Temperature Extremes and EV Battery Trade-offs

The first production-model Nissan Leaf electric vehicle is scheduled to be delivered to a customer in the San Francisco Bay Area tomorrow. I know if I were on the receiving end, I'd be as excited as a kid on Christmas morning, particularly in a place where having the first Leaf will score its owner many green points. However, if the assessment by MIT's Technology Review of Nissan's choices concerning the temperature control of the Leaf's battery pack is accurate, then it's probably just as well that the first one is going to a location with such a benevolent climate, instead of the Midwest, upstate New York, or the desert Southwest. Batteries are sensitive to external temperature, in terms of both performance and longevity, and Nissan appears to be betting that making the battery simpler to replace is a higher priority than optimizing its condition at all times, as GM has done for the battery pack in the Chevrolet Volt.

It's easy to forget that batteries are fundamentally chemical, rather than just electronic devices. The chemical reactions in a battery absorb or release heat during the charge/discharge cycle, and the capacity of the battery's environment to accommodate those heat flows can affect these reactions. For a battery pack storing and delivering as much energy as required to run a car, these interactions are significant, and early adopters of EVs are already learning that the range of EVs becomes more limited in hot or cold weather. It's not as clear that they understand the degree to which extreme temperatures can degrade battery life. The economics of an EV could look very different if a battery pack only lasted six or seven years, instead of ten.

As the article explains, GM chose a liquid cooling system for the battery pack in its Volt range-extended EV. This system cools or heats all of the battery's cells, as necessary, and sometimes draws power for this purpose even when the vehicle is parked, as I learned when I test-drove one with the Volt's Vehicle Line Director last winter. According to him, GM's design team knew it had to go to extraordinary lengths to ensure the battery would perform reliably and last the expected ten years or 150,000 miles. Nissan appears to have taken a different path to battery management, providing a cooling fan for the battery pack and an optional battery heater--an option reportedly not available on the first Leafs. You don't have to be an expert in heat transfer to guess that air won't move heat around the battery pack's cells as well as liquid can, and that as a result, at least part of the Leaf's battery could potentially be exposed to more heat and cold--and possibly suffer more performance impact from them--than the Volt's.

That trade-off might reflect a different vision for how the battery will be used. Nissan (with its alliance partner Renault) is the main carmaker working with Better Place, Shai Agassi's EV battery recharging-and-exchanging start-up. A battery pack with only electrical connections to the car will be much easier and neater to swap in and out than one with liquid hoses running to a radiator and heater. This situation wouldn't even be a consideration for the Volt, which has an onboard generator to take over when the battery's charge falls too low. But for battery-only EVs, battery-swapping is as close as they can get to replicating the convenience of refueling a gasoline or diesel car in a few minutes. If EVs catch on via a business model like Better Place's, in which consumers routinely exchange their flat batteries for fully-charged ones (and might not even own the battery pack, but instead rent it by the month or the mile) any shortcomings from Nissan's less robust battery-conditioning strategy would fall on someone other than the consumer, as a statistical cost of doing business.

From my perspective this is just one of the uncertainties concerning the operation and consumer acceptance of EVs about which we'll learn more as their numbers climb from the low thousands to the hundreds of thousands and millions. However, I find it interesting that few journalists have picked up on an issue that could have far more impact on the EV ownership experience than the tempest in a teapot that some stirred up when they found out that the Volt's wheels are occasionally driven partly by the engine-generator, rather than entirely electrically. If I were buying one of these cars, I'd be a lot more interested in how far its expensive battery pack will carry me and how long it will last, than in whether the car is truly a range-extended EV or just a plug-in hybrid.

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Fuel Economy Gold Standard

I've long been fascinated by the X-Prize approach of providing substantial (but not astronomical) incentives for key breakthroughs: private sub-orbital flight, lunar landers, and most relevantly for this blog, the Progressive Automotive X-Prize for a 100 mile-per-gallon car, which began in 2006. The latter competition has been won by a trio of extremely efficient cars with very different architectures, power sources, and appearances. Splitting a $10 million prize probably won't even come close to reimbursing these teams for the cost of developing their cars, but the associated visibility should lead to some valuable opportunities. In a larger sense, the competition has served another useful purpose, In addition to furthering the technology for continuing to improve the efficiency of mainstream automobiles, it provides a gold standard reference against which to gauge the lavish claims of fuel economy we've already begun to hear from the makers of various plug-in electric vehicles.

One of the main aspects that impressed me about the Automotive X-Prize was the determination of its founders to avoid the superficial approach of merely counting how many gallons of liquid fuel each competing car burned, in favor of a comprehensive energy consumption metric, MPGe, or miles per gallon equivalent, which is based on the gasoline-equivalent energy used, regardless of source or form. MPGe gave the X-Prize judges a fair and unbiased means of comparing cars running on gasoline, ethanol, hydrogen, electricity, or any other energy carrier, onboard or offboard.

Now, as long as our primary concern is reducing our dependence on imported oil, a simple view of gallons of gasoline consumed isn't all bad. Displacing gasoline with electricity or hydrogen produced from domestic energy sources provides important benefits for energy security and our balance of trade, even if it doesn't save much actual energy in the process. One of the main arguments for vehicle electrification is that we can generate electricity in many different ways, but we can only produce gasoline or effective liquid-fuel substitutes for it in a few ways. However, in the long run, total energy consumption matters, particularly because of its strong linkage with emissions. Running a Nissan Leaf or GM Volt on electricity generated from coal--as would be the case in large swaths of the country--certainly saves oil, but it doesn't do very much for the atmosphere or climate. That's where MPGe comes in, and that's why I was pleased that the EPA and Department of Transportation have proposed something similar in their new fuel economy stickers for cars.

