“It’s because the cars that I’m in are like tanks,” Obama said.

But he did emphasize that he ordered a tripling of the number of hybrid vehicles in the federal government’s massive fleet. That’s our proactive president where image, not the cost to taxpayers, is what matters.

The event was also, unintentionally, a microcosm of federal policy missteps driven by the lack of concern of regulators to the myriad performance demands of the auto buying public. If the President has unique needs for performance, isn’t it possible others do as well? What about considerations that go beyond fuel economy?

Electric Vehicles (Remember the Biofuels Bust?)

Today’s favorite among the political cognoscenti are electric vehicles and hybrids cars. They are riding high, as noted by the New York Times, while tax subsidies have made them appear a realistic option. But the increased attention will undoubtedly highlight flaws of this fuel source in comparison with gasoline.

The attention being paid to the electric vehicle industry also irritates the biofuel industry, whose own overheated market was abruptly halted in 2007, with subsequent bankruptcies and a fall from grace, after nexus were drawn between biofuels and higher food prices, and between some biofuels and increased greenhouse gas emissions.

Biofuels went from hero to zero, along with billions in investments in factories and farms to produce the fuels. Yet gasoline-powered cars may trump both biofuels and electric/hybrids for decades as the least-worst option. Not only do they fit within existing infrastructure, but wider adoption of more efficient conventional cars will help to curb carbon emissions and oil dependence. Of course, the lower energy content of most biofuels also conflicts with increasingly stringent mileage standards.

Are EVs Really the Future?

So will EVs, hybrids, biofueled or improved conventional cars dominate the future? The uncertainty is striking for a $5 trillion global auto and fuel supply market where there is agreement only that the number of cars will keep increasing, perhaps doubling to two billion by 2050, driven largely by the surging Chinese and Indian middle classes.

Last week, the United States announced new fuel efficiency standards, following similar rules in Europe. Green cars took center stage at auto shows in New York, Geneva and Detroit, including all-battery cars; hybrid varieties that switch between electricity and gasoline; and small (some really, really small), more fuel-efficient conventional cars. But battery-only electric vehicles are expensive.

As reported in the Times:

Mitsubishi Motors and Nissan Motor announced prices for their battery-only electric cars, which are in production already or about to be introduced. Before government subsidies, the Mitsubishi i-MiEV will sell for about $42,000, and the Nissan Leaf for just a few dollars less. And a single charge allows for a driving range of about 160 kilometers, or 100 miles, far less than for a gasoline-powered car. American consumers typically expect to exceed 300 miles on one tankful.

The average refill time for a tankful of gasoline is about ten minutes, not the several hours needed for an EV charge. The time value of refilling is absent from most economic analysis of vehicle technology, but even a once every two weeks instead of once every three, can add to the cost of fuel. For alternative fuels, any temporary price advantage can be quickly eaten up by convenience costs.

Hybrid gasoline-electric cars overcome the range problem but are still pricey because of their complexity and battery costs. Sales of gasoline-electric hybrid vehicles are expected to reach about 1.3 percent of an estimated 67 million light vehicle sales this year, according to J.D. Power and Associates. Battery-powered, all-electric vehicles are expected amount to about 20,000 units but by 2015 could have a market share of 0.3 percent. Toyota’s recent safety-related public relations nightmare with the hybrid Prius is sure to affect the hybrid market by some, as yet unknown, amount.

Don’t Forget Improving Gasoline Vehicles

Gasoline may continue to dominate both alternatives in the car market, especially if oil price increases are muted by efficiency drives or expanded domestic production. Automakers are already making smaller engines that are more powerful and more efficient, while the carbon emissions savings of both electric cars and biofuels are disputed.

“I think oil-based transport fuels have such a competitive advantage and dominance that you need a compelling argument to move to something different, and the case has not been made for what that is,” said Chris Mottershead, vice principal of research and innovation at King’s College London and formerly consultant on climate change at BP.

And EPA has to move slowly. As related in USA Today:

Electric-vehicle provisions in federal fuel-economy and emission rules announced last week already threaten to shatter the uneasy truce among automakers, environmentalists and the Obama administration. The rules, proposed by the Obama administration in the fall, set a 35.5 mpg average for the U.S. auto industry by 2016. One of the only questions that remained about the final rules was how automakers would be credited for their electric vehicles in meeting emissions goals. Credits could be used by an automaker to offset emissions by its non-electric vehicles. In an apparent compromise, the Environmental Protection Agency capped at 200,000 per maker the number of electric vehicles that could be credited with a 0-gram rating for carbon dioxide (CO2) through 2016. Additional EVs would be charged some responsibility for the CO₂ created while producing the electricity to charge them.

