Australians could be driving electric cars by 2012 if Californian company Better Place has its way and introduces its innovative electric car network in Australia. Better Place has announced agreements with financial adviser Macquarie Capital Group to raise $1 billion to develop the initial infrastructure, and with AGL Energy to supply the renewable energy.
Better Place has developed a model for “sustainable mobility”, which allows consumers to own an electric car for a fraction of the cost of a comparable petrol-engine car.
Under the business model, Better Place would own the specially developed batteries that power the cars, and these would be recharged or exchanged at numerous Better Place network stations forming an Electric Recharge Grid. The electricity to power the batteries comes solely from renewable sources; in Australia it would be supplied by partner AGL Energy.
The Electric Recharge Grid infrastructure “is a massive network of battery charging spots” around cities and in the country. A computer in the car shows the remaining power supply and the nearest charging spot. Changing batteries is said to be quicker than filling up.
Better Place says it will offer several car models and subscription packages that will reduce the total cost of ownership and subsidise the car as part of the package.
Better Place has a partnership for the production of mass-produced electric vehicles with the Renault-Nissan alliance, which it says is the world leader in electric car development.
Nissan, with joint venture partner NEC, has created a battery pack that is suitable for electric vehicles and can be produced in mass volume. Renault is working on the development of exchangeable batteries for continuous mobility.
Renault’s vehicles will run purely on electricity, achieving the objective of zero emissions. They will “offer driving performances similar to a 1.6-litre gasoline engine. Equipped with lithium-ion batteries, they will give driving range and longevity.”
Consumers will have a choice of make and model. “Consumers will buy and own their car and subscribe to energy, including the use of the battery, based on kilometres driven. This model is similar to the way mobile phones are sold, with an initial purchase and a monthly subscription for the mobility service,” Better Place says.
“Combined with the lower cost of electricity as opposed to fuel-based energy, and the vehicle’s lifetime guarantee, the total cost of ownership for the customer will be significantly lower than that of a fuel-based car over the life cycle of the vehicle.”
Better Place expects the first mass market EV models to be available in Australia by the 2012 model year, a year after its mass market launch in Israel and Denmark.
The scaleable model adopted in Israel and Denmark will be used to build the EV network in Australia. Macquarie will assist in business development and help raise $1 billion to build the network.
It is early days and details of the fund-raising should be known in about six to nine months, says David Roseman, head of Macquarie Capital Group’s Infrastructure and Utilities Advisory-Australasia.
The offer is likely to be pitched at professional and sophisticated investors and would suit superannuation funds with their long time horizons, he says. The investment vehicle is likely to be unlisted. Melbourne, Sydney and Brisbane will see the initial infrastructure roll out.
Victorian Premier John Brumby says: “The Victorian Government supports any initiative that will have positive outcomes in reducing emissions in the transport sector and welcomes this innovative approach to help make broad adoption of EVs in Australia possible.”
Shai Agassi, chief executive and founder of Better Place, said Australia is the world’s sixth-largest country and building the network in Australia will demonstrate that the business model works in all countries, regardless of size.
The plan will help Australia take a generational leap forward toward oil independence, said Agassi. “With our commitment to build infrastructure and the federal government’s $500 million Green Car Innovation Fund, there is a compelling case for automobile manufacturers to jump in and build clean, safe, affordable electric cars for Australasia and South-East Asia.”
AGL’s group general manager, Jeff Dimery, says the initiative will accelerate the shift toward renewables that is already under way. “AGL is committed to increasing its renewable energy generation and believes it is important to collaborate and implement cross-industry initiatives to counter climate change. Because EVs charge primarily at night, they can maximise the potential of intermittent renewable energy such as wind.”
Roseman says: “The Better Place business model is game-changing and represents an exciting opportunity for Australian consumers, the environment, domestic automakers, the renewable energy sector, local industry and workers to move to the forefront of the energy revolution.
“Electric vehicles represent a more affordable alternative to the conventional combustion-powered vehicle. We believe the combination of a competitively priced vehicle, being driven by cheaper and cleaner fuel is a compelling business case.”
Better Place was launched in 2007 with $200 million of venture funding. Investors include: Acorns to Oaks II, Esarbee Investments Canada, GC Investments LLC, Israel Cleantech Ventures, Israel Corp, Maniv Energy Capital, Morgan Stanley, Musea Ventures, Ofer Group, VantagePoint Venture Partners, Vayikra Partners and Wolfensohn & Co.
Better Place plans to activate its electric car networks on a country-by-country basis beginning in 2010.
Friday, December 26, 2008
Oil Prices are Wrong--Very Wrong
By Chris Nelder | Wednesday, December 24th, 2008
Everybody seems to have the same question for me lately: What's the deal with gasoline prices?
How could it go from $2 a gallon to over $4 and then back to $1.66 in a single year? Was it speculators? The evil machinations of OPEC? Badly-timed fills and draws of the Strategic Petroleum Reserve (SPR)? A financial calamity engineered by the masterminds of a shadowy wealth conspiracy?
It's never an easy question to answer, but I can easily say "none of the above."
The price of oil and gasoline is set daily and globally by a complex interaction of many factors, including the relative valuations of currency, speculation in oil futures, the fact that oil is "priced at the margins," delayed supply and demand feedback to the market, economic growth rates, money flows of hedge funds and big institutional investors, geological factors, geopolitics, and many more.
Oil shot to $147 this year because of a particular highly-leveraged alchemy of those factors, and it fell as the leverage unwound. It's down now because the world is heading into a major recession and traders are, as usual, overdoing their bearish reaction.
OPEC's responses this year have been mostly late to the game, so they were regularly ignored by the market. Last week's production cuts by the cartel, and the subsequent sell-off in oil, was a fine example of this.
Filling the SPR is too negligible to move the markets either. In May, the debate over filling the SPR raged on with hardly anyone seeming to realize that its 68,000 barrels per day of demand is a mere blip against the US consumption of 21 million barrels per day. Traders ignored it.
Much more to the point is an analysis of over 100 studies on gasoline price elasticity by the trade magazine Energy Journal, which found when gas prices increase 10%, they cut demand by 2.6%. When prices fall, consumption picks back up.
