Deferring Climate Action

Depending on one's perspective on climate change, last week's events provided either a series of predictable disappointments or a temporary breather, before our expected plunge into a world of constrained emissions. The statement on climate change from the G8 Summit in Hokkaido, Japan, and the subsequent "Major Economies Meeting" reflected only incremental progress since 2005's Gleneagles G-8 meeting and last year's Bali Climate Conference. And although the announcement that the EPA would effectively defer regulating greenhouse gas emissions under the Clean Air Act until the next administration was overshadowed by allegations that Vice President Cheney had interfered with Congressional testimony on the health risks of climate change, the former should not have shocked anyone. On the heels of the latest failure of US cap & trade legislation, it was not in the cards for 2008 to be more than a transition year for action on climate change, and that view has been borne out.

Lacking the time or space to comment on all of the implications of these actions, I'd like to focus on the principal complaint I've seen concerning the G8's contribution, to the effect that their stated target of cutting global greenhouse gas emissions in half by 2050 falls far short of what would be necessary to stabilize the climate. I would suggest that at this point setting any global emissions target and then starting to work towards it is more important than the absolute level of the goal. Stabilizing atmospheric concentrations of CO2 and other greenhouse gases at their current level would apparently require reductions on the order of 80%, but whatever target we set now for 2050 is unlikely to be the last word, and even more unlikely to be achieved with precision. We will ultimately either undershoot, because global emissions are now growing so rapidly that it will take longer and cost more to halt and reverse this trend than we hope, or we will overshoot, because the world will change so much in the next 42 years that a 50% reduction will prove to have been ridiculously timid.

Consider 1966, removed from us by the same interval as the world of 2050, and the sorts of predictions that were then current regarding the 21st century--predictions rooted firmly in the dominant technologies and institutions of the day. By now all air travel should take place in sumptuous luxury aboard supersonic aircraft. Rather than lumbering along with gasoline engines, our cars should zoom down the roads on nuclear batteries and occasionally even fly. Recessions and credit crises should be a relic of the past, as gigantic mainframe computers guide the economy with total accuracy. And don't forget the colony on the moon. For good or ill, we didn't get those outcomes. Instead, we got ubiquitous real-time information and communications via wireless PCs, cellphones and the Internet, and the beginnings of unprecedented medical and materials revolutions based on DNA-level biotech and nanotechnology. In addition, the world's population has grown by about a half billion fewer people than once expected, making some of our current problems less severe than they would have been. I see little reason to conclude that the next four decades will be any less surprising and prediction-thwarting than the last four. That doesn't mean we should punt on climate change and wait for a miracle, but it does suggest that focusing our first steps firmly on the next 10-20 years makes more sense than bogging down in arguments about a longer-term future we can't forecast.

Few things about climate change are certain, including the level of our emissions in 2050. However, at this point we do know that the roadmap set forth in Bali last December, and resting on the findings of the Fourth Assessment Report of the Intergovernmental Panel on Climate Change, continues to guide the negotiations on a new global climate agreement. Although the shape of the ultimate compromise between the developed and developing economies--the sine qua non of a meaningful successor to the Kyoto Protocol--remains unclear, the key parties at least seem to be willing to tackle it. And we know that on January 20, 2009, a new US administration will take office with climate change as a top priority from day one.

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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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Airlines vs. Speculators

Yesterday a friend sent me a copy of an email letter she had received from an airline on which she is a frequent flyer. It made an urgent plea for public support to rein in oil market speculation, which it blamed for between $30 and $60 per barrel of the current oil price, which has been ruinous for the airline industry. Millions of Americans received the same letter--apparently I haven't flown enough, lately, to merit one--with a link to the "Stop Speculation Now" campaign website. Congress and the Commodity Futures Trading Commission have been grappling with this issue, and new energy futures market regulations should be forthcoming shortly. However, I hope that the chiefs of America's airlines are not banking on a speedy return to sub-$100 oil, and the $1.00 or more per gallon this would subtract from their jet fuel bills. Even if all speculation were eliminated tomorrow, the combination of a weak supply response and the low price elasticity of demand for oil make it unlikely that prices would quickly revert to last fall's $80-$95 per barrel price range.