The news story continued with the politics of the issue:

Some environmentalists say the credits will reward automakers for building cars they would have built anyway. But the Union of Concerned Scientists’ Jim Kliesch says at least regulators put a limit on the credits — to do otherwise would “significantly erode” the savings. “The issue is really: We want a true accounting of emissions,” he says. “If substantial credit is given, it should not continue” forever.

Gloria Bergquist, spokeswoman for the Alliance of Automobile Manufacturers, which favored no limit, says capping the credits impedes President Obama’s goal of having a million electric cars on the road by 2015. Automakers also argue that emissions not created by operation of the vehicles shouldn’t be their problem. “There is no precedent for holding companies responsible for the CO₂ generated by electric utilities. We do not determine what happens from the plug to the utility plant,” Bergquist says. “It’s unfair to base our compliance on what is entirely outside our control.” The alliance, which represents all major automakers except Honda, notes the industry will sell 12 million vehicles this year and at least 60 million from 2012 through 2016.

Don’t Forget Hybrids’ Rare Earth Problem

The life cycle issue is being replayed not only in electric vehicles. Hybrids are coming under increasing scrutiny as well. As Ken Maize wrote on Master Resources, here, last month,

Another supply-chain mineral that may give pause to U.S. green power developers is lithium, not a rare earth by chemical or physical definition, but a crucial ingredient in the batteries that are the heart of planned electric vehicles. The lithium problem is located in Bolivia, and it is political.

Today, most of the world’s lithium carbonate, the chemical compound that is the basis of the lithium component of the lithium-ion battery, comes from salt flats in Chile’s Atacama Desert, according to the U.S. Geologic Survey. But the Saudi Arabia of lithium lies across the border in Bolivia on the Uyuni Salt Flats.

Bolivia, one of the poorest countries in South America, has never developed a lithium production capacity. It hopes to benefit from what many analysts believe is a coming worldwide boom in automotive electric batteries, driven by the development of electric cars. If the boom occurs, it will require lithium far beyond the resources of the Chilean desert, according to expert analysts.

Maize adds:

If Bolivia is unable to exploit its lithium resources, and the market for lithium carbonate tightens, that will drive up the costs of the already-expensive lithium-ion batteries, used extensively in laptop computers and cell phones, and the only choice today for electric vehicle propulsion. Electric cars, where the buyer’s price tag (probably in the range of $40,000 per car) is largely driven by the battery cost, may again stagnate in a consumer-driven market. Large government subsidies—maybe $10,000 per vehicle in state and federal tax breaks—could reduce the final cost to a range that meets the market demands for new cars, according to automotive analysts.

And we should not forget that environmental safeguards in poor, and socialist, countries are typically not up to par compared to those in free societies and free markets. Socialist countries idea of “green jobs” generally tend toward military-favored olive drab.

Remember Ethanol Flunked AB32

Ethanol as a fuel substitute has also fallen from grace, at least in California. On April 23, 2009, the California Air Resources Board (CARB) approved a Low Carbon Fuel Standard (LCFS) regulation, as part of the AB32 Global Warming Solutions Act. As part of the Board Hearing, the Board approved Resolution 09-31. The Resolution includes a number of provisions related to ongoing work on the LCFS, including a provision that relates to land use and indirect effect analysis of transportation fuels [ i.e., life cycle carbon emissions from upstream fuel production on farms that were formerly rainforests.]

Previously a favored substitute, ethanol was found to increase carbon emissions, largely because of the upstream life cycle impacts. The Board-approved resolution reads:

BE IT FURTHER RESOLVED that the Board directs the Executive Officer to convene an expert workgroup to assist the Board in refining and improving the land use and indirect effect analysis of transportation fuels and return to the Board no later than January 1, 2011 with regulatory amendments or recommendations, if appropriate, on approaches to address issues identified. This workgroup should evaluate key factors that might impact the land use values for biofuels including agricultural yield improvements, co-product credits, land emission factors, food price elasticity, and other relevant factors. The Executive Officer shall coordinate this effort with similar efforts by the U.S. Environmental Protection Agency (U.S. EPA), European Union, and other agencies pursuing a low carbon fuel standard. (emphasis added)

The Lesson: Politics Picks Losers

So yet another politically favored technology went from hero by political fiat to zero by government fiat, but only after millions were invested by the private sector.

I’ve written on the unintended (but not unanticipated) consequences of pushing alternatives to gasoline, but not so eloquently as William Griesinger, here, at Master Resources.

