Volt. He has an incentive to "diss" his competitors, and suggest that batteries will be too expensive.

More later...

Nick G said at April 17, 2009 11:21 AM:

"Is the .024/mile the cost for a SINGLE kwh of battery capacity?"

Yes.

"That's not even half the cost of the electricity alone to move a car that gets 22 mpg."

Well, a conventional vehicle doesn't use electricity, so this kind of conversion gets very...misleading.

" 12.7 kwh/GGE "

Well, that's incorrect or misleading. A conventional ICE vehicle is, perhaps, 15% efficient, which gives about 5 KWH/GGE.

" 5 miles/kwh equates to 60 miles/gallon"

See, this is how things get..fuzzy. An electric vehicle is more efficient, and uses less energy than an ICE vehicle. If you want to compare the cost effectiveness of an EV or PHEV to an ICE, it's better to use cost per mile. If you like, we can use a Prius for comparison, which does use about .2KWH/mile (when it's on the electric motor), and gets about 50MPG.

"Next, if you use cheap batteries for $400/kwh"

GM's batteries aren't "cheap".

"you need twice the capacity"

True, GM is doubling the capacity - they've said that they're likely to reduce that buffer in the 2nd generation Volt, but it's a fair criticism. Let's add the 100% safety factor in.

" just to have a shot at 7 solid years of life (GM's approach),"

No, GM is aiming for 10 years.

More later...

Nick G said at April 17, 2009 2:37 PM:

"that gets us to a 69 kwh hour battery "

We don't need a 69KWH battery. The Volt will use a 16 KWH battery (including the 100% safety factor), and that's enough: it will have a net capacity of 8 KWH, and have a 40 mile all-electric range. That will take care of 80% of miles driven, which is the proper balance at the moment.

"cheap batteries for $400/kwh "

Are you familiar with the LG chemistry that they plan to use? It's anything but "cheap", and it's very different from cobalt laptop batteries. Please review what I said earlier about pricing: $300/KWH is a reasonable expectation in 2-4 years, when volumes get reasonable.

"Under ideal conditions li-ion batteries lose 5% per year "

I believe you're thinking of older, cobalt-based li-ion batteries.

"10% capitalization factor? For a battery that lasts seven years in the best case scenario? "

Actually, its intended to last 10 years (that's the CARB requirement), and is likely to last much longer - the life of the car.

So, that gives us costs for the battery of: $300/KWH x 10% capitalization factor x 2 (safety factor) = $60/KWH/year battery cost.

$60/KWH/year / 250 uses per year / 5 miles/KWH = $.048/mile.

Now, electricity costs are very simple:

$.10/KWH / 5KWH/mile = $.02/mile. Of course, many people will use night time power, and pay using time of day pricing ( e.g., www.thewattspot.com ), and pay $.05/KWH or less, for a cost/mile of $.01.

So, that gives us $.058-$.068/mile: call it $.06, as most people will go for the discount night-time pricing option....at least, anyone who cares about the cost. Anyone else...well, they don't care, do they?

So, multiply $.06/mile x 22 Miles/gallon, and we get $1.32 for the equivalent cost per gallon for the average US vehicle. For a Prius, the equivalent gas cost is $3.

Mercy Vetsel said at April 17, 2009 7:58 PM:

So it seems we differ on four points:

1) kwh/GGE
2) battery cost
3) finance rate
4) whether it makes sense to compare a Chevy Silverado Hybrid Pickup Truck (21mpg) with a Prius-like Volt (46mpg)

So, in turn:

1) kwh/GGE

> If you like, we can use a Prius for comparison, which
> does use about .2KWH/mile (when it's on the electric motor), and gets about 50MPG.

Very good! That equates to 10 kwh/GGE and very close to my number. Do you have a source for that? When I Googled Prius and kwh/hour the number I found was .25kwh/mile or 12.5 kwh/GGE -- almost EXACTLY the number I used in the first place and I don't think that number was measured at the plug.

The apples to apples comparison is actually how many kwh's the electric meter shows going into the car versus the number of miles driven.

If I Google for "miles per kwh", I see that people who keep track of how much electricity they put into electric cars get results in the 10 to 15 kwh/GGE range.

http://privatenrg.com/#Bill_Moores
http://www.diyelectriccar.com/forums/showthread.php/efficiency-your-miles-per-kwhi-28577.html

2) Battery cost

You are throwing out fantasies for what's going to happen in two years when li-ion has been a flatline technology for 5 years. The reality is that $800 per usable kwh ($400/kwh with 50% used) is actually wildly optimistic for a battery that only loses 1/3 of it's capacity in 7 years.

