Fuel Economy and Oil Dependency

kernick · April 2006

logic: My theory cuts much broader.

me: ah, you gave me exactly ZERO answers to a specific question; you're a politician?

I have no idea what the rest of your post is about, except I agree Reagan was brilliant to engage the Soviets in an arms race to bankrupt them. It was a very cheap way to win a non-violent world war! But oil was a distant secondary or tertiary concern in the Cold war.

The current deployment and use of U.S. has been against autocrats/dictators, and not always hingeing on oil - Panama, Grenada, Ethiopia, Kuwait, Iraq, and Afghanistan, the Balkans, and a high tension level on the Korean. peninsula.

logic1 · April 2006

I am not trying to dodge you.

We have a modded forum here where the emphasis is on autos.

My theory, one which is derived from mainstream historians is that post WWII, the world order as it now exists was forged largely from the US willingness to devote a significant portion of its economy toward defense spending.

There may be good results from the effort. But victims include poor investment in rail and other infrastructure that could have prevented us from becoming so dependent on limited and almost completely foreign sourced fossil fuel.

he current deployment and use of U.S. has been against autocrats/dictators, and not always hingeing on oil - Panama, Grenada, Ethiopia, Kuwait, Iraq, and Afghanistan, the Balkans, and a high tension level on the Korean. peninsula.

Suffice to say, I think US policy abroad is far more cohesive than your apparently random view. (and no, I do not think this shows a conspiracy. rather I think it shows a rational - albeit dated philosophy that never fully appreciated the limits of the fossil fuel economy)

andre1969 · April 2006

Somehow I don't know how mass transit are so looked down upon in the US. Depending from one single transportation way is as healthy as having one single candidate to choose for the president run.

I think mass transit just gets a bad rap in the United States because sometimes it's dirty and dangerous, and you can run into some, umm, interesting people. And while the majority of it is probably okay, there's just enough truth to those stereotypes to perpetuate them.

The Washington DC Metro (subway) system is actually pretty nice. The trains and stations are pretty clean and in good repair, and I've never felt in danger for my life when I've ridden on it. Unfortunately though, it doesn't go everywhere. I think the nearest station to me is about 5-6 miles away, so getting to it requires at least some driving. There is also no convenient, direct bus route to the station, and the nearest bus stop is about a mile from my house.

So basically, starting from my front door, I could probably get anywhere in Washington DC by car quicker than I could by mass transit. Of course, depending on where in DC I'm going, parking might be a problem!

I think for the most part too, the United States is just too spread out to make mass transit work well on a national scale. It's fine in big cities, but once you get out into the suburbs, smaller towns, etc, it's just not that feasible.

kernick · April 2006

The reason the automobile has been much more prevalent than rail travel, is because frankly it is better. I've been in cities where large sums of money are put into public transportation - Boston and NYC, and frankly they are only of value because those areas are car-unfriendly (at least during workdays).

IMO trains are inferior because they require you to get to a train station usually by car, then there is a shortage of parking at train stations. Then you might get lucky and the train is on time. Then you have to share a ride with persons of questionable hygiene, and with bird flu potentially coming - a perfect breeding ground. Then when you get off you still have a walk to where you really want to go; or someone has to be waiting with their car to pick you up.

I can drive faster, and be door-to-door in my own controlled environment.

Even the Amtrak high-speed service in the northeast corridor needs a few billion a year pumped into and can't compete with the airlines, despite how far air travel has fallen.

If gasoline gets too expensive someday, I'll get a motorscooter next, and then a horse or mule before I ride a train or bus.

tlong · April 2006

I have a Chemistry degree. Facts:

1. Given geometric growth in demand, additional drilling is a stupid idea, as new sources will only buy us a few years.
2. Corn isn't going to do much. Hydrogen isn't going to do much. Solar isn't going to do much. Corn and Solar both use sunlight to capture energy. Sunlight is dilute. The collection area requirements would be enormous to make a big dent in our consumption. Hydrogen doesn't exist in fuel form and takes an inefficient energy conversion to make it. Where does that energy come from?
3. We had better start working on efficiency to stretch our supplies. We could have started it 30 years ago, but the idiot politicians and the idiot Americans wanted it all and now we have hulking SUVs driving all over the place, mostly unnecessarily (how many of them are hauling loads or towing at any given time?).

There are no magic bullets. You need to use less energy or find other sources. Nuclear energy is one large source that could supply much and last a long time. Even the founder of Greenpeace recently reversed his stand on nuclear, finally realizing that it is likely less harmful than the alternatives.

For the time being, enjoy our cheap $3.50/gallon gas.

vchiu · April 2006

>but there is no alternative.

There is, but it needs huge investments, efforts, political and citizen will.
Cheap oil (in comparison to Europe prices) makes people choose to live in scattered suburbs where nothing can be done without a car. So people are first responsible because of their way of life

Politicians have a share because they sometimes sink a lot of taxpayer's money in some debateable foreign policy, but won't spend a dime in any local/ interurban / interstate transportation project alternative to the road. But Politicians just obey the will of the masses.

>but the cost of my monthly bus pass has increased about 20% in the last 3 years

Buses are the most visible manifestation of any non-existent tranportation policy. Any administration that don't want to invest will just throw some bus lines on the same congested roads that everybody use and do nothing else.

I am not against buses, but they must complement and irrigate a backbone of mass transit. they can't be a backbone by themselves because of their dependance on oil and because of their low average speed. (unless in very small cities)

The way Germans handle their mass transit is interesting. their buses lanes are neatly interconnected with light rail that becomes subway when going downtown. This kind of lines use tramway-like units which cope the needs from heavily populated downtowns and suburbs with more scattered housing. True it needs some higher investment than just putting buses, but it is quite quiet and runs on electricity.

such light rail lines irrigate heavy railway stations where bullet-trains kick up to 1000 passengers to the next city in a few hours.

For this system to work in the US, (light) Railway station should have accomodation for cars and could be integrated in shopping malls for instance. I am not saying to kill the car, but just to use it less.

I heard there is no serious rail connection between L.A. and san Francisco, leaving car, bus and planes as gas guzzling options. A Bullet-train would need only 90 minutes to link both downtowns.

kernick · April 2006

you: I heard there is no serious rail connection between L.A. and san Francisco, leaving car, bus and planes as gas guzzling options.

me: since trains use some sort of fossil fuel even if using electric, do you have any data as to whether trains are more efficient on an energy basis?

Financially trains are very expensive to build, maintain and run. Amtrak loses money and has to be subsidized. Here is a fairly negative GAO report on the Boston-NYC-D.C. service. http://www.gao.gov/new.items/d05698t.pdf It sounds like a money pit to me.

you: A Bullet-train would need only 90 minutes to link both downtowns.

me: what counts is door-to-door time, because if I drive it is door to door. How long would it take for someone to leave their house (I would have a 60 mile into the heavy traffic of Boston), get to the train station, load their luggage - you have to get there early right, you've got to make sure you get there early, hope the train leaves on time, when you arrive retrieve your luggage, find your way to whatever transportation is going to take you to the door of your transportation, wait, and then actually grt to your destination. What is that time? I know I can get from my house in NH to NYC faster than I could take the train. the train goes 2X as my car, but I'll get there a couple of hours sooner. And the train is not cheap at $99 ea. way + I have all those other trips to and from the train, to still pay for.

gasman1 · April 2006

My answer to the original question, "Will our dependence on oil ever end?".

