As electric future unfolds, gasoline remains king

Posted on 01/18/2013 by Howard Lovy

Ford’s 1.0-liter EcoBoost engine on display at the Paris Auto Show in 2012. (Photo by Autoblog via Creative Commons)

DETROIT — While electric cars wow crowds and the media at auto shows, there’s no denying that for now, gasoline-powered cars still rule the roadway.

That’s not to say electric vehicle technology isn’t important, says a leading industry analyst, but the focus for the near future will continue to be developing internal-combustion engines that meet tightening fuel economy standards while still being affordable to consumers.

Brett Smith, a co-director at the Center for Automotive Research, based in Ann Arbor, Michigan, sat down for an interview with Midwest Energy News in front of the Chevy Volt — which incorporates both technologies — at the North American International Auto Show in Detroit this week. →

Why we freak out over gasoline prices

Posted on 02/28/2012 by Ken Paulman

There’s no other commodity that gets more media attention than gasoline prices.

While we’re generally aware that major expenses like housing and health care are getting more costly, they don’t quite hold the same outrage factor.

Even a single-digit percentage change will inspire endless “Pain at the Pump” segments on local TV news. Here’s one that’s typical of the genre:

It’s also a perennial campaign issue — right now, it’s President Obama’s turn to be attacked for an increase in gasoline prices that short-term government policies can do little to control.

This is not to say it’s a non-issue. For low-income people, fluctuations in the price of gas, like the price of everything else, can have a major impact on household budgets. This is especially true in areas lacking in transportation options other than cars.

But for all the sturm und drang over, say, a 10-cent-per-gallon price increase at the pump, the impact is relatively minimal. The difference in fueling most cars at that price is less than $2, about the cost of a one-way fare on a city bus.

So why all the outrage?

In an interview on the public radio program Marketplace, Harvard behavioral economist Senhil Mullainathan says there’s a relatively simple explanation: Signs.

While most of us couldn’t correctly identify the price of a tube of toothpaste or a head of lettuce, Mullainathan finds it curious that we can nevertheless recite that morning’s gasoline price, probably to the penny.

People go shopping, we spend on so many things, and we just don’t know. We don’t know the prices of things. But gasoline, even when you’re not buying, it’s staring you in the face. Psychologists call this salience. And the salience of gas prices, I think, makes it such a focal point in the debate.

But apart from getting angry, is there anything we can do about high gasoline prices? Using less of it might be a start, as energy analyst Robert Rapier suggests:

The most sensible thing that governments can do is to encourage a move away from gasoline dependence. In that case, even if prices continue to rise, the economy won’t be as susceptible to the price shock. In fact, when people ask me what they should do to protect themselves against high gas prices, the first thing I ask is “What do you drive?” Do your part to limit gasoline’s hold on your life, and you won’t have to hold your breath that a politician is going to solve this problem for you.

(h/t on Marketplace piece to MPR’s Bob Collins)

Study: Minnesotans willing to pay premium for E85

Posted on 02/16/2012 by Dan Haugen

(Photo via USDA)

Minnesota drivers like their E85, and they’re willing to pay a premium for it.

A new study by a Michigan State University economist shows that even when the higher ethanol blend is a more expensive option than regular gasoline, some flex-fuel vehicle owners in Minnesota continue buying the higher-blend ethanol.

E85, which contains a mix of 85 percent ethanol and 15 percent gasoline, is almost always less expensive per gallon than regular gasoline, which in Minnesota typically contains 10 percent ethanol. But because of E85′s lower energy content, the relative cost per mile of using it can vary.

Soren Anderson, an assistant professor of economics, examined sales and price data from 200 Minnesota fueling stations between 1997 and 2006.

“When the price of E85 rose relative to gasoline, the market didn’t disappear,” Anderson said. “There were still people buying E85 even when its price was quite a bit higher [relative to] gasoline.”

Anderson argues that researchers should take this consumer preference into consideration when calculating the cost of policies such as the federal renewable fuels standard.

