Today almost everything that goes into your car's gas tank started as oil (Photo by Shawn Allee)
How you fuel your car could change pretty quickly. California air regulators are requiring gasoline producers to reduce greenhouse gases by 10% by 2020. That could force big oil companies to invest in alternative fuels. Tamara Keith reports when it comes to environmental regulations, what happens in California usually spreads from there:
Transcript
How you fuel your car could change pretty quickly. California air regulators are requiring gasoline producers to reduce greenhouse gases by 10% by 2020. That could force big oil companies to invest in alternative fuels. Tamara Keith reports when it comes to environmental regulations, what happens in California usually spreads from there:
Today almost everything that goes into your car’s gas tank started as oil. But in the future it could be very different.
“The fuels that we will be moving towards are electricity, biofuels and hydrogen mostly.”
Daniel Sperling is a member of the California Air Resources Board which voted in the new rule.
Sperling says the goal is to reduce the overall greenhouse gas emissions from vehicle fuels. That could mean oil companies might even have to buy credits from power companies for electric cars.
“You start transforming the oil industry, getting off of oil. I mean that’s what we talk about and this is a policy that will actually do it.”
The California rule even looks at how much greenhouse gas pollution goes into making corn ethanol.
Oil companies say fuel prices will definitely go up in California.
Raser Technologies has been showing off its electric hummer that can get 100 miles per gallon. (Photo courtesy of Raser Technologies)
A technology company is showing off its 100 mile-per-gallon Hummer to Wall Street. Lester Graham reports:
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A technology company is showing off its 100 mile-per-gallon Hummer to Wall Street. Lester Graham reports:
Today, the honor of ringing the opening bell at the New York Stock Exchange went to Raser Technologies – and the company brass parked a Hummer-H3 out front.
It’s powered by Raser’s completely electric drive-train. The system uses a gas-powered engine, but only for generating electricity to recharge the battery.
David West is the Vice President of Marketing at Raser Technologies. He says they modified a Hummer, but that’s just one example.
“It was designed appropriately not just for the Hummer H-3, but it’ll power a Ford F-150, a Chevy Silverado, a Dodge 1500. These are the top-selling vehicles in America.”
Raser Techonologies side-steps questions about price, saying if automakers used the system in a production model, a vehicle’s price would be in the range of a fully-equipped pick-up or SUV.
These Suzukis at Ken Butman's dealership, which were in high demand last year, are now sitting unsold (Photo by Samara Freemark)
Chances are, you haven’t bought a new car this year. Auto sales are down across the board – including in the small car and electric-gas hybrid markets. Now some dealers and automakers are proposing a way to move some of those cars: increase the gas tax. Samara Freemark explains why the same people who sell cars might want to make driving them more expensive:
Transcript
Chances are, you haven’t bought a new car this year. Auto sales are down across the board – including in the small car and electric-gas hybrid markets. Now some dealers and automakers are proposing a way to move some of those cars: increase the gas tax. Samara Freemark explains why the same people who sell cars might want to make driving them more expensive:
It was almost exactly this time last year that Ford dealer Ken Butman
traded in his pickup for a Suzuki hatchback.
His Ann Arbor, Michigan
dealership had been selling Suzukis for a couple of years. But they got
really popular last spring when gas prices jumped. Butman ordered a big
shipment to keep up with the demand.
“These are the Suzukis. These little cars get good gas mileage. And
they’re so cute. Look at them. Look at this one here. It’s got a little
rack for your skis. Look at
that.”
But those cars – the ones Butman ordered a year ago – most of them are
still here. They’re still sitting on his lot. Not moving.
“It was strange because they were so hot. For awhile there you couldn’t
give a big car away. And everybody was rushing to the small cars. And then
just as quickly, about when the price of gas came down again, we saw a
complete reversal. Like a light switch. That’s how fast it cut off.”
It’s been like that all over the country. Dealers who last year had
waiting lists for hybrids and small cars suddenly have a lot of extra
inventory. Sales of hybrids are way down from last April, mostly because
gas costs about half what it did last year.
Brett Smith is an auto analyst with the Center for Automotive Research. He
says consumers only really care about fuel economy when gas prices are
high. When gas hits about 4 dollars a gallon, consumers switch to fuel
efficient cars. When prices drop again, so do sales of efficient cars.
“Look at what’s happened every time we’ve had an energy crisis. We’ve
gone to smaller cars for a couple of years, and then the consumer has gone
back to larger cars. Why? Because at that fuel price they can get away with
it, they can justify it.”
It’s a real problem for dealers. It also worries auto manufacturers who
have poured money into developing hybrids and have a lot of new models due
to come out this year.
And that’s why some people who sell cars have begun to push for
increasing the gas tax.
Dealers and auto executives might not seem like the first bunch to line up
behind a tax hike. Traditionally they’ve lobbied hard against anything
that makes driving more expensive.
But a high tax – and therefore, higher gas prices – could get all those extra
hybrids moving again.
Michael Jackson is the CEO at AutoNation. That’s the
nation’s largest chain of dealership.
Jackson wants to see gas at four
dollars a gallon – the figure at which many analysts say consumer behavior
changes. And he thinks the government can keep prices at that magic number
with a floating tax.
Auto makers have been a little more cautious. But some top executives at
American companies have called Jackson’s ideas ‘smart’ and ‘worth
looking into’.
Smith says they believe that higher gas taxes could
stabilize the market for fuel efficient cars – making investment in new
technologies a safer bet.
