by Robert Bryce
And none of those calculations account for the fact that there’s no infrastructure available to plant, harvest, and transport the switchgrass or other biomass source to the refinery. The U.S. farming sector has invested billions of dollars in all types of tractors, planters, and harvesters to grow and manage food crops. But none of that equipment—made by John Deere, Kubota, and other companies—has been designed to handle the gargantuan volumes of biomass that would be needed to make cellulosic ethanol viable.
Even if there is a breakthrough in ethanol production that allows the production of large quantities of alcohol fuel from biomass, it does not necessarily mean that the United States will see a corresponding drop in its imported oil needs. Why? The answer is simple: Ethanol only replaces one of the myriad products that refiners extract from a barrel of crude oil. And that leads to another heretical notion: Increased ethanol use won’t cut oil imports.
H. L. Mencken once remarked that there is always a “well-known solution to every human problem—neat, plausible, and wrong.”
That quote comes to mind when considering the vocal group of politicos and neoconservatives who claim that the best way to cut American oil imports, and thereby impoverish the petrostates (and, in theory, reduce terrorism), is to require automakers to manufacture “flex-fuel” cars that can burn motor fuel containing 85 percent ethanol. (For more on this claim, and the people who are promoting it, see my book Gusher of Lies.)
Their rationale is that using more ethanol made from corn, switchgrass, or other biomass will create competition in the motor fuel market and thereby depose oil as the world’s primary transportation fuel. Once that is done, they claim, oil will no longer be a strategic commodity; its price will fall, the petrostates will be bankrupted, and a newly energyindependent United States will race back to the head of the line as the world’s undisputed sole superpower. The rhetoric put forward by these underinformed-but-persistent sophomores has proved so irresistible that several members of Congress have introduced legislation aimed at requiring automakers to produce flex-fuel cars. Fortunately, none of their proposed bills have passed.
The idea that ethanol provides a viable solution betrays a near-complete ignorance of the world petroleum business. The supposed solution fails because it only replaces part of the crude oil barrel. During the refining process, a barrel of crude yields several different “cuts,” ranging from light products such as butane to heavy products such as asphalt. An average barrel of crude (42 gallons) yields about 20 gallons of gasoline.30 And certain types of crude oil (“light sweet crude,” for example) are better suited to gasoline or diesel production than others. The overall point is that refiners cannot produce just one product from a barrel of crude; they must produce several. And the market value of those various cuts is constantly changing.
But there’s little growth in gasoline demand. Meanwhile, demand for other cuts of the crude barrel are booming. In short, the ethanol producers are making the wrong type of fuel at the wrong time. They are producing fuel that displaces gasoline at a time when gasoline demand, both in the United States and globally, is essentially flat. Meanwhile, demand for the segment of the crude barrel known as “middle distillates”—primarily diesel fuel and jet fuel—is growing rapidly. And ethanol cannot replace diesel or jet fuel, the liquids that propel the vast majority of our commercial transportation machinery.
In mid-2008, the Paris-based International Energy Agency released its medium-term oil market report, which said that while global gasoline demand is growing slowly, “distillates (jet fuel, kerosene, diesel, and other gasoil) have become—and will remain—the main growth drivers of world oil demand.”31 Between 2007 and 2013, the IEA expects distillate demand to nearly double, while global gasoline demand will grow only slightly.32 Those projections were seconded by the Energy Information Administration in its 2009 Annual Energy Outlook, which expects demand for diesel fuel to grow by about 1.5 percent per year through 2030 while gasoline demand will fall by nearly 1 percent annually.33
The surge in diesel demand is due in large part to the ongoing “dieselization” of the European automobile market as well as continued economic growth in Asia and the United States. Ethanol is doing little, if anything, to reduce overall U.S. oil consumption or imports, because refiners are having to buy the same amount of crude (or more) in order to meet the demand for products other than gasoline—that is, jet fuel, diesel fuel, fuel oil, and asphalt. For instance, since 2000, the United States has consumed an average of 185 million barrels of asphalt and road oil per year,34 and the vast majority of that asphalt is produced by domestic refiners who produce it from domestic and imported crude. Asphalt may not be as sexy as gasoline, but it is one of the myriad oil products that are essential elements of the U.S. economy.
