Owners love them, but none are especially cheap. The question remains: Are hybrids really worth it?

Hybrid options
While all of the major automakers have a hybrid in their lineup, several are achieving outstanding fuel economy without complicated batteries and motors.

Chevrolet’s Cruze Eco achieves 28/42 mpg city/hwy. The redesigned 2012 Ford Focus SFE and smaller Fiesta manage 40 mpg hwy, as does the hot-selling Hyundai Elantra. VW Golfs with diesel engines go 30/42 mpg city/hwy. These are roomy cars that cruise happily at road speed.

On the flipside of the energy equation are the benchmark Toyota Prius hybrid that delivers 51/48 mpg city/hwy and the Honda Insight hybrid that achieves 40/43 mpg. A Chevy Volt slips by with 93 mpg-equivalent, but that’s an electric ghost of a different tale.

Other gas-powered sippers are coming. Toyota’s Scion brand is launching the iQ, a four-seat car about a foot longer than a Smart. Chevrolet will replace its Aveo sub-compact with the Detroit-built Sonic this fall. Even large cars like the 2012 Chevy Impala and Ford Taurus will achieve over 30 mpg hwy.

General Motors CEO Dan Akerson recently announced his company will launch a diesel-powered Chevy Cruze in 2013 that should top 45 mpg hwy.

Hybrid and the pocket book
Let’s assume you drive 15,000 miles per year and gas hovers around $3.50 per gallon. A Cruze Eco, Focus SFE or Elantra would cost you just under $1,600/year to fuel. Gas-powered micro cars like the Smart or Scion iQ drop it to about $1,400. The Chevy Volt in gas mode and Honda CR-Z sport hybrid are comparable to these.

Hybrids and electrics generally do better. A Toyota Prius will consume under $1,100/year in fuel while the Honda Insight hybrid uses just under $1,300. Electric cars, according to EPA and power company estimates, will consume about $570 in electricity.

If you purchase a Cruze Eco, Elantra or Focus instead of a base Prius, you’ll save about $5,000 ($18,500 vs. $23,500). Buy the Cruze instead of a Volt trims around $14,000 (after rebates). The Honda Insight, starting under $19,000, is priced comparably with mainstream gas-powered compacts.

Given all of this, hybrids don’t pay for themselves in pure economical terms. It would take 10 years in fuel savings to justify the current price difference between normal compacts and a base Prius. If never driven in gas mode (unlikely), the payback on a Volt is about 14 years.

The Honda Insight is the only hybrid considered that will save cash from day one.

In conclusion
Overall, you probably won’t save money by purchasing a hybrid. However, like driving a Corvette or Ford F-150 Raptor, vehicle purchases often are about emotion as much as practicality. People tend to determine a monthly budget, then buy a car they desire. Maybe they lease a Chevy Volt instead of a Buick Regal Turbo? Or, they choose a loaded Prius instead of an Audi A3?

After that choice, the Volt or Prius definitely will save money on fuel day after day.

For reasons of image and “coolness,” few people outside of us nerdy journalists actually compare a Prius to a Corolla or a Volt to a Cruze. Drivers just don’t think that way. Each of us decides by our own values and emotions what is “worth it.” Price is only one factor.

As you know, a lot of people in the oil and natural gas industry have lost their jobs due to the offshore drilling moratorium and the “permitorium.” Today, API and the National Ocean Industries Association (NOIA) released a study that quantifies the job losses as well as the opportunities for job creation. According to the study:

• The offshore oil and gas industry currently supports 242,000 jobs across the country;
• 60,000 jobs in the Gulf states alone have been lost since 2008 due to the poor economy, deepwater moratorium and continued slow pace of permitting; and
• Greater access to Gulf development could increase offshore employment by 77 percent – from 242,000 jobs in 2010 to 430,000 jobs in 2013 – with almost a quarter of the new jobs outside of the Gulf region.

For more information on the study, check out this news release and my colleague Mark’s post on the Energy Tomorrow Blog.  As always, let me know if you have any questions.

Jane Van Ryan
Senior Manager, Communications
E: vanryanj@api.org
T: 202-682-8181

American Petroleum Institute (API)

Remember, we been in a drought for years. Water districts raised rates because there was a scarcity of water. Remember tiered rates? For years they have been urging us to conserve water. We have been asked to landscape our yards with plants that need little irrigation. Parks have been retooled to use recycled water. Businesses like car washes have done likewise. So we have listened.

However, now that we have an abundance of water from the Spring thaw, our habits haven’t changed. It would seem that with an increased supply, rates would go down, not up. And where is this money going? To pay bloated government salaries, pensions and benefits, not to improve the water quality.