For the last year, I have discussed the potential impact of speculation on oil prices. Investment in oil futures, options and derivatives as a new asset class has affected the market in ways that traditional speculation by financial players--a key ingredient of market liquidity--didn't. Even if these investors never take delivery of a single barrel of oil, they constitute a new segment of demand for oil futures and exert upward pressure on the market. I have also described at length the mechanism by which the resulting higher futures prices affect the prices that refineries pay for the physical barrels of oil they process, and why in that margin-based business, resistance to higher prices is likelier to come from end users, rather than refiners. But none of this alters the main facts governing the price of oil: The growth of global demand over the last five years has consumed most of the existing spare production capacity, and restrictions on access to resources--within OPEC and the US--combined with the time-lags inherent in bringing new supplies online have left the market balanced on a knife edge, setting up the conditions without which asset-class investments in oil futures would just be another complicated way to lose money, which may still be the ultimate result for many.

In a recent Wall Street Journal op-ed, Martin Feldstein, a former chairman of the Council of Economic Advisers, provided an exceptionally clear explanation of how small changes in supply and demand can translate into large price movements for commodities with very low short-term price elasticity, or sensitivity, of demand. Yesterday I discussed the recent demand response in the US. It took $4 per gallon pricing to halt the steady year-on-year rise of US gasoline consumption, a trend that was unbroken since 1991. And in the absence of serious refining problems, the only two paths to $4 gasoline were $130 oil or the imposition of a $1.00 per gallon surtax when oil was still under $100/bbl. Constraining the futures market now might provide some temporary relief, but it won't resolve the underlying problems that brought us to this point.

I don't blame the CEOs of the airlines for grasping at this straw. The signatories to the letter include my former boss at Texaco, Glenn Tilton, who understands the oil and airline businesses better than most. These executives know that a commercial aviation industry built on cheap fuel will emerge from a long period of sustained high oil prices as transformed as if it had been re-regulated, and that the mass access to cheap and convenient air travel that we have taken for granted could disappear. Their effort here may even pay off, but as I noted recently, the exact form of any new regulations on energy trading matters greatly, if the cure is not to be worse than the disease.

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Driving Less

The signs that Americans are driving less are everywhere. From headlines such as, "Gas Prices Spur Drivers to Cut Use to Five-Year Low", to increasing ridership on mass-transit systems and TV news segments on the growing numbers of folks bicycling to work, we see $4 gasoline doing what $3 fuel didn't: deliver a meaningful conservation response. But before we pat ourselves on the back for the DOE report that gasoline demand has fallen by 3% compared to last year, we should review a somewhat longer stretch of our recent history of fuel consumption and vehicle miles traveled. It suggests that the current decline, abetted by a weak economy, barely scratches the surface of our per-capita fuel consumption increase since 1995.

Conventional wisdom blames the SUV fad for most of the increase in US oil consumption in the last decade or so. But while rising sales of large SUVs in that period certainly helped to stall the positive trend of passenger car fuel economy, the bigger culprit has been the heretofore steady growth in vehicle miles traveled (VMT.) Between 1995 and 2005 this statistic grew by 23%, slightly more than the 21% increase in gasoline and diesel fuel consumption, and ahead of the 19% expansion of our car and light truck fleet. By comparison, during this period the US population grew by about 13%. In other words, Americans have been driving more cars, and on average driving them farther each year, than in 1995, accounting for more of the accompanying increase in fuel consumption than SUVs. This year's 2% decline in VMT compared to last year's record figure only erases part of the roughly 10% per capita growth of average annual miles driven since 1995. If we unraveled the rest of that growth, we could reduce US gasoline consumption by another 8% without any contribution from the higher fuel economy of the new cars consumers are now choosing. That equates to more than twice as much oil as our use of ethanol will save this year.

