Widgets Magazine
Page 1 of 3 123 LastLast
Results 1 to 25 of 69

Hybrid View

Previous Post Previous Post   Next Post Next Post
  1. #1

    Lincoln Area Obama’s energy plans often ignore even basic economics.

    http://www.instituteforenergyresearc...-a-pipe-dream/

    President Obama speculates a lot about his vision of energy and its operation in our economy,

    but his vision often ignores economics His proposals would probably become much more practical if he studied the economics of how markets function.


    While governments can subsidize high cost technologies, it doesn’t mean they are affordable to the American public, particularly in these gloomy times with official unemployment at 8.2 percent[i].

    High-cost technologies are still affordable to a very small niche market with enormous government subsidies, but remain too expensive for average Americans. That explains why Obama’s goal of million electric car and plug-in hybrid vehicle goal by 2015 is lucky to be at 50,000 vehicles right now.[ii]

    Edmunds, an industry research firm, expects electric cars and plug-in hybrids to make up only 1.5 percent of the U.S. market in 2017, compared with 0.1 percent last year. Lux Research estimates that number will be fewer than 200,000. [iii]

    The Electric Vehicle Market

    Last year 17,300 plug-in hybrid and electric vehicles were sold in the United States out of 12.8 million new light-duty vehicles.[iv] And, electric car sales continue to be sluggish.
    •Nissan sold about 2,610 Leaf electric cars through the first five months of this year[v], but expects to sell 20,000 by year-end. After 2013, Nissan plans to sell up to 150,000 Leafs a year. The company borrowed $1.3 billion from the Department of Energy to build a battery plant and manufacturing line in Smyrna, Tennessee, which will be finished in September, and will be capable of making 200,000 battery packs a year.
    •GM had expected to sell 45,000 Chevrolet Volts this year, but only sold about 7,380 Volts in the first five months. Last May, the Volt got bad press when one caught fire three weeks after a lab-supervised crash test. The fire was due to leaking coolant that came in contact with the battery, causing a short. The Chevy Volt’s range is 40 miles on a battery charge and 300 to 350 miles on a tank of gas. In mid-March, GM suspended its Volt production for five weeks and temporarily laid off 1,500 workers to let production levels equal demand, having lagged well below expectations. However, because of soaring gasoline prices, a record number of Volts sold in March—2,289 vehicles—prompting GM to resume production a week earlier than originally announced.
    •Ford is introducing plug-in electric models this year that are versions of gasoline-engine models. It delivered the first Focus Electric vehicles to retail customers in May. The company is down-playing sales expectations given the current market sales statistics.
    •Toyota is expected to release three plug-in vehicles in the United States, but only expects to sell about 15,000 a year. It sold 1,700 plug-in vehicles in April.

    According to American Enterprise Institute scholar Kenneth Green, electric vehicles have been the next great technology promise for more than a century. In fact, Henry Ford bought his wife, Clara, at least two electric cars in the early 1900s with 50 miles driving range and speed of about 35 miles per hour.[vi]

    According to Green, subsidies come to about a quarter of the Volt’s $41,000 sticker price, starting with the $7,500 tax credit and adding in federal, state and local government support for charging stations, HOV lanes and research grants for new battery technologies.“They’re not saying, ‘Take away our subsidy,’” Green said of the automakers. “When they say that, I’ll be convinced the cost curves are declining.”

    According to the Lundberg Survey, based on the cost of gasoline versus electricity, fuel efficiency and depreciation, gasoline prices would have to rise to $8.53 a gallon to make the Leaf competitive and $12.50 for a Volt to be competitive. Obama’s dream includes a car battery that costs half the price of today’s batteries and can reach 300 miles on a single charge, which the industry is far from achieving.[vii]