Some people seem to think the solution to deficits is to tax the rich, but how does raising water rates do that? Don’t the poor people of Novato have to pay for their water too?

The ones voting for these rate increases are not the ones paying for them. We are. It’s time to make them get their spending under control.

The Senate passed a bill yesterday to repeal a tax-reporting requirement (known as the 1099 provision) for small businesses, including landlords, in the 2010 health care overhaul law.  The bill will now go to the president’s desk where he is expected to sign it into law.

The provision would have required millions of businesses to file tax forms for every vendor that sells them more than $600 in goods each year, starting in 2012.  The requirement was projected to raise nearly $25 billion over the next decade by ensuring that vendors pay their taxes.

National Association of Realtors

Some say electric cars will save the planet from man-made climate change. Others see a need to clean up the exhausts of an increasing number of cars clogging up city centers across the globe. Most agree that oil will run out one day, and some manufacturers have bet the farm that battery-only electric cars will be able to rise to the occasion and provide us with viable personal mobility.

The evidence is mounting that this won’t happen.

According to a new report from Trend Tracker, an automotive research company based in Wiltshire, England, electric cars are unlikely to be able to raise their game to bail out the world’s need for mobility as the oil runs out by, say, 2050. Trend Tracker says car manufacturers’ expensive scramble to produce electric cars with limited ability would be better spent on long-term research to produce electric cars good enough to compete with regular ones.

Business strategy consultancy Roland Berger reckons electric cars will face a crisis by around 2015, when the limited demand created by early adopters becomes more like a mass market, and electric cars have to compete with internal combustion engines and plug-in hybrids on level terms. This will mean manufacturers will have to offer compelling packages of services to make up for the electric cars’ limitations.

With battery-only cars unable to meet range and cost demands that would make them popular among buyers without government subsidy, and fuel cells failing to beat the cost barriers, the possibility of the world running out of oil before a viable replacement for the internal combustion engine emerges is a possibility, says Trend Tracker director Toby Procter.

The planned production of electric cars indicates they will still be a peripheral choice by 2050, with the global market rising to about two billion, with only about 30 million electric vehicles, the report said.

Not ready for prime time

“EV production would need to increase by an average two million units a year over 23 years to effectively electrify the global car market by 2050 when the ‘peak oil’ scenario may have played out. In the medium term, EVs will continue to suffer adverse comparison in terms of price and utility with conventional cars and plug-in hybrids. Suppliers will need to develop more enticing value propositions,” the report said.

The Nissan Leaf, the first of the new EV or battery-only cars, is going on sale now. Range: a claimed 100 miles. The Chevrolet Volt range-extended electric vehicle is also hitting showrooms. Range with gas engine backup: at least 350 miles. Toyota’s Prius gas-electric plug-in hybrid will appear next year. Range: ditto.

All of the important automakers are spending big money readying battery-only and plug-in hybrid cars without any real conviction for which cars will be successful long-term.

The all-electric car falls short of being ready for prime time on many fronts. Range needs to be improved by at least 100 percent. Battery prices need to be shaved at least in half. The problem of depreciation — batteries are unlikely to last much more than eight years — will destroy the value of the first electric vehicles. If battery technology does make a big, unexpected lurch forward, that will be even worse for the economics of the early adopters.

“Cars that look pretty much like ordinary cars, cost twice as much and go a third of the distance, don’t look like cracking the problem,” said Procter in an interview.

Max Blanchet, a partner at Roland Berger’s Paris office, said limitations won’t be a problem until about 2015, because early adopters won’t pay attention to the electric cars’ disadvantages.

“Between 2011-2015, there are huge expectations for electric cars with many players, many fleets, and customers looking for electric cars. In the meantime the (electric car) production of car manufacturers will be slowly ramping up, so for the next three or four years there will be under-capacity and a scarcity of vehicles. The problem comes when manufacturers want to sell EVs as an alternative to thermal (internal combustion engine) vehicles. These buyers will want to see a clear advantage,” Blanchet said.

Compelling packages required

Because the advantage won’t be there, manufacturers will have to offer compelling packages to make up for the fact that they will be too expensive to be sold as products in their own right.

“To be able to compete, the offer (from battery-only manufacturers) must be for complete mobility,” Blanchet said.

This will include what he calls a mobility “ecosystem” combining specific use, targeted customers, tailored products and services like recharging batteries and intelligent navigation. There will be electric taxi fleets with battery replacement stations, last mile-delivery firms, and car-sharing schemes, he said.