Several studies have examined how drivers respond to changes in gasoline prices, but little was known about how ethanol blend prices affect consumer decisions. Anderson concluded that a 10-cent-per-gallon increase in E85 prices caused demand to fall off between 12 percent and 16 percent. That’s significant, but smaller he would have guessed knowing that drivers could have easily switched to conventional gasoline.

“They value something about that fuel when they’re willing to buy it even when the per-fuel-mile price is high,” Anderson said.

The study didn’t survey drivers about their motivations, but it says possible explanations include perceived social and environmental advantages, or misunderstanding about how the fuels compare.

Sales of E85 ethanol have continued to grow in Minnesota, according to statistics publicized this week by the American Lung Association in Minnesota.

Minnesotans bought an estimated 19.8 million gallons of E85 in 2011, making it the third best year for E85 and best since the pre-recession record of 22.5 million gallons in 2008. Gasoline sales, meanwhile, fell to 2.4 billion gallons in 2011 from 2.5 billion gallons in 2010.

“I think it’s a sign that E85 has really become well established in Minnesota,” said Bob Moffitt, spokesman for the American Lung Association of the Upper Midwest. “It’s got a really solid base of customers. The number of stations is not growing quite so fast as it was in the earlier years, but we’re steadily adding numbers.”

Moffitt takes issue with the second part of Anderson’s study, which concludes that even accounting for the “sizable” premium some drivers are willing to pay for ethanol, the federal renewable fuel standard is an expensive way to reduce greenhouse emissions — about $70 per metric ton of carbon dioxide emissions avoided, Anderson calculated.

Anderson acknowledges in his report that the carbon cost is based on current assumptions about the price of ethanol and gasoline, either of which could change due to political, economic or technology factors, such as a game-changing breakthrough in cellulosic ethanol production. If greenhouse emission reductions is the goal, Anderson said in an interview that a more direct policy such as a carbon tax would be less costly to consumers.

The federal renewable fuel standard will require 36 billion gallons of annual production by 2022, with no more than 15 billion gallons coming from corn-based ethanol. Many of the assumptions Anderson makes about its cost come directly from the U.S. Environmental Protection Agency’s regulatory impact statement for the policy.

Moffitt said one of Anderson’s assumptions — that E85 ethanol nets 36 percent fewer miles per gallon than conventional gasoline — is not what they’ve observed and heard from drivers. In real life it’s closer to a 15 percent or 20 percent decrease, Moffitt said.

Ethanol offers benefits beyond reducing greenhouse gases, too, Moffitt said. Anderson’s study focuses solely on greenhouse gases and consumer impacts. The EPA’s policy impact report counts $2.6 billion worth of energy security benefits, up to $2.2 billion in health benefits, and $13 billion in new farm income. (Also: millions of pounds of new nitrogen and phosphorus pollution in the Mississippi River.)

“Gasoline powered vehicles produce a lot more than just greenhouse gas. They’re the single largest source of air pollution in Minnesota,” Moffitt said. “Any steps we can take toward cleaner, more renewable fuels is a step in the right direction.”

On that point, it would seem many Minnesota drivers agree.

Did ending ethanol subsidy raise gasoline prices?

Posted on 01/05/2012 by Ken Paulman

On January 1, the 45-cent per gallon federal tax credit for ethanol expired. Since then, gasoline prices have gone up in some places by more than 20 cents per gallon, leading to some speculation that there’s a connection.

Case in point, this brief item from a St. Louis TV station specifically mentions the lapsed ethanol subsidy, along with a more vague reference higher wholesale prices.

But as a USA Today piece from a few days ago pointed out, because most gasoline is (at most) 10 percent ethanol, the expiring subsidy should, in theory, only account for an increase of 4.5 cents per gallon at most.

John Funk of the Cleveland Plain Dealer says the bulk of the increase is most likely because of anticipated sanctions against Iran. And analysts say if Iran follows through on its threat to close the Strait of Hormuz, oil prices could shoot up by 50 percent almost immediately.

So did ending the ethanol subsidy cause gasoline prices to go up? Perhaps a bit. But gasoline prices are determined by a complex web of economic factors, and it looks like they’re probably going to keep going higher.