Anatomy of a Frenzy
Oil and other commodities shot up in the first part of the year as investors sought a safe haven against the financial calamity stemming from the subprime meltdown and levered up their bets with wild abandon.
That trend reversed course in June as the world's central banks began cutting interest rates and the US flooded the markets with dollars. The global deleveraging that ensued caused a rout in the commodity markets, and absolutely everything was sold indiscriminately as money managers scrambled to meet redemption calls and raise cash.
The progressively worsening news about the health of the global economy has only fed the selling frenzy, pushing down oil prices further still. It's now more profitable to store oil than to sell it immediately, and OPEC has made yet another belated and ineffectual move to curb a supply glut.
The Asian tigers that were widely expected to support demand, even as OECD demand fell, have reported extremely bearish numbers in the last week as their economic growth stalls.
Oil consumption is off 3.2% from a year ago in China, the world's second-largest consumer of oil, and its crude imports are now at their lowest levels this year.
Japan's oil exports fell to record lows in the sharpest monthly decline since such records have been kept; meanwhile, imports to the world's third-largest oil consumer are down 17% year over year. South Korea's oil imports are also down 6.5% year over year.
Oil consumption by the world's top oil consumer, the US, has led the global decline with an expected 1.2 million barrels per day decline from past levels through 2009, according to the latest EIA report.
And voila: after thirteen straight weeks of price declines, gasoline is back to $1.66 a gallon.
Some have even suggested that oil in the $40s, and the current glut of oil supply, is proof that fears about peak oil supply were wrong.
Nothing could be further from the truth.
A False Sense of Complacency
A sub-$40 fill-up only lulls us into a false sense of complacency. As I have written repeatedly in recent weeks, we are setting ourselves up for a serious supply problem in the future with oil prices now below their replacement costs.
The facts are sobering:
Current petroleum stocks in the US are still within the average range for this time of year, according to EIA. They're now about 8% higher than this time last year, but that's really nothing to write home about, and it's not much of a "glut."
In a recent interview with Jim Puplava, energy analyst Robert Hirsch commented that a 1 million barrels per day decline in world demand would only move back the global peak of oil production by one month. By that metric, the allegedly huge cutback in oil consumption has bought the world about one month more before we peak—whoop-de-do.
Oil production in Canada, the US's top source of crude imports, is faltering as prices are now too low to justify new projects that tap its large-but-costly and difficult reserves in tar sands and heavy oil.
Our number-three source of imports, Mexico, is in serious trouble. Crude output from our southern neighbor has fallen 7% over last year, and exports are falling much faster, at a 20% decline, according to Pemex. (As I wrote back in June, exports fall faster than overall production. See "The Impending Oil Export Crisis.") Production from its largest field, Cantarell, one of the four "supergiant" oil fields in the world, is crashing at the rate of 33% per year. At the current rate, Mexico's oil exports will cease altogether in just seven years.
Experts at the ASPO and elsewhere believe that, within the next two years, world oil production will go into permanent decline, with depletion removing 2.5 million barrels per day from the world market— that's roughly equivalent to the total oil imports of Germany. There are no oil projects that can overcome a decline rate like that. And yet, no major economy is even preparing for this inevitability.
Saudi oil minister Ali al-Naimi has warned that the world needs $75 oil to ensure future supply, and that current prices "are wreaking havoc on the industry and threatening current and planned investments."
With gasoline now well below $2 a gallon, hybrids and other higher-efficiency cars are staying on the dealer lots. According to an analyst at Edmunds.com, a new hybrid would pay for itself in gasoline savings in two or three years with gasoline at $4 a gallon; but, below $2 a gallon, it's more like seven to eight years. Less than a year ago, you had to get on a waiting list and pay a premium over sticker to buy a new Prius. Now dealers have lots full of them, and Toyota has experienced such a sharp decline in sales that it posted its first operating loss in 70 years. Hopes that we will quickly replace a large percentage of our rolling stock with higher efficiency vehicles are now on hold, along with the hopes for a massive campaign of drilling shale formations and deepwater reservoirs.
A steep contango condition in oil futures is still in place, reflecting the market's near-term oversupply and long-term uncertainty.
Given the evidence, the price of oil is wrong. Very wrong. Crude for under $65 a barrel is a bargain, and crude in the low $40s is a steal. I would not be at all surprised to see a sudden and violent move back up for oil prices within the next year, once the current extreme market conditions revert to the mean.
I am still long oil (United States Oil Fund LP ETF, NYSE:USO) and will add to my position if it goes lower. My expectation is to hold it for a year, in case it further overshoots to the downside before recovering.
I'm also on the hunt for top-notch oil companies with low production costs, sizable reserves, and balance sheets healthy enough to let them acquire smaller competitors at basement prices.
I know it's been a tough year for most investors; but, we're nearly done with this turkey, and I'm setting my sights on profits for 2009. The buying opportunity of a lifetime is upon us. All we have to do now is wait for the right moment to pull the trigger.
Here's to a restful and joyous holiday!
Until next time,
Energy and Capital
P.S. Although oil prices may not have bottomed yet, that doesn't mean investors should sit back and be lazy. The problem is that the window for finding those up-and-coming energy stocks is running out. Many of your fellow Energy and Capital readers have already begun to prepare their portfolio for oil's comeback. Perhaps it's time you joined them. Click here to learn more about the $20 Trillion Report.
Sunday, December 21, 2008
Nothing like a little economic uncertainty to encourage people to stay home for the holidays, so the oil companies appear to be keeping prices lower in an attempt to encourage people to travel a little more.
Today I bought ordinary unleaded for 92.9 cents per litre - the lowest I've seen for a very long time.
I know it won't last, but it's nice to have a few extra dollars in my pocket to spend on EV parts. There's no way the lower fuel prices have slowed this project down.
I'm planning to go into Jaycar tomorrow and pick up the plugs I need to connect my Ammeter and Voltmeter to the battery pack, so that will tie up another loose end. Browsing their catalogue, I've also learned that I can pick up Ni-MH batteries and make a 120v 90Ah pack for about $2,190 - not bad for a starter pack!
