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Ford to Sell Multiple EV and Hybrids in 2012

excerpt from original post at Clean Fleet Report

With gasoline prices over $4 per gallon in many states, Ford is rolling out a variety of exciting hybrid cars and electric cars.

In April, consumers will start buying the new Ford Focus Electric. Yesterday, I rode in this beautiful compact hatchback. I silently cruised down the streets unless you cranked on the impressive sound system. Ford is pricing the Focus Electric at $39,200, about $4,000 more than the Nissan Leaf. The 23kW Ford battery pack, with LG Chem lithium-ion cells, charges at twice the speed of the LEAF and has about 10 percent more range. By the end of the year however, the 2013 LEAF will charge at the same rate. Ford increasingly believes in customer choice. The gasoline sipping Ford Focus SE gets 40 mpg highway and is not even a hybrid.

Ford C-MAX Energi and Hybrids = Crossover SUVs with Great Mileage

Ford C-MaxIn the fall of 2012, Ford brings unparalleled fuel economy to the 5-seat crossover SUV segment. The C-MAX plug-in hybrid will allow you to drive the first 20 to 30 miles on a garage electric charge before engaging a fuel-efficient engine. It may rate over 100 mpg. The C-MAX lives up to its name. It maximizes the cargo and passenger space that can be fit on the popular “C” sized vehicle platform. For customers that want to pay less up-front, Ford will also offer the C-MAX as a hybrid. It will be as roomy as the C-MAX Energi, but never get plugged-in. With a lithium-battery pack it will have excellent fuel-economy. The C-MAX Hybrid will compete head-on with the new Toyota Prius V, which gets 42 mpg combined and has 40 percent more cargo than the best selling Prius Liftback.

Ford Intends to Take Midsized Market Share from Toyota

When the 2013 Ford Fusion Hybrid goes on sale at the end of this year, it will offer the best fuel economy of any midsized sedan. It is targeted to deliver 46 mpg highway, 44 city, and 46 combined, beating the Toyota Camry Hybrid with its famous Synergy Hybrid Drive System. I have been very impressed with test drives of both hybrids, which are roomy, quiet, and smooth as silk to drive. The Camry uses NiMH batteries; the Fusion Hybrid uses lithium-ion.Outdoing Toyota, Ford will also offer the Fusion Energi, a plug-in version that will deliver the first 20 to 25 miles of driving on a garage charge before engaging the gasoline engine. Pricing has not been announced. Ford will also emphasize customer choice with the Fusion available with a variety of non-hybrid configurations.

Ford’s Strategy to Lower the Cost of Hybrid and electric cars

Ford built 2.5 million “C” platform vehicles last year with many common components. The Focus Electric and C-MAX offerings will be built with over a dozen other vehicles on the same assembly line in Wayne, Michigan. Ford controls cost with flexible manufacturing, where it can quickly adjust to market demand. Over 80 percent of the Fusion Hybrid and Energi components will be the same, allowing Ford to achieve more cost efficiencies.

Ford’s team of more than 1,000 engineers working on hybrid and electrification programs – including Fusion Hybrid and Fusion Energi plug-in hybrid – has grown so fast that the company today is announcing the conversion of its 285,000-square-foot Advanced Engineering Center in Dearborn, Mich., to electrified vehicle development. The new jobs are part of Ford’s plans to add more than 12,000 hourly and salaried jobs by 2015 in the United States. The company also has announced it is tripling production capacity of its hybrid, plug-in hybrid and electric vehicles in the U.S. next year compared with 2011.

Three years ago, lithium battery packs cost about $1,000 per kilowatt. Now the cost is closer to $500. By the end of the decade, costs may only be $250 per kilowatt. Ford makes all of its lithium-packs and works with several lithium cell manufacturers to get the best price and battery chemistries separately optimized for battery-electric, plug-in hybrid and hybrid. Ford’s pack and volume strategy will lower costs of hybrid and electric cars.

 

Ford will only use lithium batteries in all Ford hybrids starting in calendar year 2012 when it announces the new Focus using the Ford global C platform. FWhen I lasted interviewed Nancy Gioia, Director Ford Global Electrification, she said that Ford has a 2020 goal of 10 to 25 percent of its vehicle sales including lithium batteries. Her best guess is that 70% would be hybrids, 20 to 25% plug-in hybrids, and 5 to 10% battery-electric. Everything from technology innovation to oil prices will affect the future mix.