An early example of this idea comes from BMW. The German luxury car manufacturer announced that it will unveil its new “BMW i” sub-brand at the Geneva Motor Show next month. The first vehicle will be the i3, known until now as the Megacity, and will be a four-seat electric-only city car. To make this car more appealing, BMW said it will sell a package of “premium mobility” services including Smartphone applications that provide traffic, parking and other real-time information. The i3 will go on sale in 2013.

No shortage of negatives

How soon will battery-only cars be able to compete in the market place on their own qualities?

“2020 is too soon to make EVs competitive. This will be 2030 at the earliest,” said Blanchet.

There are other negatives.

Lithium-ion batteries, which are used in most battery-only cars, are prone to catching fire from overheating or sudden impact. Fast charging is said to be able to get around the problem of short range and the many hours needed to replenish, but this will quickly weaken the battery.

“The use of such fast charging systems has potentially severe negative impacts on battery life, and is not compatible with the capacity of domestic power outlets,” the report said.

Attempts to get around the battery range problem by setting up exchanges for spent batteries have been suggested by Better Place of Palo Alto, Calif., in conjunction with GE of the U.S. and Renault-Nissan. The report believes the case for battery swapping is “economically fragile.”

The Franco-Japanese Renault-Nissan alliance has allocated about $5.5 billion for the development of battery-only cars. The alliance reckons battery-only vehicles will account for 10 percent of global sales by 2020, about twice as much as many other automotive organizations estimate. Roland Berger sees a five percent market share for battery-only vehicles. Other manufacturers expect two percent or less.

Devastating conclusion

The report concludes that the move to battery cars has got ahead of itself, by going to the market before it was ready. It quotes Peter Wells of the Centre of Automotive Industry Research at the Cardiff Business School in England with this devastating conclusion.

“For electric-vehicle sales to grow significantly several things need to happen. Vehicles need to be much lighter, battery technology needs to be cheaper and offer greater performance, urban authorities have to promote zero emission zones, industrial capacity to support the technologies needs to be created, petroleum prices have to rise, renewable energy prices have to fall and consumers have to be re-educated in terms of how they think about personal mobility.

“In the latter regard, we have to break the culture of ‘just in case’ purchasing whereby consumers buy a car for the maximum application, and instead encourage a culture of ‘minimalism’ or ‘just enough’ purchasing where consumers buy a car for their normal everyday needs,” Wells said.

Good luck to manufacturers who try to encourage “minimalism” or “just enough.”

Not too late

It is not too late for car manufacturers to change course and go for a much simpler, cheaper and less ambitious solution. Why not produce a little vehicle that doesn’t attempt to emulate the car with its speed, range and comfort? Why not make something utilitarian which would go about 30 mph down to the shops or around campus, where limited range would make no difference, and which many families could afford. Why not apply the new electric technology to the golf cart? This would be an affordable, unpretentious little utilitarian second car which didn’t attempt to reinvent the wheel.

Unfortunately, this is unlikely to happen any time soon.

“The technology would be very suited for a golf cart,” said Roland Berger’s Blanchet, “but the car manufacturers are not in that market today. They are selling volume and they will hope that short range mobility will be more than a niche market. They aren’t going to make a car that isn’t a car.”

Neil Winton, European columnist for Autos Insider, is based in Sussex, England. E-mail him at neil.winton@btinternet.com.

From The Detroit News: http://detnews.com/article/20110223/OPINION03/102230301/Battery-electric-cars-will-struggle-after-normal-buyers-replace-early-adopters#ixzz1FOCXMJ25

 As part of the event, API also released a new study by Wood Mackenzie that assesses the economic impacts of producing more domestic oil and natural gas vs. raising energy taxes.  By a wide margin, more jobs are created and more government revenue is generated by allowing the oil and natural gas industry to produce more U.S. energy.

 Please contact me if you have any questions.

 Jane Van Ryan
Senior Manager, Communications
E: vanryanj@api.org
T: 202-682-8181

Here is a video that provides an overview of three of EPA’s proposals, including the ozone standard, the E15 fuel blend, and the greenhouse gas regulations.

Second, we have an updated briefing paper that outlines our concerns with these proposals. For example, under the EPA’s proposed ozone standards, even Yellowstone National Park would be out of attainment.

And finally, check out the OMB Watch graph in my blog post about last month’s EPA-themed blogger conference call.  It shows that, in the first 18 months of the second Bush administration, the EPA proposed 16 significant regulations with an annual economic impact of $100 million or more. In the first 18 months of the current administration, EPA has proposed 42 significant regulations.