I'm 48 and certainly don't see a replacement energy source replacing oil while I'm alive. However, like you and I, oil will NOT last forever. Several posts (including mine) are focused on extending a limited oil supply. Why?

We could be asking several other questions related to replacement energy sources:

What progress has been made on alternatives? - I agree that ethanol is a poor solution and I live in Iowa. The nitrogen fertilizer is destroying our land and our water supply. I lived on the East coast for 13 years and didn't like MBTE either. MBTE destroys air quality.

Who is making progress (government, independent, oil company)? - Governments and oil companies have the resources to make it happen. However, if I were a betting man...I'd put money on an independent.

How will alternatives effect our society? - Oil prices (or a lack of oil) effects everyone (poor man to rich man, but more so the poor man). Oil effects everything to include transportation, manufacturing, heating/cooling (gas-fired electric power plants), you name it... Modern wind generators are quiet and beautiful (IMO). Nuke plants -- we have a few, but not enough. Stop building gas-fired power plants! Build more nuke plants and wind farms. The short-term answer is that some will argue alternatives, because it's in their backyard. However, we must do what is right for all society in the long term.

How will governments decide to spend resources to meet our energy requirements? It's not a good time to be an elected official if s/he is expected to know this answer. Our government needs to do what successful companies do. They need independent professionals who will objectively research the tasks and the means. These professionals weigh the pro and the con and present alternative actions. Our elected officials, having been presented viable alternative actions with pro and con for each, must decide the best course of action(s) for us. Tough job? You bet!

Why are China, Mexico, and other countries now using more oil? They still have many coal based plants, but have been switching to oil/gas fired power and manufacturing plants for the past decade. Why the change? I'll leave this one open.

pmerk28 · April 2006

We don't need to be come oil independent. We need to increase refining capacity and increase domestic production/exporation. Once the geopolticial situation calms down particulalry Venzuela and we have gotten serious about production we can return to normalcy. Like most poster on theses boards I ma not old and don't remember the 70's. But I do read and ask questions. We were supposeldy "running out of oil" then too. The real reason was geopolitics. I do remember the response to the 1970's though. Did the gov't increase refineries? No. Did the gov't relax restriction on oil excvations and increase production no? They raised CAFE standards is what they did. I remember the cars from the 1980's both deomestic and foreign. The word SUV wasn't even in our lexicon. The cars of the 1980's got good mileage because they were smaller and lighter. Cheap plastics were used everywhere to save wieght and V 8's were extinct. Four cylynders with no power were the buzzword of the decade. I owned a 1988 Accord and a 1991 Camry ( which is an 80's model run). The curb weight of my 91 camry is only about 2,350 pounds! It's also small cramped and noisy and cheap feeling although reliable. Those cars were not cheap to buy. Americans expect and want more for our money. The cars now are much bigger, heavier and far mmore substanial in feel and quality. No one wants to go back to horrible underpowered cars which meet some CAFE standard set by alarmists who have some irrational hate towards oil which we have enough of under he earth for a 1,000 more years minimum.

It's not up Exxon Mobil either businees wise or morally to find "alternative" fuels. Exxon Mobil is an oil company. We need oil for a thousand other reasons besides cars. IF other companies want to start up and try to develop these fuels than go right ahead.

houdini1 · April 2006

Hey everyone, cheer up. There has been gloom and doom predictions since the world began and each year things just continue to get better. The world is on the verge of major breakthroughs that will revolutionize the way we live for the better. Here is what you can expect in the next ten years, so plan for it.

1. No energy problems at all. You will be able to drive your auto practically free.

2. Medical breakthroughs will increase your lifespan by 30 to 40%. Your children will live to be 200.

3. The world will become a much more peaceful place to live.

4. Too many other positive developments to list here, but please save this message, look back in a few years and you will say, by golly Houdini was right!!

Live well and be happy!!

bottgers · April 2006

posed in the topic title, simple logic dictates we must end our dependancy on crude oil. There simply isn't an endless supply of crude to supply the world's needs indefinitely. If we don't end, or drastically reduce our use of crude, the U.S will become just another 3rd world country.

The solution? A lot of you aren't going to like hearing this, but it's going to take intervention from Uncle Sam. The energy companies won't act on their own since their only interest is their own self interest. Exxon-Mobil refuses to put any effort into alternative energy souces because they don't think there's future in it. The fact is, there's no future in crude oil. The government must mandate higher fuel economy standards from the auto industry, and they must mandate alternative energy R&D from the energy companies. Until this happens, we will continue to watch the price at the pump increase, while the wallets of Americans continue to get thinner and thinner.

bottgers · April 2006

Whatever it is you're on, I want some! It must be some good stuff!

pmerk28 · April 2006

You're right there isn't an endless supply of crude. Only 1,000 years worth by conservative estimates and 2,000 by more liberal estimates. Simple logic dictates we increase production and capcity to refine.

We heard the same nonsense in 1970's..we're out of crude oh no the sky is falling,,we must do what the liberals say...Jimmy Carter forever. the mindless uneducated masses will believe anything if you repeat it enough times. People keep hearing from certain sources who are against oil that " We are going to run out of Oil in 50 years!" and they hear it enough so they beleive it.

What do tires, tennis rackets, trash bags, and toothpaste have in common? They all start with the letter T, of course. They are also products made from "Texas tea"--crude oil, or liquid petroleum.

"Oil is the single most important item traded between countries today. Ninety percent of the world's transportation runs on petroleum, and thousands of products--everything from drugs to detergents to fertilizers--are made from it. Less than 150 years after the world's first oil well was drilled on the shore of Oil Creek in Titusville, Pa., the global economy has been transformed."

jmiller1984 · April 2006

The question asked by the title of this form is, "Will Our Dependence on Oil Ever End?". Of course it will... the day it's gone.

I am saddened and amazed every time I see a lumbering giant of a passenger vehicle with just 1 or 2 occupants. What are these people thinking when they choose such an expensive (in lots of ways) and wasteful option? Yes, I know, it's their money and they can do whatever they want with it, but just because you can do something, doesn't mean you should do something.

As a society we love to complain about ploblems with rather simple (not necessarily easy) and obvious solutions. Witness Hurricaine Katrina, immigration, and energy comsumption.

Here's a very unoriginal idea. How about we all use less. And that means less of everything. Have you noticed the average size of a new home? How about the average size of a typical American? And, of course, we've covered the problem of the huge vehicles, ad nauseum.