    The Electric Battery Market

    In anticipation of electric vehicle sales, the Department of Energy has awarded more than $1 billion to companies to make advanced batteries since 2009. The money, which funded nine battery plants scattered across the United States from Michigan to Pennsylvania and Florida, are operating well below capacity. The mismatch between electric car sales and battery production has caused problems for the battery suppliers.
    •A123 Systems Inc.’s matching grant of $249 million required it to build facilities that could make at least 500 megawatt-hours of lithium-ion battery capacity a year by this November. That amount of capacity would supply the equivalent of 21,000 Nissan Leaf electric-cars, but only about 12,000 Leafs have sold in the United States since the end of 2010. The company’s grant from the Department of Energy set out a specific sequence for the hiring of engineers and ordering of equipment. The company is now trying to raise new money to stabilize its finances.
    •Johnson Controls Inc. built a battery plant in Holland, Michigan, using Government grants, but the facility is nearly idled now due to the bankruptcy of its primary customer.
    •Korea’s LG Chem built a plant in Michigan to supply General Motors, but that plant has not yet started production.
    •Ener1 Inc., a battery maker that built a plant in Indianapolis using $54.9 million of a $118 million government grant, filed for bankruptcy earlier this year. Its plant is operating with 250 workers, short of the 1,700 originally envisioned in 2009.

    Because of low electric vehicle sales, battery makers are having a difficult time despite the $1.26 billion they received in matching grants from the federal government. It was expected that more than 6,400 jobs would be created, but to date, about two-thirds of the total funds have been spent and only about 2,000 workers have been hired. Here are some of the explanations from analysts following the electric vehicle market:

    “The goals that were tied to the grants said you have to ramp up this quickly, and those goals were overly optimistic,” said John Gartner, an analyst who follows the electric-vehicle market for Boulder, Colo.-based Pike Research. “The market was never going to develop it as quickly as the DOE expected. It’s kind of out of alignment with reality. The whole goal of 1 million electric vehicles [by 2015], there is just no way that is going to happen.”

    Carter Driscoll, an analyst who specializes in researching alternative energy companies for CapStone Investments, blames the administration’s insistence on quickly setting up and staffing these operations for the current troubles. “It was about making jobs in certain areas. It wasn’t market driven. There is going to be a [jobs] fallback,” said Mr. Driscoll.[viii]

    Battery manufacturing is substantionally overbuilt because there is little demand for electric vehicles. The automobile battery industry is finding that out right now. The government, which has a poor track record of chosing winners and losers, is trying to get even more involved by dictating exactly how expansion should occur. They should learn from Solydra and the experience of other countries that subsidies come at a high cost.

    China’s Experience

    Besides manufacturing gasoline-fueled vehicles, BYD is China’s electric car manufacturer. Because of government policies, the company is losing sales to its rivals that have better quality and more expensive cars. Last year, Beijing issued two-thirds fewer license plates and used a lottery to distribute them resulting in fewer car buyers. And, in December 2010, the Chinese government ended two programs that had stimulated car sales in 2009 and 2010: one where the sales tax on cars with small engines was reduced and another that subsidized vehicle purchases by residents of rural areas. With fewer buyers, expensive foreign-brand cars sold more than BYD’s economy cars that are targeted to the rural population.[ix]

    But BYD now sees the future of the auto industry to lie in hybrid gasoline-electric vehicles and not in all-electric cars, which face issues of battery range and recharging time. BYD’s battery technology came into question recently when a sports car slammed into the back of one of BYD’s electric taxis in southern China, setting the vehicle aflame. The taxi, an e6 battery-electric sedan, spun across three lanes of traffic, hitting a tree and killing all three occupants. Photos of the wreck were spread on China’s Internet.

    BYD had plans to start exporting electric cars to the United States by 2010 but those plans stalled because of the global economic slowdown and because of BYD’s decision that gasoline-electric hybrids are more promising than electric vehicles in the market place.

    Conclusion

    When the government provides subsidies for industries, the subsidies come at a cost. It is no different whether the market is renewable energy, electric vehicles, or batteries. The government has never had a good track record of picking winners and losers. Why some think that should now change is a mystery.

    The evidence is mounting that the government is a poor venture capitalist
    ,
    and one only has to look at Solydra and other bankrupt firms that government chose to support to see that it is not working.

    The question for Americans in an extended economic downturn and a rapidly growing deficit must be, “can we afford these experiments and trust the government to choose the technologies we will use in the future?” The record is not good.

  2. #2

    Default Re: Obama’s energy plans often ignore even basic economics.

    The government funded the rollout of fossil fuels much harder than it has for electrics. Even now the volume of fossil fuel subsidies dwarfs green investmet(and especially the much smaller green energy markets). When you work in the fossil fuel industry and claim that the government has a bad track record of picking winners and losers it just makes you look like an unread partisan hack.


    The total costs of our fossil fuel heavy power infrastructure dwarf the per-kilowatt true costs of green technologies. Just because a cost is externalized does not make it disappear.

