Your car—its impact on world you live in will be far greater than you’d expect.
If you read the last oily part of this Future of Energy series, you’d have bet this third installment would cover the rise of solar as the world’s new dominant form of energy. Well, you’re only slightly wrong: we’ll cover that in part four. Instead, we chose to first cover biofuels and electric cars because the whole reason crude oil has the world by the balls is because the majority of the world’s transportation fleet (i.e. cars, trucks, ships, planes, monster trucks, etc) runs on gas. Remove the gas from the equation and the entire world changes.
Of course, moving away from gas (and soon even the combustion engine) is easier said than done. But if you read until the depressing end of the part two, you’d remember that most world governments won’t have much choice in the matter. Simply put, continuing to run an economy on an increasingly volatile and scarce energy source—crude oil—will become economically and politically unsustainable between 2025-2035. Luckily, this giant transition could be easier than we think.
The real deal behind biofuels
Electric cars are the future of transportation—and we’re going to explore that future in the second half of this this article. But with over one billion cars on the road globally, replacing that vehicle fleet with electric vehicles could take one to two decades. We don’t have that kind of time. If the world is going to kick its addiction to oil, we’re going to have to find other sources of fuel that can run our current combustion vehicles for the decade or so until electric takes over. That’s where biofuels come in.
When you visit the pump, you really only have the option of filling up with gas, better gas, premium gas, or diesel. And that’s a problem for your pocketbook—one of the reasons why oil is so expensive is that it has a near monopoly on the gas stations people use across most of the world. There’s no competition.
Biofuels, however, can be that competition. Imagine a future where you see ethanol, or an ethanol-gas hybrid, or even electric charging options the next time you driving into the pump. That future already exists in Brazil.
Brazil produces massive amounts of ethanol from sugar cane. When Brazilians go to the pump, they have a choice of filling up with gas or ethanol or a variety of other mixes in between. The result? Near complete independence from foreign oil, cheaper gas prices, and a booming economy to boot—in fact, over 40 million Brazilians moved into the middle class between 2003 and 2011 when the country’s biofuel industry took off.
‘But wait,’ you say, ‘biofuels need flexfuel cars to run them. Just like electric, it would take decades to replace the world’s cars with flexfuel cars.’ Actually, not really. A dirty little secret within the auto industry is that virtually all cars built since 1996 can be converted into flexfuel cars for as little as $150. If interested in converting your car, check out these links: one and two.
‘But wait,’ you say again, ‘growing plants to make ethanol will raise the cost of food!’ Contrary to public belief (beliefs formally shared by this writer), ethanol doesn’t displace food production. In fact, the by-product of most ethanol production is food. For example, much of the corn grown in America isn’t grown for humans at all, it’s grown for animal feed. And one of the best animal feeds is ‘distillers grain,’ made from corn, but produced first through the fermentation-distillation process—the by-product being (you guessed it) ethanol AND distillers grain.
Bringing choice to the gas pump
It’s not necessarily food vs fuel, it can be food and lots of fuel. So let’s take a quick glance at the different bio and alternative fuels we’ll see hitting the market with a vengeance by the mid-2020s:
Ethanol. Ethanol is alcohol, made by fermenting sugars, and can be made from a variety of plant species like wheat, corn, sugar cane, even weird plants like cactus. Generally, ethanol can be produced at scale using most any plant that’s best suited for a country to grow.
Methanol. Race car and drag racing teams have been using methanol for decades. But why? Well, it has a higher equivalent octane rating (~113) than premium gas (~93), offers better compression ratios and ignition timing, it burns much cleaner than gasoline, and it’s generally a third of the price of standard gasoline. And how do you make this stuff? By using H2O and carbon dioxide—so water and air, meaning you can make this fuel cheaply anywhere. In fact, methanol can be created using recycled carbon dioxide from the world’s growing natural gas industry, and even with recycled biomass (i.e. waste generated forestry, agriculture, and even city waste).
Enough biomass is produced each year in America to produce enough methanol to cover half the cars in the US at two dollars a gallon, compared to four or five using gasoline.
Algae. Oddly enough, bacteria, specifically Cyanobacteria, may power your future car. These bacteria feed off of photosynthesis and carbon dioxide, basically sun and air, and can be easily transformed into a biofuel. With a bit of genetic engineering, scientists hope to one day cultivate massive amounts of these bacteria in giant outdoor vats. The kicker is that since these bacteria feed off of carbon dioxide, the more they grow, the more they also clean our environment. This means future bacteria farmers can make money both off the amount of biofuel they sell and the amount of carbon dioxide the suck out of the atmosphere.
Electric cars are already here and already awesome
Electric vehicles, or EVs, have become part of pop culture thanks in large part to Elon Musk and his company, Tesla Motors. The Tesla Roadster, and the Model S in particular, have proven that EVs aren’t just the greenest car you can buy, but also the best the car to drive, period. The Model S won the 2013 “Motor Trend Car of the Year” and Automobile Magazine’s 2013 “Car of the Year.” The company proved that EVs can be a status symbol, as well as a leader in automotive engineering and design.
But all this Tesla ass kissing aside, the reality is that for all the press Tesla and other EV models have commanded in recent years, they still only represent less than one per cent of the global car market. The reasons behind this sluggish growth include a lack of public experience driving EVs, higher EV component and manufacturing costs (hence a high price tag overall), and a lack of recharging infrastructure. These drawbacks are substantial, but they won’t last long.
Cost of car manufacturing and electric batteries set to crash
By the 2020s, a whole host of technologies will come online to reduce the costs of manufacturing vehicles, especially EVs. To start, let’s take your average car: about three-fifths of all our mobility fuel goes to cars and two-thirds of that fuel is used to overcome the car’s weight to push it forward. That’s why anything we can do to make cars lighter will not only make them cheaper, it’ll also help them use less fuel as well (be it gas or electricity).