Jane Van Ryan
Senior Manager, Communications
E: vanryanj@api.org
T: 202-682-8181 

American Petroleum Institute (API)

Editor,

I was at the Congressional District 6 question and answer that was held in Santa Rosa on Monday, September 20. Lynn Woolsey could not have looked any more uncomfortable. For someone who has been in Congress as long as she has you would think public speaking would be a fine art. However, the incumbent stuttered and stammered through almost every question as if she was not prepared for what was going to be asked.

Now the Marin League of Women Voters have scheduled a debate in Novato for October where the public will not be invited. It’s obvious that the “non-partisan” league has been approached by the Woolsey camp to keep the doors closed. If this election isn’t about the voters, then who does Woolsey represent?

In a press release dated today, GOP challenger, Jim Judd, has stated his disappointment that the debate will not be open to the public and encourages the League to reconsider. Regardless, he has nothing to hide and will show up anywhere Woolsey is and talk about the issues. This is the type of character we need in a representative in Washington!

Sincerely,

Mick Orton
Vice President
Marin Conservative Forum
Congressional District 6 – California

Meanwhile, as we begin Labor Day 2010, the national group overseeing its affiliates, Planned Parenthood Federation of America, still has not published the annual report from July, 2008-July, 2009. The report, which includes information such as the number of abortions that were performed during that time and the dollar amount received in government funding, is typically made public every April. Interestingly, this report will be the first summary of how the group has fared during the Obama Administration. What might they be hiding?

What we do know is that the non-profit is profiting quite nicely since the Obamas came to D.C. In Planned Parenthood’s IRS 990 form from July, 2008-July, 2009, they had a net profit of over $106 million dollars (and President Obama had only been in office for six months!) For more information on Planned Parenthood’s financials and other interesting facts about the organization that everyone should know, see FRC’s newly released pamphlet, Planned Parenthood: What Every Parent, Teacher, Woman, Community Leader and Elected Official Needs to Know.

Family Research Council

Question: how does having the word “peace” stuck on a bumper sticker achieve the goal? Shouldn’t these people be going to countries where human rights are in jeopardy? I say, “Shut up and go do something.” But I digress…

On three out of four corners of Camino Alto and Blithedale and the south bound freeway exit in Mill Valley we now have various races of homeless people begging for money. One of these days I am going to buy an hour of one of the more coherent of them and find out how much money and services they are getting from all the welfare programs available to them; federal, state, county and city. I’ll bet it’s a lot when you add up subsidized housing, food programs, health programs, etc. These people are in their situation, not because there is no opportunity in the US. It is because of other problems like mental illness or drug and alcohol abuse. Very few of them are there because of life circumstances, and of those, rarely do they find themselves permanently in the ranks of the homeless.

Don’t get me wrong. Many of us have problems. Every third commercial on the conservative radio stations is about legally discharging debt while keeping the goodies that got them there. Tax attorneys are advertising about how they can get the government to forgive all or part of a tax liability. Nobody seems to have any responsibility any more. It’s sad when you think about it. Even during the depression, people took make-work jobs because they were too proud to receive hand-outs. Oh, if only that sentiment existed today. Now the Obama government is talking about forcing lenders to forgive any home loan that is underwater where people are unable to pay their mortgage. What about those of us who are struggling to make our payments to keep our credit in good stead? It’s catastrophic what will happen to the housing market if Obama does this as his October surprise. Talk about chaos!

In the meantime, many of us are banging our heads to secure new employment or renegotiate contracts to keep the work we have. How long before we too give up? After all, why should we pull the cart while so many freeloaders are piling on? What’s our incentive? After all, aren’t we conservatives the bad guys even when we are paying the bills to keep the lights on? And what happens when the rest of us stop pulling and jump in the cart with the rest of the country? Do yo think those rich people running Congress and the Senate will have to start putting money in to keep the scam going? Will it be government workers who are now being paid more than their private sector counterparts? Doubtful. Government will probably just print or borrow more money.

But wait! Don’t jump off the bridge yet! Here’s why I have hope. Most people in the United States don’t want a handout from the government. The prevailing sentiment is that we still live in the greatest country in the world, even if the news media is telling us otherwise. Tea Parties and other protests are continually springing up all over the country put on by people who don’t normally go out and do this. All predictions for the elections in the fall say Republicans (mostly conservatives) will win handily.

A word of caution: winning the election is just the beginning. Once elected, we must insist they govern like conservatives. Will this happen, or will the old “John McCain” return? Right now I see 4 Republicans who stand in the way of real victory: Lindsey Graham, John McCain, Olympia Snowe and Susan Collins. Of course there are others like Charles Grassley who could throw a spanner in the works. But make no mistake; the shift is starting to happen. And that gives me hope.

FedUpEditor