Biofuel mandates in the U.S. suffer from a high-octane blend of politics and special interest agendas that have corrupted physical science, economic analysis, and the policy prescriptions alike. This is the predictable outcome when process and policy are de-linked from basic economics and marketplace realities. Unintended consequences and distortions always result.

Historian, professor and author Burton Folsom in his book, The Myth of the Robber Barons, makes an important distinction between “market entrepreneurs” and “political entrepreneurs.” Market entrepreneurs compete by utilizing their own funds, resources and private investment in an effort to create and market a superior product. Political entrepreneurs, on the other hand, fund their business models off of government subsidies, federal protections and vote buying.

This is a useful distinction to keep in mind when evaluating the perverse outcomes of the subsidized U.S. ethanol industry where the participants consist mainly of political entrepreneurs. …

In addition, aside from the major distribution infrastructure deficiencies, our federal policy geniuses failed to consider an even more basic impediment to exceeding 10% ethanol-blended fuels: Automobile manufacturers will not extend warranties on engines or parts in vehicles that use more than 10% ethanol content in fuel. The only exception is flex-fuel vehicles (FFV) designed to run on E-85 (85% ethanol content). Unfortunately, FFVs represented only 3% of the car fleet as of March 2009. Oops

Griesinger continues with the somewhat older story of MTBE,

Many readers may recall the introduction of MTBE (methyl tertiary butyl ether) in the late 1990s as an EPA-approved additive to gasoline. It was approved to blend with gasoline in order to attain new federally mandated specifications to oxygenate gasoline in order to meet more stringent air quality standards. MTBE turned out to be fraught with detrimental environmental effects. It was determined to be easily soluble in water and toxic. Its eventual presence in groundwater systems raised red flags and its use was abandoned under threat of product liability lawsuits.

The incestuous nature of “science” and politics is not isolated nor short term. As Ken Green points out,

To those who have a memory that transcends more than a few weeks, recent events in the auto sector must induce a great feeling of irony.

Back in August of 2008, then-candidate Obama called for 1 million plug-in hybrid vehicles to be on the road by 2015.

To that end, then-candidate Obama called for:

*$4 billion in tax credits to American automakers to retool plants for the production of plug-in hybrid cars capable of 150 miles to the gallon;

*A $7,000 tax credit for consumers who bought early model plug-in vehicles; and

*Candidate Obama vowed that half of all cars purchased by the federal government would be plug-in hybrids or all-electric by 2012.

As both candidate and president, Obama has repeatedly raised plug-in hybrids as a vital technology for greening Detroit.

Fast forward to a recent item in the Wall Street Journal, which tells us that “In a five-page analysis of GM’s viability, the [Obama car] team critiqued GM’s marquee next-generation project, the electric-powered Chevy Volt, as “too expensive to be commercially successful in the short-term.”

Conclusion

Would it be too much to ask that comprehensive economic, strategic and life cycle analysis be done before new mandates and subsidies are imposed on a transportation system that works reasonably well for most consumers, including even the President’s limousine-tank? Is doing it right too complex for a cadre of bureaucrats? Unfortunately, the answer is yes—only the free market can deal with the complexity, as it always has.

As we enter another campaign season, we are sure to hear rhetoric that “we need to run government more like a business.” All too often though, the business of government is building stranded assets—the billions of dollars from the private sector in alternative fuel production, in infrastructure, and in retooling by the automakers.

The metals and their compounds used in battery technologies, windmills, catalysts, and communications technologies are not mined in the U.S. The majority of commercially useful Rare earths come from mines in China, a country that is fickle toward the U.S. in many ways. This energy-security issue contradicts a rationale for taxpayer support for government-dependent energy technologies such as windpower and electric cars.

China’s Rare Earth Monopoly

The Rare earths occupy 57th to 71st place on the periodic chart of the elements. Discovered largely in the 19th century, the minerals have proven useful for modern technologies because of their electrochemical properties. They are crucial to advanced, high-temperature superconducting technologies, in addition to being used in windmills, electric vehicles, and new lighting technologies.

China owns the market for the most important rare earth metals, producing almost 100% of dysprosium and terbium, both crucial to the advanced performance of electric motors and lighting (see figure). Today, demand for the rare metals is booming. But China has been exploiting its dominant monopoly of rare earths to manipulate the market, according to U.S. commodities analysts.

Geographic changes in rare earth production. Courtesy: USGS

These are not internationally traded commodities on transparent markets, so sussing out market price trends is difficult. Analysts surveying the market assert that China is using its market power to control prices and benefit its domestic producers and users.