But in the end, what has changed... what improvements have been made? Compared to increases in consumption, not much. It's so much easier to complain and blame greedy oil companies and geopolitics for our current oil struggles, but as a society we continue to do it to ourselves.

michael2 · April 2006

i'm 62 years old, saw the 1973 and 1976 gas crunch, and we are no better off today then we were then, still dependent on oil, driving millions of trucks/suv's that get 15mpg if there is a stroong tail wind.
we've squandered the most important resource of all, TIME, as one post indicated we had 30 years to come up with either alternative sources of energy, or at least a steady program to increase the gas mileage we get, and act intelligently by NOT DRIVING SUV's.i just spent $22.50 on 7 gallons of 89 octane(car really uses 93, but it's up to $3.35 a gallon, enough is enough. i love my car, a 2005 subaru gt limited sedan, but it's gas mileage sucks, so i'm looking to replace it, but with what. the only hybrids are from honda,toyota, and ford(an suv, no thanks), so this country is screwed, because we squandered 30 years, and achieved nothing, our politicians are clowns, they could care less.

highender · April 2006

agree with your sentiments about European public transit systems...and how they all interconnect. We were in Rome and Paris...and the mass transit was very good.

People are much happier to place the blame on others...and not willing to decrease or eliminate their own dependence on gasoline.

Realizing that there may be real practical usage of cars and gas....there is still a lot of room for improvement by all US residents. We must all decrease usage. We are being fleeced...due to demand....and many people are profiting...but us AMericans are getting deeper into debt due to our addiction.

Time to face reality....

pmerk28 · April 2006

Instead of crying buy oil futures and you will profit too. IF you are so confident we are "going to run out of oil" than it wouldn't be much of a gamble to you now would it.

kernick · April 2006

I agree with much of your sentiment, but here's the problems with those ideas.

1) Uncle Sam WON'T do much, oh maybe a minimal CAFE raise over the next 5 years but nothing major and long-term. Politicians are elected by people, and people want society to cut-back, but few want to cutback themselves. Everyone wants to see low taxes, but no one wants their services cut.

2) Even if Uncle Sam did something drastic, oil and general energy consumption is a global issue. If the U.S. reduced its oil consumption 10% next year, the world would still use the SAME amount of oil as this year. The world is growing!

3) There are hundreds of millions of vehicles on the roads in the U.S. The mpg of these vehicles is fixed. The cars being built and planned for the next year or 2 are set, and their capacities are somewhat limited. There is no way to shift production to 1M Fits for example. We're going to be getting hemis, SUV's and PU's in numbers. This is a huge amount of vehicles that we're not going to just throw away. It will take many years, 10+ to change the mpg (say +5mpg) of the existing fleet. Hybrids would need to exist in the range of 50M-100M to really start showing an effect. And 99+% of the existing fleet can not use E85. It will be years before the 1st mass produced H2 cars are made.

4) If we are near Peak Oil production, then we will be on the downward-slope of production if we begin to get significant hybrid, H2 and ethanol. But the population and demand has kept growing.

So I really don't think we're going to have cheap gas again. Those with money will continue to use energy as they do today, and the poorer people are going to disproportionately be cut back. That is why I keep telling people, to develop skills and save and invest, if they want to have oil rather than someone else in the world. The price is going to go up and they are going to have to "outbid" others. We do that today in the markets, as traders send the oil/gasoline to who pays the most.

gljvd · April 2006

I have a Chemistry degree. Facts: Thats nice

Corn isn't going to do much Most likely not however switch grass and other high yield crops can make a diffrence. We can get a maximum 21% increase from corn. With switchgrass we can get a 343% increase with current tech. I think that will make a sizable diffrence

Hydrogen isn't going to do much You can use electricty to create hydrogen . Electricty can be created by many diffrent things , solar , gas , hydro electrical . So it can reduce the oil dependancy

The collection area requirements would be enormous to make a big dent in our consumption

Yes enormous . However we have a large amount of space that is being used for nothing that can be used for solar power . Think of all the houses out there with roofs that do nothing . Add solar cells , build new houses to harness it better and use electric heaters for the heat . We'd save alot of gas that way that would have been used to generate electricty or heat the house .

3. We had better start working on efficiency to stretch our supplies
I think efficiency has been increased in the last 30 years . You forget that other things have also been included in the last 30 years and others have been increased. Saftey is one area that we keep increasing while mpg stays the same or increases in some of the classes .

There are no magic bullets. You need to use less energy or find other sources

You need to use as many renewable sources as possible.

If we switched over to ethanol fully , solar power for houses and industrial areas and wind power we'd decrease our dependancy on oil which is not renewable or renews at a much slower pace than the other options .

As for cheap gas . Its not really cheap when its more than half the minimum wage over here

highender · April 2006

I do not know why you are replying to me...as I have never "cried " about the current situation. I think our gasoline should have been at $3.00 per gallon 15 years ago. When I was traveling, invariably most places had HIGHER gas prices than the US...

I think only market forces will FORCE the American people to conserve and decrease their usage.

This includes all people....not just SUv drivers.

highender · April 2006

Agree we have to use as much renewable resources as possible...

and the flip side is all of us have to be serious about conserving...

gljvd · April 2006

1) Uncle Sam WON'T do much sure they wont , because the oil companys pay for their elections .

2) Even if Uncle Sam did something drastic, oil and general energy consumption is a global issue. If the U.S. reduced its oil consumption 10% next year, the world would still use the SAME amount of oil as this year. The world is growing! That is true. However we have to remember that the less we need the less we have to pay for .

If we could reduce our oil consumption to a point where we only need to get oil from the americas we would pay less for it.

Take it a step further. If we had solar panels for every house , had solar panel farms in every state , had wind power in every state and tidal power where applicable and switch to high yield ethanol options for our commuting we might even be able to use oil from just north America .

That would help us greatly .

3) There are hundreds of millions of vehicles on the roads in the U.S. The mpg of these vehicles is fixed. of course , yet every year a certian amount of the older vehicals are replaced and with gas at such a high price i'm sure many of them are looking to trade up for fuel economy . That means even if we raise mpg by 1 on the lowest fuel economy cars a year we'd get off our oil dependancy .

The cars being built and planned for the next year or 2 are set, and their capacities are somewhat limited

That is true , however they can still ramp up production of certian engines and ramp down production of other engines. They can also tweak engines to get another 1 mpg at the cost of x amount of horsepower .

You'll also be surprised at what will happen with the 2008 models , the big companys are going to be switching over in mass to other engery types . Just look at chyrsler , they just announced a few models using flexfuel . I'm sure when the hybrid altima is made they will make more hybrids of it than they were planing on making last year .

The major problem with hybrids are there are not enough models avalible and the premium is still much to high.

Hybrids would need to exist in the range of 50M-100M to really start showing an effect. And 99+% of the existing fleet can not use E85. It will be years before the 1st mass produced H2 cars are made.
Well if you can get the e85 out there in enough places and at the right price there are 4 million or so vehicals that can run on e85 or any mixture of it . almost every car can run on e10 . Its a start.

