Ford's 88 MPG Hybrid SUV. Get Ready For the Oil Bear.
I've posted a handful of commentaries on the tremendous transformation going on in the labs and garages of inventors. It seems many are missing the incredible transformation taking place right before our eyes. The solutions of tomorrow are being formulated as I write this. We can expect government to play a role in this transformation as well. Some of it will be beneficial and some of it won't. Corn ethanol production probably isn't a sustainable or worthwhile effort facilitated by government but then government funding in other areas is making a substantially positive impact.
Along those lines, I would like to comment on a recent proposal by Presidential candidate McCain. McCain has offered to have the government pay $300 million to create a new car battery with certain specifications. I am quite confident that there is enough incentive that anyone working on energy storage research would realize exponentially more than $300 million of profit in the market were they to develop a leapfrog technology. McCain's idea is novel but does it provide economic incentive?
A fundamental problem with the idea is how it is framed. Having a technology neophyte, or for that matter even the most brilliant scientist, anticipate what specific technology would provide the best solution to the market is misguided. What if a better battery isn't the best answer? What if it isn't even the right question? As an example, what if the more appropriate question is how we transform business into a more self-directed virtual organization so that many people don't need to drive to work? I consider McCain's proposal to be an extension of existing knowledge as opposed to inspiring inventors to dream new solutions. The most important reality is one cannot and should not frame what has not been invented beyond incenting new invention. I'm going to get up a post at some point about the many very misguided calls for a "Manhattan Project" on energy. And, it has nothing to do with dogma or ideology involving government participation in markets.
As it pertains to this topic, the current Presidential administration must have the worst public relations apparatus in history because they seem indefensible re being aligned with oil companies and not doing enough to further alternative energy. Correct me if I'm wrong, but I do believe President Bush has allocated more money for alternative energy research than all other Presidents combined. That would be over the last two hundred years. Yes, I realize the time value of money doesn't allow me to compare George Washington's nuclear power program with that of today but the point is Bush is the alternative energy President. The operative word being 'the'. Of course, were those words ever uttered, most would laugh. Why we don't hear about that investment is beyond me. Well, it's not beyond me but it's unfortunate.
Now let's change gears. General Motors' market research had shown that the vast majority of daily driving for Americans is less than forty miles. Makes perfect sense. So, automakers only need engineer cars with alternative energy capabilities of forty miles to make an enormous impact on petroleum consumption. We don't need vehicles that run forever on alternative energy as an initial phase of energy independence. And, there will be phases. The ENIAC doesn't bear a lot of resemblance to a Cray XT5 supercomputer.
AutoSpectator and other news sources are reporting on Ford's 88 MPG plug-in hybrid SUV. This is obviously a prototype vehicle and, therefore, we don't know what the cost would be in production trim but it is nonetheless an interesting milestone. We now have people calling the end of pickup trucks and a relatively primitive technology achieves 88mpg. (It's not really 88mpg but that's okay. The point is it doesn't use a lot of petroleum over moderate driving distances.)
The fastest way for America to achieve the greatest impact in its use of petroleum with current technology is through plug-in vehicles. Note the words fastest and existing. To take it a step further, the addition of nuclear power generating facilities in conjunction with plug-in vehicles would have an encompassing and enormous impact. A step further would be to have distributed energy capability(s) where every home had its own power generating source be it solar, wind or something yet developed. A step further would be to have solar efficiency reach a point where the car could recharge its power storage device through its own solar panels or even run directly via solar power. In the latter few of these scenarios one would never have to buy any energy for normal daily driving. At some point capabilities along some line such as this will be a reality. And, there are other substantial sources of research that hold significant promise as well. Then all of those trillions of dollars leaving the U.S. every decade for oil will be spent here creating new jobs, creating new sources of wealth and the economic vibrancy most believe has now passed America by.
It sounds like a broken record but the U.S. will very likely come out of this economic crisis with an even greater economic advantage than at any time in modern history. I don't need to be bullish on stocks or the intermediate term economic outlook to make this statement. And, I'm clearly not bullish on either. I simply need to be bullish on the long term prospects for America. And for more reasons than I could ever cite, I remain long term bullish. Conversely, I'm extremely bearish long term on oil and many emerging markets. I'm extremely bearish on oil and emerging markets today. Quite frankly, I'm just plain bearish without qualification on both.