Once the instrumentation in complete I'll make another video and post it up.
Thursday, December 18, 2008
I planned to film myself talking about the process, but it was just so hot, I look physically ill on film, so I put together a quick slideshow instead.
Call it a homage to the Forkenswift boys!
Also, Phil Karn has some FABULOUS research on "the long tailpipe" issue. Many people seem to think that EV's are just as bad as petrol cars because of the emissions generated by electricity production. Well, Phil conclusively proves that even burning coal, phasing in the EVs will significantly reduce the emissions. With the rise in renewable energy in places like California and Texas, it's easy to see how EVs are a win for everyone (except OPEC).
Anyway...here's the research. Thank You Phil!
EV Emission Analysis
I discovered a wealth of energy and pollution info on various California state agency web sites, particularly CARB and CEC. So I computed my own figures for per-mile power plant emissions for EVs.
From http://www.energy.ca.gov/fuels/gasoline/gasolinesales.html I see that the total taxable motor fuels (gasoline & diesel) sold in CA in 1996 was 15,791,759,000 gallons.
And from http://www.energy.ca.gov/reports/stats/table49.html I see that the CA average fuel economy in 1993 (latest year available) was 17.7 miles/gallon.
17.7 mpg * 15,791,759,000 gallons = 279.5e9 miles driven per year. That's 765.8 million miles/day, a figure I wasn't able to find directly. From http://www.arb.ca.gov/ceidars/emssumcat.query?F_DIV=0&F_YR=1995&F_AREA=CA" we see that the total pollutants from all that gasoline burned and on-road miles driven are (1995 figures)
Pollutant: Tons/day - grams/mile
Total organic gases: 1,800 - 2.1323
Reactive organic gases: 1,600 - 1.895
Carbon monoxide: 15,000 - 17.77
Nitrogen oxides: 2,100 - 2.488
Sulfur oxides: 56 - 0.06634
Particulates: 80 - 0.09477
Particulates < 10 micron: 67 - 0.07937
("1 ton" = 2000 pounds, not 1000 kg)
Electric Generation Emissions
Now let's look at the situation for electricity. From http://www.energy.ca.gov/electricity/electricitygen.html I get an in-state annual electricity generation from all sources of 202,022 GW-hr, which works out to 553.44 GW-hr/day or an average of 23.06GW, which seems about right. From the emissions inventory page mentioned earlier, we can see that in 1995 in-state electric generation produced
Pollutant: Tons/day - grams/kW-hr
Total organic gases: 28 - 0.0459
Reactive organic gases: 6 - 0.009835
Carbon monoxide: 36 - 0.059
Nitrogen oxides: 69 - 0.1131
Sulfur oxides: 8 - 0.0131
Total particulates: 6 - 0.00983
Particulates < 10 microns: 5 - 0.00819
So if we use that electricity to charge EVs getting 4 miles/kW-hr, the electric generation emissions attributable to each EV mile driven would be
Pollutant: grams/mile - % of internal combustion
Total organic gases: 0.011475 - 0.5%
Reactive organic gases: 0.002459 - 0.13%
Carbon monoxide: 0.01475 - 0.083%
Nitrogen oxides: 0.028275 - 1.136%
Sulfur oxides: 0.003275 - 4.9%
Total particulates: 0.0024575 - 2.59%
Particulates < 10 microns: 0.0020475 - 2.578%
Obviously it depends on the specific pollutant, but this all is pretty consistent with the 97% reduction figure I've heard for some time (power plant emissions per EV mile being 97% less than the per-mile emissions for an average gasoline or diesel vehicle). And those emissions are at the power plants, not in downtown LA or SD or wherever the cars are.
• I wasn't able to find all my statistics from the same year.
• The electric generation figures are probably gross totals, so they don't include transmission losses (I think I've seen 20%).
• I assume the current electric generation mix would apply to large numbers of EVs. This may or may not be true, depending on how much capacity is available from which kinds of plants when the EVs are charged. If all of the miles driven in California could be electrically powered at 4 miles/kW-hr, that would work out to an average electrical load of about 8GW, which is about 35% of the average in-state electric generation of 23.06GW. About three and a half San Onofres (@2.2 GW each) would do it (just had to say it :-))
• Most of the petroleum fuels go to cars and trucks, but the total taxed fuel sales figures might include other users (aviation, trains); depending on how polluting these users are, and how much they use, it could affect the figures either way.
• My EV "mileage" of 4 miles/kW-hr, referenced to the AC socket, is for the EV1, and may be optimistic for larger EVs -- though given the number of cars you see on the freeway with exactly one occupant, it's clear that a lot of people could commute in the EV1.
Despite these caveats, it's pretty clear that EVs have the advantage when it comes to air pollution.
Phil Karn, January 1999
Tuesday, November 18, 2008
The original heater - fresh out of the box, with that acrid plastic smell still clinging like London mist...
The heater core from a wrecked Pulsar. It's just begging to be sliced open and stuffed like a Thanksgiving Turkey.
The unit was screwed together with little star-headed screws. No screwdriver or allen key in the toolbox could get it open, so I did what any 32-year old boy would do...BATTERY DRILL!!! FUNFUNFUN!! Here's the result of me playing Dr House MD on a sick ceramic heater.
I've taken out the core element and lined it up on the heater unit - plenty of room there and I'll even be able to hook the wires out through one of the water holes to keep it all nice and tidy.
I like this pic. Something about the confluence of the light, shape and texture make it appealing to my eye.
Now all I have to do is cut open the old heater core and fix in the ceramic element. Gav from KiwiEV used a gasket seal to stick it in place so that's what I'll do also.
Saturday, November 15, 2008
IEA Oil Report: "Time is Running Out"
After some six months of leaks and previews, the long-awaited World Energy Outlook report from the International Energy Agency (IEA) is finally out. And in many ways, it is the bombshell we expected.
The agency struck a new tone of urgency in the report, as it sharply reduced its outlook for the growth of world oil production.