  3. #3

    Default Re: Obama’s energy plans often ignore even basic economics.

    30 years from now most folks will laugh at this thread

  4. #4

    Default Re: Obama’s energy plans often ignore even basic economics.

    Quote Originally Posted by Easy180 View Post
    30 years from now most folks will laugh at this thread
    The railroad industry must have mocked the government's support of the emerging automotive industry just as the stagecoach folks probably mocked the emergence of passenger rail.

  5. #5

    Default Re: Obama’s energy plans often ignore even basic economics.

    Quote Originally Posted by Easy180 View Post
    30 years from now most folks will laugh at this thread
    That assumes we find something to replace fossil fuels with and that it’s cheap enough to not seriously limit man’s quality of life. You assume much, because man has been searching for a lot longer than 30 years for a replacement, this in spite of the many predictions that date back to the 1920’s that I know of that we would soon be substantially running out of oil in a decade or 2.

    When trillions could be made by finding a solution and it hasn’t come despite decades of trying it’s foolish to assume that a full scale solution is automatically going to come within a certain time frame.

  6. #6

    Default Re: Obama’s energy plans often ignore even basic economics.

    It is one thing to have a change in technology. It is one thing to give tax breaks to encourage new techonolgy. It is another thing to give huge tax payer backed loans to companies working on new technology that lack a strong track record of success. What this administration has done is gamble on long shots because they want their product to succeed. With our money.

  7. #7

    Default Re: Obama’s energy plans often ignore even basic economics.

    Quote Originally Posted by PennyQuilts View Post
    It is one thing to have a change in technology. It is one thing to give tax breaks to encourage new techonolgy.
    Like spending millions (back when that was real money) on infrastructure to provide for automobile transportation before it was widespread?

    It is another thing to give huge tax payer backed loans to companies working on new technology that lack a strong track record of success. What this administration has done is gamble on long shots because they want their product to succeed. With our money.
    We have to do something. This is the future. Do you want the next Model T to be invented and produced by China?

  8. #8

    Default Re: Obama’s energy plans often ignore even basic economics.

    Quote Originally Posted by PennyQuilts View Post
    It is one thing to have a change in technology. It is one thing to give tax breaks to encourage new techonolgy. It is another thing to give huge tax payer backed loans to companies working on new technology that lack a strong track record of success. What this administration has done is gamble on long shots because they want their product to succeed. With our money.
    You should probably look at the actual success rates of the loan programs instead of the one story that keeps getting tossed around the righty blogosphere. The loans programs, instituted by Congress, NOT the president, have performed much better than they were expected to. The same thing was done with every facet of our power infrastructure, most of them to a much higher degree than the current green investment. The markets and the subsidies are all currently rigged in favor of fossil fuels. Where's your anger over decades of that?

  9. #9

    Default Re: Obama’s energy plans often ignore even basic economics.

    Cars were selling and they were popular. They worked. They were being bought by regular people and shown to be vastly superior to the horse and buggy for many, many things. Given a contest between an automobile and a horse, the automobile won, everytime. It didn't have to be fed, it didn't have to be pastured. It was faster, stronger, allowed weak people to use as well as hefty farmboys - I could go on. It was a superior product that was only improving by the year. Yes, the government helped build the roads but they didn't do it to "encourage" a fledgling industry. They did it because it was needed to adjust to a successful changing technology. The amount of money poured into it wasn't some beaurocrat with the idea that the rubes back on the farm needed to be edjukated by Washington. They did it because it was overwhelmingly popular with people and because it made life better. http://www.1920-30.com/automobiles/

    Automobiles wasn't some pie in the sky energy theory that was going to replace everything from gasoline to clothing to pill bottles. A huge problem with green energy is that petroleum energy isn't going to go away anytime soon. We use it for everything. And as long as it is used for everything, it is going to continue to be relatively cheap - NOTHING has a better bang for the energy buck. It is more efficient than green. It is HERE. It is available.

    Even if people could only buy green cars, starting today, gas fueled cars would be here for the next 100 or more years. Probably much longer than 100 years. We use petroleum fuel for farm equipment, aviation, pharmaceuticals - I could go on. In contrast, horse and buggies became obsolete because they couldn't compete in the marketplace. It wasn't because the government built highways. It was because new, popular and successful technology left horses in the dustbin of history. Building highways was facing reality - it wasn't about trying to bulldog this country into adopting an entirely different energy dependence.