Here’s what’s in the pipeline: by the mid 2020s, car makers will start making all cars out of carbon fiber, a material that is light years lighter and stronger than aluminum. These lighter cars will be able to run on smaller engines and maintain the same performance. Lighter cars will also make the use of electric batteries over combustion engines more viable, as current battery technology will be able to power these lighter vehicles as far as gas-powered cars.
Of course, this isn’t counting the expected advancements in battery technology, and boy there will be many. The cost, size, and storage capacity of EV batteries has improved at a lightning fast clip for years now and new technologies are coming online all the time to improve them. For example, by 2020, we’ll see the introduction of graphene-based supercapacitors.These supercapacitors will allow for EV batteries that are not only lighter and thinner, but they’ll also hold more energy and release it more quickly. This means cars to be lighter, cheaper, and accelerate faster. Meanwhile, by 2017, Tesla’s Gigafactory will begin producing EV batteries at enormous scale, potentially dropping the costs of EV batteries by 30 per cent by 2020.
These innovations in the use of carbon fiber and ultra efficient battery technology will bring the costs of EVs on par with traditional combustion engine vehicles, and eventually far below combustion vehicles—as we’re about to see.
World governments pitch in to speed the transition
The dropping price of EVs won’t necessarily mean an EV sales bonanza. And that’s a problem if world governments are serious about avoiding the coming economic collapse (outlined in part two). That’s why one of the best tactics governments can implement to lower gas consumption and reduce the price at the pump is to promotethe adoption of EVs. This is how governments may make that happen:
One of the biggest obstacles to EV adoption is the fear by many consumers of running out of juice while on the road, far away from a charging station. To address this infrastructure hole, governments will mandate EV recharging infrastructure be installed in all existing gas stations, even using subsidies in some cases to speed up the process. EV manufacturers will likely get involved with this infrastructure build out, as it represents a new and lucrative revenue stream that can be stolen from existing oil companies.
Local governments will start updating building bylaws, mandating that all homes have EV charging outlets. Luckily, this is already happening: California passed a law requiring all new parking lots and housing to include EV charging infrastructure. In China, the city of Shenzhen passed legislation requiring developers of apartments and condos to build charging outlets/stations into every parking space. Meanwhile, Japan now has more fast-charging points (40,000) than gas stations (35,000). The other benefit of this infrastructure investment is that it will represent thousands of new, non-exportable jobs in every country that adopts it.
Meanwhile, governments may also directly incentivize the purchase of EVs. Norway, for example, is one of the world’s largest Tesla importers. Why? Because the Norwegian government offers EV owners free access to uncongested driving lanes (e.g. the bus lane), free public parking, free use of toll roads, a waived annual registration fee, exemption from certain sales taxes, and an income tax deduction. Yeah, I know right! Even with the Tesla Model S being a luxury car, these incentives make buying Teslas almost on par with owning a traditional car.
Other governments can easily offer similar incentives, ideally expiring after EVs reach a certain threshold of total national car ownership (like 40 per cent) to speed up the transition. And after EVs eventually represent the majority of the public’s vehicle fleet, a further carbon tax can be applied to the remaining owners of combustion engine cars to encourage their late game upgrade to EVs.
In this environment, governments would naturally provide subsidies for research into EV advancement and EV production. If things get hairy and more extreme measures are necessary, governments may also mandate car manufacturers shift a higher percentage of their production output to EVs, or even mandate EV-only output. (Such mandates were amazingly effective during WWII.)
All of these options could speed the transition from combustion to electric vehicles by decades, reducing worldwide dependence on oil, creating millions of new jobs, and saving governments billions of dollars (that would otherwise be spent on crude oil imports) that could be invested elsewhere.
For some added context, there are about two is over one billion cars in the world today. Automobile manufacturers generally produce 100 million cars each year, so depending on how aggressively we pursue the transition to EVs, it would only take one to two decades to replace enough of the world’s cars to reignite our future economy.
A boom after the tipping point
Once EVs reach a tipping point in ownership among the general public, roughly 15 per cent, the growth of EVs will become unstoppable. EVs are far safer, cost far less to maintain, and by the mid 2020s will cost far less to fuel up compared to gas powered cars—no matter how low the price of gas falls.
The same technological advancements and government support will lead to similar applications in EV trucks, buses, and planes. This will be game changing.
Then suddenly, everything gets cheaper
An interesting thing happens when you take vehicles out of the crude oil consumption equation, everything suddenly becomes cheaper. Think about it. As we saw in part two, food, kitchen and household products, pharmaceuticals and medical equipment, clothing, beauty products, building materials, car parts, and a large percentage of just about everything else, are all created using petroleum.
When the majority of vehicles transition to EVs, demand for crude oil will collapse, taking the price of crude oil down with it. That decline will mean huge cost savings for product manufacturers across every sector that uses petroleum in their production processes. These savings will eventually be passed onto the average consumer, stimulating any world economy that was battered by high gas prices.
Micro power plants feed into the grid
Another side benefit of owning an EV is that it can also double as a handy source of backup power should a snowstorm ever knock down power lines in your neighborhood. Simply hook up your car to your house or electrical appliances for a quick boost of emergency power.
If your house or building has invested in solar panels and smart grid connection, it can charge your car when you don’t need it and then feed that energy back into your house, building, or community power grid at night, potentially saving on our energy bill or even making you a bit of side cash.
But you know what, now we’re creeping into the topic of solar energy, and quite frankly, that deserves it’s very own conversation: Solar energy disrupts the old guard: Future of Energy P4