Cost of converting entire U.S. to electric cars? Zero.

http://blogs.law.harvard.edu/philg/2008/05/27/cost-of-converting-entire-us-to-electric-cars-zero/

by bdfh42 • 18 years ago

55 111 18 years ago

blogs.law.harvard.edu

pierrefar2• 18 years ago

Yes you can convert everything from oil-based to renewables, but what about cost per kWh? At the moment, renewable energy sources just can't compete with oil even with the current high prices.

That's not to say that entrepreneurs aren't making headway and closing the gap... Soon. Can't wait!

rms6• 18 years ago

he's not talking about renewables, this plan would involve building many more coal plants. Browntech. We're going to burn through the coal, even once we convert the southwest to a solar farm we are still going to need mor energy. And we have a lot of coal.

pierrefar2• 18 years ago

And the cost of the ensuing clean up? It's more than zero.

ssharp2• 18 years ago

The electric grid gets cleaner even without renewables. Clean coal is a rapidly growing area in electricity production and nuclear production continues to increase.

Having to create electricity to meet our energy demand is a fantastic problem to have. Energy independence should be an economic goal of any developed country. You don't want ANY foreign control of 7% of your GDP, let alone a cartel like OPEC.

anamax5• 18 years ago

President Clinton turned the biggest source of clean coal in the world into a national monument. Curiously, the folks who owned the second biggest source (in Indonesia) were big campaign contributors.

Prrometheus14• 18 years ago

>Energy independence should be an economic goal of any developed country.

Why? The whole idea of comparative advantage is that you can increase your overall standard of living by making the things that you are best at and importing everything else. The only reason why you would want to be independent is if you planned on fighting a war with all the other countries in the world at the same time (granted, this could be the policy of our current US administration). Interdependence creates peace.

If China attacks Taiwan, they will have the huge percentage of their GDP that consists of trade with the US on the line. So I consider outright military conflict unlikely. However, if we were as "independent" as you suggest I think war would be much more likely.

Why again is independence a good thing?

gnaritas7• 18 years ago

There's no such thing as clean coal, it's an oxymoron made up by energy companies, it's newspeak! What's next, dry water?

mattjung• 18 years ago

Cost to produce the energy? Cost to upgrade the existing stations?

ph0rque2• 18 years ago

The cars can be charged at night, when the base power stations are producing electricity far below their capacity. (In many places, electricity is cheaper at night for that very reason). I remember reading somewhere that 70% of the US fleet can be converted without needing more power plants.

anamax5• 18 years ago

That works so well for folks who vacation by car.

michael_dorfman2• 18 years ago

Cute idea, but a a lot of the details don't even stand up to a basic reality test.

For example: "value of a used car, if exported to Latin America or China: $5,000"

Does he seriously think the US can sell the entire set of automobiles currently on the road to Latin America or China at that price?

Xichekolas2• 18 years ago

I didn't see him use that number in his analysis (other than list it), so it doesn't seem important either way.

michael_dorfman2• 18 years ago

Sure he does-- he subtracts it from the (assumed) $20,000 price of a mass-produced electric car, to give a net price of $15,000 per vehicle.

nazgulnarsil3• 18 years ago

yeah, because the markets often do things where no profit is involved right? there's no evil conspiracy. people want gasoline, companies supply it and make money.

rms6• 18 years ago

Exactly, this is a clear example of the imperfections of capitalism. Do you think it would be good for a powerful globalized government to fund free electrical cars for the people?

Prrometheus14• 18 years ago

> Do you think it would be good for a powerful globalized government to fund free electrical cars for the people?

Any organization large enough to do so would be fearsome, bureaucratic, unpredictable, and with an agenda of its own.

I feel voiceless as one of 300 million US citizens. I have no desire to dilute my voting power by another factor of 20.

nazgulnarsil3• 18 years ago

see this is the problem I have with progressives. Your entire paradigm relies on collectivism. No, the government shouldn't take my money and decide how to spend it "for the good of the people". People should decide for themselves and the market will be forced to reflect people's real desires rather than some artificial notion of "good". Who are you to decide what's good for me?