The lesson here is obvious: Producing ethanol from corn or other substances cannot, and will not, significantly reduce oil use or oil imports, because it cannot replace the entire crude barrel. Unless inventors can come up with a substance (or substances) that can replace all of the products that are refined from a barrel of crude oil—from gasoline to naphtha and from diesel to asphalt—then the United States is going to continue using oil as a primary energy source for decades to come. And that will be true no matter how much corn gets burned up in America’s delusional quest for “energy independence.” But of course, ethanol isn’t the only alternative fuel getting lots of hype these days.
Electric cars are all the rage. And the hype, once again, has lost all connection with reality.
CHAPTER 19
Electric Cars Are the Next Big Thing
Electric cars must keep near to power stations.
The storage battery is too heavy.
THOMAS EDISON, 18961
There are not enough idiots who will buy it.
JOHAN DE NYSSCHEN, president of Audi of America, talking about the Chevrolet Volt, September 20092
ALL-ELECTRIC CARS are The Next Big Thing. And they always will be.
Okay, that’s a bit harsh. But even a cursory look at the 100-year history of the electric car sector illustrates the need for a healthy dose of skepticism. And skepticism is a much-needed commodity today as the hype over electric cars slips into overdrive.
Consider the case of Shai Agassi, the founder of an electric car company called Better Place. In July 2008, Thomas Friedman of the New York Times dubbed Agassi “the Jewish Henry Ford” and said he was launching “an energy revolution” that would end the world’s “oil addiction.”3 A few weeks later, Wired wrote a fawning article on Agassi saying that the entrepreneur had lined up $200 million in funding in his effort to launch “the fifth-largest startup of all time in less than a year.” Agassi has convinced a lot of investors that his plan will work: “Everyone who meets him already believes he can see the future,” gushed the author of the Wired piece.4
In May 2009, Time magazine declared that Agassi was going to “help the world end its addiction to oil by transforming cars from their climatechanging, lung-polluting, gas-guzzling design to one that’s clean, affordable and all-electric.”5 (The glowing article was written by a venture capitalist who had invested in Agassi’s company.) All of that fantastic press, and yet only one or two of the stories bothered to mention the size of Agassi’s electric car fleet, which consisted of exactly one prototype. Beyond that, Agassi’s company had no charging stations and no customers.6
The hype around Agassi was hardly unique. Two other startup car companies—Tesla Motors and Fisker Automotive—have been getting similar treatment. The all-electric Tesla Roadster retails for about $100,000, and the plug-in hybrid-electric car being sold by Fisker, called the Karma, sells for $87,500.7 Despite that price, Newsweek explained that the Karma, a high-performance sports car, “will get 100 miles per gallon—and those who rarely travel more than 50 miles at a time will do even better.”8
I am not disparaging hybrid-electric vehicles, such as the Toyota Prius, the Honda Insight, or the Ford Fusion. There is no question that
the technologies behind those vehicles and others like them are durable, reliable, and functional. For those reasons, as well as their relative affordability, hybrid-electric drive cars, that is, the cars that don’t come with an extension cord, are here to stay. And in the coming years, those vehicles, not their plug-in, or all-electric, peers, will likely claim an increasing share of the automotive market. That’s the assessment of Menahem Anderman, a California-based battery expert who heads a firm called Total Battery Consulting. In 2007, Anderman told a U.S. Senate panel that conventional hybrid-electric technology was “the only one mature enough for its market growth to have an impact on the nation’s energy usage in the next 10 years.”9
Two recent studies have come to very similar conclusions. A 2008 study by the Center on Global Change at Duke University concluded that “gasoline prices would need to increase to around $6 per gallon to make plug-in hybrids cost effective; below $6 per gallon, regular hybrids are more cost effective than plug-in hybrids.”10 And an early 2009 study by a team of engineers at Carnegie Mellon University found that plug-in hybrid-electric vehicles that are “sized for 40 or more miles of electriconly travel do not offer the lowest lifetime cost in any scenario.”11
And while sales of hybrids are growing, don’t count out the old internal combustion engine just yet. Gasoline and diesel engines are seeing continual improvements as automakers wring yet more efficiency out of the designs that have ruled the terrestrial transportation market for more than a century. Nor is it a sure thing that hybrid-electric and all-electric cars will be able to surmount their challenges of material availability. The exotic components on many hybrid cars and all-electrics depend on the availability of elements such as lithium and neodymium. And the availability of those commodities is far from assured.