All I ask is that you use real costs. The Prius battery costs $2500 for 0.75kwh of usable energy and it uses cheaper NiMH batteries. Why doesn't Toyota just swap in an LG Chem battery that costs the same but delivers 10 times the power?

3) 0% financing

Even if these batteries have a 10 year life and magically to become the first li-ion batteries ever to not lose capacity with time, you don't get to assume a 0% finance rate! It's just more pure fantasy. If you're going to make up numbers, do it with style a la Shai Agassi. Maybe the bank will pay YOU to allow them to finance the battery. The real finance rate should really be at least as high as the 8% it costs to finance a new car.

4) Goofy comparison

> So, multiply $.06/mile x 22 Miles/gallon, and we get $1.32 for the equivalent cost per gallon for the average US vehicle.

Who do you think you're fooling? You can't compare a 22 mpg SUV with a Prius-like Volt. The (tax-free) gas price for a Prius is $1.50/46 miles = 3.2 cents per mile. I don't accept your 0% finance rate or your battery price (that's still 1/3 of what the NiMH Prius battery costs per usable kwh) BUT even with these assumptions, you are still calculating a price/mile twice as high as a Prius.

There is plenty of room to improve fuel efficiency in a fleet that averages 22 mpg, but you don't get to claim the fuel efficiency improvements as a reduction in the battery cost.

So finally, if we use real world numbers, none of my starting assumptions need to be revised. The reality is that cars can be made much more fuel efficient, but a battery car with a 60 mile range costs $15/GGE just for the battery and electricity.

But Shai the Shyster is claiming much more. In addition to being normal sized, his cars will have a 100 mile range, advanced battery chemistry AND a network of charging and swapping stations. Add up all of his claims and you're paying about $20 for each gallon of gas equivalent for a 12,000 mile per year driver. For the average American vehicle, that's 90 cents a mile, although of course no one would be stupid enough to build a car that runs on $20/gallon gas so inefficiently.

This is the simple economics that explains why battery cars aren't widely used even in countries where gasoline costs $7/gallon. In those places, they just drive smaller more fuel efficient petroleum cars. Israel has some of the highest gasoline taxes in the world and they still needed an 80% tax on vehicles to make this possible.

Even if we raised gasoline taxes to $10 a gallon, the Shai Agassi plan still wouldn't be even close to feasible in the U.S. I don't know if he's lying about the planned specifications of the cars or if he's lying about the cost per mile, but he can't be telling the truth about both!

I want to replace oil as badly as anyone, but indulging in hopeful fantasies gave us mercury fish from coal-based electricity (rather than nuclear power) and ethanol which is an ecological and economic disaster.

-Mercy

Nick G said at April 18, 2009 11:23 AM:

hmmm. We seem to be making slow progress. Let's try resolving one thing at a time.

Are we agreed that we should calculate costs based on the best option? A PHEV with a 16KWH battery (as used in the Volt), makes better use of a smaller battery (16KWH used for 80% of the 12,000 miles/year, rather than 69KWH used for 12,000).

I share some of your skepticism about Better Place, and I think we may as well analyze the best option. Does that make sense?

Randall Parker said at April 18, 2009 11:39 AM:

I agree with Mercy that 200 watt-hours per mile seems too low. If we are going to get into comparing electric and gasoline we should compare similar cars. Apples-to-apples, not apples-to-oranges. The Prius would be more efficient as a pure gasoline car. But even 200 watt-hours per mile for the Prius seems low.

However, regards battery life I am thinking Mercy's doing apples-to-oranges comparisons. I say that for two reasons:

1) The existing lithium ion batteries are not representative of the new lithium iron nanophosphate and other new designs that are aimed at the car market. The new ones probably last longer owing to better design.

2) GM is using the Volt battery in a way aimed at increasing battery life. They only discharge half. But they even do more than that: They do not fully charge. They cycle it from 30% charge to 80% charge. GM claims the battery will go for 150,000 miles without significant deterioration. GM's algorithm for controlling battery charge sounds sophisticated.