Gasoline isn't a problem. Eventually supply will be constricted and demand will slow down. It's not going to be The Grapes of Wrath overnight, we'll be forced to gradually move to more efficient transportation. Economics trumps feel good social programs.

newt03112• 18 years ago

One by one:

Problem #1: (Price/Barrel: $130) Does he seriously think that there is no chance that the price of oil will ever reduce from this plateau?

Problem #2: (5% interest) The interest payment for a long term loan of $8 trillion are going to be a lot more than just 5%.

Problem #3: (cost of a new electric car, if mass-produced: $20,000) So... an electric lexus can be mass produced and sold for $20,000. How about a Ferrari?

Problem #4: Administrative costs: Who does the book keeping.

Problem #5: Who pays for the massive amounts of electricity used by these electric cars?

Problem #6: Who pays for the infrastructure required to keep these cars charged?

Problem #7: Who pays for the massive infrastructure to maintain these awesome cars after they are manufactured and bought?

Problem #8: If it really was so cheap and efficient to convert straight to electric cars? why isn't anybody doing this in scale?

In total: A very haphazard analysis of the cost of converting to electric cars.

rms6• 18 years ago

1: certainly I would bet on the price of oil increasing over time

2: The US government bonds aren't very high interest rate.

3: $100,000 for something Ferrari class in speed, see the Tesla Roadster

4: The government

5: The consumers and electricity companies. The coal lobby would be in favor of a plan like this, they are itching to start burning all the extra coal we have in the USA.

6:The consumers

7: The consumers and the mechanics repairing the cars in the free market.

8: Because this type of thing requires strong government authoritarianism.

Prrometheus14• 18 years ago

>2: The US government bonds aren't very high interest rate.

Currently US government bonds have a low interest rate. However, we also would be doubling our debt on this plan, and inflation expectations have been ticking up. Furthermore, such desperation for energy independence might be looked down on by international investors who already view the actions of the US government as reckless. What might the US be planning in the Middle East that they need to take such rash actions to get off of oil for?

All these factors could swing interest rates higher.

> 4: The government

Administrative costs by the government will be non-zero.

>8: Because this type of thing requires strong government authoritarianism.

Actually, I just don't think the technology is there yet. If scale production was the only obstacle in the way of the electric car right now, then it would require an investment in the $1 billion magnitude to start up efficient production, something within the reach of modern car companies. Economical, comfortable, useful, and safe electric cars are not available with modern battery technology. As soon as the technology is ready to make an attractive electric car, I expect to see consumers converting to them voluntarily and at-scale in the free market.

Now if we want to force everybody to convert to an inferior and immature product right away, then we do need strong government authoritarianism, yes.

jimbokun5• 18 years ago

"The coal lobby would be in favor of a plan like this, they are itching to start burning all the extra coal we have in the USA."

I'm surprised the Republicans have not jumped all over this.

This could give them a card to play in the energy independence debate. There's a lot of coal in some so-called swing states, and coal miners and their friends and neighbors are part of the demographic that have been voting Republican on "social" issues but are now swinging Democratic on "Bush is utterly incompetent" issues. Proposing a program to transition the country to coal powered electric cars would go over well with this group.

To the rest of the country, it could be sold as more pragmatic than trying to generate all our energy from solar and wind in the near term, while still offering a path to energy independence. They could play up arguments about how coal generated electricity is already less carbon emitting than the gasoline engines in autos.

This might not be as easy a position to take for Democrats, because the staunch environmentalists on their side may not be happy about increased coal burning.

radu_floricica2• 18 years ago

Apparently the consumers aren't so eager to invest in this. It's a chicken and egg problem on many levels:

- To be able to finance this you need the money you pay for oil. To use those money you already need the solution.