To Boldly Go Where No-One Wants To Go

I am appalled at the state of the public discourse on oil and gasoline prices.

Between the newspapers and the talking heads, there is an increasing cacophony that the government should do something, just about anything, to halt the increase in oil and gasoline prices.

From the lefties:  Release stocks from the Strategic Petroleum Reserve!  Stop Big Oil from gouging customers!

From the wingnuts on the right:  Get the enviros out of the way and drill, baby, drill!  Cut gasoline taxes!

All of these steps are just re-arranging deck chairs on the Titanic.  The facts are simple, but they are discouraging, and they won’t be changed by wishful thinking or loudly-shouted populist mantras.  (It’s useful to remember, but often forgotten in today’s world, that just because the volume of your voice is higher doesn’t mean you’re more correct.)

In its territory, the U.S. possesses about 2% of the world’s proven oil reserves.  Yet, the U.S. economy consumes about 25% of the world’s annual oil production.  This blog post depicts the situation succinctly.

True, the U.S. share of global oil consumption will likely decline in the coming years — but that’s probably not because our demands for oil will decline.  Rather, it’s because China, India and the rest of the developing world are ravenously ramping up their demands for oil, with relatively little concern for the price.

With 727 million barrels according to the DOE, the Strategic Petroleum Reserve is only big enough to support U.S. consumption for a little over a month, so releasing even all of it doesn’t chnage the fundamental dynamics. 

There are balderdash claims floating across the Internet that there are hundreds of billions of barrels of oil resources in the U.S. (referring primarily to the Bakken Formation in the Dakotas) waiting to be tapped, if the bloody environmentalists would simply get out of the way.  Alas, as this blogger does so nicely, just a little bit of fact-checking easily exposes these claims as wildly-exaggerated

While there are about a trillion barrels of hydrocarbons in the Green River Formation in Colorado, Wyoming and Utah, this is not petroleum but rather oil shale  — which are not to be confused with the shale gas deposits that have yielded natural gas bonanzas in such places around the U.S. as the Barnett and the Marcellus.  Technologies in use today can’t produce the Green River oil shale resource, and while new technologies are being developed to pursue this compelling opportunity, they are being thwarted less by environmental constraints than by economic ones — more investment capital is required, and greater certainty of higher oil prices is required to attract that capital. 

Meanwhile, the biggest slug of known petroleum reserves on Earth lies in the Middle East.  Much of this is in Saudi Arabia — and as a set of cables released by Wikileaks a few weeks ago hints, it’s hardly certain that those reserves are as vast as have been widely-assumed.  If production starts to decline from Saudi Arabia — either because it’s become geologically over-tapped or due to internal political strife of the type we’ve seen of late in the Middle East — it’s hard to know where oil prices will crest.

Even so, at least currently, Saudi Arabia and the rest of OPEC continue to set the world price for oil — and while the privately-held oil majors profit handsomely when the price rises, it’s not like these guys have much of a say in the price of oil.  They’re the minority players in world oil production:  they merely go along for the ride, and take the money to the bank.

Moreover, the size of the planet’s endowment of fossil fuels is not increasing.  Old fossils aren’t being compressed into hydrocarbons at anywhere near the rate they’re being extracted from the ground.

Exploration and drilling technologies have improved dramatically over the past thirty years, and the oil industry has poked holes all over the planet — and in large swaths of the waters too.  We’ve explored most of the easy places, and we’ve sucked dry most of the cheap resources from the easy places.  What’s left is harder stuff to extract.  It’s more expensive.  Any as-yet-undiscovered reserves are generally going to be in harder places, or in smaller quantities.  There will be sizable finds here and there now and then — and they will be worth pursuing and utilizing in a responsible manner, but they won’t change the overall picture materially.

It’s damn-near impossible to consider this set of facts and conclude something other than oil prices — and therefore gasoline prices — are on an inexorable path upwards.  Perhaps with some downward blips along the way, but the upward trend seems inescapable.

And, yet, the vox populi is whining insistently that some miracle be performed by some mystical force to push the price trajectory downward!

Do something, anything!  These are the rants of a desperate society living paycheck-to-paycheck.  These are the cries of those who live in denial that we’ve painted ourselves into a corner with no clear escape. 