So when you see an ad for a new plug-in car that claims that to get effectively 100, 200, or even 300 miles per gallon, you should take a careful look at it, both in terms of MPGe and the physical characteristics of the car in question. This is what a real 100 mpg 4-passenger car looks like: the 830 lb., one-cylinder engined Very Light Car of the Edison2 team--from Virginia, I might add. Or consider the 187 MPGe Wave II two-seater plug-in battery electric car from Li-ion Motors. Cars like this show what it takes to deliver that kind of efficiency on a comprehensive basis. If you're buying a plug-in production model in the next year or two, and it looks more like a normal passenger car than these do, with room for four or more passengers and equipped with all the usual accessories we've grown accustomed to, then you should recognize that while it might burn little or no fuel from petroleum, that's not the whole story.

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Electric Vehicle Choices Expand

One of my basic assumptions about our energy future is that most automobiles will eventually be electrified. That's based on extensive scenario work done with my former colleagues at Texaco, Inc. in the late 1990s. Nothing I've seen since then has changed my view on that. However, vehicle electrification is not necessarily synonymous with "electric vehicle" (EV) in its common usage to connote a car powered only by electricity stored in batteries. It's a much broader category, covering all three electrification options now slated to be available to consumers by year-end: hybrids, plug-in hybrids, and "pure" EVs. It also encompasses fuel cell vehicles, though these have yet to move beyond the test-market stage. The characteristics of the three current varieties of electrified vehicles differ in important ways that will affect both their impact on our energy consumption and their success as consumer products.

With hybrids already well established and plug-in and EV models intended for the mass market about to go on sale, this is no longer just a theoretical comparison. Shortly, consumers will be assessing these cars against each other, as well as against more conventional choices, including clean diesels and ordinary gasoline-powered cars, which are becoming more energy-efficient all the time, as noted for the new-model Ford Explorer SUV. Only part of that comparison will hinge on how their drivetrains are energized. In order to achieve mass-market success, they must compete on the whole array of product attributes, since for many people cars are much more than simple transportation.

Start with hybrids, which are sometimes referred to as conventional hybrids, or even "non-plug-in hybrids", to distinguish them from other types. According to the June Hybrid Cars Dashboard at hybridcars.com, 26 hybrid models represented 2.3% of the cars sold in the US in the first half of 2010. That's down from about 2.8% last year. The Prius by itself accounted for half those sales, and it's still the archetypal hybrid for comparison purposes. Like other hybrids of this type it gets all its energy from the gasoline that's put in its tank, and it uses this fuel more efficiently than non-hybrid cars by recovering and recycling part of the energy otherwise lost through braking, and by avoiding idling. (The latter feature is pretty much all that some "mild" or stop/start hybrids do.) The EPA rates the 2010 Prius at 51 mpg city/48 mpg highway. The base model Prius has a sticker price of $22,800, and as far as I can tell it is no longer eligible for any federal purchaser tax credits.

The Chevrolet Volt is based on a different hybrid design, as a plug-in hybrid (PHEV) or more accurately a range-extended electric vehicle (REEV). It also represents a different car philosophy, presumably aimed at a different segment of the market than the Prius. This kind of hybrid gets its primary power from an external electricity source, stored in a battery pack that gives it a range of roughly 40 miles without using gasoline. At that point, and before the battery's charge is fully depleted, the car's onboard generator--a four-cylinder gasoline engine--kicks in to recharge the battery, which continues to send power to the electric motor. Actual fuel economy thus depends on how often and how far one drives with the generator running. I believe the EPA is still grappling with an appropriate methodology to represent this fairly. Of course even when driven only on battery power, it still consumes energy, and in most parts of the US that means that some fossil fuel will be burned somewhere to power it, most likely natural gas.

GM just announced the base sticker price for the Volt, and at $41,000 before tax credits this should make it pretty clear that GM had someone other than Prius buyers in mind. Having driven a pre-production Volt this winter, I'd see it competing more with the Lexus HS250 hybrid, which starts at $34,650, and with non-hybrid entry-level luxury cars like the Acura TSX ($29,310 MSRP but more like $32,410 similarly equipped.) If it lives up to its potential, the Volt could significantly broaden the appeal of hybrids in general, while also saving a lot of gasoline for its owners. Whether it will also save them money is much harder to assess, because the calculation hinges on the specifics of where and how the car would be used.

Nissan's new Leaf is a bolder, if technologically less-complex step than the Volt, because it relies entirely on grid power stored in a 24 kWh battery pack, with no back-up other than a cable and plug--or a tow-truck. At $32,780 before tax credits the stakes are also somewhat less daunting for buyers willing to risk a bit of range anxiety and some adjustments in their lifestyles. I'm not the only one who sees the Leaf aimed squarely at the green consumers who have formed the core of Prius buyers. That's important for several reasons. It reduces the substantial product launch risks for Nissan, which already has thousands of prospective buyers on its waiting list. However, if the Leaf cannibalizes existing hybrid sales, rather than dramatically broadening the electrified vehicle market, then its impact on US oil consumption and the economics behind those tax credits will look a lot less valuable to policy makers.

My skepticism about the Leaf goes a lot farther than Nissan's incredible claims concerning its equivalent miles per gallon. In the basic architecture of the Leaf I see many of the same issues that caused the launch of GM's ground-breaking EV-1 electric car to fail. Attitudes towards oil and the environment have changed significantly in the last decade, and the government is pushing recharging infrastructure much harder and with much more financial support than when the EV-1 was launched. The Leaf also benefits from not being the only plug-in vehicle coming to market, though it requires its plug, whereas the Volt merely works better with one. Fundamentally, however, I just don't know if enough Americans are ready for a car that can only go about 100 miles on a good day, and potentially a lot less than that when conditions aren't ideal. That's particularly important when we recognize that at the price points for both the Leaf and Volt their realistic market isn't first-time buyers in their early twenties for whom basic assumptions about range and refueling times might not be so ingrained. Taking advantage of the entire $7,500 federal tax credit would require an adjusted gross income of at least $55,000 for single taxpayers ($74,000 for married couples), based on last year's tax tables--and probably even higher when taking into consideration itemized deductions, dependents, and other factors. In my view, likely buyers for both cars would be solidly middle-to-upper-middle class.