I don't pretend that conservation on that scale would be easy or costless. Some portion of the increase in VMT is structural, in the form of workers traveling longer distances from communities beyond the traditional suburbs. Much of the rest is associated with some sort of economic activity, including delivering goods and taking children to daycare or activities. The main advantage of this kind of conservation is that, at least in principle, it can occur much more rapidly than the efficiency gains from the gradual turnover of the vehicle fleet to smaller cars and a larger number of hybrids and alternative fuel vehicles.

It remains to be seen whether the fuel savings we are now observing will persist and expand, level out, or rebound. The first appearances of $2 gasoline in 2004 and $3 gasoline in 2005 delivered milder shocks to a healthier economy, slowing the growth of gasoline demand but not reversing it in the way that sustained $4 fuel has. That result could be put to the test, if oil prices continue to slide from their $145 high last week, or once the economy finally starts to improve. In the meantime, the scope for further behavior-based conservation remains significant.

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Hyundai Tiburon

The Hyundai Tiburon is why you should never analyse a car from just its specs sheet. The Tiburon boasts a 2.7-litre V6, 6-speed close ratio gearbox, all-independent suspension and 17 x 7 alloys wearing high performance tyres. And to many people’s eyes (though not ours) it looks good, with the latest styling upgrade adding a bit more impact. Add all that lot to the increasingly impressive reputation that Hyundai is now carving out and you’d think the Tiburon a winner.

Except it isn’t. Instead, it’s an inconsistent mish-mash of components and ideals, assembled into the ultimate committee car.

Is it a sports car? Nope, not with front-wheel drive that will noticeably torque-steer and with factory performance figures that include a not-scintillating 0-100 km/h in 8.2 seconds.

So is it a personal coupe – y’know, practical and stylish? Not even close – with a cramped and contorted cabin, harsh ride and with six gear ratios stacked closer than the cards in a deck.

So it must be good for economy then, one of those cars that unexpectedly turns-in really good fuel consumption? Not there either – we recorded 12.4 litres/100 in pretty gentle driving, mostly done on the highway.

The trouble is, as a cohesive car the Tiburon isn’t.




Let’s start with the best first. The all-alloy Delta V6 runs on normal unleaded and develops 123kW at 6000 rpm and 245Nm at 4000 rpm. Those figures aren’t anything groundbreaking but the engine is an absolute sweety, silky smooth and superbly linear in its power delivery. Helped by the (absurdly) low gearing, there’s excellent throttle response and power available everywhere. The note developed by the engine is also wonderful. But there’s a jerk when getting on and off the throttle (the cruise control shows this up very well) and a strong dash-pot effect, where revs are slow to fall when the throttle is released.

The final drive ratio (4.4:1!) gives gearing that is way too low and so the engine’s revving at 2800 rpm at 110 km/h. That makes the six-speed box a chore rather than delight – what’s the point of changing gear after gear to get into 6th by 60 km/h, when clearly the engine could pull gearing 20 per cent taller? And it’s not just irritating to drive: the fuel consumption must also suffer a great deal. We get the feeling someone liked the look of “close ratio 6-speed” on the pamphlet, and didn’t concern themselves unduly with the reality. (Although the four-speed auto is also geared much the same.)

The gear-change itself is a delight, with a very short throw and a metallic clicking sound that assures you the gear has been selected. The clutch is also positive and light.




The steering – controlled by a good leather steering wheel – is relatively heavy for a power-steer system. It’s fine most of the time but can kick-back when cornering hard on bumpy surfaces. Under full throttle in the lower gears, torque steer is clearly present.

Handling is an interestingly mixed bag. Corner at 7/10ths on smooth surfaces and it’s impressive. Go really hard on smooth surfaces and it doesn’t take much to realise the car is set up extremely stiffly in roll, which in turn makes it rather skatey. Get off the loud pedal abruptly and the tail will come out at a rate of knots – just as well there’s the electronic stability control to help catch it.