Along those lines, I would like to comment on a recent proposal by Presidential candidate McCain. McCain has offered to have the government pay $300 million to create a new car battery with certain specifications. I am quite confident that there is enough incentive that anyone working on energy storage research would realize exponentially more than $300 million of profit in the market were they to develop a leapfrog technology. McCain's idea is novel but does it provide economic incentive?
A fundamental problem with the idea is how it is framed. Having a technology neophyte, or for that matter even the most brilliant scientist, anticipate what specific technology would provide the best solution to the market is misguided. What if a better battery isn't the best answer? What if it isn't even the right question? As an example, what if the more appropriate question is how we transform business into a more self-directed virtual organization so that many people don't need to drive to work? I consider McCain's proposal to be an extension of existing knowledge as opposed to inspiring inventors to dream new solutions. The most important reality is one cannot and should not frame what has not been invented beyond incenting new invention. I'm going to get up a post at some point about the many very misguided calls for a "Manhattan Project" on energy. And, it has nothing to do with dogma or ideology involving government participation in markets.
As it pertains to this topic, the current Presidential administration must have the worst public relations apparatus in history because they seem indefensible re being aligned with oil companies and not doing enough to further alternative energy. Correct me if I'm wrong, but I do believe President Bush has allocated more money for alternative energy research than all other Presidents combined. That would be over the last two hundred years. Yes, I realize the time value of money doesn't allow me to compare George Washington's nuclear power program with that of today but the point is Bush is the alternative energy President. The operative word being 'the'. Of course, were those words ever uttered, most would laugh. Why we don't hear about that investment is beyond me. Well, it's not beyond me but it's unfortunate.
Now let's change gears. General Motors' market research had shown that the vast majority of daily driving for Americans is less than forty miles. Makes perfect sense. So, automakers only need engineer cars with alternative energy capabilities of forty miles to make an enormous impact on petroleum consumption. We don't need vehicles that run forever on alternative energy as an initial phase of energy independence. And, there will be phases. The ENIAC doesn't bear a lot of resemblance to a Cray XT5 supercomputer.
AutoSpectator and other news sources are reporting on Ford's 88 MPG plug-in hybrid SUV. This is obviously a prototype vehicle and, therefore, we don't know what the cost would be in production trim but it is nonetheless an interesting milestone. We now have people calling the end of pickup trucks and a relatively primitive technology achieves 88mpg. (It's not really 88mpg but that's okay. The point is it doesn't use a lot of petroleum over moderate driving distances.)
The fastest way for America to achieve the greatest impact in its use of petroleum with current technology is through plug-in vehicles. Note the words fastest and existing. To take it a step further, the addition of nuclear power generating facilities in conjunction with plug-in vehicles would have an encompassing and enormous impact. A step further would be to have distributed energy capability(s) where every home had its own power generating source be it solar, wind or something yet developed. A step further would be to have solar efficiency reach a point where the car could recharge its power storage device through its own solar panels or even run directly via solar power. In the latter few of these scenarios one would never have to buy any energy for normal daily driving. At some point capabilities along some line such as this will be a reality. And, there are other substantial sources of research that hold significant promise as well. Then all of those trillions of dollars leaving the U.S. every decade for oil will be spent here creating new jobs, creating new sources of wealth and the economic vibrancy most believe has now passed America by.
It sounds like a broken record but the U.S. will very likely come out of this economic crisis with an even greater economic advantage than at any time in modern history. I don't need to be bullish on stocks or the intermediate term economic outlook to make this statement. And, I'm clearly not bullish on either. I simply need to be bullish on the long term prospects for America. And for more reasons than I could ever cite, I remain long term bullish. Conversely, I'm extremely bearish long term on oil and many emerging markets. I'm extremely bearish on oil and emerging markets today. Quite frankly, I'm just plain bearish without qualification on both.
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