Rather than making expansive predictions based on guesses about how well these new cars will do with real consumers, I will be watching the start of this grand experiment with great interest. If the Leaf catches on as well as Nissan hopes, then the trickle of other EV launches that are expected to follow could turn into a tidal wave of automotive innovation. If the Volt does better than the Leaf, despite its higher price, that could signal that consumers still value the comfort of knowing they can pull into a gas station and refuel in three minutes--rather than several hours--more than they value their independence from oil. And if both do well without eroding the sales of conventional hybrids, then that would bode well for a much more efficient vehicle fleet in the years ahead, relying on a much wider mix of energy sources than today's.

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Setting Energy Goals

With the failure over the weekend of BP's "top kill" effort, the odds that the oil will continue flowing until relief wells can be completed--in months, rather than days--have gone up considerably. In addition to the accumulating economic and environmental consequences, that also means that media attention on the oil spill and the questions it raises about US energy policy will remain front and center for at least that long. In the absence of any formal effort to guide the discussion, we're likely to end up with the usual array of random energy musings and rants, built around an understandable, if unrealistic message of ending our reliance on oil now. That would be a shame, because this sad situation gives us a unique opportunity to refine our thinking about our energy future when much of the country is focused on it.

One comment that I've heard frequently in the last few weeks is that this spill serves as a reminder that oil companies are drilling in depths of a mile or more of water, far offshore, because the easy oil is mostly gone. There's more than a grain of truth in that view, though the full picture turns out to be rather more complicated. While it's certainly true that the mature oil regions of the US have been drilled like a pincushion for 150 years, and that many of the large, important undeveloped oil resources we know about are on the Outer Continental Shelf, there's still a lot of oil in other places, both onshore and in the nearer offshore, in shallower water, that we've chosen not to exploit. Access has driven development at least as much as geology in the last decade or two. In the US, we've made an implicit decision to focus oil and gas development on the Gulf Coast, not because it had the most resources--though it has plenty--or because it was less-densely populated , but presumably because it had already been developed so extensively. In effect, this approach sacrificed the Gulf Coast--whether that sacrifice was ever envisioned in quite the terms we're seeing today--to give us the oil we needed while preserving the beaches and viewscapes of our other coasts.

There's also an international dimension to this issue of access. At the same time the US offshore oil industry has been constrained in a box with only one open end pointed toward ever deeper water, the publicly-traded international oil companies have been progressively squeezed out of world-class oil opportunities elsewhere, as a result of full or partial nationalization and through competition with national oil companies that are guided not by market forces, but by geopolitical ones. As a result of these parallel trends, the major oil companies have focused their efforts where they retained both access and some key advantages over many of their state-owned competitors, usually in the form of technology or management of complex projects. In other words, they've been pushed to the frontiers, such as the deepwater Gulf of Mexico.

While many lament the powerlessness of the US government to plug the leaking well, and some like Admiral Allen ponder whether the government should acquire that capability for itself--a topic for a future posting--we shouldn't ignore that even without banning deepwater drilling the federal government has the power to shift the industry toward less-risky opportunities by expanding its access to onshore and near-offshore resources that are more attractive and less difficult, but have been restricted for years.

Another common response to the spill relates to the incentives for moving away from oil. If we just had more incentives for biofuels and for electric vehicles, goes this thinking, we could quickly wean ourselves off oil and not only do away with the need to import it, but also to drill for it in such challenging locations close to home. While many of my recent postings have been aimed at showing why this can't happen quickly, I want to disassociate myself from what Tom Friedman calls the "petro-determinist" approach. I'm not here to tell you that breaking our addiction to oil is impossible; if I thought that I wouldn't have spent much of my career working on or promoting alternatives to oil. At the same time, with the current euphoria for cleantech and green jobs, someone needs to remind us that if breaking our oil addiction requires a 12-step program, we are only on about step 2. More importantly, it matters how we get there: Not all paths are equally valuable, and we don't have good enough information to determine which ones will work best in replacing a hydrocarbon-based energy system that evolved over the better part of a century.

Consider vehicle electrification, which depends on batteries. If the goal is putting the largest number of mainly-electric vehicles on the road in the shortest time, then we might be on the right track, handing out extremely generous tax credits for consumers to buy fully- or partially-electric vehicles, along with billions of dollars in manufacturing tax credits, grants, loans and loan guarantees for the factories to build those cars and the batteries they require, in addition to installing the recharging infrastructure they'll need. But if our goal is to reduce oil consumption and the emissions that accompany it, then this approach could be counterproductive, particularly if growing concerns about the availability and sourcing of the crucial raw materials necessary to build today's state-of-the-art electric vehicle batteries are correct. Simply put, the batteries in a Prius-style hybrid that never plugs in save many more annual gallons of oil per kWh of onboard storage than the batteries in a plug-in hybrid (PHEV) or full EV. That's true for two reasons that are a function of physics, rather than economics: a) fuel economy is subject to diminishing returns, in which moving from 25 mpg to 50 mpg saves twice as much total fuel as going from 50 mpg to 100 mpg and b) PHEVs and EVs require a lot more battery capacity per car than conventional hybrids.

What both of these examples share in common is that focusing on specific paths instead of outcomes can be counterproductive and multiply risk, instead of reducing it. An oil policy that started with the recognition that we must produce significant quantities of oil domestically during a lengthy transition to alternative and renewable energy sources, and that asked where the best-placed resources were to provide that supply with the least risk, might arrive at a different answer than one that resulted from a series of isolated decisions to place a growing sequence of oil resources off-limits. Likewise, a fuel economy and emissions-reduction strategy centered on annual fuel savings, rather than rewarding consumers and carmakers for concentrating the largest number of batteries into each vehicle, would better leverage vehicle-electrification technology to reduce our reliance on oil. That's particularly relevant when batteries look like a short-to-medium term constraint and their raw materials might impose longer-term limits until we have better battery technology based on cheap and plentiful raw materials.