The Chinese government late last year announced it would cease exports of rare earths to favor its own manufacturing of wind turbines. Following international protests, China backed off from its threat but said it would increase its restrictions on rare earths exports by 12% annually, in order to favor domestic producers.
China’s policy has caused several U.S. and international wind turbine developers, including General Electric, to shift turbine manufacturing from the U.S. to China to ensure access to rare earth supplies. Because the military uses rare earths in a variety of military applications, such as night-vision equipment, Congress ordered the Department of Defense to review the U.S. military’s reliance on imported rare earths, with a report due April 1.

Additionally, the environmental practices of rare earth mines in China have drawn public criticism. The PBS television network last December focused on the impacts of rare earth mining in China. Correspondent Lindsey Hilsum reported, “Rare earth processing in China is a messy, dangerous, polluting business. It uses toxic chemicals, acid, sulfates, ammonia. The workers have little or no protection.” The report included graphic images of allegedly unprotected workers.

The New York Times noted, “These elements come almost entirely from China, from some of the most environmentally damaging mines in the country, in an industry dominated by criminal gangs.”

What to do? Some suggest that the U.S. should revive its domestic rare earth mines, which supplied a major portion of the world’s demand until China’s lower-cost capacity undermined U.S. production. Jack Lifton, an analyst and documentary filmmaker, recently argued that the U.S. should respond to the world supply situation by reactivating “the rare earth mines we have and by starting new ones in the United States and North America. If we don’t start producing our own critical and strategic metals and minerals, we’re going to find that our industry, and anything we want that uses those materials, will be made in other places such as China.”

It’s Also About Lithium

Another supply-chain mineral that may give pause to U.S. green power developers is lithium, not a rare earth by chemical or physical definition, but a crucial ingredient in the batteries that are the heart of planned electric vehicles. The lithium problem is located in Bolivia, and it is political.

Today, most of the world’s lithium carbonate, the chemical compound that is the basis of the lithium component of the lithium-ion battery, comes from salt flats in Chile’s Atacama Desert, according to the U.S. Geologic Survey. But the Saudi Arabia of lithium lies across the border in Bolivia on the Uyuni Salt Flats.

Bolivia, one of the poorest countries in South America, has never developed a lithium production capacity. It hopes to benefit from what many analysts believe is a coming worldwide boom in automotive electric batteries, driven by the development of electric cars. If the boom occurs, it will require lithium far beyond the resources of the Chilean desert, according to expert analysts.

Bolivia is counting on that lithium boom for its economic health. President Evo Morales, a populist and socialist who is allied with Venezuela’s Hugo Chavez, says, “Lithium is the hope not only for Bolivia but for all the people of the planet.”

That hyperbolic hope, Morales has insisted, will be a resource developed by the Bolivian government, not by private industry. To accomplish that, Morales will need to raise nearly $1 billion in capital to develop a lithium mining infrastructure that does not yet exist. It isn’t clear who will put up those needed bucks.

Will the socialist Morales be able to convince private investors that the risks of investing in a state-owned lithium industry, combined with the market risks of electric cars, are acceptable? Not an easy sale. It will require Bolivia to offer returns commensurate with the risks.

Can Bolivia float bonds on the international market to finance the lithium play? Unlikely, according to international finance experts talking to MANAGING POWER on background. They cite the track record of many South American countries in repaying international infrastructure debt. “I’d rather burn the money for heat in my wood stove,” said one investment manager.

If Bolivia is unable to exploit its lithium resources, and the market for lithium carbonate tightens, that will drive up the costs of the already-expensive lithium-ion batteries, used extensively in laptop computers and cell phones, and the only choice today for electric vehicle propulsion. Electric cars, where the buyer’s price tag (probably in the range of $40,000 per car) is largely driven by the battery cost, may again stagnate in a consumer-driven market. Large government subsidies—maybe $10,000 per vehicle in state and federal tax breaks—could reduce the final cost to a range that meets the market demands for new cars, according to automotive analysts.

—Kennedy Maize is the executive editor of MANAGING POWER magazine.

Whither the Electric Vehicle

Take the electric vehicle versus the internal combustion engine. The market verdict of a century ago still holds–and for the same reasons. Thomas Edison was correct to pronounce the verdict to Henry Ford in 1896.