We Americans need to come to grips that we cannot continue to be held hostage to a damn-it-all mentality that continued economic well-being can only be achieved with permanently unfettered access to cheap oil and gasoline.  If we can’t ensure unlimited low-cost energy supplies — and I hope it’s becoming clearer to more people that we surely can’t — then the house of cards on which we’ve built our economy will fall.

Rather than turning the world on its head to keep alive a false promise that can scarcely any longer be extended, we need to turn our commitments towards building a more robust economic system that isn’t precariously dependent on one non-replenishable commodity.

This is not a popular line of thinking.  As the title of this post suggests, this is boldly going where no-one wants to go. 

I don’t want to argue whether or not it’s good for oil to be cheap or expensive.  I want a reasoned debate about what do we do when oil is expensive and we can’t do anything about it.

In his 2011 State of the Union speech, President Obama offered the theme that, as Americans, “We do big things.”  Moving our economy off of oil is a very big thing.  Alas, I’m not as sanguine as the President that we relish the challenge and have the appetite to do it proactively.  However, I am more hopeful about our future after considering Winston Churchill’s (hopefully timeless) observation:  “Americans can always be counted on to do the right thing…after they’ve exhausted all other possibilities.”

Cap-and-Trade Gold in the Golden State

By John Addison (7/2/08). Obama and McCain have both stated that climate change requires decisive action. Both support cap-and-trade, putting a limit (cap) on greenhouse gases and enabling the market to work by allowing the trading of permits.

How would this work in the United States? We will all learn from California’s progress with its enacted law – AB32 Climate Solutions Act. The implementation is detailed in the 93-page Climate Change Draft Scoping Plan.

By requiring in law a reduction in greenhouse gas emissions to 1990 levels by 2020, California has set the stage for its transition to a clean energy future.

Since the law was enacted in 2006, the lead implementing agency, the California Air Resources Board (ARB), has been getting an earful from everyone from concerned citizens to industry lobbyists. It moves forward publishing data from the California Climate Action Registry, facilitating 12 major action teams, conducting public workgroups, and drafting plans which get more feedback in public meetings. The ARB Board will next meet to review the proposed Scoping Plan on Novembers 20 and 21.

Climate change is already impacting everything in California from draughts that cause agricultural loses to water shortages that impact industry. But instead of seeing the glass as half empty, the California Plan states, “This challenge also presents a magnificent opportunity to transform California’s economy into one that runs on clean and sustainable technologies, so that all Californians are able to enjoy their rights to clean air, clean water, and a healthy and safe environment.” Cleantech will be a major winner.

The plan is ambitious because California’s population in 2020 is forecasted to be double the 1990 level. The Climate Solutions Act will require that per capita CO2e emissions be reduced from today’s 14 tons per year to 10 tons per day by 2020. The total state cap for 2020 is 427 MMTCO2e. Keys to success will include:

  • Green buildings with improved construction, insullation, energy efficient lighting, HVAC, equipment, and appliances.
  • Electric utilities that use at least 33 percent renewable energy.
  • Development of a California cap-and-trade program that links with other western states and Canadians provinces to create a regional market system.
  • Implementation of existing State laws and policies, including California’s clean vehicle standards, goods movement measures, and the Low Carbon Fuel Standard.

The Plan shows that California has learned from the Kyoto implementation. California’s scope is much broader, covering 85 percent of the State’s greenhouse gas emissions from six greenhouse gases: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), sulfur hexafluoride (SF6), hydrofluorocarbons (HFCs), and perfluorocarbons (PFCs). AB32 calls for incremental improvements all the way to 2050.

The transportation sector – largely the cars and trucks – is the largest contributor with 38 percent of the state’s total greenhouse gas emissions. Electricity generation is 23 percent. Industry 20 percent. Commercial and residential buildings are 9 percent.

Look for economic growth in a number of areas. New buildings will increasingly be LEED certified, often at the Silver level. Building efficiency retrofits will be an active area employing contracts large and small.

Distributed power generation will grow. Combined heat and power will be actively deployed. Process efficiency will continue.

Renewable energy will experience strong growth including wind, solar, geothermal, and bioenergy. Ocean power pilot projects will continue. Controversial new power from nuclear and petroleum coke gasification with CSS will be considered. In-state coal power generation is history in California. Using out-of-state coal power will continue to decline as GHG emissions are priced into the equation.