- To have many electric cars on the streets means you need the distribution system (ie gas stations). To finance the new electric stations you need enough cars on the road.

- To get the consumers to buy electric cars they need to have lower prices and better autonomy. To get to lower prices and better autonomy you need economies of scale and a few generations of cars to develop the technology.

This chicken&egg problem it's specific to this. Pretty much any successful entrepreneur just found a way to solve one in his domain. If nobody invested money and time in this it just means there are better ways to invest - i.e. it's time hasn't come yet. When it will, you'll see people coming with the money.

And about forcing the government to invest into a venture private capital doesn't dare enter yet it's ... not a good idea. This rarely works, and only for some special cases. Remember the government is always less efficient then private capital, so there'd better be a good reason to succed where free market failed.

DanielH2• 18 years ago

Problem #1: We'll see probably $200 this year and even higher in the next years. This can only be slowed down and nothing else... http://en.wikipedia.org/wiki/Peak_oil

Prrometheus14• 18 years ago

I don't know a single person who takes near-term Peak Oil seriously who is not some random blogger or pop star.

Edit for the down-modders: Our "years of consumption" for oil, which is known oil reserves divided by current usage, has increased pretty constantly since 1920. In 1945 we had about 20 years of consumption left, in 2000 we had about 40. You can find this stat as figure 66 in "The Skeptical Environmentalist" which sites the primary source. "Peak Oil" is an unproven baseless scare-mongering prediction about the future.

It should also be noted that these kind of simplistic doomsday predictions have been going around since at least 1865, when Stanley Jevons predicted that England's coal supplies would run out and torpedo the industrial revolution. He failed to account for the incentive effects of rising coal prices.

But you know what they say about those that do not study history...

gruseom5• 18 years ago

My understanding is that this prediction of oil running out (always a few decades in the future) has been commonplace for almost a century. How is it possible to know what will or won't be discovered, either by way of new deposits or new technologies? 30 billion (estimated) barrels were just discovered in Brazil.

I should perhaps add that I don't have much of an opinion one way or the other. I just like being skeptical, and I smell ideology in these predictions.

pchristensen• 18 years ago

RE the oil price: at status quo, prices will go up, since Chinese and Indians are learning to spend like Americans.

But if the US spent 8 trillion scrapping its entire auto fleet, that would probably have a chilling effect on oil prices (incidentally making the entire effort less meaningful)

marcus• 18 years ago

Oil prices will continue to rise in the long term because Oil reserves are finite, prices reflect cost to extract a barrel or oil not the cost to produce a barrel of oil.

And people forget that oil has another important uses that aren't related at all to energy, it is used as base material for a most plastics, lubricants and so on.

JoelSutherland• 18 years ago

Problem #9: If we are sending all of our gas-consuming cars to Latin America how does this solve any environmental problems?

Problem #10: This neglects the energy costs of producing a new car.

As long as we're being completely hypothetical, wouldn't it make more sense to just mandate that all new cars must be electric after a certain date?

ssharp2• 18 years ago

Electric cars are important to the United States because of the economy and energy independence, not because of global warming. Remember, the people making energy decisions don't "believe" in global warming.

Prrometheus14• 18 years ago

#3: Simple - we just all drive the same car issued to us by the government. This has the added benefit of reducing class disparities in transportation.

run4yourlives2• 18 years ago

Viva la revolution!

eru3• 18 years ago

I will employ a driver then.

hugh5• 18 years ago

Another big problem: hypothetical $20,000 electric car with acceptable range doesn't exist yet. The closest thing we have is the Tesla, which costs $100K, carries two people, and... well, still doesn't exist yet.

It's no good saying that the price would magically come down immediately if they were produced in sufficient quantities. If anyone had the ability to build a $20,000 long-range four-seat electric car they'd sell millions of 'em anyway.