Edison himself labored to make batteries more economical for the transportation market, but the problem of weight and poor energy density could not be overcome.  A news splash in 1914 by Ford Motor Company of an “experimental” car, the  “Ford Electric” that would sell for $900 and have a range of 100 miles, based on Edison’s work, described as “Mr. Ford’s personal project” and “experimental” by Ford Motor Company—never got off the ground. Edison’s alkaline battery that penetrated the truck market was rejected by car makers because of its size and an incremental cost of between $200 and $600 per vehicle (1)

So it was back to 1896 for Ford and Edison despite the latter’s $1.5 million effort to commercialize batteries for the car. (2) 

Horse Pollution

Consider horse transportation and what supplanted it.

The quotations below should remind the reader of how big a step it was for transportation to become energized by affordable, plentiful, transportable, dense, reliable energy–and that was petroleum.

“In New York City alone at the turn of the century, horses deposited on the streets every day an estimated 2.5 million pounds of manure and 60,000 gallons of urine, accounting for about two-thirds of the filth that littered the city’s streets. Excreta from horses in the form of dried dust irritated nasal passages and lungs, then became a syrupy mass to wade through and track into the home whenever it rained. New York insurance actuaries had established by the turn of the century that infections diseases, including typhoid fever, we much more frequently contracted by livery stable keepers and employees than by other occupational groups, and an appeal to the Brooklyn Board of Health to investigate resulted in the institution of new municipal regulations on stables, compelling more frequent removal excreta and disinfecting of premises. Medical authorities stated that tetanus was introduced into cities in horse fodder and that an important cause of diarrhea, a serious health problem among children at the time, was ‘street dust’ consisting in the main of germ-laden dried horse dung. The flies that bred on the ever present manure heaps carried more than thirty communicable diseases, and the unsightliness and stench of the stable meant that most urban owners of horses ‘boarded and baited’ them at public facilities at inconvenient distance from their residences. In addition, traffic was often clogged by the carcasses of overworked dray horses that dropped in their tracks during summer heat waves or had to be destroyed after stumbling on slippery pavements and breaking their legs. About 15,000 dead horses were removed from the streets of New York each year. . . . These conditions were characteristic in varying degree of all of our large and medium-sized cities.”

- James Flink, The Automobile Age (Cambridge, MA: The MIT Press, 1993), p. 136.

“The first automobiles, whether gasoline-, steam-, or electric-powered, represented a dramatic environmental improvement over the horse-drawn technology that they replaced.

- David Kirsch, The Electric Vehicle and The Burden of History (New Brunswick, New Jersey: Rutgers University Press, 2000), p. 6.

“Out on the streets and off the rails were horse carts of every shape and size. From light one-horse traps to fancy carriages to heavy teams hauling thousands of pounds of freight, the streets of New York were awash with horses, urine, manure, and flies. An extremely lucky or patient observer might have noticed a rare horseless carriage.”

- David Kirsch, The Electric Vehicle and The Burden of History (New Brunswick, New Jersey: Rutgers University Press, 2000), p. 11.

“Horses, like the railroad, brought environmental problems of their own. It took about 2 hectares of land to feed a horse, as much as was needed by eight people. So in Australia, which in 1900 had one horse for every two people, much of the country’s grain land went to sustain horses. In 1920 a quarter of American farmland was planted to oats, the energy source of horse-based transport. Supplying inputs was only part of the horse problem. Horses deposited thousands of tons of dung on the streets, making cities pungent, fly-ridden, filthy, and diseased. A big city had to clear 10,000 to 15,000 horse carcasses from the streets every year.”

- J. R. McNeil, Something New Under the Sun (New York: W. W. Norton & Company, 2000), p. 310.

“The motor vehicle offered an attractive alternative because it combined the flexibility of the horse with the speed of the locomotive or electric trolley, without the costly liability of a system of fixed rails and overhead wires. General adoption of the automobile promised to relieve taxpayers of the high cost of removing tons of excreta daily from city streets and to eliminate huge expenditures for endless miles of track, overhead wires, and networks of elevated platforms and/or tunnels, and with this graft and corruption that too often seemed to be associated with building urban mass transit systems. It was facilely assumed that the cost of improving city streets for antiseptic automobile traffic would be negligible. Further, it was anticipated that urban traffic congestion and parking problems would disappear, because automobiles were more flexible than streetcars running on fixed rails and took up only half the space of horse-drawn vehicles.”

- James Flink, The Automobile Age (Cambridge, MA: The MIT Press, 1993), p. 138.

“Part of the automobile’s manifold appeal in 1910 was its modest emissions and the liberation it promised from the urban environmental problems associated with horses. By 1930, the urban horse was on the road to extinction.”