Randall Parker said at April 18, 2009 1:15 PM:

Nick G,

I looked at the The Watt Spot Commonwealth Edison dynamic electricity pricing program and it looks pretty cool. On an April Saturday afternoon they are currently selling at 2.8 cents per kwh if I understand correctly. So driving will be cheaper when it is cooler. I'll use spring and fall to cheaply charge across the highways in an electric Hummer engaging in commerce to keep civilization intact. I'm sure you are as excited by this prospect as I am.

The batteries will cost more than the electricity. Electric cars really do come down to battery costs and battery longevity.

Since GM says a Volt will recharge in 8 hours at 110V and in 3 hours at 220V how much does it cost to install a 220V outlet in your garage or car port?

Nick G said at April 18, 2009 1:20 PM:

Randall,

I agree with you on battery life - there's absolutely no question that the existing cobalt-based laptop-style lithium ion batteries are not representative of the new lithium iron nanophosphate and other new designs, like that of LG: the new designs get 5-10x the cycle life! As a further detail (and something you noted in an earlier story), GM is also building into the software a goal of 8KWH discharge, with the software controlling the % of charge and discharge. That means that the battery can maintain a constant 8KWH discharge even in the face of deterioration: it's a large part of the 100% safety factor we were discussing above.

On the 200 W-hours - that's GM's spec: 40 hours and 8 KWH's. We should note that 1) the Prius' NIMH batteries lose 30% of their input in the charge-discharge cycle, while li-ion batteries lose less than 10%; and 2) it's supported by Tesla's specs, which are 240 mile range from 52 KWH batteries, for 217 WH/mile (I'm perfectly willing to believe that GM can get slightly better efficiency than Tesla: better batteries (Tesla is using cobalt-based li-ion with shorter cycle life, and cycle life and internal losses are related), and much more engineering depth and experience with EV's).

Nick G said at April 18, 2009 1:32 PM:

oops: that should be: the Prius' NIMH batteries lose 30% of their input"

Nick G said at April 19, 2009 11:00 AM:

Well, the conversation appears to have slowed down, so I'll address a couple of other points:

Cost: 1st, I provided some sources above for a $25-300/KWH cost in 2-4 years. 2nd, Tesla more than a year ago said that they were paying $400/KWH, for small-format cobalt-based batteries. Newer li-ion will be cheaper in a large format, with cheaper ingredients. It will also have much larger economies of scale.

Financing period: this is tied to life. Newer li-ion has a much longer life.

Comparison to conventional vehicles: The average US vehicle gets only 22 MPG. That's what people are used to, and provides a perfectly valid cost comparison. If the average light vehicle costs $.10/mile for fuel, that tells us something about what people consider a reasonable fuel cost. Keep in mind that the average operating cost for new cars is about $.50/mile - as long as fuel costs stay below roughly $.08-10/mile, most US drivers don't really think about them.

We also have to keep in mind external costs of oil: supply insecurity, CO2, the war in Iraq. A lot of people are willing to pay a premium for non-oil transportation.

Europe: if plug-in's and EV's are such a good idea, and if they're competitive at, say $3 gasoline prices, then why aren't they used more in Europe, where gas prices are higher?

Well, EV's are less convenient . Even in Europe, fuel costs are only a part of driving costs, and the lower cost of an EV hasn't been quite worth the inconvenience.

Also, Europeans have far fewer garages, as their housing is much older.

PHEV's would work for many Europeans, but 1) diesel is occupying the high-MPG niche, and 2) European cars are driven less, on average, than US cars, and so it's harder to amortize higher capital costs.

Most importantly, there were large barriers to entry (billions in R&D and retooling, as well as resistance from ICE oriented manufacturers) for PHEV's, and there wasn't an obvious need for them. There was resistance from people in the industry who's careers would be hurt. This ranges from assembly line workers and roughnecks to automotive and chemical engineers. And, you've got to give them respect and compassion: they're people, and deserve to be helped as much as possible during a necessary transition away from oil.

Until we find a way to help these people, they're going to desperately fight any proposals to transition away from their industries, by honest attacks or dishonest: whatever works. You can't really blame them: they're just trying to protect their lives and families.

Biofuels, fuel cells, nuclear power, carbon sequestration all involve more chemical/process engineering R&D, and building of plants and retirement of old technologies. Is reduction of greenhouse gases gonna be a golden age for the Chemical Engineering?