The opening paragraph was blunt and on the mark:
The world's energy system is at a crossroads. Current global trends in energy supply and consumption are patently unsustainable - environmentally, economically, socially. But that can - and must - be altered; there's still time to change the road we're on. It is not an exaggeration to claim that the future of human prosperity depends on how successfully we tackle the two central energy challenges facing us today: securing the supply of reliable and affordable energy; and effecting a rapid transformation to a low-carbon, efficient and environmentally benign system of energy supply. What is needed is nothing short of an energy revolution.
For the first time, the IEA included in its analysis a study of the depletion rates of the world's top 800 oil fields. Why they didn't include that crucial information in the past we don't know, but as readers of these pages are well aware, it's the hole in the bucket that is the very heart of the peak oil study.
The rates they found were high enough to surprise even me: 6.7% for past-peak fields, increasing to 8.6% by 2030 (the end date of the report's "reference scenario"). Averaged across all fields, the rate is 5.1%, but that includes 3.4% for the very largest fields, 6.5% for the next-largest and 10.4% for the next size down.
This is important, because the fields being discovered today are all in the smaller categories. As the world's largest and most productive fields, which are also its oldest, go past their peaks and into decline, the smaller newer fields with the higher depletion rates play a more dominant role.
But these are only the "observed decline rates." The authors distinguish that from a "natural decline rate," which "strips out the effects of ongoing and periodic investment" (whatever that means; as far as I am aware, all oil fields require some sort of ongoing investment). The authors note that the natural decline rates "are about a third higher on average than observed decline rates," with a current global average of about 9%, increasing to 10.5% by 2030.
Against such high decline rates-up from a generally accepted 4.5% estimate only a year ago-the agency calculates that the world will need to add a whopping 64 million barrels per day (mbpd) of new capacity between 2007 and 2030 in order to meet an anticipated demand growing at 1.6% per year.
That's like adding six new Saudi Arabias (up from five less than two years ago, when I wrote Profit from the Peak).
That's like adding a new Kuwait every single year.
The report goes on to say if the world does not add 30 mbpd of new capacity by 2015—equivalent to three new Saudi Arabias—it "will cause an oil-supply crunch" by 2030. More incredibly, that 30 mbpd must include 7 mbpd of new capacity above and beyond all currently planned projects! That's over 1 mbpd of new, unplanned, unfunded capacity, plus a presumed 5 mbpd of planned new capacity (which seems highly doubtful) every year for the next 6 years.
Where Do You Find Six New Saudi Arabias?
One might reasonably ask then, just where exactly do they think all that new oil is going to come from, since global oil discovery has been in continuous decline for over 40 years?
The IEA sidesteps this question, blithely noting that "The volume of oil discovered each year on average has been higher since 2000 than in the 1990s, thanks to increased exploration activity and improvements in technology, though production continues to outstrip discoveries (despite some big recent finds, such as in deepwater offshore Brazil)."
A chart of the history of world oil discovery quickly nullifies that thin argument:
Here is the IEA's scenario, in graph form, on where those six new Saudi Arabias will come from:
You can see the clear peak of "currently producing fields" right around now, after which we'll have a massive increase in "fields yet to be developed" followed by another big chunk of "fields yet to be found." A steady increase in "non-conventional oil" and natural gas liquids round out the supply picture. (We'll get to the problems with this scenario in a moment.)
Finally, they project that the rate of oil production will increase fairly steadily to 104 mbpd (excluding refinery gains) by 2030, at which point a peak in global production is implied, but not directly stated:
Although global oil production in total is not expected to peak before 2030, production of conventional oil - crude oil, natural gas liquids (NGLs) and enhanced oil recovery (EOR) - is projected to level off towards the end of the projection period. Conventional crude oil production alone increases only modestly over 2007-2030 - by 5 mb/d - as almost all the additional capacity from new oilfields is offset by declines in output at existing fields. The bulk of the net increase in total oil production comes from NGLs (driven by the relatively rapid expansion in gas supply) and from non-conventional resources and technologies, including Canadian oil sands.
Out of morbid curiosity, I dug up a few older World Energy Outlook reports from the IEA for comparison. Their 2006 report had oil production increasing to 116 mbpd by 2030, needing only $4.3 trillion in investment to achieve. And their 2004 report didn't see any peak before 2030, and needed only $3 trillion to achieve 121 mbpd by 2030.
See a pattern here? They're slowly backing into the truth.
Here's my prediction: their 2010 report will state that the new peak is only 95 mbpd, at a cost of over $30 trillion. And by 2012, they'll admit that the peak was in fact in June of this year, at 87 mbpd. By 2030, fully 20 years past the peak, world oil production will likely be under 70 mbpd.
Several new admissions caught my eye.
For one, they finally seem to have put their hopes for a resurgence in non-OPEC production to rest, saying it is "at plateau and is projected to start to decline by around the middle of the next decade." This was a bit of a vindication for me, as I had struggled with the lower-quality data I could get nearly three years ago when researching Profit from the Peak, and concluded that all future production would have to come from OPEC, despite what the official projections said.
Another pleasant surprise was this statement: "The super-majors have been struggling to replace their proven reserves and expand production, while the share of their cash earnings that is returned to shareholders has been growing." Back when I was writing Profit from the Peak I suspected as much, but wasn't able to round up the data to completely prove it, and besides, my Wall Street buddies thought I was being too "conspiratorial" about that point. Boo-yah, boys!
I also have to applaud their sharp criticism of the way that the corrupt governments of the African oil-producing nations do not share their oil revenue wealth with their desperately impoverished peoples. This is an issue I wrote about in the book that is hardly ever mentioned in the energy press, but which remains a serious threat to future oil production. So long as the criminal inequity of the status quo maintains, Africa will never be stable enough that we can count upon her to help produce the world's precious few remaining barrels.
The $26 Trillion Question
In order to accomplish all this, the IEA projects that the world will need to spend $26 trillion by 2030, or over $1 trillion per year. Of that, over $13 "goes simply to maintain the current level of supply capacity" because so much of the world's energy infrastructure will need to be replaced by then. As Matthew Simmons has often noted, most of the existing worldwide oil industry infrastructure is literally rusting away.