Despite the continuing advances being made to the internal combustion engine, that technology is being viewed by the media as rather stodgy. The sex, the sizzle—and of course, loads of media attention—are being given to all-electric and plug-in hybrid-electric vehicles. General Motors plans to start selling the Chevrolet Volt, a plug-in vehicle that is vying for the position of most-hyped car of the twenty-first century, in late 2010. The automaker has claimed that the Volt will get an astounding 230 miles per gallon.12 (Shortly after that claim was made, The Economist calculated that 50 miles per gallon was more realistic.)13 In mid-2009, Mitsubishi announced that it would begin selling the all-electric iMiEV car in Japan in 2010. The tiny, four-door car weighs just 2,400 pounds, has a 16-kilowatt-hour battery, and will sell for $44,700. 14
Other automakers have jumped on the all-electric bandwagon, too. In early 2009, a Nissan official said the company saw “electrification of the transportation sector as our highest priority.” The company claims that by 2020, 10 percent of the vehicles it produces will be all-electric.15 In August 2009, Nissan announced that it would introduce an all-electric vehicle, the Leaf, which the company says will have a 100-mile range and cost about $30,000. Nissan expects to start selling the car in the United States sometime in 2010.16 Honda is also planning an electric vehicle. The same month that Nissan announced the Leaf, Honda said it would begin selling an all-electric car in the United States as well, but did not specify a date.17
Thus, within the next year or two, nearly all of the world’s major automakers are planning to introduce plug-in hybrid-electric or all-electric cars in the United States. But the hype isn’t limited to the United States. In Britain, motorists may get government subsidies of up to 5,000 British pounds if they buy hybrid or all-electric cars. And the country’s prime minister, Gordon Brown, has said that he wants all of the cars on the roads of the United Kingdom to be all-electric or hybrid-electric by 2020.18 Some European automakers have announced plans to launch plug-in hybrid cars by 2012 or so, including PSA Peugeot Citroen, BMW, and Daimler.19 Shortly after Nissan and Honda announced their plans to sell all-electric cars, the German government announced that it wanted to put 1 million electric cars on Germany’s roads by 2020.20
There’s no question that electric vehicles have many positive attributes: low refueling costs, no air pollutants at point of use, and quiet operation. But despite their promise, all-electric cars continue to be hampered by the same drawbacks that have haunted them for a century: limited range, slow recharge rates, lack of recharging stations, and high costs, particularly when compared to conventional cars. In short, the problems today are the same as they were back in Thomas Edison’s day. And those problems can be summed up in one word: batteries. For more than a century, inventors have been trying to develop high-capacity batteries that will work well in the automotive market. And for the most part, they have failed. Since Edison, entrepreneurs and inventors have achieved a host of amazing feats, including putting a man on the Moon, building nuclear power plants, and figuring out how to deliver pornography to pocket-sized computer-phones. But even as other technologies have zoomed ahead in terms of cost and availability, batteries continue to be short-circuited by the same issues that hamstrung Edison. Sure, batteries have improved. But they haven’t achieved the orders-of-magnitude improvements that are needed for them to compete effectively with other transportation fuels.