I suspect that this kind of thing is much more attractive to students and professors than it is to engineeers with 10-20 years of experience, who've attained high salaries in large companies due to their narrow expertise in a particular area, in that company. For them, I suspect any change which threatens their company threatens them personally.

On the other hand, the momentum is shifting: most of those R&D $ have now been spent, and there's enormous pressure for PHEV's from regulators.

Engineer-Poet said at April 23, 2009 11:23 AM:

If a European EV fleet drives relatively few miles, it would presumably be plugged in even more of the time than the US fleet.  This would make it a much more reliable resource for V2G, would it not?  That may help expand the role of wind power in the region.

Mercy Vetsel said at May 1, 2009 7:43 AM:

Sorry for the delayed post. Well, I disagree. I think battery cars are ethanol all over again, but with even worse economics. Economically inept politicians can make any bad idea profitable, but the calculations are obvious and they explain why car companies are so leery. When you live off taxpayers you can fall out of favor very quickly. Remember when ethanol was cool and tech mogul, Vinod Khosa was cheer-leading it? Now the ethanol stories are about losers trying to hawk environmentally destructive palm oil.

You're free to argue with my assumptions, but I think my approach is correct. I want to know at what gasoline price different alternatives become economical. If batteries really made sense they would become economical in big cars first. That's the way it is with hybrids. By my calculations, a large SUV hybrid starts making economic sense at about $4/gallon fuel prices, while a Prius-sized car makes sense economic sense at about $6/gallon.

The hybrid with gasoline generator concept with the Volt is quite interesting and might be economical with a smaller battery. Unfortunately, with a 16kwh battery, it’s an economic disaster that would require $9/gallon gas in order for the larger battery to be economical. The Shai Agassi plan and Tesla approach are a cruel joke in economic terms and would require gas (or some other equivalent tax advantage) to be about $20/gallon to make economic sense.

I don’t see any point in denying this basic reality by giving large batteries credit for making cars smaller, lighter and more aerodynamic.

-Mercy

Randall Parker said at May 2, 2009 9:23 AM:

Mercy Vetsel,

Since I see Peak Oil as happening in the next 6 years (unless it has happened already) I'm more interested in electric cars as a necessity.

Shai Agassi: His is a financial scheme. He shifts ownership of the batteries and does not lower their costs. My guess is that the extra cost of managing ownership raises total costs. Also, while he shifts costs to bond and stock holders with longer time horizons it is not obvious to me that the risk of his approach makes sense. Buy huge numbers of batteries, get a revenue stream for 10 years, pay off the costs of the money and the principal in that time. One problem: if battery costs drop in the mean time then the value of the assets drops faster than planned. The venture loses big money.

Mercy Vetsel said at May 5, 2009 4:36 AM:

Randall,

I don't think you understand the reasoning in my original post. It doesn't matter if we use up all of the oil next year. Without a 3 to 5 fold improvement in battery price, EV's still wouldn't be an economical way to run cars. Instead we would use hybrids, natural gas, methanol and hydrogen ICE's.

I'm a peak oil guy too, but peak oil doesn't mean we run out of oil. It just means that the price gets high enough that other alternatives become economical.

-Mercy

Randall Parker said at May 5, 2009 3:53 PM:

Mercy,

I think it is telling that European countries with $8 per gallon gasoline do not have electric cars. So your argument seems plausible just from looking at a market that has the prices we'll have eventually.

What I can't tell: how high must prices go to achieve each level of demand destruction? The answer to that question will tell us whether electric cars will play a big role. If the market can support $12 per gallon gasoline then I can see a lot of people buying Chevy Volts and even pure electric vehicles.

Mercy Vetsel said at May 7, 2009 2:26 PM:

Randall,

I suppose one could counter my argument by pointing out that Europeans also haven't gone for my other sub-$8/gallon options either. I really don't know why everyone in Europe isn't driving natural gas, methanol and H2 ICE cars, but I'd guess that those alternatives probably face higher taxes as well.

That's an important point to remember because governments don't like to give up revenue streams. Currently we're paying over 0.50 cents a gallon in taxes and if we really made a serious switch, that revenue would still have to come from somewhere.

I suppose that when you're paying the equivalent of $15/gallon to fuel your Tesla or Shai Car, an extra $0.50 is peanuts!

-Mercy

Mercy Vetsel said at May 7, 2009 2:28 PM:

Whoops! That's 0.5 DOLLARS.

-Mercy

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