- J. R. McNeil, Something New Under the Sun (New York: W. W. Norton & Company, 2000), p. 310.

“Evidence of the horse was everywhere (in 19th century cities)—in the piles of manure that littered the streets attracting swarms of flies and creating stench … and in the numerous livery stables that gave off a mingled smell of horse urine and manure, harness oil and hay.

- Joel Tarr, “Urban Pollution: The Old Gray Mare was not the Ecological Marvel in American Cities that Horse Lovers like to Believe,” American Heritage, October 1971, p. 66.

“The city father of New York, faced with the threat of cholera in 1832, made special efforts to cleanse the cobblestone (streets), thereby divesting the city ‘of that foul aliment on which the pestilence delights to feed.’”

- Joel Tarr, “Urban Pollution: The Old Gray Mare was not the Ecological Marvel in American Cities that Horse Lovers like to Believe,” American Heritage, October 1971, p. 67.

“The equine carcasses added fearsomely to the smells and flies already rising in clouds from stables and manure piles. In 1880 New York City removed 15,000 dead horses from its streets, and as late as 1912 Chicago carted away nearly 10,000 horse carcasses.”

- Joel Tarr, “Urban Pollution: The Old Gray Mare was not the Ecological Marvel in American Cities that Horse Lovers like to Believe,” American Heritage, October 1971, p. 68.

“Aside from the disagreeable esthetic effect created by horse manure, its chief impact upon public health seemed to come from the wind-blown manure particles that irritated respiratory organs; from the reservoir furnished by the manure for disease spores; and most critically, from the fact that horse dung provided a breeding ground for the fly, proven by medical science to be the carrier of thirty different diseases, many of them acute.”

- Joel Tarr, “Urban Pollution: The Old Gray Mare was not the Ecological Marvel in American Cities that Horse Lovers like to Believe,” American Heritage, October 1971, p. 106.

”(B)lamed on the horse were such familiar plagues as cholera, typhoid fever and intestinal diseases like dysentry and infant diarrhea.”

- Joel Tarr, “Urban Pollution: The Old Gray Mare was not the Ecological Marvel in American Cities that Horse Lovers like to Believe,” American Heritage, October 1971, p. 69.

“At the beginning of the twentieth century writers in popular and scientific periodicals were decrying the pollution of the public streets and demanding ‘the banishment of the horse from American cities.””

- Joel Tarr, “Urban Pollution: The Old Gray Mare was not the Ecological Marvel in American Cities that Horse Lovers like to Believe,” American Heritage, October 1971, p. 65.

”The presence of 120,000 horses in New York City wrote one authority in 1908 is ‘an economic burden, an affront to cleanliness and a terrible tax on human life.’ The solution agreed the critics was adoption of ‘the horseless carriage.’”

- Joel Tarr, “Urban Pollution: The Old Gray Mare was not the Ecological Marvel in American Cities that Horse Lovers like to Believe,” American Heritage, October 1971, p. 65.

“Sanitary experts in the early part of the twentieth century agreed that the normal city horse produced between 15 and 30 pounds of manure a day.”

- Joel Tarr, “Urban Pollution: The Old Gray Mare was not the Ecological Marvel in American Cities that Horse Lovers like to Believe,” American Heritage, October 1971, p. 65.

”Health officials in Rochester NY calculated in 1901 the 15,000 horses in that city produced enough manure in a year to make a pile 175 feet high covering an acre of ground, and breeding 16 billion flies, each one a potential spreader of germs.”

- Joel Tarr, “Urban Pollution: The Old Gray Mare was not the Ecological Marvel in American Cities that Horse Lovers like to Believe,” American Heritage, October 1971, p. 66.

”Writing in Appleton’s Magazine in 1908, Harold Bolce entitled his article ‘The Horse vs. Health.’ In a thoroughgoing assault he blamed most of the sanitary and economic problems of the modern (1908) city on the horse and essayed to calculate the savings if all horses were replaced by automobiles and motor trucks … he reach a total of approximately one hundred million dollars as the price that New York City paid for not banning the horse from its streets.”

- Joel Tarr, “Urban Pollution: The Old Gray Mare was not the Ecological Marvel in American Cities that Horse Lovers like to Believe,” American Heritage, October 1971, p. 69.

“[With the displacement of horse-drawn by motor vehicles in the 1920s] streets were cleaner, particle pollution resulting from ground-up manure and the diseases thereby produced were diminished, the number of flies was greatly reduced, goods were transported more cheaply and efficiently, traffic traveled at a faster rate, and the movement of people from crowded cities to suburbs was accelerate by the automobile. Events appeared to justify the spokesmen for the advantages of the motor vehicle over the horse.”