Wind continues to grow in California and the nation. A fascinating read is the Department of Energy (DOE) report, entitled 20 Percent Wind Energy by 2030, which identifies the real feasibility of the United States reaching meeting 20 percent of its energy requirements from wind by 2030. A path to over 300 GW of wind power by 2030 is detailed.

California and much of the nation is blessed with an abundance of sunlight. The Utility Solar Assessment (USA) Study, produced by Clean Edge and Co-op America, provides a comprehensive roadmap for utilities, solar companies, and regulators to reach 10% solar in the U.S. by 2025 with both PV and CSP.

C02 costs are not likely to significantly increase the cost of fuel, but rocketing oil costs have changed the game. Use of corporate flexible work programs, commuting, and use of public transportation are now at record levels in the state and will grow in popularity.

California High-Speed Rail (HSR) is likely to be on the California ballot this November, with a price tag that will be a fraction of the cost of expanding highways and adding an airport. HSR would link major transit systems throughout the state, and save billions in fuel costs and emissions.

AB32 is also likely to reach its goals because cars will increasingly outsell SUVs and trucks in California. By 2020, electric cars and plug-in hybrids may experience and explosion of popularity. New low-carbon fuels are likely to be widely used.

California is working closely with six other states and three Canadian provinces in the Western Climate Initiative (WCI) to design a regional greenhouse gas emission reduction program that includes a cap-and-trade approach. ARB will develop a cap-and-trade program for California that will link with the programs in the other partner states and provinces to create this western regional market. California’s participation in WCI creates an opportunity to provide substantially greater reductions in greenhouse gas emissions from throughout the region than could be achieved by California alone. AB32 may give the United States a head-start in its own cap-and-trade program.

John Addison publishes the Clean Fleet Report.

Is Corn Ethanol Lowering Gas Prices at the Pump?

Despite providing the largest portion of alternative fuel in the US, corn ethanol gets a lot of flack in the circles Cleantech Blog runs in. The usual culprits go something like this: Corn ethanol is heavily subsidized (yes it is). Corn ethanol does not reduce greenhouse gas emissions (sort of, it really, really depends on your assumptions). Corn ethanol contributes to the fertilizer driven “deadzone” in the Gulf of Mexico (maybe, another complicated topic). Corn ethanol drives up the price of food (a topic for another day).

But the main argument for supporting corn ethanol production has always been about energy independence and fuel switching. Enabling a new source of supply into our gasoline supply chain should in theory, put some some downward pressure on gasoline prices at the pump, and keep those energy dollars at home rather than send them overseas.

So the real question is, does it?

A very interesting paper was published at Iowa State last month says yes, US ethanol production (almost all from corn) has reduced gasoline prices at the pump $0.29-$0.40 per gallon, depending on the region. Further, that the reduction came largely at the expense of profits the refining industry would otherwise have made (indicating perhaps that our ethanol production helped US consumers at the pump, but did not impact world oil prices).

In their paper entitled The Impact of Ethanol Production on US and Regional Gasoline Prices and on the Profitability of the US Oil Refinery Industry, authors Xiaodong Xu and Dermot Hayes analyzed the impact on price at the pump and refining profits of adding ethanol to the US gasoline fleets by separating the impact of ethanol from the major variables like gasoline imports, refining capacity, refining utilization rates, hurricanes, market concentration in refining, stocks, and seasonality, that generally affect gasoline price.

I find their $0.29 to $0.40 per gallon results a surprisingly large number, indicating that ethanol production, while providing on average well less than 5% of our gasoline supplies over their study period, could have affected prices at the pump downward to the tune of greater than 2 to 3 times that percentage level. That result is a huge win for ethanol proponents, as it suggests that adding ethanol to the US fleet has significantly benefited consumers (as one would expect), and also suggests that the ethanol subsidy program (at about $0.40 per gallon for 5% of the US gasoline production works out to around a 1 to 2 cent effective tax on gasoline at current levels) may well have paid for itself up to 20x over or more. The studies authors are careful not extrapolate too much from the results, but they are certainly interesting enough to warrant significant further research, and argue a strong case for further corn ethanol support.

Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is founding contributor of Cleantech Blog, a Contributing Editor to Alt Energy Stocks, Chairman of Cleantech.org, and a blogger for CNET’s Greentech blog.