Energy News Tidbits: EVs & Oil

European countries made a decision following the 1970s when OPEC held the world hostage for oil.  They decided they were going to diversify their energy portfolios and reduce the impacts that OPEC would have on their economies.  Renewable energy has found quite the secure home across Europe.  Their problems aren’t completely solved today, but they’re far closer than we in the U.S. are.

In the past few years, a push for electric vehicles has taken root in Europe.  Spain wants 1 million hybrid or electric cars on its roads by 2014.  25,000 charging stations could be in England by 2015.  France is building a national network of charging stations.  Europe is in the growing stages of a race to deploy electric cars.  The U.S. continues to lag far behind European countries in fuel economy standards because our domestic auto manufacturers’ executives stuck their fingers in their ears and made fun reality as it passed them by.

Overall, investing in electric cars is up.  Charging stations, regardless of country, will have to be built.  Standards will have to be decided upon.  Our past decisions will heavily and negatively impact our ability to lead the world in future decisions.

Back to OPEC – one of the deciding factors on the acceptance of electric vehicles will be the availability and thus the cost of oil.  World oil reserves are likely only 2/3 that reported by the oil cartel.  With that much of a discrepancy, even $2.80 gas is underpriced.  When shortages appear in the upcoming years, price shocks will result because of OPECs unwillingness to tell the truth.

2008 Energy Bill: House Version & Initial Reaction

The House passed their initial version of the 2008 energy bill.  Two major focal points of this bill are the following: it would allow drilling 50 to 100 miles off-shore and it would repeal tax breaks (corporate welfare) for oil corporations.  Republicans have been pining for the former and screaming about the latter for months.  Americans generally support increased drilling as long as its coupled with renewable energy research funding increases.  A clear majority of Americans support rescinding the fossil fuel industry’s welfare.  Americans can pretty easily make the connection between $4.00 gas and news of record profits that corporations like Exxon enjoy every quarter.  They’re tired of that being the status quo.  So I say let Republicans continue to scream about stopping the corporate welfare.  They’ll continue to look like ideologues for it.

Republicans are also whining about no “litigation reform”.  But here’s the reality: if the off-shore areas end up going up for lease, which would require Senate passage of the same bill (unlikely this year) and no veto by Bush (not a guarantee in the off-chance Congress actually passes something), it’s not like they’ll drill on those new areas.  Why?  Because here’s the dirty secret Republicans want to keep out of the spotlight: fuel corporations currently hold leases on 68 million acres of land and they’re not drilling on them right now.  More than that, those corporations have no plans to begin drilling any time soon.  They’re enjoying the high fuel prices too much.  Increasing the supply would bring that price down.  That situation was true before demand for fuel started falling in the face of $4.00 gas and is even more true now.  With demand decreasing, they have absolutely no incentive to put more fuel into the market.  So no environmental lawsuits will be issued because no corporation will drill.

Government to Release Fuel Economy Rules

The Bush administration released preliminary plans establishing fuel economy standards for vehicles sold within the U.S.  One initial goal would establish a fleet average of 31.6 miles per gallon by 2015.  By 2020, the standard would be 35mpg.  Some details per manufacturer include:

Among individual manufacturers, passenger cars built in 2015 by General Motors will need to average 34.7 mpg, Ford’s cars will need to reach 35.5 mpg and Toyota’s cars will have to achieve 34.6 mpg.

For light trucks, GM will need to reach 27.4 mpg by 2015, while Ford will have to average 28.8 mpg and Toyota will need to hit 28 mpg.

In terms of climate change and energy security:

The plan is expected to save nearly 55 billion gallons of oil and reduce carbon dioxide emissions by 521 million metric tons over the life of the new vehicles built between 2011-2015. It will add an average cost of $650 per passenger car and $979 per truck by 2015.

$650 per car should be easily handled by consumers.  We’re already choosing add-on features that cost that much and more.  If achieved, the 521 million metric tons that wouldn’t be released is good news.

The plans are scheduled to be finalized by the end of Bush’s term later this year.  Let’s hope the final standards are at least this strong.