- Joel Tarr, “Urban Pollution: The Old Gray Mare was not the Ecological Marvel in American Cities that Horse Lovers like to Believe,” American Heritage, October 1971, p. 69.

————————

(1) Mom, Gijs. The Electric Vehicle: Technology and Expectations in the Automobile Age. Baltimore: Johns Hopkins University Press, 2004, pp. 255–56).

(2) Jonnes, Jill. Empires of Light: Edison, Telsa, Westinghouse, and the Race to Electrify the World. New York: Random House, 2003, p. 352.

[Editor note: This post from February 19th is reprinted and expanded upon given the Obama Administration's release of $2 billion this week for electric car components built in the U.S]

The wisdom of the ages applies to energy. The smartest-guys-in-the-room approach to energy transformation by DOE secretary Stephen Chu, based on a false premise of the unsustainability of hydrocarbon energy, should note such history. The silver bullets that he is looking for have a long, failed history for good reason.

Take for example the electric car, a perennially bad idea for receiving taxpayer subsidies. Below, produced verbatim, is an eye-witness account of a conversation between the father of electricity and the father of the automobile that took place some 113 years ago.

This conversation, dated as August 1896 by the eyewitness Samuel Insull (1859–1938), himself considered the father of the modern electricity industry, is recounted in his autobiography, The Memoirs of Samuel Insull (full cite at end):

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“He asked me no end of details,” to use Mr. Ford’s own language, “and I sketched everything for him; for I have always found that I could convey an idea quicker by sketching than by just describing it.” When the conversation ended, Mr. Edison brought his fist down on the table with a bang, and said:

Young man, that’s the thing; you have it. Keep at it. Electric cars must keep near to power stations. The storage battery is too heavy. Steam cars won’t do, either, for they require a boiler and fire. Your car is self-contained—carries its own power plant—no fire, no boiler, no smoke and no steam. You have the thing. Keep at it.

Later on Mr. Ford wrote:

That bang on the table was worth worlds to me. No man up to then had given me any encouragement. I had hoped that I was headed right, sometimes I knew that I was, sometimes I only wondered if I was, but here all at once and out of a clear sky the greatest inventive genius in the world had given me a complete approval. The man who knew most about electricity in the world had said that for the purpose my gas motor was better than any electric motor could be—it could go long distances, he said, and there would be stations to supply the cars with hydro-carbon. That was the first time I ever heard this term for liquid fuel. And this at a time when all the electrical engineers took it as an established fact that there could be nothing new and worthwhile that did not run by electricity. It was to be the universal power.

The above meeting between Mr. Henry Ford and Mr. Thomas A. Edison took place at a time when Mr. Ford was engaged in getting ready to build his second car. He has told me on a good many different occasions that the inspiration he received from meeting Mr. Edison had a great deal to do with his having the courage to go ahead with his work in trying to produce a cheap motor car operated by an internal combustion engine.

-  Insull, Samuel. The Memoirs of Samuel Insull. Polo, Ill: Transportation Trails, 1934, 1992, pp. 142–43.

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This is not the end of the story. Edison returned to electricity later in his career to make batteries viable for Ford’s vehicles. Henry Ford, in close friendship with Edison, wanted it badly. But the venture failed as I describe in my forthcoming book, Edison to Enron: Energy Markets and Political Strategies:

Edison got the battery bug later in his career, seeing this field as his way to right the wrongs that others had bestowed on him when General Electric was taken over by others in 1892. The Edison Storage Battery Company, founded in 1900, encountered early setbacks, but Thomas Edison soldiered on and produced a superior nickel-iron-alkaline product by 1909 (Jonnes, 351–52).

But a major hoped-for market, motor vehicles, was using gasoline, not electricity. But it was not for want of effort between two titans and dear friends. In 1914, Henry Ford announced a “Ford Electric” that would sell for $900 and have a range of 100 miles (Mom, p. 255). The brainchild of Thomas Edison himself, the concept—described as “Mr. Ford’s personal project” and “experimental” by Ford Motor Company—never got off the ground. The alkaline battery that penetrated the truck market was rejected by car makers because of its size and an incremental cost of between $200 and $600 per vehicle (Mom, pp. 255–56).

So it was back to 1896 for Ford and Edison despite the latter’s $1.5 million battery effort (Jonnes, 352).

- Jonnes, Jill. Empires of Light: Edison, Telsa, Westinghouse, and the Race to Electrify the World. New York: Random House, 2003.