If the Gulf Coast spill represents another crisis too important to waste, then it's also one that is too important to relegate to unfocused wishes for an oil-free world within the next few years. The best "use" of the spill is to convene a concrete national conversation on how to provide the US with energy that is as affordable and environmentally-acceptable as we can realistically make it in the in the short, medium and long-term. That will require examining all the trade-offs involved, as well as how the balance between conventional energy and renewables and other alternatives is likely to shift in the years ahead. If that did nothing else but get us clearly focused on outcomes, rather than picking our favorite pathways, then it might constitute a positive outcome from an otherwise miserable episode in our nation's energy history.

FYI, tomorrow (June 2) at 1:00 PM EDT I'll be on a webinar panel hosted by The Energy Collective to discuss the implications of the oil spill for the future of energy. If you're interested, please sign up using this link.

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Paying the Bill for Electric Vehicles

Perhaps it's merely a sign of the times, when a billion is the new million and firms in many industries have found it easier to get capital from the government than from bankers, bondholders and shareholders, but the price tag implicit in the recommendations of a new cross-industry group formed to promote electric vehicles is startling even in this context. Although I couldn't find the total anywhere in the lengthy report from the Electrification Coalition, the Washington Post tallied the combined cost of their proposals at $124 billion in new government incentives, over and above the billions already being spent under the stimulus bill and other programs to support the R&D, manufacturing, and infrastructure for plug-in electric cars, and to subsidize consumer purchases of them. The frustrating part of this is that I'm in general agreement that electric vehicles probably represent the long-term future of cars. However, I don't believe anyone can know this with sufficient certainty, any more than they knew a few years ago that fuel cell cars were the answer, or in the late 1990s that diesel hybrids were the answer. The report also raises basic questions about how new industries should be built, and at whose expense.

Without dissecting the entire document, the justification for its recommendations appears to hinge on a few key arguments concerning our current use of oil, which the Coalition is hardly alone in regarding as excessive. Although they go a bit overboard focusing on the $900 billion Americans spent on petroleum products last year--roughly half of which represented the value of domestic production, refining margins, and federal, state and local taxes collected on product sales, all of which are part of GDP and thus a plus, not a minus for the economy--they eventually get around to mentioning last year's oil import tab of $388 billion. (That figure is currently running at around $250 billion per year, based on the September refiner acquisition price applied to our average monthly net imports, but it is still a lot of money.) Yet as attention-focusing as that sum is, vehicle electrification is hardly the only way to go about reducing it, and from what I can tell it is almost certainly not the most cost-effective means of doing so.

Aside from the diesel options I discussed the other day, there are a variety of strategies available to improve fuel economy significantly without merely shifting our transportation energy consumption from one category (oil) to another (electricity generated from a mix anchored by coal.) Our approach to reducing oil consumption must also take into account the diminishing returns to increasing fuel economy. Doubling the average car's fuel economy from 25 mpg to 50 mpg saves twice as much gasoline as going from 50 mpg to 100 mpg--and it still saves more than achieving the fancifully hyperbolic mpgs we've seen quoted for various plug-ins and EVs that ignore the energy required to generate grid electricity. The avoided fuel cost effectively sets a ceiling on the financial rewards available from the notional fuel economy of grid-based vehicles. Because fuel savings can't justify today's high up-front cost of battery-powered cars, the Coalition proposes consumer tax credits for plug-in hybrids or EVs that could top $10,000, compared to the current $7,500 maximum. By comparison, for ten grand you could fuel a Prius for 100,000 miles at $5/gallon, or a pair of them at current gas prices.

Nor do I find the suggestion of providing federal tax credits to cover 75% of the cost of EV-recharging infrastructure (50% in later phases) appealing, other than as a gift to the member companies of the Coalition that paid for this study. Infrastructure is an expensive investment, and I'm quite familiar from my experience of the EV-1 rollout with its importance in breaking the chicken-and-egg market dynamic associated with battery cars. However, I don't see sufficient justification for taxpayers to pick up this much of the tab--and risk--for infrastructure for which the demand will be so small and uncertain for years to come.

Even measured against the scale of the bailouts of GM, Chrysler, and the big banks, $124 billion is a huge price tag to impose on taxpayers who have just begun to wake up to the likely consequences of the enormous debts that our deficits are piling up. While vehicle electrification might reduce our trade deficit in oil, it's not obvious that it won't replace it with offsetting deficits in cars, batteries and the scarce strategic materials they require. Nor does it seem equitable to ask average taxpayers to furnish other, perhaps higher-quintile taxpayers with EV tax credits so generous that they would exceed the depreciated value of the average car on the road.

I'm not opposed to electrification or the companies behind this initiative. In fact, I wish them well and look forward to someday having the choice of buying an attractive and affordable electric car. What I do oppose is another massive handout to another chosen industry on the basis of a highly uncertain scenario of future market development, bypassing all of the competitive pressures that should shape such a revolutionary change along the way. The first few million grid-powered EVs would have a negligible impact on the nation's energy consumption, emissions, and oil imports, yet even their advocates suggest they will cost a bloody fortune to put on the road. As you read the Coalition's analysis and their proposals for who should foot the bill for all this, I encourage you to consider who stands to benefit the most from it in the next ten years. Taxpayers should insist that the early adopters and the companies that will garner most of the value of these developments pay their own way, as was the case for personal computers, cellphones, and most other successful new technologies of the last several decades.