The technology for cheap and practical electric cars will arrive eventually, but it's probably still a decade away. When you can buy a decent electric car for $20K then people are going to convert anyway, with no need for a huge scary government program forcing them to do so.

stcredzero3• 18 years ago

There are already $30,000 electric cars with dandy range for commuting. (The Aptera.) These are only two seat, but they would suit my needs just fine. It seems reasonable that this could hit $20,000 if produced in volume.

A more realistic goal would be the incremental replacement of internal combustion cars with electric cars. Something like 30% in 10 years would be a tremendous good and would seem possible. I think the ultimate goal should be 85% electric vehicle use. I suspect that there will be a last 15% of uses for which the IC engine will still be the most cost effective solution.

rms6• 18 years ago

You'd want to do this transition over time and give the cars away in a lottery, in a way calculated to upset the financial markets as little as possible. Saudi Arabia would NOT be happy with this arrangement. They would be very, very angry in fact; we have been such close allies. I would not like to see them angry.

berryg2• 18 years ago

If all the people in the US would drive electric cars, you obviously need electricity to do so. Let's assume the power stations use oil the generate electricity. How much oil would you need to keep all these electric cars in the US going? Would that be more or less oil the US consumes now for keeping its cars running?

Let's assume we would all drive a Tesla: http://www.teslamotors.com. Who will do the math?

Xichekolas2• 18 years ago

Except we are in the US, which is blessed with 27% of the world's coal reserves (by far the largest; Russia is second with 17%).[1] So there is no reason we would burn oil to generate power.

Even better would be generating all that electricity with Nuclear power, since the "middle east" of Uranium is Canada and Australia, with 28% and 22% of global production, respectively.

[1] http://www.eia.doe.gov/neic/infosheets/coalreserves.html

[2] http://en.wikipedia.org/wiki/Uranium#Supply

berryg2• 18 years ago

Of course there are better options than to use oil to generate electricity. But what I am interested in is: what is more energy efficient? x million combustion engines or a few centralized power station plus x million electric cars?

josefresco• 18 years ago

Wired published a quick oil reserves map the other day: http://www.wired.com/special_multimedia/2008/oilreserves

Most interesting find: Canada is #2 in the world with 179 billion barrels. Why are we getting our oil from the middle east? And what % comes from up north?

anamax5• 18 years ago

"We", as in North Americans, don't get much of our oil from the middle east. We get the majority of our oil from Canada, Mexico, and various South American countries.

However, we pay world price because the oil that we get from those sources can be sent elsewhere. If the middle east shut down, the Euros would buy from "our" suppliers.

gruseom5• 18 years ago

Much of Canada's oil (I'm thinking of the Alberta tar sands) hasn't historically been economical to produce, because it's harder to get out of the ground and refine. In the Middle East, by contrast, they dig a hole and it comes bubbling out like in the Beverly Hillbillies. (One interesting consequence of that is that petroleum economics haven't been widely practiced in the Middle East.) Anyway, with the price of oil having gone up so much there is now huge investment going on in northern Alberta to develop this stuff.

aggieben6• 18 years ago

See the Dilbert toon on fungibility:http://dilbert.com/strips/comic/2006-02-19/

run4yourlives2• 18 years ago

That is the most retarded use of flash ever.

andresvi• 18 years ago

Little over simplifying the situation but its fun to read and think the way he does.

jcromartie• 18 years ago

The biggest problem that I see with this idea is a social one, and not an economic one. It can be summed up in one word:

Pride.

Just look at how tenaciously consumers cling to SUVs and large luxury cars, even though they surely know better. People who can't even afford decent food or housing spend ridiculous amounts of money on excessive vehicles.

I'd imagine you'll have to pry the wheels of their gas-guzzlers from their cold dead hands before they get in some cheap, mass-produced, plain-vanilla electric transportation, virtually devoid of status and "bling."

Prrometheus14• 18 years ago

>I'd imagine you'll have to pry the wheels of their gas-guzzlers from their cold dead hands before they get in some cheap, mass-produced, plain-vanilla electric transportation, virtually devoid of status and "bling."