    In terms of efficiency, fossil fuels kick "green" energies' butts. Yes, there is the pollution thing and I'm not going to get into the climate change because all that would do is derail the thread. What I am saying is that short of outlawing petroleum products, they aren't going away. And given the choice, most people are going to spend their money on something that works the best.

    And if our culture was suddenly changed from one that relies on fossil fuels to one that relies on green energy, the result would be dismal in comparison. Our standard of living would plummet. Argue that the world is going to end if we don't do this if you like, but you won't change my mind that pouring money into cronies' green energy companies that lack a proven track record is how most Americans want their money spent/wasted. And I am also unconvinced that "investing" in green energy experimental products is remotely similar to building roads for automobiles that are popular, work well and wanted by tax payers.

  10. #10

    Default Re: Obama’s energy plans often ignore even basic economics.

    In terms of economics, fossil fuels also kick "green" energies' butts.
    Obama and many of his supporters do not understand low level elementary energy economics.

  11. #11

    Default Re: Obama’s energy plans often ignore even basic economics.

    If we are still using gas cars in 100 years this world will be unrecognizable for the next millennia. The fact that you can say something like that and really mean it is a travesty. You are smarter than your words, PQ.

  12. #12

    Default Re: Obama’s energy plans often ignore even basic economics.

    Quote Originally Posted by HewenttoJared View Post
    If we are still using gas cars in 100 years this world will be unrecognizable for the next millennia. The fact that you can say something like that and really mean it is a travesty. You are smarter than your words, PQ.
    I enjoy the daily revelations from HeSpokeToNostradamus.
    Enlightening. Refreshing. Spot-on.

  13. #13

    Default Re: Obama’s energy plans often ignore even basic economics.

    Perhaps more than in any other area Obamas energy record is his most abysmal failure and a big reason why is his lack of basic economic understanding.

    Obama and his adviser’s hair brained energy ideas only serve to show their complete and total incompetence.

    Then when you followed the money it can be seen that Obama has received big donations from many of the people who recived the government assistance on energy programs.

  14. #14

    Default Re: Obama’s energy plans often ignore even basic economics.

    Obama and his team are focused more on the long run is all which Presidents should do

  15. #15
    Lord Helmet Guest

    Default Re: Obama’s energy plans often ignore even basic economics.

    Quote Originally Posted by Easy180 View Post
    Obama and his team are focused more on the long run is all which Presidents should do
    This.

    I can understand what ou48A is saying regarding economics, but everyone that understands that we can't continue down this road with fossil fuels knows that we're headed for short term economic pain in order to provide a sustainable future for generations to come. It's a small price to pay really.

  16. #16

    Default Re: Obama’s energy plans often ignore even basic economics.

    Quote Originally Posted by Lord Helmet View Post
    This.

    I can understand what ou48A is saying regarding economics, but everyone that understands that we can't continue down this road with fossil fuels knows that we're headed for short term economic pain in order to provide a sustainable future for generations to come. It's a small price to pay really.
    I good suggestion would be for the elimination of all fossil fuel use 100%.
    Close all power plants.
    Shut down all water and sewer systems.
    Shut down all business.
    Return to the Medieval Period.
    No horse travel, too much methane.
    Cheers.

  17. #17
    Lord Helmet Guest

    Default Re: Obama’s energy plans often ignore even basic economics.

    Quote Originally Posted by Sheetkeecker View Post
    I good suggestion would be for the elimination of all fossil fuel use 100%.
    Close all power plants.
    Shut down all water and sewer systems.
    Shut down all business.
    Return to the Medieval Period.
    No horse travel, too much methane.
    Cheers.
    No one is advocating anything remotely like this.

  18. #18

    Default Re: Obama’s energy plans often ignore even basic economics.

    Quote Originally Posted by Lord Helmet View Post
    No one is advocating anything remotely like this.
    The problem is that unless they do that, people are going to remain dependent on fossil fuels. There are no good solutions so I, for one, would rather face reality.

  19. #19

    Default Re: Obama’s energy plans often ignore even basic economics.

    Quote Originally Posted by Lord Helmet View Post
    This.

    I can understand what ou48A is saying regarding economics, .
    If you can understand what I’m saying about Obamas energy economics you then must also understand that Obamas energy ideas are not solutions at all.