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Counting All the Carbon

An editorial in this morning's Wall St. Journal reminded me that I had intended to update my readers on the latest installment in the ongoing saga concerning the global land-use impact of biofuels. The Journal's comments referred to a paper in the latest issue of Science entitled, "Fixing a Critical Climate Accounting Error", which concludes that the manner in which the greenhouse gas impacts of biofuels are currently assessed fails to account for significant emissions that occur outside the envelope normally drawn around an ethanol or biodiesel plant and the farms that supply it with feedstock. And if that omission weren't glaring enough, in the course of preparing for a meeting tomorrow I ran across another instance in which regulators appear to be turning a blind eye to the full impact of another popular option for addressing climate change, electric vehicles. As we prepare to re-orient our entire economy around the restrictions embodied in pending climate legislation, it is essential that we account for all of the emissions involved in a consistent way, and on a scale matching the global environmental problem we're trying to solve. This is crucial to making real progress on reducing emissions, rather than just making us all feel good about what we are doing.

When the emailed table of contents for the October 23 issue of Science showed up in my inbox last Friday, I spotted the name of Timothy Searchinger of Princeton University as lead author of the paper cited by the Journal today. Dr. Searchinger was also the lead author of an earlier paper in Science that I highlighted last February, when the debate concerning the global land-use implications of corn ethanol was just getting underway. Dr. Searchinger's collaborators on the new paper are an impressive bunch, including Dr. Dan Kammen, the director of the Renewable and Appropriate Energy Laboratory at U.C. Berkeley.

The report provides further evidence that it's no longer appropriate to assume that just because the carbon embodied in biofuels such as ethanol originated in green plants that absorbed it from the atmosphere, they must therefore be "carbon neutral"--other than the emissions from fossil fuels used in the cultivation, harvesting and transportation of the crops from which they are produced, along with the energy used in their processing. Additional emissions apparently result from the global displacement of the crops turned into energy here, and in some cases those emissions are on a similar order of magnitude to the direct emissions from the combustion of the biofuels--combustion that has gotten a free pass until now.

This is a highly inconvenient result for those engaged in the production of biofuels from food crops, on two levels. First, it puts the climate change justification for the subsidies and mandates responsible for the rapid ramp-up of conventional biofuel production in question. Second, the source of this doubt is no less than one of the same scientific journals in which so much of the peer-reviewed science contributing to the oft-cited scientific consensus on climate change has appeared, and subject to the same level of scientific scrutiny. Casting doubt on the source of this unwelcome message thus risks casting doubt on the entire edifice upon which the current, much-expanded biofuel endeavor rests.

Let's be clear that I don't blame the biofuel industry for promoting a product that many thought would help, but may ultimately turn out to do little or nothing to reduce the greenhouse gas emissions implicated in climate change, any more than we should blame the producers and consumers of fossil fuels for their contribution to the accumulation of those gases before the current consensus on climate change emerged. (I confess that I regard attempts to portray that consensus as having existed as long as 40 years ago as the worst kind of revisionism, since the creation of the consensus depended not on a few key insights, which might have turned out to be wrong, but on mounting evidence from the steady accumulation of peer-reviewed research during that interval.)

Having said that, I have a much harder time understanding the inclusion of an equally serious--and apparently entirely conscious--omission in the new automotive fuel economy and emissions standards jointly developed by the Environmental Protection Agency and the Department of Transportation. I had occasion to browse through the agencies' proposed text (warning: large file) yesterday and was startled to see that for purposes of calculating carmakers' fleet CO2 emission averages, it assumes that electric vehicles (EVs) and the electric usage of plug-in hybrids (PHEVs) have zero lifecycle emissions. Not only that, but the proposed regulation would count each EV as if it replaced two other emitting cars: thus, zero GHG impact not once but twice. Even the authors admit that this is false, and here I must quote,

"EPA recognizes that for each EV that is sold, in reality the total emissions off-set relative to the typical gasoline or diesel powered vehicle is not zero, as there is a corresponding increase in upstream CO2 emissions due to an increase in the requirements for electric utility generation. However, for the time frame of this proposed rule, EPA is also interested in promoting very advanced technologies such as EVs which offer the future promise of significant reductions in GHG emissions, in particular when coupled with a broader context which would include reductions from the electricity generation. For the California Paley 1 program, California assigned EVs a CO2 performance value of 130 g/mile, which was intended to represent the average CO2 emissions required to charge an EV using representative CO2 values for the California electric utility grid."

But while I appreciate the agencies' rationalization that EVs and PHEVs might be counted as having zero emissions on a purely temporary basis in order to provide incentives for carmakers to accelerate their introduction, I'm also painfully aware that other such "temporary" measures have persisted long after the original justification for them had become obsolete--and here I can't help but think of the ethanol blending credit that is now in its 31st year.

Why do these loopholes in the way we tally greenhouse gas emissions matter enough for me to hammer away at them like this? Consider the proposed vehicle rules. By ignoring emissions that occur outside these vehicles, the government is discouraging carmakers from using less exotic technologies that might actually deliver comparable savings of fuel and emissions sooner, and at a lower cost to taxpayers and consumers. A conventional Toyota Prius hybrid running on gasoline emits only 10% more grams of CO2 per mile than California claims for an EV powered by its greener-than-average state electricity mix. Since the same number of batteries could equip many more Prius-type hybrids, at a much lower cost per car than for a full EV, the benefits of rushing EVs into production seem much less compelling at this point, particularly when the government is also subsidizing the purchasers of EVs and PHEVs to the tune of many thousands of dollars per car. That will amount to billions of dollars of extra subsidies for an incremental emissions benefit that might just be negative for an EV recharged using coal-fired power.

"Start as you mean to go on," goes the old saying. We know that whatever their energy security benefits and general hi-tech niftiness, EVs are not zero-emission vehicles, just as we now understand that it is likely that burning corn ethanol releases roughly the same level of greenhouse gases as the gasoline it is intended to replace. If cap & trade bills such as Waxman-Markey and Kerry-Boxer are to have any integrity as tools for achieving genuine reductions in the global greenhouse gas emissions behind global climate change, then we must count all the emissions from all sources, no matter how politically unpalatable that may be. EPA and DOT might do well to heed this advice, too, before establishing a new, impossible-to-revoke entitlement for the manufacturers of electric vehicles.