4) If we are near Peak Oil production, then we will be on the downward-slope of production if we begin to get significant hybrid, H2 and ethanol. But the population and demand has kept growing.

We are at peak oil production because after this point in time we are going to be drilling more and more for less oil . So prices are just going to go up and up as more people in other countrys fight over the gas that is left.

The less we have to fight over the better off we are . Instead of having to fight for 10 barrels of oil , if we only had to fight for 1 we'd be much better off .

highender · April 2006

Why are China, Mexico, and other countries now using more oil? They still have many coal based plants, but have been switching to oil/gas fired power and manufacturing plants for the past decade. Why the change? I'll leave this one open.

There are lots of people in Mexico and China. They used to all live close to the poverty line...most of them.

for example: China sold their first private vehicle in 1985. Before that....all oil and gas was controlled by the state...and used for mass transportation and official use only ( I mean as it relates to autos) .
IN 1987... CHina exported oil and gasoline to the US !!

NOw , with millions of new vehicles on the roads and new ones added everyday....China and Mexico are becoming greater consumers of gas then the US. China is already number 2 .

No matter where you go...all the big metropolis's in China have traffic jams. That was the most amazing thing that shocked me. In 1982...the roads were filled with bicycles, and the driver had to honk to try to get them to move to the right side of road.

Now...they have to actively buy all the gas and oil they can get...and all this is spurred on by us...

By buying cheap doodads at Walmart..we are adding money to China...which in turn uses all that trade surplus money to buy all the gas to make their people happy and make more doodads to sell to us .

We Americans are shooting ourselves in the foot.....by being addicited...and giving money away so our competitor has money to buy gas .... :sick:

gljvd · April 2006

Agree we have to use as much renewable resources as possible...

and the flip side is all of us have to be serious about conserving...

Right we also have to push for more options . We are the consumers, we have to tell them we want hybrids in more than just a prius .

That is the problem

gasman1 · April 2006

No arguments, but something to add. China and Mexico also began switching from coal based to gas-fired power and manufacturing plants. We've been exporting crude oil products other than gasoline to both countries.

And yes, crude is used in the manufacturing process (petro-chemicals such as plastics). They need the crude to make the cheap (low quality) junk that we purchase... Sorry, another topic.

kernick · April 2006

you: Take it a step further. If we had solar panels for every house , had solar panel farms in every state , had wind power in every state and tidal power where applicable and switch to high yield ethanol options ...

me: I agree with your theory. I'll even put you as project manager - now tell us how long it would take to build the factories for the solar panels and windmills, build them, and install them. I could envision your solution if you put a person like Joseph Stalin in charge and he could find any unemployed or criminals "work for good of society" (Gulags).

I could also offer a solution like yours to this issue. Build 1,000 nuclear plants. Problem solved right?

Actually the most likely scenario is to use the coal tars and shale in Canada and western U.S.

gljvd · April 2006

I agree with your theory. I'll even put you as project manager - now tell us how long it would take to build the factories for the solar panels and windmills

Everything takes time . However if we actually got a push behind it and made it mandatory that new houses or new expansions on old houses have solar paneling installed the money to ramp up production would be there .

Instead of building 1 solar panel plant every 5 years or so (i'm throwing numbers out there cause I really odn't know how many plants are built in a time frame) if we built a few of them at once in 5 years we'd have x amount of plants coming online . This in turn would drive prices down faster .

Wind is a tricker situation . I don't really see that on the top of everyones house for awhile . However we just recently got a new loews or whatever home store . Its huge , they could easily set up a few wind generators on the top of it. It also has a huge parking lot . They can easily put a field of solar panels as cover for the parking lot .

If we actually start mandating it for busniesses the econmeys of scale would mean when we institute it for homes 5 years or so later the panels would be much cheaper as they are no mass produced in extremely large quanitys and there will be alot more plants building these panels thus driving costs down again.

We need ethanol ? New jersey has huge highways and railways . What do we have growing next to them ? Weeds and trees and grass. Why not set up switch grass along the roads and train tracks . Take out the chain gang and have them work the land , have them harvest it . Switchgrass consumes a large amount of co2 . It would improve the air quality in the state and have the state produce a load of cheap ethanol . It would also give the criminals a way to pay back society instead of siting in a jail watching cable and working out .

Nuclear plants are a great idea and we should build newer plants and phase out the oldest in the countrys . But the elements to produce this power are also rare so it wont be the only way to do this . Your also faced with our power network sucking complete [non-permissible content removed] . Generating the power at the house and busniess or close to the comunitys are the best way .

Sure doing this will take awhile , perhaps a decade or two before we make a huge dent in our dependancy on oil . But if we start tommorow its 2015 or 2020 . Instead of starting this in 2015 or 2020 . I don't even want to think about gas prices if we do nothing till then.

Slow baby steps get things done.

gagrice · April 2006

Wind is a tricker situation

Both wind and Solar have a lot of limitations. Solar has to have good sun to work. I can see large arrays in the desert. What do you do at night to keep your electric furnace heating when the sun goes down. Wind will only work in limited areas. The average wind has to be 9 mph for them to be practical. Again the desert has some fine locations for wind generation.

From an individual standpoint. Have you installed solar panels on your home yet? I did about 23 years ago on my home in Lake Havasu. They were worthless in 5 years. The sun had destroyed them. By then the company that installed them was out of business. I understand the new designs are warranted for 25 years.

When you start saying how it can be done, you forget that many of us have tried these things and were burnt. Brazil for example had a real push to Ethanol in the 1980s. Then the price of sugar made ethanol too expensive. Everyone went back to using gas and selling gas cars. Even today Brazil is only supplementing their oil with about 20% Ethanol.

The easiest way to cut down on fuel consumption is to build more diesel vehicles. The EU is now at about 50% diesel. It is cheaper to refine than gas and gets at least 30% better economy.

When and if they get the Switchgrass to ethanol process working, start using ethanol more across the board. I am skeptical that our current production of corn based ethanol can even provide the 5-10% that is mandated. That is a big part of the current price sky rocketing.

gagrice · April 2006

Indeed, if Americans shouldering the increasingly heavy burden of rising gasoline prices follow the European example, where gas has typically been between two to three times more expensive, diesel -- not gas or electric hybrids -- may forge the path forward.

The advantages of diesel engines to European car buyers are obvious. Besides the lower fuel cost per gallon, the average engine benefits from 30% better fuel economy. In turn, carbon-dioxide emissions -- a figure more commonly paid attention to by European consumers -- are reduced on average by 25%
By 2004, nearly half of all passenger vehicles sold in Europe were diesel-powered. In the markets most hard-hit by high gas prices -- France and Belgium -- diesels now account for nearly two-thirds of all new cars sold. This year, analysts expect that number to reach 55%, passing for the first time in European history the majority mark. What's more, in the first three months of 2006 alone, 2 million diesel cars have been sold. (Compare that with the mere 120,000 Prius hybrids bought last year, out of 17 million passenger cars sold in the American market.)
Toyota (TM) is so proud of its clean-burning diesel engines, which are equipped with multiple filters to catch even invisible pollutants, that dealerships offer a special in-showroom demo. The "Toyota Clean Test" consists of a salesperson holding a white handkerchief behind a new model's tailpipe, while prospective buyers are invited to hammer the gas pedal. The test is concluded by examining the still-clean hanky.