On bumpy surfaces the bad ride tends to obliterate any interest in the handling. The ride is awful – far harder than a current model Porsche we recently drove over the same roads. It feels very much like the low-speed bump setting of the dampers is too firm – or it’s that in combination with the 45 series tyres. Over bad surfaces you can actually hear your conversation being altered by the bumps – air whistles out of your lungs as you ride over bigger ones…

And it’s the ride and the interior packaging that we think are the biggest disappointments. Inside, the car feels cramped. Head-room in the front is tight – and it’s simply impossibly bad in the back. No adult can ride in the back seat (their head hits the glass of the rear hatch) and no rear head restraints are even provided. (Yep, no rear head restraints!!) Even children are hard-pressed in the back – a baby seat is a horrible squeeze and once the children are large enough to be directly strapped-in, their legs will also have grown long enough for room to again be a struggle. The driver also needs to place their seat exactly right if their left knee isn’t to bang the console, and the high waistline makes room feel even tighter. We’ve been in smaller, lower cars that had far more room.




Interior equipment is ok - good quality switchgear, a decent stacker CD radio and four airbags. But there’s no electric seat adjust, no proper trip computer and the steering is tilt-only. There were also some exposed screw heads in the interior trim, rough edges you don’t expect when paying $37,590. The tested TS limited edition model also includes for that money a glass sliding sunroof and leather seats.

As we said at the beginning, Hyundai is now building some very good cars. This isn’t one of them.

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Driving the Porsche 997 Carrera S

Talk to the mythical average person about a current model Porsche and they’re likely to say things like hard ride, heavy controls, and an engine that’s a bit temperamental in traffic. After all, that’s what lots of people have long associated with performance cars and well, the higher the performance, surely the greater all these must be in evidence?

But those perceptions are a long way from the truth. We recently stepped out of a 2005 model 997 Carrera S (still available new) and what impressed us most was not the performance or the handling, but instead the way it combined these with an incredibly tractable and sweet engine, and a ride so good you could take your grandma down to the shop without a single complaint.

Let’s start with that engine. We think it’s the best naturally aspirated engine we’ve ever driven.

But that’s not the immediate impression.




Step into the car and turn the key and resulting vibration at idle is downright unpleasant. Paul of the QSM Auto Group, owner of the car and very familiar with all Porsches of the last 20 years, suggested that in fact the idle quality was better than previous models. And that is probably the case – but it doesn’t excuse the high frequency vibration that’s a constant at idle. And no, we’re not talking about the engine being just a nice accompanying growl that let’s you know you’re in a sports car; we’re talking 3-cylinder Daihatsu vibration that’s simply ugly.

The clutch is also a bit of a disappointment. It has an ‘over-centre’ feel which, by definition, gives a non-linear weight through the travel. It’s moderately heavy; not heavy as in the muscle cars of yore but heavy in the context of other current cars. But, in contrast both to the clutch weight and also the gearshifts of all other Porsches we’ve driven, the 6-speed gearbox lever is a delight. With a factory short throw (most Porsches with short throw gears have aftermarket modification) and a light weight, the gearshift would be completely at home in a modern Japanese sports car. Reverse is over to the left and forwards; there’s no lock-out.




With the engine warmed and the clutch out in first gear, the brilliance of the engine starts to show. For this is a car that you can idle along, foot completely off the throttle. The Porsche creeps along without the slightest hint of a stutter or a surge. And yes, you can do that in plenty of modern cars but not one other that we know of that has 261kW available from a naturally aspirated 3.8 litres! Still trickling along in first gear, apply just the slightest throttle and the Porsche moves faster; take your foot back off again and the car slows back to its idle progression. As later proves to be the case across the whole rev range, this is one engine where the power can be absolutely accurately dealt out by the driver; there’s never the slightest hint of stutters or non-linearities to upset driving flow.

Up to about 4000 rpm the response is strong but not mind-blowing. But from 4000 to 7000 rpm the Porsche just gets up and flies. But the transition in power delivery isn’t ever startling; the simply superb mapping of the engine management, electronic throttle and camshaft timing make this a car that - believe it or not – a learner driver could safely pedal. The contrast with all-or-nothing turbo cars (including Porsche’s own non-sequential twin turbos) is extreme.