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The Demise of MPG

Even before the advent of partially- or fully-electric cars, it was becoming increasingly apparent that the old fuel economy metric of miles per gallon isn't as useful for measuring energy consumption in vehicles as when it was first codified in the original Corporate Average Fuel Economy standard in the 1970s. That is due in part to the proliferation of new fuels--E85, LPG, LNG, CNG, methanol, and hydrogen--but also because expressing the relationship between distance and volume in this way obscured the diminishing returns to higher levels of fuel economy. As a Wall St. Journal column earlier this week put it, adding electricity into the mpg mix, "risks giving consumers inaccurate information about the financial and environmental costs of driving." But if we need a new metric, what should it measure?

I've been interested in this issue for some time, and GM's recent announcement that its new Volt plug-in hybrid achieves 230 mpg in city driving prompted some further thought. I don't doubt the accuracy of that figure or the thought that GM's engineers put into bridging this new vehicle type into a system that was designed when the average US fuel economy was 13.1 mpg and unleaded gasoline was the newest fuel around. Yet all this figure tells us is how much liquid fuel the car's generator would consume over a carefully-chosen driving interval, completely ignoring the electricity--with its cost and consequences--required to deliver that result. Nissan's Twittered riposte that it's new Leaf electric car gets 367 mpg is even less useful, because the assumptions behind it are not clear--and might just ignore some basic engineering realities.

Without access to Nissan's calculation, I can only guess at how they might have arrived at it by backing into it. (Skip this if you hate numbers.) Start with the fact that each gallon of petroleum gasoline (without ethanol) carries 115,000 BTUs of energy. At an official conversion of 3412 BTUs per kilowatt-hour (kWh), that equates to 33.7 kWh per gallon, so 367 mpg implies that the Leaf would go nearly 11 miles per kWh. That's pretty amazing by itself, considering that the Volt is generally expected to go between 4 and 6 miles per kWh. It also suggests that the Leaf would be using less than half of its 24 kWh Lithium Ion battery pack to deliver its advertised 100 mile range. But even if this is all correct, there's a basic problem with the calculation; in the real world it can take a lot more than 3,412 BTUs of primary energy to generate one kWh of electricity, depending on how you do it. If the power source is surplus wind, solar or nuclear power that wasn't already being used to displace power generated from fossil fuels, the BTUs required could be effectively zero. Otherwise, for power generated from coal or natural gas they would range between 6,000-12,000 BTU/kWh. Even assuming a relatively conservative 8,000 BTU/kWh for the natural gas turbines that provide the incremental power supply for many markets, the resulting equivalent mpg falls from 367 to 156 mpg. But that still doesn't tell us enough, in my estimation.

The problem here is the existence of a variety of perspectives on vehicle energy efficiency with competing information needs. From the standpoint of energy policy, we are most concerned about annual oil consumption and greenhouse gas emissions. We already have a new federal mileage standard that is set in terms of grams of CO2-equivalent per mile, which gets at the latter issue. The EPA's current mpg methodology based on liquid fuels comes close to addressing the former, though the increasing contribution of biofuels renders it suspect. Unfortunately, any standard or metric that treats non-petroleum energy as essentially free seems certain to result in colossal unintended consequences, as non-oil energy sources ramp up. The engineer in me would argue strongly for something like the MPGe calculation used for the Automotive X-Prize, comparing all the energy delivered to the car in any form with how far the car went. However, from a consumer perspective that still seems overly complex and opaque. While I would certainly prefer the inverted form of fuel economy--gallons per 100 miles--to our current mpg, it's hard to beat miles per dollar as a means of comparing how much it will cost the average driver to operate any of these new cars.

Money is the common denominator for most of the things we consume, so why shouldn't it be for vehicle energy, as well? At current pump prices, an average American passenger car goes about 9.5 miles per dollar (mp$), while a Prius-type hybrid approaches 20 mp$. If we factor in electricity at the national average retail price of $0.11/kWh, then the Chevrolet Volt would deliver something in the vicinity of 30 mp$, if I've correctly understood how they arrived at their 230 mpg figure, while the Leaf might yield as much as 99 mp$--though my natural skepticism about its unofficial claims leads me to suspect it would be closer to 45 mp$. Of course, when you have to pay $5,000-10,000 extra for a battery pack, you'd certainly hope the operating cost per mile would be a lot lower than for a conventional car. And that's precisely the kind of comparison that a truly useful fuel economy metric should facilitate.

In the near term, the EPA should continue its work on adapting the familiar mpg metric to a new world of more diverse vehicle technologies, but for the longer term it ought to convene other government agencies, car and fuel companies, universities, and consumer groups for the purpose of developing a new and more helpful set of metrics that would tell consumers what they need to know about costs and consequences as the car fleet undergoes its long transition toward an uncertain destination.

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Plug and Pay

Yesterday's photo-op at an Indiana RV factory for the purpose of announcing more federal assistance for the electric vehicle industry came just a few days after Nissan debuted its Leaf electric car, which might become the first mass-market EV in the world. Cars powered by batteries alone or a combination of batteries and conventional engines look like one of the most promising long-term solutions to the dual problems of energy security and climate change. But precisely because of their potential to have such a large impact, it's vital that the economic arrangements for their energy consumption are put on the right basis from the start. Among other things, that means avoiding the temptation to provide free public recharging for them. If we get this wrong, we risk negating much of the energy and greenhouse gas benefit these cars offer. We could also inadvertently deter the substantial private investment in recharging infrastructure that would be needed to make EVs fully competitive with cars running on liquid fuels.