- Mom, Gijs. The Electric Vehicle: Technology and Expectations in the Automobile Age. Baltimore: Johns Hopkins University Press, 2004.

Back in August of 2008, then-candidate Obama called for 1 million plug-in hybrid vehicles to be on the road by 2015.

To that end, then-candidate Obama called for:

*$4 billion in tax credits to American automakers to retool plants for the production of plug-in hybrid cars capable of 150 miles to the gallon;

*A $7,000 tax credit for consumers who bought early model plug-in vehicles; and

*Candidate Obama vowed that half of all cars purchased by the federal government would be plug-in hybrids or all-electric by 2012.

As both candidate and president, Obama has repeatedly raised plug-in hybrids as a vital technology for greening Detroit.

Fast forward to a recent item in the Wall Street Journal, which tells us that “In a five-page analysis of GM’s viability, the [Obama car] team critiqued GM’s marquee next-generation project, the electric-powered Chevy Volt, as “too expensive to be commercially successful in the short-term.”

Ah, the irony is palpable. And it’s not as if we hadn’t told them so because we did in a post at The American, “Stop the Green Carjacking”:

Consider the Chevy Volt. When it was first announced, the price estimate from General Motors (GM) was $30,000. That soon jumped to $35,000. Now GM’s president says that the actual price could be closer to $40,000, and that GM will still lose money on the sale. As for fuel cells, GM’s prototype fuel-cell car runs on hydrogen and emits nothing but water vapor. It’s hard to get greener than that—but it’s also hard to find a more expensive car: the prototypes cost $1.5 million to produce.

 And add to this insurance costs:

Hybrids are also more expensive to insure. Online insurance broker Insure.com shows that it costs $1,374 to insure a Honda Civic but $1,427 to insure a Honda Civic Hybrid. Similarly, it costs $1,304 to insure a Toyota Camry but $1,628 to insure a Toyota Camry Hybrid.

What explains the higher rates? According to State Farm, hybrids cost more to insure because their parts are more expensive and repairing them requires specialized labor, thus boosting the after-accident payout. Even conventional small cars are more expensive to insure than larger vehicles, because the former are involved in more accidents that produce extensive injuries. According to a recent article in The Wall Street Journal, the same driver would pay $412 more to insure a Honda Civic compact that gets 36 mpg on the highway than he would to insure a Honda CR-V (Honda’s mini-SUV) that gets 27 mpg.

Trying to make the uneconomic economic is not good public policy.

Take for example the electric car,

a perennially bad idea for receiving taxpayer subsidies. Below, produced verbatim, is an eye-witness account of a conversation between the father of electricity and the father of the automobile that took place some 113 years ago.

This conversation, dated as August 1896 by the eyewitness Samuel Insull (1859–1938), himself considered the father of the modern electricity industry, is recounted in his autobiography, The Memoirs of Samuel Insull (full cite at end):

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“He asked me no end of details,” to use Mr. Ford’s own language, “and I sketched everything for him; for I have always found that I could convey an idea quicker by sketching than by just describing it.” When the conversation ended, Mr. Edison brought his fist down on the table with a bang, and said:

Young man, that’s the thing; you have it. Keep at it. Electric cars must keep near to power stations. The storage battery is too heavy. Steam cars won’t do, either, for they require a boiler and fire. Your car is self-contained—carries its own power plant—no fire, no boiler, no smoke and no steam. You have the thing. Keep at it.

Later on Mr. Ford wrote:

That bang on the table was worth worlds to me. No man up to then had given me any encouragement. I had hoped that I was headed right, sometimes I knew that I was, sometimes I only wondered if I was, but here all at once and out of a clear sky the greatest inventive genius in the world had given me a complete approval. The man who knew most about electricity in the world had said that for the purpose my gas motor was better than any electric motor could be—it could go long distances, he said, and there would be stations to supply the cars with hydro-carbon. That was the first time I ever heard this term for liquid fuel. And this at a time when all the electrical engineers took it as an established fact that there could be nothing new and worthwhile that did not run by electricity. It was to be the universal power.

The above meeting between Mr. Henry Ford and Mr. Thomas A. Edison took place at a time when Mr. Ford was engaged in getting ready to build his second car. He has told me on a good many different occasions that the inspiration he received from meeting Mr. Edison had a great deal to do with his having the courage to go ahead with his work in trying to produce a cheap motor car operated by an internal combustion engine.

-  Insull, Samuel. The Memoirs of Samuel Insull. Polo, Ill: Transportation Trails, 1934, 1992, pp. 142–43.

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