Ultimately, this report chooses to lay the question of future oil production at the feet of investors. If that $1-trillion-plus a year materializes, the IEA believes the energy can be had. If not, it won't be the fault of geology or technology that oil production doesn't meet our projected demand. And their projected increases will have to come from essentially unproven sources.
So much for their scenario. Our question is: Can it be done? Or perhaps more accurately, will it be done?
The only way I can see the IEA scenario coming to pass is under the opposite of Murphy's Law, which Wikipedia tells me is "Yhprum's Law." That is, everything that can possibly go right, will. In particular:
Most of the new oil and gas production would have to come from OPEC, since non-OPEC is "at plateau." [That phrasing is so pretentious that from now on, I shall refer to the oil peak as a plateau with an aristocratic French accent.] Yet only Saudi Arabia has any real hope of significantly increasing its supply. It has recently produced around 10 mbpd, it has a stated capacity of about 12 mbpd, and some anticipate (while others doubt) that it will eventually reach 15 mbpd. But that's really about it for any OPEC production growth. The Saudi king has also stated more than once that he's more interested in long-term stewardship of the resource than in short-term maximization of profits. So let's be generous and give all of OPEC a net production increase of 5 mbpd over current levels.
IEA anticipates a massive new wave of production from the Canadian tar sands. Yet Suncor and other major tar sands producers have recently announced that they are scaling back their production plans due to the low price of oil, the uncertain global growth outlook, and problems in arranging credit for the massive capital needed to expand these projects amid a global credit market lockup. From a current level of about 1.5 mbpd production from the tar sands, I believe the research that points to a possible 3.5 mbpd a plateau by 2030. But the absolute peak of 5 mbpd looks increasingly doubtful, due to the availability and cost limitations on water and natural gas. So I'd allow no more than another 2 mbpd for the tar sands by 2030.
Third, the reliance on enhanced oil recovery (EOR) will prove, I think, to be a false hope. The decades-long history of EOR suggests that perhaps it doesn't increase total recovery at all, it just produces some of the remaining oil faster; or in the best case, it thickens and lengthens the tail of production somewhat. The implication in the report that the global recovery rate might be raised from the current roughly 30% to some 40% seems highly unlikely to me based on the historical evidence.
- The report still claims that reserves are growing in a significant way (which is wishful thinking) and that current proven reserves of oil and NGLs of around 1.2-1.3 trillion barrels "is enough to supply the world with oil for over 40 years at current rates of consumption."
This is truly one of the low points of the report, since the authors surely know that oil production doesn't go a plateau for decades, then suddenly hit a wall and go to zero. After the peak, it declines, gradually, on the back of a bell curve. By avoiding any clear statement on the global peak, and pinning such enormous hopes on such slim straws as EOR and undiscovered fields, the report avoids having to deal with such unpleasant details.
The fact is that 20 years from now, we'll likely be down to three-quarters of today's energy budge, and 40 years from now, we'll be down to less than half. That's the fact that any honest assessment of our situation would emphasize, not some misleading statistic about 40 years' worth of oil. It's more like 100 years' worth, at production rates that decline relentlessly, starting right about now.
The report claims that ultimately recoverable conventional oil resources will prove to be 3.5 trillion barrels. Again, this seems extremely unlikely, as it is based on a significant amount of oil yet to be found, and highly questionable reserves growth. I believe 2.3 trillion barrels is closer to the right number here, with 1.1 already produced and 1.2 still to go.
Similarly, the report anticipates a production of 1-2 trillion barrels from tar sands and extra-heavy oil (the stuff that Venezuela has in abundance), plus oil shales (which I believe will never prove to be economical), for a total of some 6.5 trillion barrels. Then they add in another 2.5 trillion barrels for coal-to-liquids and gas-to-liquids, for a total of 9 trillion barrels in unconventional what-have-yous. This conjecture would require another entire article to debunk, so I won't get into it now (it's all in my book anyway), but suffice to say that I would be very surprised to see this lot, put together, add more than half a trillion barrels to the recoverable total.
The money, the money, the money. Can anybody really conjure up a scenario, given the current state of the financial markets and the prospect of a global recession for the next year or more, that the world is somehow going to commit to spending more than $1 trillion per year for the next 22 years straight? When oil is hitting new lows daily, and a global deleveraging is sucking money out of every energy investment under the sun? If they can, I want some of what they're smoking.
IEA chief economist Fatih Birol expressed his own concerns: "We see and hear about energy investments being delayed ... This is a major worry and could lead to a supply crunch and much higher oil prices than we've seen before."
The press slide deck reinforced this point, asking if the financial crisis and economic slowdown will affect investment in energy to the point where it sets us up for a supply crunch once the economy gets back on its feet. (This is an important question I plan to take up in a future article.)
The $35 Trillion Challenge
As for the price outlook on oil, I think the agency's assessment was good:
Prices are likely to remain highly volatile, especially in the next year or two. A worsening of the current financial crisis would most likely depress economic activity and, therefore, oil demand, exerting downward pressure on prices. Beyond 2015, we assume that rising marginal costs of supply exert upward pressure on prices through to the end of the projection period.
The report also placed a heavy emphasis on controlling carbon emissions, and was unequivocal about the importance of merging the energy and climate change challenges into a unified effort—something I have advocated for years. I have no doubt that carbon emissions will soon come with a global price, and that those who are well positioned to profit from it, be they carbon credit marketers or wind power generators, will see a booming future. In addition to the $26 trillion investment in energy infrastructure, the report suggests another $9.2 trillion will need to be invested in carbon control in order to meet a goal of 450 parts per million of CO2 equivalent in the atmosphere.
So that's our global challenge: to invest another $35 trillion in energy and carbon emissions over the next 20 years. That means an unprecedented market opportunity for clean energy technologies like wind, solar, geothermal, biomass and marine energy. It means that we literally must throw money hand-over-fist at renewable energy and an electrically powered infrastructure.
In sum, I don't find their scenario terribly credible. Adding another 64 mbpd of oil production capacity from the existing, very well explored, and very well exploited resource base-a 74% increase over current levels-seems quite impossible even under the best of circumstances, let alone attempting it even as the largest fields are going into decline.
Which means that the real outlook for oil production and its cost is likely much worse than even this dire-sounding warning from the IEA suggests. And the outlook for renewable energy is even greater.