    Understand that Obamas energy ideas are in large part a vehicle to reward those who have made campaign contributions to Obama.
    For those who complained about Halliburton and Dick Chaney you look like big hypocrites if you’re not also complaining about Obama and his green energy scandals because the campaign contributions are out in the open and clear to see.
    If Obamas ideas were not such an abysmal failure perhaps we could be more forgiving.

  20. #20

    Default Re: Obama’s energy plans often ignore even basic economics.

    Quote Originally Posted by Lord Helmet View Post
    but everyone that understands that we can't continue down this road with fossil fuels knows that we're headed for short term economic pain in order to provide a sustainable future for generations to come. It's a small price to pay really.
    For almost a century there are people who have said that we can’t continue down the same energy road we are on. Entire nations, university’s privet companies, and many individuals have been looking long before that. If it was so easy somebody would have found solutions.
    A world with our relatively reliable and affordable energy is going to mean a near worldwide depression. The seeds of many of man’s most destructive wars were planted during time of great economic difficulty.
    Right now there is no affordable solution that fits the scale required it doesn’t mean we stop trying, but throwing the money away like Obama has done is no solution. With our limited resources that’s why the understanding of economics is so important.

  21. #21
    Lord Helmet Guest

    Default Re: Obama’s energy plans often ignore even basic economics.

    Quote Originally Posted by ou48A View Post
    For almost a century there are people who have said that we can’t continue down the same energy road we are on. Entire nations, university’s privet companies, and many individuals have been looking long before that. If it was so easy somebody would have found solutions.
    No one said it would be easy. That's why we need to spend more money to find solutions. They aren't going to be discovered unless we continue to increase efforts to do so.

    I'm not advocating that we cease use of fossil fuels right now (or ever really because there will likely always be some need), but we do need to find alternatives. That's going to mean more spending on research and the expansion of alternatives we already have where they make sense. It WILL lead to increased energy costs in the short run, but hopefully not the doom and gloom you are speculating will happen.

  22. #22

    Default Re: Obama’s energy plans often ignore even basic economics.

    Accurate. Even the strongest deniers from the ranks of climatologists would tell you the same thing.

  23. #23

    Default Re: Obama’s energy plans often ignore even basic economics.

    Quote Originally Posted by HewenttoJared View Post
    Accurate. Even the strongest deniers from the ranks of climatologists would tell you the same thing.
    I'll give them a call. Will get back to you on this.

  24. #24

    Default Re: Obama’s energy plans often ignore even basic economics.

    Quote Originally Posted by Sheetkeecker View Post
    I'll give them a call. Will get back to you on this.
    You can just email them. They're nice guys. I usually get pretty quick answers. Ask them this: "If we push CO2 over 800 ppm in only a century how much damage can we expect?"

  25. #25

    Default Re: Obama’s energy plans often ignore even basic economics.

    Wanting new energy sources isn't the same as having them. Wanting them to work doesn't mean the same as success. The world may be in awful condition if we don't get off fossil fuels but absent a viable alternative - which we don't have - I submit to you that fossil fuel for the masses is better than a society where the only people who aren't living in the dark ages are rich people who can afford...fossil fuel. So far, we haven't seen anything to suggest the world is remotely close to having something to replace fossil fuel, no matter how unhappy we are with fossil fuel.

    And since China and India are using fossil fuels like there is no tomorrow, going to an alternative fuel (if there was one that would replace it - which there isn't) still won't save the planet. Using tax payer money in the amounts this administration have used to gamble that somewhere, somehow, someone will stumble on an alternative is irresponsible. I resent my tax dollars being used to fill the offering plate of their particular church.

Thread Information

Users Browsing this Thread

There are currently 1 users browsing this thread. (0 members and 1 guests)

Similar Threads

  1. Replies: 16
    Last Post: 03-26-2012, 10:30 AM
  2. Replies: 7
    Last Post: 03-10-2012, 11:09 AM
  3. Obama’s War on U.S. Energy
    By ou48A in forum Politics
    Replies: 11
    Last Post: 01-06-2012, 05:22 PM
  4. Replies: 8
    Last Post: 12-10-2011, 07:46 AM
  5. Ryan, Obama Deficit Reduction Plans
    By dismayed in forum Politics
    Replies: 124
    Last Post: 04-22-2011, 09:50 PM

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  
Single Sign On provided by vBSSO