Against the backdrop of $2.4 billion in new subsidies for EV and battery manufacturers and federal electric vehicle tax credits ranging up to $7,500 per car, my concerns about collecting for the electricity actually used by the first few mass-production EVs might seem disproportionate or even eccentric. After all, how much juice can a few battery cars use, compared to our factories, office buildings, and billions of home appliances? Initially, very little and eventually still less than you might imagine. If every vehicle-mile traveled in the US were driven in an EV averaging 3 miles per kilowatt-hour (kWh), US electricity consumption would only increase by about 27%. The impact on emissions is much harder to assess, however, since it depends heavily on which generating technologies deliver the power used by EVs, and that in turn depends to a large degree on the time of day when they are recharged. Charge up at 3 AM, and you might be getting zero-emission wind power that would otherwise go to waste. Charge up at 3 PM, and you are almost certainly going to be drawing on a gas turbine somewhere--probably a fairly inefficient "peaking" unit--or a coal power plant. To put that in perspective, let's look at the emissions from two comparable cars, under both scenarios.

For our baseline, consider a Prius-type hybrid that gets all of its energy from the fuel that goes into its tank. At 50 mpg, its emissions from gasoline amount to roughly 40 lb. of CO2 per 100 miles. For an EV getting 4 miles per kWh and recharged with wind power, they would be essentially zero. However, the same car recharging during mid-peak or peak electricity demand would trigger power plant emissions between 35 lb. ("peaker" turbine @ 12,000 BTU/kWh on natural gas) and 53 lb. (average US coal plant) for every 100 miles. In other words, while the hidden emissions from an EV would in the worst case still be lower than those of the average car in America today (around 80 lb. CO2/100 mi.), they could be substantially higher than from an ordinary hybrid that never plugs in. So if we want EVs to repay the substantial national investment we're making in them by reducing our fossil fuel consumption and greenhouse gas emissions, we will want them to recharge as little as possible during daylight hours, particularly in the late afternoon, at least until wind, solar and geothermal power account for a much higher share of our annual electricity generation than the 1.6% they contributed last year.

Paying for the electricity to recharge plug-in electric vehicles involves major cultural and behavioral shifts. The price of gasoline is one of the most visible, ubiquitous and transparent prices in our society. You stand at the pump and see the dollars going into your tank. But when you recharge an EV at home, unless you have a separate electric meter, you're going to have to sift through a power bill with a welter of distribution, fuel and non-fuel supply charges plus various state and local taxes and fees to see what it actually cost. At the current national average rate of around $0.11/kWh, a typical driver might only see an extra $27 a month, a big savings compared to the typical gasoline bill even at the current $2.55/gal. The extra power cost could easily get lost in seasonal usage fluctuations and rate changes. The impact would likely be more noticeable for utility customers in places with sharply graduated rate structures or time-of-use rates. For many people, however, even if they don't charge up using someone else's electricity--their employer's, their town's, or the local Starbucks'--it could look nearly free.

That would have implications for companies that are building vehicle recharging infrastructure that would need to recoup their investment on a per-kWh basis or, like Better Place, charges per mile of usage in a manner similar to cellphone service contracts. Those investments won't happen and the companies involved will go out of business if consumers regard the electricity for their new plug-in vehicles as effectively free and resist paying as they now do for fuel.

How this will all turn out is anyone's guess at this point, and I emphasize "guess." Until there are at least hundreds of thousands of these vehicles on the road, in the hands of many ordinary consumers and not just unrepresentative deep-green or "gear-head" early adopters, we can only make assumptions about how they will really be used. Still, it seems safe to predict that recharging that was free or regarded as free would get used more, resulting in more trips, more miles traveled, and eventually more energy consumption and emissions.

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Rate of Change

For how much longer will the US depend on petroleum as our primary source of the energy we use for transportation? Conflicting beliefs about the answer to that question lie at the heart of the current debates about offshore drilling and additional support for alternative energy programs. If it is only a few more years, as some assert, then indeed, the production from oil fields in tracts currently off-limits would likely arrive after the greatest need for them has passed. If, on the other hand, we will still be importing oil 20 years from now, then we need to keep our oil project pipeline full, to ensure that we don’t open an even larger window of import vulnerability, on our way to greater energy self-reliance.

Answering this question involves a number of large uncertainties, including the persistence of Americans’ current conservation efforts, particularly if energy prices stabilize or fall farther; whether and how soon non-food-based biofuels can be produced on an industrial, rather than boutique scale; how rapidly plug-in hybrids and other electric vehicles can capture significant market share; and how our response to climate change will re-prioritize our use of other energy resources, and in particular whether we preferentially back out oil or coal first. The future availability of oil itself will also play a role, depending on how close we really are to a permanent peak in global production.

It’s good to have a vision of the end result we desire, presumably a world that is much less reliant on fossil fuels and in which renewable energy sources power electrified cars via a modernized power grid, augmented by nuclear power and liquid biofuels. But planning our journey to that outcome requires a clear understanding of the incremental changes that must occur along the way. In order to make progress toward such a goal, every year the output of that year’s additions to our renewable energy sources must exceed the net result of the growth of demand, moderated by efficiency and conservation, and any changes in the output of other energy sources. If, for example, domestic oil production declines by more than the net new contribution from biofuels, conservation and vehicle electrification, we will lose ground and import more foreign oil.

Last year we did pretty well on the liquid fuels front. In 2007, US ethanol production increased by 1.65 billion gallons per year, the energy equivalent of 71,000 bbl/day of gasoline, about 0.8% of demand, while gasoline consumption grew by less than 0.4%. This year, with gasoline consumption down and ethanol likely to add over 2 billion gallons of additional production, ethanol should capture more market share from petroleum-based gasoline. But in light of concerns about competition between food and fuel, and new questions about the environmental benefits of grain ethanol, that kind of growth cannot be sustained for much longer, without a large contribution from cellulosic biofuels that are still in the demonstration phase.