GAS POLITICS. Even the Environmental Protection Agency is onboard. In that agency's 2006 fuel economy guide, three of the six vehicles rated with the best real-world gas mileage are diesel-powered. In fact, despite public misperception and limited model availability, diesels tied hybrids among the best picks.

What's more, there may be a foreign-dependence case to be made, with the American public's attention now turned to what President Bush called the national "addiction to oil." Indeed, predictive models created by the U.S. Energy Dept. show that a doubling of diesel market share would reduce American gasoline consumption by 350,000 barrels of oil a day.

Bring the Diesels

gljvd · April 2006

What do you do at night to keep your electric furnace heating when the sun goes down

Use other means . Or can you point out where I said only use solar power ? If we can have every house hold and busniess run on solar energy during the day we can cut down a large amount of electricty we need to generate . Considering that during the day most people are awake and going to stores or working or at home using power we would need more than at night . I would say around 4-5pm in the winter till 5am or so we would need alternate forms of power . So about 12 hours of power can be generated on site. If we use long lasting batterys ( perhaps ones that can last 5-10 years ) we can have those charge so any extra power can be stored for the evening . In the summer time in we can have sunlight from around 5am to 8pm and would need to store less power .

For wind I was talking about houses . Its not practical to use them in the burbs . Simply not enough room.

From an individual standpoint. Have you installed solar panels on your home yet? No my house was built in the 30s and doesn't the slanted roof doesn't get alot of sun through out the day .

Regardless , tech improves each day and as I said . Start with busniesses first. Let them bear the brunt of the cost . 5 years after having the companys spend hundred of millions to billions on the tech , the prices would drop like a rock and they would be refined so they will last longer and be more efficent as time goes on .

The easiest way to cut down on fuel consumption is to build more diesel vehicles. The EU is now at about 50% diesel. It is cheaper to refine than gas and gets at least 30% better economy. That would be a nice help . However cars are not the only area in which we use tons of gass . Not only that but diesel has a huge stigma to overcome in the states. My father says he will never buy a diesel as the last one he owned was junk and spit out black smoke and made a ton of noise . Personaly I don't care. If i could buy a diesel i would

When and if they get the Switchgrass to ethanol process working, start using ethanol more across the board. I am skeptical that our current production of corn based ethanol can even provide the 5-10% that is mandated. That is a big part of the current price sky rocketing I'm sure they can do it . Everything can be done. Its a matter of how well its excuted .

vchiu · April 2006

>me: since trains use some sort of fossil fuel even if using electric, do you have any data as to whether trains are more efficient on an energy basis?

Well, 75% of French Electricity is Nuclear and 9% is coming from dams. let us say 15% is fossil here. I heard Nuclear account for 25% in the production of Electricity in the US

A Bullet train carrying 800 passengers at 185 mph will use an average of 4000-6000 HP, that is 5 to 7.5 HP per person.
The efficiency of modern Electric motors is about 90% so the Electricity need per head will be of 5,5 to 8.2 HP X the duration of the trip

whereas it is about 30% for good gas motors (up to 40% with diesel). A Car going 75 mph will use an average of 35 HP , so will need about triple the power to produce that , say 100 HP X the duration of the trip. Of course, this must be divided by the number of passengers in the car.

My view is that taking the train is from 5 to 20 times more efficient in energy consumed per head. And 9X% of the energy used by cars is fossil, a much higer percentage than for Electricity.

Countries with little fossil fuel resource massively use mass transit, so it must lighten somehow their energy consumption.

>Financially trains are very expensive to build, maintain and run. Amtrak loses money and has to be subsidized

Bullet trains in France are all profitable and even fund money loosing secondary lines. They strongly compete with planes and cars and contributed to the withdrawing of some air links below 600 miles.

The US rail system is known for being in need of real overhaul. Contrary to the public roads, US rail receive a very small fraction of its money from the state, the remaining being privately funded. The train can't work if there is no political vision for it

In a cost uncompetitive country such as France, a High speed line costs average about 12 Million Euro per km ( 2 tracks) so say 25 million USD per mile. I trust US being less populated, the cost may be half. but let us consider it is not, I heard that if the money for the war in Iraq was put in the railway instead, it would have been enough to fund 20,000 miles of dedicated High speed line. (maybe 40K if less conservatively measured)

I am pretty confident this would have made a dense enough Bullet train network that would make the train a true alternative (which is not as is now)
This rail network would have significantly impacted the US dependancy on Fossil fuel.

This is the difference between cosmetic measures and ground breaking ones

imidazol97 · April 2006

I just heard on the Sunday morning talk show that there was a 50cent tax placed on ethanol import from Brazil, who has succeeded in generating their own ethanol from sugar cane or something at a high rate over 10 years. Could that tax be to protect ADM's ability to produce ethanol here from food corn and to protect the 10 percent increase they had a couple weeks ago?

Senator Durbin from Illinois, corn country, was very supportive of the extra tax to prevent ethanol coming in to support fuel total volumes here in the US.

The logic was that keeping out foreign ethanol would cause greater research on ethanol production methods here. ?????

dpat · April 2006

Senator Durbin from Illinois, corn country, was very supportive of the extra tax to prevent ethanol coming in to support fuel total volumes here in the US.

Durbin, like every other politician in Washington, thinks he should be president. What's the first stop on the road there? The Iowa caucuses. Anyone who wants to succeed there has to promise massive subsidies and import protection for corn growers. That's why there's a big tariff on Brazilian ethanol. We've now got a huge ethanol need to replace MTBE, and the ONLY way to produce it in large quantities here right now is from corn. The agriculture lobby is happy.

vchiu · April 2006

You raise very sensible questions

Don't know for China powerplants. Just know car on the roads in China increase 2 digit every year and (contrary to their military spendings) mass transit is in the slow lane only.

There are so many power cuts now (up to 3 in the same last week where I work) that most companies have their own generators. And of course they don't drink E85 nor Diester. when you have full areas with powerful generators switched on a full day, one understands China demand for oil is just newborn

I remember the struggle in my own country to budget funds over 15 years to search Nuclear Fusion. Basically we were not able to agree to spend 2 billion Euro / year on this project (EU + China + Russia) whereas in an Enron like scandal, a French state-operated bank let 25 billion Euros assets evaporate in a few years.

We are in the vicious circle of high expenses and low investment. This is going to cost us a very dear price which appetizer taste is just reaching our mouths now.

brightness04 · April 2006

Start with busniesses first. Let them bear the brunt of the cost . 5 years after having the companys spend hundred of millions to billions on the tech , the prices would drop like a rock and they would be refined so they will last longer and be more efficent as time goes on.