The problem is the second of the Four Imperatives: energy density. Automakers usually measure the energy density of batteries in watt-hours per kilogram—that is, the number of watt-hours of electricity stored per kilogram of battery weight.21 Battery makers have been making significant improvements in energy density. Modern lithium-ion batteries provide a four-fold improvement in energy density when compared with their older lead-acid cousins. But neither source can hold a candle to gasoline, or for that matter, ethanol. Gasoline holds eighty times as many watt-hours per kilogram as a lithium-ion battery, and ethanol holds more than fifty times as many.
FIGURE 28 The Problem with Batteries: It’s the Energy Density, Stupid!
Sources: Donald Sadoway, “Power Storage: Batteries and Beyond,” February 12, 2009; John Newman, University of California, Berkeley, personal communication with author, January 16, 2009; David J.C. MacKay, Sustainable Energy—Without the Hot Air (Cambridge: UIT Cambridge, 2009) (online at http://www.inference.phy.cam.ac.uk/sustainable/book/tex/cft.pdf), 284.
Given that batteries hold such small amounts of energy, designers of electric vehicles must, in effect, build their cars around the bulk and weight of the battery pack. For instance, on the Tesla Roadster, arguably the most famous electric car now available, the battery pack weighs 992 pounds, or slightly more than one-third of the curb weight of the vehicle, which tips the scales at 2,723 pounds.22
In 2009, Bill Reinert, one of the lead designers of the Toyota Prius, told me that existing battery technology simply “does not provide the cost, durability and energy storage attributes that allow for the development of mass-market products. We can get around some of these issues with niche products, or schemes like battery leasing, or subsidizing the products, but none of these are solutions for the mass market.” And while Toyota is planning to develop an all-electric car, he said, the company is “looking at sales volumes of thousands, not millions. To produce an electric vehicle that’s truly intended for a mass market, a replacement for your current gasoline car, we’re going to need a battery chemistry that isn’t currently available.”23
Reinert’s view was reinforced by a report on energy storage that was released by the U.S. Department of Energy’s Office of Vehicle Technologies in early 2009. The report concludes that despite the enormous investments being made in plug-in hybrid-electric vehicles and lithium-ion batteries, four key barriers stand in the way of their commercialization: cost, performance, abuse tolerance, and life. The DOE’s summary deserves to be read in its entirety:Cost: The current cost of Li-based [lithium-based] batteries (the most promising chemistry) is approximately a factor of three to five too high on a kWh [kilowatt-hour] basis. The main cost drivers being addressed are the high cost of raw materials and materials processing, the cost of cell and module packaging, and manuf
acturing costs.
Performance: The performance barriers include the need for much higher energy densities to meet the volume/weight requirements, especially for the 40-mile system, and to reduce the number of cells in the battery (thus reducing system cost).
Abuse Tolerance: Many Li batteries are not intrinsically tolerant to abusive conditions such as a short circuit (including an internal short circuit), overcharge, over-discharge, crush, or exposure to fire and/or other high temperature environments. The use of Li chemistry in these larger (energy) batteries increases the urgency to address these issues.
Life: The ability to attain a 15-year life, or 300,000 HEV [hybrid-electric vehicle] cycles, or 5,000 EV [electric vehicle] cycles are unproven and are anticipated to be difficult. Specifically, the impact of combined EV/HEV cycling on battery life is unknown and extended time at high state of charge is predicted to limit battery life.24
Of course, the DOE’s grim prognosis hasn’t prevented the media from gushing over all-electrics. Consider this quote from the Los Angeles Times: “The electric automobile will quickly and easily take precedence over all other” types of motor vehicles. That declaration was published on May 19, 1901, in a story headlined: “Edison’s New Storage Battery.” “If the claims which Mr. Edison makes for his new battery be not overstated, there is not much doubt that it will make a fortune for somebody,” the article said.25
Today’s electric cars—once again—may be on the verge of yet another spectacular breakthrough. But, just for fun, let’s take a quick drive past a few newspaper stories:• 1911: The New York Times declares that the electric car “has long been recognized as the ideal solution” because it “is cleaner and quieter” and “much more economical.”26
• 1915: The Washington Post writes that “prices on electric cars will continue to drop until they are within reach of the average family.”27