Photo by Nathan Schock via Creative Commons

Calculating the costs of the new fuel economy standards

Posted on 08/03/2011 by Ken Paulman

"The government wants to force us to buy tiny, unsafe cars that get 27 mpg. Can you imagine such a thing?"

There’s no question that the recently announced White House plan to increase CAFE standards to 54.5 mpg will make cars more expensive. But does that necessarily mean it will be more costly for consumers?

One might be tempted to look at the often-compared Chevy Volt and Cruze. For about $20,000 you can get a Cruze Eco sedan that’s rated at 42 mpg on the highway, or for about $40,000 (before tax credits), you can get a Volt that’s rated at 93 mpg by the EPA.

So, high-mileage cars will be really, really expensive, right?

Not necessarily. As recent articles in Forbes and the Cleveland Plain Dealer point out, automakers have a variety of options for making cars more fuel efficient – some exotic, like carbon-fiber body panels, but mostly more mundane upgrades like direct injection and electric water pumps.

The White House estimates the additional costs of those upgrades will be about $3,500 per car. Will the gas savings make up the difference? It all depends.

The current average for American cars is about 27 mpg; a car getting 54.5 mpg will use half as much fuel. If we assume a car’s useful life to be about 150,000 miles, and an average gas price over that time period of $5 per gallon, the higher-mileage car will save its owners a collective $14,000 in fuel costs over its lifetime. The Obama administration, whose calculations I can only assume are more sophisticated than mine, puts the number at $8,200.

Of course, individual results will vary, and those more-advanced cars will likely be more expensive to fix as they get older. But still, you’d have to really strain to find a way to run the numbers that makes the new fuel economy standards look like a bad deal for consumers (that doesn’t mean people won’t try).

It’s also useful to look back at what happened the last time fuel economy averages were doubled – from 13 mpg in 1974 to 27.5 mpg in 1985 (where, incidentally, we still are today). The average price for a car went from about $3,750 in 1974 to about $9000 in 1985. More than double, right?

Not really. That $3,750, adjusted for inflation, is the equivalent of about $8,200 in 1985 dollars, which means a car in 1985 was only about 10 percent more expensive after a decade of major efficiency, pollution and safety regulations.

Don’t get me wrong – I’d love to drive a big, cushy land yacht as much as the next person. But considering the safety, efficiency and pollution control improvements made during that decade, would anyone really want that 10 percent back?

Photo by Alden Jewell via Creative Commons

Video: What’s the true price of gas?

Posted on 07/05/2011 by Ken Paulman

Did you take a road trip over the weekend? Find yourself cringing at the price of gas?

Here’s a video from the Center for Investigative Reporting that puts things into context:

Prototype delivers cooling and electricity from exhaust

Posted on 06/14/2011 by Jeff Kart

One of the leading problems in energy use around the world today? Emissions that contribute to climate change? Nope. The waste of half or more of the energy produced by cars, factories and power plants, according to engineers at Oregon State University.

This may be something that just gets blown off in the energy debate (as in through a tailpipe).

OSU has completed a successful prototype that captures and uses the low-to-medium grade waste heat that’s lost out of the exhaust pipe of cars and trucks, or out the stacks of factories and electrical utilities, according to university officials.

If it’s good enough for landfills, as in creating electricity from the methane that’s usually burned off, then why not waste heat? The Oregon researchers say the potential of recycling vehicle exhaust is enormous, and new systems being developed at the university should be able to reuse much of that waste heat for cooling or producing electricity.

Photo Courtesy OSU

Hailei Wang, a research associate at OSU, says the new prototype is more efficient than previous methods used for capturing and using waste heat. The system also has the added advantage of being able to produce electricity.

How does it work? The details have been published in a professional journal called Applied Thermal Engineering.

The technology, called a “thermally activated cooling system,” gains much of its efficiency by using mini microchannels (no wonder OSU has a Microproducts Breakthrough Institute). The system effectively combines a vapor compression cycle with an existing energy conversion technology called an “organic Rankine cycle,” researchers say.

The result is a machine that turns 80% of every kilowatt of waste heat into a kilowatt of cooling capability. The conversion efficiency for producing electricity is only 15-20%. Not bad.