While the report certainly has its flaws, on the whole I think it's a big move in the right direction for the IEA. It's heartening to see them stepping up and addressing the twin devils of climate change and peak oil more directly, and I hope that the world is paying attention to its unflinching warning.
We'll let them have the last word:
For all the uncertainties highlighted in this report, we can be certain that the energy world will look a lot different in 2030 than it does today. The world energy system will be transformed, but not necessarily in the way we would like to see...[W]hile market imbalances could temporarily cause prices to fall back, it is becoming increasingly apparent that the era of cheap oil is over...It is within the power of all governments, of producing and consuming countries alike, acting alone or together, to steer the world towards a cleaner, cleverer and more competitive energy system. Time is running out and the time to act is now.
Until next time,
Monday, November 10, 2008
The billion dollar electric car plan
Australians could be driving electric cars by 2012 if Californian company Better Place has its way and introduces its innovative electric car network in Australia. Better Place has announced agreements with financial adviser Macquarie Capital Group to raise $1 billion to develop the initial infrastructure, and with AGL Energy to supply the renewable energy.
Sunday, November 9, 2008
Wednesday, November 5, 2008
As of today, electrical vehicles can be charged at the Wilhelminakade in Rotterdam. Electricity is an environment friendly form of fuel and is substantially cheaper than gasoline. The NRGSPOT, the charge spot where people can charge the battery of their electrical scooter, car or bicycle, is an initiative of Eneco in cooperation with RCI (Rotterdam Climate Initiative) and TNT.
Starting today, Rotterdam will become a bit cleaner. That is because electricity fuelled transportation is both environment friendly and cheap. Eneco has, with financial support from TNT and RCI, introduced the first NRGSPOT. An NRGSPOT is a public charge spot where electrical vehicles can be charged 24 hours a day. Eneco ensures that the charge point will exclusively supply Ecostroom, Eneco's brand of green electricity. Electrical cars, scooters and bicycles are connected to the charger, while the owner can in the mean time go to work, go shopping or out for diner. People are therefore not solely dependent on their own charge spot at home.
Low costs and environment friendly
Not only scooters and bicycles can be fuelled by electricity, but also various other vehicles such as mobility scooters, segways and passenger cars. This NRGSPOT is the first charge spot of the demonstration project in Rotterdam.
Friday, October 31, 2008
The passenger door still needs some body filler, so it will have to wait until next weekend.
But for an accountant who has zero experience with cars, it's not a bad effort. I'm pretty impressed with my handiwork, and saved quite a bit of money, too.
Monday, October 27, 2008
Wednesday, October 22, 2008
Electric car venture in Australia seeks $700 mln
LONDON, Oct 23 (Reuters) - California-based electric car operator Better Place joined with Macquarie Capital Group on Thursday aiming to raise $1 billion Australian dollars ($676.1 million) to install electric charge points across Australia.
Australian utility AGL Energy
Automakers are in a technology and production race to develop oil alternatives, whether biofuels or electric cars, to address problems of energy security and climate change.
"We're interested in Australia to demonstrate scale," said Shai Agassi, Better Place chief executive and founder.
The Better Place concept is to install electric car charge spots at designated parking lots in residential areas and workplaces. In addition, to allow longer drives, the company would roll out electric filling stations.
The $200 million venture-backed company is still in a very early stage, testing charge spots in Israel with plans to follow in Denmark, and is working with Renault
The company's aim is for pure electric cars to leapfrog mass production gasoline-electric hybrids such as the Toyota Prius.
Hybrids achieve range by combining an electric motor with a gasoline engine, while pure electric cars need an electric charging infrastructure. Electric batteries can manage a range of only about 250 kilometres on their own at present.
One problem for Better Place may be to gain traction in an autos industry reporting plummeting sales as consumer spending slides in response to tight credit and looming recession.
In addition, infrastructure projects will require debt finance, at a time credit markets are locked or expensive.
"Debt is a four-letter word now in most parts of the world," said Agassi. "Most of it (the present fund-raising) would be equity. We'll raise a significant chunk of equity now. We'll plan the debt component as the market evolves."
Thursday's proposal would entail developing charge spots in four urban areas, in Victoria, New South Wales, Brisbane and Canberra, and then link those with electric filling stations.
The infrastructure necessary to get the first 1 million electric cars on the road would cost 1-2 billion Australian dollars, Agassi estimated. (Reporting by Gerard Wynn; Editing by David Gregorio)
Thursday, October 16, 2008
The news just keeps getting better and better...
October 16, 2008 04:00am
Article from: AAP
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AUSTRALIAN researchers have found a way to produce cheaper and more powerful batteries to run hybrid-electric cars.
CSIRO researchers based in Melbourne have developed a new type of lead-acid battery to replace the nickel-metal hydride (NiMH) batteries environmentally-friendly hybrid cars such as the Toyota Prius use.
Lead-acid batteries are cheap and can store large amounts of energy.
But if they are repeatedly and rapidly charged and discharged - as happens when used in a hybrid car - the battery plate becomes coated with chemical deposits.
The problem means the batteries wear out faster than NiMH batteries.
But the UltraBattery, developed by Dr Lan Trieu Lam and his CSIRO team, combines a lead-acid battery with a supercapacitor.
The combination stores as much energy as a standard lead-acid battery, but without the messy deposits on the plate.
"By acting as a buffer during charging and discharging, the capacitor boosts the battery's life to match that of NiMH batteries," Dr Lam said.
During lab tests the UltraBattery lasted four times as long as the best lead-acid batteries, while producing 50 per cent more power.
A test vehicle running until the UltraBattery fails has so far covered 185,000km, while being recharged as needed.
The cost of the battery is also expected to be a third to a quarter of NiMH batteries and a sixth of the lithium-ion batteries used in some high-performance electric cars.
Independent testing is yet to be carried out.
Japanese firm Furukawa Battery Company has started modifying a plant to to make the UltraBattery by the middle of next year.
In the US, battery manufacturer East Penn in Pennsylvania will manufacture the device.