Why don't you go start a business and see how well you can absorb the mandated cost. While you are at it, why solar power alone, your business should have its own windmill too, along with human waste processing plant for methane generation, etc., etc..

brightness04 · April 2006

IMHO, what's really happening is massive devaluation of dollar. Gold has gone from $260/oz in 2001 to $650/oz today, and Silver has gone from $4/oz in 2001 to $13+/oz today, in near-lock steps with oil. The last time I checked, no car or generator burns gold or silver for fuel. What we are witnessing is the collapse of the dollar.

Why is it happening now? Because people have become dumb and lazy. Even by reading these forums, we see all those advocates for mandating this, mandating that . . . well, all those mandates have to be fulfilled by someone's hard work . . . those making the rules or advocating the mandates certainly are not doing the actual work. That means, in addtion to the professional rule makers, mandate enforcers, advocates and their lackeys, all of whom have to be supported by other people who actually produce something to support their paper-pushing livelihood, more people have to be diverted from productive work to fulfill the new mandates.

A significant segment of the population has also forgotten where wealth comes from. We see people writing about thanking IRS for refund checks, never mind that in making the interest-free loan to IRS, they just lost double-digit per centage in the past year when measured against real purchase power as measured in oil, gold, silver, and practically every single commodity in the world. As this goes on, sooner or later, more and more people are going to decide to throw in the towel and join the crowd in the Collosium. . . Bread and Circus is always accompanied by a debasing currency, as more and more net producers become net consumers.

The energy price increase is only a natural reflection of the debasement of our currency, and the devaluation of our honest labor thanks to all the interventionists clogging up the market mechanism.

kernick · April 2006

a) Read down about how the markets work. b) It's not very encouraging that natural gas is going to solve our energy needs. If anything this may mean higher oil usage. More new homes would be built to use oil-heat, and there will be a stop of oil to nat. gas conversions in existing homes.

http://channels.netscape.com/pf/story.jsp?idq=/ff/story/0001/20060430/0941638568- .htm&sc=1333&photoid=20060320NYET781

kernick · April 2006

I agree with you on the devaluation of the $ being part of the problem of increasing oil costs. I have touched on it in the past stating that when the $ devalues, a) other economies purchasing power goes up, and b) the sellers of oil such as Saudi Arabia see there purchasing power going down, if they do not increase prices. While Saudi Arabia and OPEC can't raise prices by themselves, they are not unhappy to se ethe price go up if the value of the $ has gone down.

If our $ declines 10%, that means a barrel of oil will change in cost from $70 to $77. And right now the $ is not very strong relative to the Euro; don't know enough about the other currencies, but I bet our trade-deficit hasn't helped.

fintail · April 2006

"and the devaluation of our honest labor thanks to all the interventionists clogging up the market mechanism."

Yeah, let's deregulate everything...labor will become more valuable, everyone will prosper, it will be awesome just like China! Transportation/infrastructure problems will vanish, unions will vanish and all of a sudden once non-competitive products will lead the world...really, every economic evil will vanish! The same human nature that devalues our modified capitalism, along with dooming socialism and communism surely won't come into play in a pure dog-eat-dog unregulated labor market. No way.

Is Mises paying you like 50K a year just to bleat propaganda?

Oh, and I got a chuckle out of "our honest labor". Thanks.

stevekilburn · April 2006

I agree with some of your comments. It seems we are on same wavelengths at least on this one. To that I would add and its not necessary to agree on all points.

1. Decreasing the gas price will not help.
2. Increasing the gas price through whatever means will.
3. Conservation is the key. We have to dramatically reduce oil consumption.
4. The only way we can achieve energy efficiency is when there is pressure on the wallet.
5. To put pressure on wallet, we have to dramatically increase gas price.
6. I think we should triple to gas price to somewhere north of 10$/gallon.

gem069 · April 2006

LOL....... nope fossil fuels won't every get low again. Sure it will go up & down as the market changes but the bottom line is.... every day the USA and the rest of the world is sucking up more fossil fuels at a excelerated rate and prices will continue to climb.
Unfortunately, the USA doesn't have a plan and I really doubt it will, well, at least until everything hits the fan, like maybe another major cut off of fuel like in 1973. And since many of the countries the USA buys fossil fuels hate the USA, it's only a matter of time till they do it again.
The thing is.... various ways need to be developed and no one way is ideal but various different approaches will go a long way but they must be action not the typical lip service.
Did anyone see all the politicals in DC in front of the gas stations for a foto opp? After the typical propaganda of saying "yea we hear ya an we gonna do summin for ya'll" then they all left in their Support Usama Vehicules (SUV). What a farse that was.

gljvd · April 2006

Increasing the gas price through whatever means will. Please all this will do is hurt the American people .

Your putting the cost of lowering our dependacy on the people , this is the wrong group to put it on . It shoudl be on those who create the cars and the fuel that should bear the cost . After all its those companys that will profit.

4. The only way we can achieve energy efficiency is when there is pressure on the wallet. This wont do anything . If i'm driving a 90s era car that gets bad gas milleage i'm not suddenly going to be able to afford a new hybrid car that gets 50mpg because gas went up another dollar . All it will do is force me to continue to use that old car and continue to loose more and more money .

6. I think we should triple to gas price to somewhere north of 10$/gallon.

Wow , this is the most backwards thing i've ever heard . You do know that for someone who works minimum wage , they would have to work almost 2 hours just to pay for fuel to get to thier job .

5. To put pressure on wallet, we have to dramatically increase gas price.

Instead of that why don't you decrease gas prices and offer large incentives to buy these vehicals .

Look a hybrid costs upwards of 4k more than the non hybrid version of the vechical . For alot of people they simply can't afford this . What car companys need to do is bring the cost much closer and the goverment needs to go a step further and offer incentives that will then make the vehical less expensive than the non hybrid version.

The other problem is some people need bigger cars or trucks . I need a small suv as I upkeep a few apartment buildings and often need tools and suplies that simply wouldn't fit in the trunk of a prius or civic hybrid .

Now I'm buying a new suv soon . I'm looking at the 15-28k range. There are no hybrid suvs in that price range . This is the problem. There are no hybrids , no diesels and no e85 vehicals .

So what would raising the gas price even more acomplish in my case ? Suffering. It would make me suffer having to spend more and more on gas and less and less on food and housing .

gem069 · April 2006

Increasing the gas price through whatever means will.

Yea, like that would really help?

I think we should triple to gas price to somewhere north of 10$/gallon.

Sure ......since you'll be paying for everybody in the USA. Otherwise, Why?

Look a hybrid costs upwards of 4k more than the non hybrid version of the vechical . For alot of people they simply can't afford this . What car companys need to do is bring the cost much closer and the goverment needs to go a step further and offer incentives that will then make the vehical less expensive than the non hybrid version.

The other problem is some people need bigger cars or trucks . I need a small suv as I upkeep a few apartment buildings and often need tools and suplies that simply wouldn't fit in the trunk of a prius or civic hybrid .