This looks like a way to put waste heat to work, rather than just releasing it back to the atmosphere. How much additional energy can this technology save? Enough to put more hybrid-electric vehicles on the roads, and cut power usage by factories and power plants, hopefully.

Researchers at Northwestern University also are working on ways to harness waste heat.

What if everything ran on gas?

Posted on 05/27/2011 by Ken Paulman

A brilliant commercial for the Nissan Leaf (h/t to David Roberts of Grist, via Twitter):

Two miles or not two miles?

Posted on 05/24/2011 by Ken Paulman

Untapped energy potential.

As I’ve mentioned before, one of the obstacles people have to thinking of cycling as viable transportation is that they tend to think in terms of modes rather than trips.

We too often break up the world into cyclists and drivers, without considering that most of us, at one time or another, are both. For most people, myself included, the bike can’t completely replace the car, at least not without major infrastructure changes.

But as I ride through the wide, quiet streets of my inner-ring suburb and see bike upon bike hanging in garages, I realize how much potential there is for people to ride instead of drive, even if it’s only a couple of times a week.

That’s where the 2 Mile Challenge comes in. It’s a fundraising and advocacy effort that aims to reduce the short trips that make up a significant chunk of our driving.

It works like this. You join a “team” on the website, and log your bike trips. The more trips your team takes, the more money one of three participating nonprofits will receive for your efforts.

While most people aren’t going to take on a daily commute or a six-bag grocery run on a bike, what about that Saturday trip to the library? Or the neighborhood yard-sale cruise? Or the trip to the hardware store for that one little washer you need to fix the kitchen faucet? Those little trips add up.

Taking on those short trips, especially where time is not a factor, has always struck me as a better gateway to cycling than the daily commute, where you have to worry about showing up on time and not looking like you’ve just spent the night outside. The key is getting people to start seeing bikes as transportation, not just recreation.

True, most people are only going to ride in summer. But that’s also when demand for gasoline (and, in turn, prices) is highest.

I don’t think it’s reasonable to expect that cycling alone is going to make a significant dent in our oil consumption. But it’s a piece of the puzzle — when people are able to take control of their energy use, it makes us more flexible in the face of market swings.

What’s the harm in that?

Photo by Gregory P. Smith via Creative Commons

Gasoline vs. jobs?

Posted on 04/29/2011 by Ken Paulman

The 40 mpg Toyota Estima. Could driving a Japanese van save American jobs?

A new report by the Environmental Law and Policy Center says raising fuel economy standards could create thousands of jobs in Illinois.

It goes like this: A higher average MPG means more money spent locally instead of on gasoline, and more money spent locally boosts the economy, creating jobs.

The ELPC did an analysis estimating a fleet average of 30 mpg would save Illinois drivers more than $6 billion (assuming $5 per gallon gas), and relying on University of Illinois economic modeling, translating those savings into 72,000 net jobs in the state.

There are all sorts of caveats, of course. The authors acknowledge that it will take years for the impact of an increased federal mandate to be seen locally. But the point is that every dollar we spend pumping imported oil into our inefficient cars is a dollar that is exported from the local economy.

Does that mean we’ll all be driving around in subcompacts? Not necessarily. Did you know that Toyota has been making a 7-passenger, all-wheel-drive hybrid minivan that gets 40 mpg? For a decade? It’s true – you just can’t buy the thing in the United States.

Then there are developments like the wave disk engine – researchers at Michigan State are working on a prototype – which burns fuel more efficiently and eliminates the need for a cooling system or transmission. Professor Norbert Mueller at MSU estimates the engine, which is intended to run a generator in a hybrid application, a la the Chevy Volt, would be three to four times more efficient than current hybrids and cut emissions by up to 90 percent. Oh, and it would also be cheaper and lighter to build:

Mueller wants a prototype on the road in three years. Can you imagine? An American-built car that gets in excess of 100 mpg, that can run on a variety of fuels and has virtually no maintenance costs?

That 30 mpg doesn’t seem quite so pie-in-the-sky now, does it?

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