Wednesday, October 15, 2008
Tuesday, October 14, 2008
Monday, September 22, 2008
The vacuum pump itself is quite noisy and even though it doesn't chew a lot of power, there's no need for it to be running all the time. What you do is make a reservoir so the brakes can access the vacuum when you need it, and then the pump only has to run to top it up.
I asked Gav at KiwiEV about his reservoir (which you can see here) and he said it was about 2 litres, and if he was doing it again he would make it 5 litres, just so he can show off the stopping and acceleration power of his EV. So I decided to stand on the shoulders of giants and make mine 5 litres.
Hmmm - problem...How do you calculate the volume of a cylinder? Was I digging out my old maths textbooks? No way - I just did a google search for "volume of a cylinder" to get the formula, then divided by 5,000 to get my dimensions:
Volume = (Radius x Pi) squared x length. So (2.5cm x 3.142)^2 x 80cm = 4.9 Litres
So, for about $20 at my local Bunnings Hardware I got 1 metre of 50mm PVC tube, two end caps, 4 washers, 2 brass hose nipples and 2 brass locks for the inside. 3m of vacuum hose cost me $12 at the local auto parts store. I cut the tube down to 80cm, as this will give me about 5 litres of vacuum.
Then when I got home I learned that the thread on the brass nipples is about 1/2 inch - a lot larger than the largest drill bit in my kit. Back to Bunnings for a drill bit and I also picked up some silicone sealant and a gun. I drilled a hole in the end caps, fitted the washers and nipples to the locks and sealed all around them, then left it to cure overnight. Pushing the vacuum hose onto the nipple was a bit of work, but then tightening up the hose clamps was the easiest part of the job.
So: here's my finished setup. I've checked that it will fit in the car in front of the radiator, using cable ties to secure it to the body.
Now all I've got to do is afford the vacuum pump from ZEVA. Please donate! If you own a business, ask me about sponsorship/advertising.
Sunday, September 14, 2008
By Sara Kennedy
9/8/2008 6:27:42 PM
Molokai News : Environment
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Driver concerned about gas prices and the environment
Have you seen a car that looks like no other driving around Molokai?
You might mistake it for a fancy golf cart or even a space-age vehicle from The Jetsons.
In fact, it is not an ordinary car, it’s an electric car and it’s the only one on Molokai.
Owned by Kala‘e resident John Wordin, the Dynasty Sedan, shipped from British Columbia, “generates a
lot of interest.”
To feed the curious minds, he actually does plug the car into a regular wall outlet. Every
night, he plugs the car in, and when he wakes up, it’s charged. According to Wordin,
the car takes four hours to fully charge, equaling one kilowatt-hour, and will run for
approximately 30 miles at 25 mph. The vehicle uses a lot of energy uphill, but with a full
charge, he makes it around town just fine.
Wordin paid $14,500 for the car, and combined with shipping costs, the total price was
At his Kala‘e home, 40 solar panels charge his vehicle and run the house. His water heater
and outdoor power equipment are solar as well.
The car, if charged twice a day, costs Wordin an extra dollar on his electric bill and gives him
approximately 30 miles. In comparison with gas prices, Wordin can travel 150 miles on five
dollars, the cost for approximately one gallon of gas.
Besides helping his wallet, the car helps the environment. The average new vehicle has a
smog/pollution index of 0.53 percent, while the electric car emits no pollution into the air.
According to the U.S. Environmental Protection Agency, for every gallon of gas burned,
20 pounds of pollution and carbon dioxide is released into the atmosphere.
Wordin’s concern about the environment has been growing since 1998. He read books and
articles on the subject of America’s fuel dependency and has been preparing himself for the
“My interest in this has evolved over a period of time,” he said.
Wordin is trying to provide an example for the community. He has seen gas prices continue
to rise, the economy fall and the environment suffer.
“People are still buying SUVs; something is definitely wrong,” he said. “They just don’t get it,
oil is running out. The world is changing and I see examples everyday.”
Wordin’s dream is to see the whole island driving electric cars.
“Sure, it’s possible,“ he said. “People just have to realize there are profound changes in the
economy, as well as the environment.”
Peter Rosegg of Hawaiian Electric Company (HECO) said the time is not too distant when
electric cars will cost less and be more readily available on the market. HECO is looking at the
situation, “closely and optimistically.” Sometime in the near future the company will be changing
its meters to an advanced system that will let customers charge electric cars overnight for a cheaper
Studies done by the Natural Resources and Defense Council and the Electric Power Research Institute
have shown that, electric cars are cheaper than driving cars running on fuel.
eVehicles in Honolulu specializes in electric vehicles and can be reached at 589-2347
Thursday, September 4, 2008
Pot calls the kettle "black"...
And Mr Cheyney, why can't the Lithium-Ion battery industry have a billion dollars to help get electric cars on the road faster? Then we won't need the oil pipeline in Georgia that's causing most of these problems...The Saudis and Iranians will go broke, the USA can retreat to the isolationist stance you had during the first half of WW2 and the environment will thank you as well.
Oh wait...Halliburton doesn't make batteries, it repairs war zones...how silly of me...
Cheney criticises Russia on Georgia visit
US Vice President Dick Cheney accused Russia Thursday of an "illegitimate" invasion to redraw the map of Georgia and cast doubt on whether Russia could be trusted as an international partner.
Standing shoulder-to-shoulder with Georgian President Mikheil Saakashvili, Cheney pledged US help beyond a one billion dollar (690 million euro) aid package announced Wednesday.
Meanwhile Moscow, which says its military intervention was justified because Georgia had attacked Russian citizens in breakaway South Ossetia, received the backing of foreign ministers from six ex-Soviet countries.
They stopped short of following Russia into recognizing the independence of South Ossetia and Abkhazia, a second separatist region also at the centre of last month's brief war.
"Russia's actions have cast grave doubt on Russia's intentions and on its reliability as an international partner, not just in Georgia but across this region and indeed across the international system," Cheney said.
"After your nation won its freedom in the Rose Revolution, America came to the aid of this courageous young democracy," he said, referring to the 2003 uprising that brought Saakashvili to power.