Why can't you have electric transportation AND status and "bling"?

jimbokun5• 18 years ago

I'd say it's starting to happen already.

When I see a Hummer these days, my first thought is "chump", and wonder what the price of a fill up is at current rates. I think among some high earning demographics, the car with the most cachet is already the Prius.

Of course, then you have the ginormous Hybrid SUVs being pushed now by Detroit. Do people really not understand that whatever gas you save through the "hybridness" is more than offset by the few tons of metal they're driving around, compared to a smaller non-hybrid?

(Yes, this question is rhetorical.)

edw5192• 18 years ago

During WWII, we were cut off from natural rubber, so we invented synthetic rubber.

In the ecology movement of the late 1960's, the federal government mandated removal of all lead from gasoline by 1975. We made it. (Anyone remember "Leaded or unleaded"?)

In the first oil scare in 1973, Detroit responded by pulling 2 old inventions off the shelf, front wheel drive and fuel injection. Effectively doubling the world oil supply within 5 years.

Why should now be any different? If the federal government mandated all new vehicles being electric only by 2014 (grandfathering in all existing vehicles), we'd make it. And the problem would gradually resolve, like every other problem.

The only thing stopping it is special interests. Anyone in congress supporting this would probably cut off his own fundraising lifeline.

Prrometheus14• 18 years ago

>Why should now be any different? If the federal government mandated all new vehicles being electric only by 2014 (grandfathering in all existing vehicles), we'd make it. And the problem would gradually resolve, like every other problem.

How about if we wait for the technology to be ready instead of setting an arbitrary deadline? And what's so important about switching to electric cars that it can't wait 10 years?

edw5192• 18 years ago

Sometimes, the arbitrary deadline is the thing that forces the technology to be ready.

Do you think JFK had any idea if the technology would be ready when he declared the goal of a man on the moon before the end of the 1960s?

We need more vision and less debate.

helveticaman• 18 years ago

I'm not sure all of this type of initiatives have happy endings.

hugh5• 18 years ago

Especially front wheel drive. Yeech!

Prrometheus14• 18 years ago

Another exercise in utopian ego-centric social planning using back-of-the-napkin stats that ignores all side effects. There are an infinite number of these pseudo-analyses that can be done, and they're easy because you don't need to collect any hard evidence.

For example, I propose that we start a forced diet and exercise program for the United States. The cost of this program will be negative $25 trillion. It will pay for itself in reduced medical costs. The present value of our Medicare obligations are around $50 trillion, so let's say we save half of that.

I could churn out another 50 of these in 50 minutes. It's easy - just imagine yourself as an all-knowing dictator (and since you already think you know what's best for everybody, you're half-way there!) and then pull numbers out of your ear.

Let's ban alcohol! Net savings = the amount we spend on alcohol each year + reduced health costs. And it worked so well the first time! Heck, let's ban fast food!

Of course, all of these ignore the intrinsic value that comes from not living in a society where some politician has control over all your consumption choices, but Americans long ago stopped caring about their own freedom.

jimbokun5• 18 years ago

Sounds like a fun parlor game.

Prrometheus14• 18 years ago

Unfortunately many people like to play it in legislative buildings.

jmilton• 18 years ago

Here's my attempt (and boy would it be fun if it actually gets implemented):

Think Green!

Want to save time, money, and the environment? Its easier than you think– just THINK GREEN.

Gasoline consumption in the US is the largest contributor to global warming and one of the largest expenses. Top Economists at Harvard University have determined that the best way to save on gas and cut down on pollution... is ignoring red lights! Only when the path is completely safe, of course, but the gas savings from avoiding unnecessary braking and reacceleration adds up to over $20 BILLION dollars a year!