In fact, even as I write this, I find it hard to describe how good the engine is. It’s not the power, although that is tremendous. It’s not the engine note; I guess Porsche aficionados might get off on it but it doesn’t do much for me in this car. It’s not even the throttle response; I’ve been in naturally aspirated cars with even greater instant eagerness.




It’s just the sheer capability of the engine to deliver what the driver wants without requiring thought or effort. Nought to 100 km/h in 4.8 seconds yet with the ability to roll along in sixth gear, two people in the car and climbing an incline, 1200 rpm showing on the tacho and the car completely happy…

As has been shown in plenty of road-based competition events, I think cars like the Evo Lancers and WRX Subarus wouldn’t be at all far behind the Porsche in terms of handling and brakes. And in fact may even be ahead. But their engines are simply light-years behind the Porsche, feeling in comparison like shoddy aftermarket quickie jobs by Joe’s Garage. If anything at all justifies the enormous amount of money that the Porsche commands, it’s that engine.

But a glorious engine is only one part of a car. This is a sports car: what’s the handling like?

Lift the rear cover and there’s the water-cooled flat six, still stuck out behind the rear axle like an anachronistic sore thumb. But the tail-happy characteristics naturally embodied in this placement have long been quelled by suspension and tyre selection, and in the more recent cars, by electronic stability control.




won’t use that old cliché - handles like it’s on rails – because that’s true of no car. In slow speed corners taken fast, the Porsche progressively powers into understeer; get on the power too early and too hard and it progressively moves into oversteer. The stability control intervened only once or twice in the drive (as owner Paul says: why’d you ever switch it off?), with the car telegraphing very well what was required to stop the slides before the electronics came into action. There’s plenty of grip (in high speed corners, too much for a driver of my capability to move the car around, I think), and the car always feels poised and agile.

The two-position sports damper control (which when activated, also changes throttle mapping) does very much what you’d expect. I preferred the handling on the softer setting for much the same reason that I prefer a car with slightly less than maximum anti-roll bars – the attitude of the car better communicates what’s going on and the tyres more progressively lose grip. Ride firmness noticeably increases with the control activated but it’s still quite acceptable. The damper control switch is on the left-hand lower side of the centre dash – it would be better in right-hand drive cars if it was moved across to the other side of the panel as, on a challenging road, we could see the driver wanting to access it a lot.

The brakes look awe-inspiring – huge red calipers biting on huge discs inside the huge wheels.

But we didn’t like them.

We’ve no doubt the system is capable of hauling the car down from 300 km/h plus speeds, and on a hard brake from 160 km/h to 100 km/h they had plenty of stopping power. As of course you’d expect. But the pedal is wooden and has a complete lack of feel. A humble Falcon or Commodore has far better pedal progression (but then again that’s technically easier to achieve if high speeds are never met!) and in city traffic the Porsche pedal was like stepping on, um, the brake pedal of a car with seizing drum cylinders. Perhaps in normal use softer pads would help?

Interior equipment of the test car – the only option fitted was reversing sensors – was pretty good. (Most Porsches come relatively stripped and then you spend perhaps 25 per cent more on options.) The car has a Bose sound system, intuitively excellent navigation, and superb instrumentation that combines digital and analog displays. The ergonomics are now well sorted.

The front boot is large and we’re always surprised by the folding rear seats that continue to be present in 911s. The rear seats clearly aren’t the sort that would suit adults but for small children, or simply as an extra load space, the in-cabin volume is a big plus.

Watch a Porsche 911 drive by and it’s easy to wonder at their ongoing success. Engine in the wrong place, hugely expensive, idiosyncratic styling, a niche car in a very small niche. But experience the car and your opinion changes: practical, comfortable, blisteringly fast, easy to drive, excellent handling, absolutely capable of doing the daily humdrum or exhilarating with a blast through the twisty bits.

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Porsche 550

Henry ford II decided to produce a super car on his failure to buy Ferrari, resulting in Ford GT40 in the year 1965. Ford GT40 challenged Ferrari with 4.7 litre V8 Engines making 350 bhp, the car was raced and tested atLe Mans. The car had an imoressive top speed of 207mph.

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