"We are doing so again as you work to overcome an invasion of your sovereign territory and an illegitimate, unilateral attempt to change your country's borders by force that has been universally condemned by the free world."
Later Thursday the OSCE said it had sent military observers in a buffer zone between Russian and Georgian troops for the first time since the conflict.
The European security body said its officers were patrolling the road between the villages of Karaleti and Megrevekisi, four kilometres (2.5 miles) from the bombed-out South Ossetian capital of Tskhinvali.
Georgia Russia has said it will only pull troops out of the buffer zone once international controls including military observers and police are in place in the area and once Georgia signs a non-aggression pact.
Cheney, who became the highest-ranking American official to visit Tbilisi since last month's conflict, watched boxes of aid being unloaded to highlight the one-billion-dollar US package.
Saakashvili, for his part, said the "number one priority" was the rebuilding of Georgia, parts of which were left devastated by Russia's fighter planes and advancing troops.
Russia sent its forces into Georgia on August 8, one day after Georgia had tried to take back control of the rebel region of South Ossetia from Moscow-backed separatists.
US-Russia relations have nosedived since the US led angry Western criticism of Moscow's military action, its recognition of South Ossetia and Abkhazia, and the continued presence of its troops in Georgia.
On Thursday, the parliaments of Russia and Abkhazia signed a cooperation agreement aimed at harmonising the laws of the two countries, RIA Novosti news agency reported.
"The parties will begin harmonising the legislation of the Russian Federation with the legislation of the Republic of Abkhazia," the report quoted the text as saying.
Cheney is pointedly not visiting Russia on a tour that has already taken him to Azerbaijan, where he stressed that the security of the energy-rich region was a top concern for Washington.
His trip has also been aimed at expanding the transit of oil and gas exports to the West through pipelines across Georgia and Azerbaijan, avoiding Russia which Washington views with increasing distrust.
Cheney also strongly backed Georgia's bid to join NATO, a move that has been vehemently opposed by Russia, saying Washington was "fully committed" to its eventual membership.
"As the current members of NATO declared at a summit in Bucharest, Georgia will be in our alliance," he said, referring to an April meeting of the Western military bloc.
NATO's chief, Jaap de Hoop Scheffer, plans to visit Georgia later this month for further aid talks.
After his talks with Saakashvili, Cheney headed to Ukraine where President Viktor Yushchenko has plunged the country into fresh political turmoil by pulling his Our Ukraine party out of the ruling pro-Western coalition.
Nicaraguan President Daniel Ortega became the first foreign leader to follow Russia's lead and recognize the independence of Abkhazia and South Ossetia, newspaper reports there said Wednesday.
© 2008 AFP
Grid Will Handle Rechargeable Cars
SAN JOSE, CA (AP) - Which draws more juice from the electric grid, a big-screen plasma television or recharging a plug-in hybrid car?
The answer - a plasma television - is what is easing the minds of utility company executives across the United States as they plan for what is likely to be a conversion of much of the country’s vehicle fleet from gasoline to electricity in the coming years.
Plasma TVs, industry officials say, consume about four times the electricity as recharging a plug-in hybrid. Yet utilities have managed to cope with the increased loads as thousands of new televisions came on line.
So as long as the changeover from internal combustion engines to electric vehicles is somewhat gradual, they should be able to handle it in the same way, Mark Duvall, program manager for electric transportation, power delivery and distribution for the Electric Power Research Institute, said.
“ We’ve already added to the grid the equivalent of several years’ production of plug-in hybrids,” Duvall said at a conference on electric vehicles in San Jose. “The utilities, they stuck with it. They said, ‘All right, that’s what’s happening. This is where the loads are going, and we’re going to do this.’”
Automakers, such as General Motors Corp. and Toyota Motor Corp., are planning to bring rechargeable vehicles to the market as early as 2010. But speakers at the Plug-in 2008 conference say it will take much longer for them to arrive in mass numbers, due in part to a current lack of large-battery manufacturing capacity. Auto and battery companies still are working on the lithium-ion battery technology needed for the cars, and on how to link the battery packs to the vehicles.
“ We see the vehicle penetration levels coming at a rate that’s manageable,” said Efrain Ornelas, environmental technical supervisor with Pacific Gas and Electric Co. in San Francisco. “It’s not like tomorrow the flood gates are going to open and 100,000 vehicles are going to come into San Francisco or something like that.”
Instead, the vehicles will show up by the thousands throughout Northern California, he predicted. PG&E will be able to track their charging patterns and plan accordingly for the future, he said.
Utility officials say they already are coping with increased demand, especially during peak-use periods in the afternoon and early evening. But the rest of the day, most utilities have excess generating capacity that could be used to recharge cars.
But the preparation doesn’t mean electric vehicles will be accommodated without problems and good planning, the officials said.
Since most electric cars will likely be charged during off-peak electric use times, utilities should have no problem generating enough electricity. But since people with the means to buy electric cars likely will live in the same areas, utilities worry about stress on their distribution systems, Ornelas said.
That means consumers will face a lot of choices about when and where they charge up their cars and how much they want to pay for the electricity.
The choice for consumers will come because utilities likely will raise rates to charge cars during peak use times, generally from around noon to 8 p.m., and lower them for charging during low-use hours, industry officials say.
In California, utilities already are installing meters that track use by time of day. PG&E charges 30 cents per kilowatt hour to charge an electric vehicle during peak hours, he said, but charges only 5 cents from midnight to 7 a.m.
Duvall said utilities still have to be wary that high gasoline prices could push sales of rechargeable electric vehicles well into the millions by 2020, because that could stress the system. Other possible problems include electric vehicles getting larger and requiring far more electricity for recharging, and demands from people that their vehicles be recharged quickly, drawing more electricity during peak times.
Also, companies such as the Campbell-based Coulomb Technologies, are starting to develop recharging stations for sale to parking lot operators, office buildings and cities, which will draw more electricity.
There’s also talk of the cars storing electricity and sending it back to the power companies during peak times, but officials say that’s a long way off.
Industry officials say they can manage the fleet changeover as the cars and the utilities each have computers in place to manage when the cars are recharged.
“ From our perspective, I think it’s something that’s really manageable,” said Ornelas.