Now I'm buying a new suv soon . I'm looking at the 15-28k range. There are no hybrid suvs in that price range . This is the problem. There are no hybrids , no diesels and no e85 vehicals

Sure there are people who need the size of a truck to haul things around but unfortnately as can be seen daily on the street, the Support Usama Vehicles are only for one passenger more matter what the mileage is.

The part about the hybrids are you have to pay about 5k more and even at todays cost of fossil fuels it will take years just to recoup the additional cost. Doesn't ford make the escape in a hybrid now and Saturn has the VUE comming out with it's hybrid?

As for diesels, VW makes a few models in the USA market but not a small SUV yet. I hear they will make a smaller SUV using using the golf chassic called the Merrikesh and should be in production in 2008.
From what I have read, in 2006 the refineries finaly can reduce the sulfer enought to allow all diesels is all states. Because states like Cali, NY and 2 others would not allow diesel cars in their states and they account for 25% of USA population. Also, the bad traits of a typical diesel have basicly been overcome.... the smoke, noise and lack of power but with the better motors and newer technology they have come a lone way.

gagrice · April 2006

During the comment period for the RFG (reformulated gas) program, supporters of ethanol had argued that the volatile organic compound (VOC) emission standards in the program -- 42 U. S. C. 7545 (k) (3) (B) (i) -- would preclude the use of ethanol in RFG because adding ethanol to gasoline increases its volatility and raises VOC emissions, especially in the summertime.

Background
The American Petroleum Institute v. the U.S. Environmental Protection Agency [Docket #94-1502 (Heard by the U. S. Court of Appeals for the District of Columbia Circuit and decided on April 28, 1995)]

If there were ever a time when the truth in advertising standards should be put back into place, it's now -- during the current (third) attempt to convince the public that the massive use of corn-derived ethanol in our gasoline supply will alleviate our need for foreign oil. Ultimately, the answer to just one question determines ethanol's actual usefulness as a gasoline extender: "If the government hadn't mandated this product, would it survive in a free market?" Doubtful -- but the misinformation superhighway has been rerouted to convince the public its energy salvation is at hand.

Act I, Scenes 1 and 2
The use of ethanol to reduce our dependence on foreign oil is nothing new. We also considered it during our nation's Project Independence in 1974, the year after the first Arab oil embargo. After the second energy crisis in 1979, an income tax credit of 40 cents per gallon of 190-proof ethanol produced was instituted as an incentive for refiners of ethanol to blend this product into gasoline.

Because this federal largesse now existed, within five years, 163 ethanol plants had been built -- but only 74 of them were still in operation. As gasoline availability opened up in the 1980s and gas prices went down, many ethanol plants simply went out of business.

Shortly thereafter, in yet another attempt to broaden the product's usage, Congress enacted a law that allowed car manufacturers to take excess mileage credits on any vehicle they built that was capable of burning an 85% blend of ethanol, better known as E85. General Motors (GM) took advantage of the credits, building relatively large volumes of the Suburban as a certified E85 vehicle. Although in real life that generation of the Suburban got less than 15 mpg, the credits it earned GM against its Corporate Average Fuel Economy (CAFE) ratings meant that on paper, the Suburban delivered more than 29 mpg.

Other manufacturers also built E85-capable vehicles -- one such car was the Ford (F) Taurus. Congress may have intended simply to create a market for this particular fuel by having these vehicles available for sale. But what the excess mileage credits actually did was save Detroit millions each year in penalties it would have owed for not meeting the CAFE regulations' mileage standards.

Act II, Scenes 1 and 2
In the mid-'90s the Clean Air Act of 1990 kicked in, mandating that a reformulated gasoline be sold in the nation's smoggiest cities. So the Clinton Administration again tried to create an ethanol industry in America, by having the Environmental Protection Agency mandate that fully 30% of the oxygenates to be used in gasoline under that program come from a renewable source. But members of the American Petroleum Institute had already geared up for the production of Methyl Tertiary Butyl Ether (MTBE), their oxygenate of choice. The ensuing lawsuit was argued before the Court of Appeals for the District of Columbia on February 16, 1995.

The EPA took the position that it had been given a mandate to find ways to conserve the nation's fossil-fuel reserves, so it needed a renewable fuel -- and ethanol neatly fit that bill. But there were problems with that argument, not least of which was the fact that the judges could find no charter or mandate from Congress that gave the EPA the statutory right to do anything about fossil fuel, reserves or otherwise.

Even more damaging, the EPA's own attorney admitted to the judges that because of its higher volatility, putting ethanol into the nation's fuel supply would likely increase smog where it was used. One of the judges, on hearing that the EPA was actively promoting a substance that could in fact diminish air quality, wondered aloud, "Is the EPA in outer space?"

The final decision favored the American Petroleum Institute. The judges agreed that the EPA was bound by law only to promote items that would improve air quality -- not to reverse the nation's advances in smog reduction. That decision was apparently forgotten with record speed. In the summer of 2000, ethanol as an additive was mandated for the upper Midwest, including the city of Chicago and parts of the state of Wisconsin.

Ethanol Tragedy

gljvd · April 2006

gem , the first two things you bolded aren't my words . I was replying to them

Sure there are people who need the size of a truck to haul things around but unfortnately as can be seen daily on the street, the Support Usama Vehicles are only for one passenger more matter what the mileage is Perhaps but increasing gas prices is going ot hurt those who actually need them as much as driving people to smaller cars. The only diffrence is I will allways need the suv . So the gas price will allways hurt me . The soccer mom can trade in for something else .

The part about the hybrids are you have to pay about 5k more and even at todays cost of fossil fuels it will take years just to recoup the additional cost. Doesn't ford make the escape in a hybrid now and Saturn has the VUE comming out with it's hybrid?
Yes they make a hybrid escape. It costs 7grand more than the normal escape. It starts at 28k . Out of my price range as I wont get the features I need . 4wd brints it up to slightly over 29k .

As for diesels, VW makes a few models in the USA market but not a small SUV yet. I hear they will make a smaller SUV using using the golf chassic called the Merrikesh and should be in production in 2008.
Perhaps they do , they don't fit into what I need though. As I said the options aren't there.

From what I have read, in 2006 the refineries finaly can reduce the sulfer enought to allow all diesels is all states. 2007 brings in new laws that are going to make diesels all but extinct . The jeep liberty diesel is doa for 2007 as the new emission laws are to tough to pass

imidazol97 · April 2006

I heard on meet the depressed this morning that there were 350 refineries and I thought they said 10 years ago; now there are 140.

The companies need to have been building refineries with that money they're been racking in since forever.

rockylee · April 2006

We both know that's not going to happen without force.
:sick:

Rocky

rockylee · May 2006

Environmental groups disappointed with plan

WASHINGTON -- Automakers and environmental groups said Friday they would closely monitor a Bush administration request to upgrade fuel economy rules for passenger cars, a move which could lead to higher gas mileage standards in future vehicles.