Being smarter at stop lights and stop signs may only boost mpg gallon by a few mpg (think about it: cars get better mileage on the highway then in the city because of less stopping and starting), but the amount saved can really add up! Here's the math: America buys 150 billion gallons of gasoline each year, and with gas at $4 a gallon an estimated 22 BILLION DOLLARS can be saved by smarter driving, saving every driving American $100 EVERY YEAR. Not to mention the time saved!

Even better, if less gasoline is used the laws of supply and demand force the big oil companies to LOWER THEIR PRICES. So you will need to buy less gas, and will help make it cheaper!

Worried about getting a ticket? If you are not endangering anyone, police will give you a free pass if you remember to mention the Think Green program.

So what should you do? Avoid unecessary stopping and acceleration. If at an intersection where it is safe to go but you see red, THINK GREEN and go! By each of us doing our part and acting efficiently, we can reduce pollution, save time, and save some serious money at the pump.

So next time you are coming up to an intersection: Think Green!

JeffL2• 18 years ago

Very well put, Prrometheus, but perhaps some more subsidies for electric cars would be in order as a softer way to move in that direction and would be justified as a measure of national defense (cutting off the funding to terrorists and Islamo-fascists by driving down the price of oil) and environmentalism?

In general, I'm all for free market solutions and only free market solutions, but they don't work as well when you're talking about defense and things that are in the commons like air and water.

eru3• 18 years ago

Instead of a subsidy for some specific thing - just tax the alternatives. It's far easier to get rid of taxes later on than to get rid of subsidies.

Prrometheus14• 18 years ago

>In general, I'm all for free market solutions and only free market solutions, but they don't work as well when you're talking about defense and things that are in the commons like air and water.

I understand the "public good" argument in favor of governments, but when I see governments producing so many "public bads" I question whether they are doing any net good at all, let alone enough good to justify their cost.

For example, the United States "defense" department doesn't produce defense, but rather produces useless destabilizing wars on the other side of the globe. Is that worth the $600 billion that we spend on defense each year? Hardly. Congress just passed a $300 billion farm bill to subsidize people with average family incomes of over $200,000. An effective use of my money? I don't think so. They spend an additional $100 billion or so each year to spy on me and make sure I don't get high. I'd like my money back.

Yes, I am an anarchist. It's a pleasure to meet you.

Prrometheus14• 18 years ago

One addition - I would like to point out that smart people are most often susceptible to these Utopian authoritarian fantasies. Mostly they tend to underestimate the complexity of society and overestimate their own intelligence.

radu_floricica2• 18 years ago

Smart _young_ people. I can easily see myself buying this 10 years ago. Right now it's almost reflex to think about side-effects, but only because they bit me in the ass too many times. Also in time you read more and your mind opens more - and not in the usual sense.

iamelgringo• 18 years ago

Why make the government pay for the entire thing? As oil and gas prices increase, the costs of purchasing an electric vehicle are going to be on parity with the costs of purchasing an electric vehicle. I imagine that the Big 3 in Detroit are wringing their hands over Toyota's success with the Prius.

And, with the bevy of new electric vehicles that are getting released in the next couple of years, you're going to be seeing more and more of them on the roads. even without massive governement intervention.

I for one am actually glad that gasoline prices are increasing. I think that we should tax gasoline heavily like most of Europe does. Do you think they drive around in those tiny little cars because they are comfortable? Increased gasoline prices decrease consumption, and increase innovation in fuel efficiency and alternative energy vehicles.

TrevorJ• 18 years ago

so we charge those cars with what? Pedal power? No, more than likely we charge them by burning fuel in some power plant miles and miles down the grid, losing energy in the process due to storage and conversion.

JeffL2• 18 years ago

Cost of bureaucracy, inefficiency and fraud in such a huge government program: $2 trillion

weegee• 18 years ago

the technology exists, it's been done, the oil lobby will not allow this to happen, too many rich people (Hi George W. Bush and family) would lose their fortunes...

http://en.wikipedia.org/wiki/Toyota_RAV4_EV

Cost of converting entire U.S. to electric cars? Zero.

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