Progress was less impressive last year with regard to electricity, despite sustained high growth rates for both wind and solar power. The US added a record 5,244 MW of wind capacity, contributing approximately 14 billion kWh of generation, or 0.3% of electricity demand. That backed out the equivalent of 100 billion cubic feet of natural gas, equating to about 50,000 bbl/day of oil. Solar power grew by approximately 270 MW, covering another 0.01% or so of demand, or the equivalent of an extra 2,000 bbl/day of oil. However, US electricity demand grew by 2.3%, while hydropower, our largest renewable energy source, declined in output. As a result, the market shares of coal and nuclear power were stable, while natural gas actually gained ground at the expense of all renewables.

Based on these figures, renewable energy must expand by about a factor of ten before its annual growth will be large enough to make a significant dent in our reliance on fossil fuels in the electricity sector, even without considering the growth in electricity demand that would follow from the addition of millions of plug-in hybrids and EVs to our car fleet. Nor are biofuels likely to eliminate our oil imports in the meantime. At the Congressionally-mandated rate of 36 billion gallons per year in 2022, they will displace the equivalent of 1.5 million bbl/day of gasoline, while the US today imports between 11 and 12 million bbl/day of crude oil and petroleum products, net of exports.

The bottom line is that renewable energy is not yet in a position to make fossil fuels obsolete, and anyone suggesting otherwise is engaging in as much wishful thinking as someone who asserts we can “drill our way to energy independence”—a proposition I have only ever heard as a straw man offered up by opponents of drilling. Renewables have ample scope for further growth, but they also face important obstacles. Even with an increased focus on conservation and efficiency, the chances that we will not still need to import significant quantities of oil ten years from now look very slim, particularly if US oil production continues to decline at the 2-3% per year rate we have experienced over the last decade. Against that backdrop, the current energy compromise suggested by the “Gang of 10” senators looks pragmatic and prudent.

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Energy Resilience

In an important op-ed in yesterday's Washington Post the former CEO of Intel, Andrew Grove, issued a rebuttal to all the slogans we've been hearing lately promoting energy independence. Without ever mentioning it by name, he also offered a practical alternative to the recently-proposed Pickens Plan. In the process, he has introduced a phrase that might catch on as more precise and pragmatic than either energy independence or energy security: "energy resilience." This notion relies on extending the dominance of electricity into transportation, and on producing this energy carrier from many different primary energy sources, including fossil fuels, various renewable flows, and nuclear energy. An energy economy entirely mediated by electricity would be much less vulnerable to disruptions or price spikes in any one commodity, such as oil.

When confronted with the overwhelming challenges preventing the US from achieving true energy independence in the foreseeable future, many of the advocates of this goal respond that we ought not be overly literal in interpreting it. Independence is a matter of degree, and what they really intend is that we become more energy independent, despite the arrow having pointed steadily in the opposite direction since the early 1980s. If that isn't merely rhetoric, then perhaps they'd be willing to trade in this imprecise slogan for one that represents an equally desirable, yet more achievable goal. Energy resilience could be just what a nation reeling from the inflationary impact of the quadrupling of oil prices in five years is seeking: an economy with the ability to absorb an oil (or natural gas or coal) price shock and keep on growing.

So what might a transition to a more resilient energy economy entail, with electricity powering most transportation, in addition to its other roles? As Dr. Grove notes, shifting our transportation systems to electricity wouldn't be easy, because it will require much new infrastructure and the turnover of most of our vehicle fleet. Powering half of the energy needs of the current US fleet of cars and light trucks would require an additional 40 1,000 MW nuclear power plants or 125,000 MW of additional wind and solar capacity--a seven-fold expansion from current levels--or some combination. In the early years of this transition, we might also consume more natural gas for power generation, not less, because natural gas turbines provide much of the existing base of spare overnight electrical generating capacity that would be used to recharge the first wave of electric cars. In addition, we'll need to upgrade our electrical infrastructure to accommodate more generation from intermittent and cyclical sources, and more sharing between regional grids.

Then there are the cars themselves. Here I think Dr. Grove may be overly optimistic in his estimate of a decade to make this shift. It has taken conventional hybrids, which don't plug into the grid, 9 years to capture 3% of the US car market, though until recently their sales depended more on government incentives and green cachet than on fuel economics. The first original-equipment plug-in hybrid models should reach the market within one to two years, depending on whether Toyota or GM launches first, and until then electric cars such as the Tesla and Aptera will occupy a small niche. Replacing half the 240 million cars and light trucks now on the road by 2020 with plug-ins hybrids and pure EVs would require them to attain a 50% market share within about five years and essentially 100% a few years after that. Dr. Grove suggests retrofitting existing cars to shorten the transition, though I wonder how attractive consumers will find such options. Nor will plug-ins and EVs be the only efficient models vying for market share.

During such a transition our demand for liquid fuels would fall gradually at first, and then more dramatically, while demand for natural gas for power generation would probably rise initially and then level out, depending on how climate change legislation affects the output of our existing coal-fired power plants. Increasing domestic oil and gas production and expanding biofuels output have an important role to play in reducing our net energy imports in the early years of a transition to a strategy of energy resilience. In any case, US oil demand would continue at reduced levels for many years to come, as the long tail of our vehicle fleet turned over, and liquid fuels continued to underpin long-distance travel.

The approach suggested by Dr. Grove has many advantages, and the most important is avoiding the trap of becoming overly reliant on any one source of primary energy, imported or domestic, in the future. In this respect, his idea has an edge over the plan put forward by T. Boone Pickens, though the latter might be simpler to execute. Energy resilience also has thermodynamic efficiency on its side. Because fossil fuels can be used to generate electricity at least twice as efficiently as burning them in internal combustion engines, a US vehicle fleet made up mostly of electric cars would require much less primary energy than the current one, without reducing annual vehicle miles traveled. That would have very beneficial implications for the long-term price of energy, and it would greatly reduce our energy imports. That still might not get us to energy independence, but the combined price and volume effects would shrink our oil import bill to much more manageable proportions.

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