Amid a recent spike in gas prices, Transportation Secretary Norman Mineta asked Congress to "take prompt action" and grant the administration the authority to change the fuel economy rules, which haven't changed in two decades.

The move came a month after the government revamped the Corporate Average Fuel Economy (CAFE) program for pickup trucks, sport utility vehicles and vans, raising average standards by about 1.9 miles per gallon from 2008 through 2011.

At the White House, Bush said Friday it was "a good idea" to give the administration "the opportunity to raise CAFE standards, just like I did on light trucks." Under the current system, passenger cars need to meet an average of 27.5 mpg, a number which has been largely unchanged since 1985.

Automakers have traditionally fought attempts to raise fuel economy requirements, but were generally supportive of the light truck program, which implemented a size-based system which would lead to an average of 24 mpg by 2011. The industry has pointed to its development of fuel-efficient vehicles and those capable of running on alternative fuels.

DaimlerChrysler AG said in a statement Friday that "it could support reasonable and achievable increases in fuel economy" but noted a lack of details with the proposal. It highlighted plans announced earlier this week by Chrysler President and CEO Tom LaSorda to produce by 2008 a half-million vehicles capable of running on E85, ethanol blends that include 15 percent gasoline.

GM said Thursday it would want any changes to be made "in the fairest way possible for all auto manufacturers."

But environmental groups, which were disappointed by the light truck proposal, said there was little evidence the Bush administration would seek major increases in gas mileage requirements if Congress gives it the authority.

The light truck proposal, they noted, would raise fleetwide fuel economy standards by less than 2 mpg and would save the equivalent of less than a month's worth of gasoline used in the United States.

"Are there going to be any real savings here or is this pre-election politics?" asked David Friedman, director of the Clean Vehicles Program at the Union of Concerned Scientists.

Dan Becker, director of the Sierra Club's global warming program, said a shift to a size-based program for passenger cars could lead to "a perverse incentive" for auto manufacturers to build less fuel-efficient, larger passenger cars.

Mineta's letter made clear the administration would not support a simple increase in the requirements without reforming the program, citing the potential for increased fatalities on the highway, higher health care costs and job losses.

Gerald Meyers, the former chairman of American Motors Corp., now a professor of management at the University of Michigan, said the industry would not welcome the changes but would likely support a new system if it mirrored the program for light trucks.

"I'm sure they don't want to have any remedy that smacks of stringency but this particular approach ... is probably the friendliest one that can be brought forward," Meyers said.

Congress is expected to begin considering the potential changes next week. The House Energy and Commerce Committee is scheduled on Wednesday to hold a hearing on draft legislation to allow the National Highway Traffic Safety Administration to set fuel economy standards for passenger cars.

Rep. John Dingell of Dearborn, the top Democrat on the committee, said he would be watching the developments closely "to ensure they will not unduly burden American manufacturers and American workers."

http://www.detroitnews.com/apps/pbcs.dll/article?AID=/20060429/AUTO01/604290326/- 1148

rockylee · May 2006

DETROIT - Rising gas prices haven't put the brakes on sales of luxury vehicles, which were up 15 percent at AutoNation retailers in the first quarter, and the company's chairman and chief executive doesn't see a slowdown coming any time soon.

"I think over the next five years, the premium luxury segment will grow at double the rate of the volume market because of demographic trends," Mike Jackson told The Associated Press in an interview Thursday. "The Baby Boom generation simply shows no signs of slowing down or retiring."

Jackson said gas prices aren't yet affecting sales but could if they remain over $3 per gallon for a sustained period. Even then, Jackson said, an actual gasoline shortage might be the only thing that would really change people's buying habits.

"There is a resistance to change that is considerable," Jackson said. "There's a lot of talk but you really have to look at behavior."

AutoNation Inc., the largest U.S. auto retailer, said Thursday its net income fell 10 percent in the January-March period, to $87.2 million from $97 million in the first quarter of 2005. That was due in part to a loss of $10.6 million because of the closure of several dealerships, Jackson said.

Overall sales were flat for the year, but revenues were up 4 percent to $4.7 billion, driven by the increase in luxury sales. The Fort Lauderdale, Fla.-based company operates 345 franchises in 17 states and is responsible for around 3.5 percent of U.S. new vehicle retail sales annually.

AutoNation defines luxury as premium foreign brands such as Mercedes-Benz, BMW, Lexus, Land Rover, Jaguar and Porsche.

AutoNation's experience mirrors the industry, which has seen a boom in luxury sales with the recent growth in household income and consumer confidence. Sales of luxury vehicles were up 6 percent in the first quarter of this year, compared to an industrywide sales increase of 1 percent, according to Tom Libby, the senior director of industry analysis at the Power Information Network, a division of J.D. Power and Associates. The Power Information Network also includes domestic luxury brands such as Cadillac and Lincoln in its totals.

But AutoNation also has more exposure in the luxury market. Jackson, the former president and chief executive of Mercedes-Benz USA Inc., has made a concerted effort to increase luxury revenues. The company is now the top U.S. seller of vehicles from BMW AG, DaimlerChrysler AG's Mercedes division and Toyota Motor Corp.'s Lexus division.

When Jackson arrived at AutoNation in 1999, foreign automakers made up 40 percent of the company's portfolio. Now, they make up 60 percent. Twenty-two percent of AutoNation's revenues came from luxury sales in the first quarter, up from 11 percent in 2000.

"The product is coming and the purchasing power is coming," Jackson said. "We are developing a portfolio to take advantage of that opportunity."

Mike Maroone, AutoNation's president and chief operating officer, said Mercedes was responsible for much of the increase in the first quarter. Sales of its redesigned S-Class flagship sedan, which starts at $86,175, more than doubled over last year, he said.

"That drove tremendous traffic to our stores," Maroone said.

Jackson said luxury sales were particularly strong in California, the Houston area, Florida, Las Vegas and Phoenix, but they weren't down in any of the markets where AutoNation has outlets.

Not everyone is upbeat about the industry's prospects. In a note to investors Thursday, Morgan Stanley auto analyst Jonathan Steinmetz revised his full-year U.S. sales forecast downward, from 16.7 million vehicles to 16.6 million, saying U.S. automakers could be especially hurt by high gas prices since their customers have lower median incomes.

"The duration of this gas spike matters," Steinmetz said.

But Jackson isn't convinced. He pointed to sales of the redesigned Chevrolet Tahoe sport utility vehicle, which were up 37 percent in the first quarter, and said he believes full-year sales could reach 17 million despite gas prices and higher interest rates.

"The American consumer is not about to give up their SUVs entirely," Jackson said. "There will be a gradual shift, but I don't see a stampede in one direction or another."

AutoNation shares fell 19 cents to close at $22 on the New York Stock Exchange.

http://www.detroitnews.com/apps/pbcs.dll/article?AID=/20060428/AUTO01/604280432/- 1148/AUTO01

kernick · May 2006

http://www.usatoday.com/money/world/2006-04-30-euro-gas-usat_x.htm

Fuel Economy and Oil Dependency

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