“The car companies will rarely come out and loudly say, things like, ‘we
think there needs to be a gas tax.’ But almost all of them will say on the
side, if you want people to drive more fuel efficient cars, the best way to
do it is a gas tax.”
For now, though, it might not take a big tax to bring gas prices back up.
Oil trader Anthony Grisanti is the president of GRZ Energy. He says an
economic recovery would do pretty much the same thing.
“Shouldn’t be any doubt about it, once the economy picks up, say,
beginning of next year or year after that, you’re going to start to see oil
prices go higher.”
And that means prices at the pump would go up too.
Proposing higher gas taxes – especially of a couple of dollars a gallon – can
mean career suicide for politicians. So a big hike in the gas tax seems
iffy. But if gas prices rise as the economy recovers, dealers might see
those fuel efficient cars move off the lot again.
Some think that a gas tax is the only way to get consumers to buy fuel efficient cars (Photo courtesy of the US Department of State)
Some in the auto industry are proposing a hike in the gasoline tax. The idea is this: if you want people to buy small cars, make gasoline more expensive. Lester Graham reports:
Transcript
Some in the auto industry are proposing a hike in the gasoline tax. The idea is this: if you want people to buy small cars, make gasoline more expensive. Lester Graham reports:
Car dealers and manufacturers say a higher gas price is the only thing that gets people buying more fuel efficient cars. So, a tax hike makes sense.
But, a guy who has a lot of sway on the idea of a gas tax hike is not going there.
Congressman Ed Markey chairs a House subcommittee on Energy and the Environment.
At a forum at MIT he said the plan is to stick with CAFÉ — the Corporate Average Fuel Economy standards – to get better mileage cars.
“That’s the route that we’re taking rather and an increase in the gasoline tax. We’re moving towards a mandate and 35 miles per gallon is the minimum that we intend on reaching by 2020.”
And under the stimulus package, new tax credits amounting to thousands of dollars get kicked-back to anyone buying a fuel efficient car.
Right now, cars get an average 27 and a half miles per gallon. By
2011, they'll have to get 30.2 (Photo by Ben VonWaggoner)
The U.S. Environmental Protection Agency issued new vehicle fuel economy standards for cars and trucks. As Tracy Samilton reports, it’s the first change since 1985:
Transcript
The U.S. Environmental Protection Agency issued new vehicle fuel economy standards for cars and trucks. As Tracy Samilton reports, it’s the first change since 1985:
Right now, cars get an average 27 and a half miles per gallon. By
2011, they’ll have to get 30.2. Light trucks, including SUVs, will
have to get 24.1 miles per gallon, up a mile per gallon.
Eli Hopson
is with the Union of Concerned Scientists. He says the change is not
dramatic but it’s still an important milestone.
“The car standards haven’t
changed. They’ve been at 27.5 for over twenty years. It is a big deal. It’s
been a long time in coming.”
Carmakers are prepared for the new standard and say they’ll meet it.
Future standards will be tougher.
Auto companies usually complain
when mileage standards are raised. But times have changed, especially
for Chrysler and GM. They might not be as vocal since accepting
billions in federal loans.
President Obama has outlined his plans
for the struggling auto industry. They
include restructuring GM and Chrysler
as well as help for auto workers and
communities hurt by slumping car and truck sales. Lester Graham reports lost in the details was the President’s bigger plan:
Transcript
President Obama has outlined his plans
for the struggling auto industry. They
include restructuring GM and Chrysler
as well as help for auto workers and
communities hurt by slumping car and truck sales. Lester Graham reports lost in the details was the President’s bigger plan:
In one sentence President Obama summed up his vision for the U.S. auto industry.
“I am absolutely committed to working with Congress and the auto companies to meet one goal: the United States of America will lead the world in building the next generation of clean cars.”
Some analysts say the market should decide whether consumers want fuel-efficient, clean cars. They point to headlines noting hybrid car sales fell off a cliff since gasoline prices went down.
But J.D. Power and Associates’ Michael Omotoso says yeah, hybrid sales are down – but not as much as everything else.
“Hybrid sales are actually doing well compared to overall sales.”
Hybrid sales in February were down 29% from last year, but overall light vehicle sales fell 40%.
Omotoso says hybrids are still selling because people expect gas prices will go up as the economy recovers.
Both studies agree that we need more efficient cars (Photo by Karen Kelly)
Recently two reports on the future of automobiles came out. They looked at cars and trucks from very different perspectives, but came to some similar conclusions. Lester Graham reports:
Transcript
Recently two reports on the future of automobiles came out. They looked at cars and trucks from very different perspectives, but came to some similar conclusions. Lester Graham reports:
The first report was published in the journal, Environmental Science and Technology. It looked at what it would take to get U.S. automobiles to reduce the greenhouse gas, carbon dioxide, enough to lower it to 1990 levels.
Why cars? Because cars and trucks produce a third of U.S. CO2 emissions.
Greg Keoleian is one of the authors at the University of Michigan. He says there are three things that need work.
We need to drive less, burn cleaner fuels, and, within about 40 years, increase the average fuel mileage way beyond the 20-miles per gallon we’re getting now.
“That would need to increase to 136 miles per gallon to meet the carbon targets. Alternatively, if we just focused on fuels, basically we’d need about 80% cellulosic ethanol by 2050. And the third scenario is a reduction in driving. It would mean we’d have to cut our driving in half by 2050.”
It’s unlikely we can accomplish any one of them, and the study’s authors suggest it’ll probably be a combination of more efficient cars, better fuels, and driving less if we’re to reduce greenhouse gases enough to make a difference.
The second report entitled ‘Envisioning an Uncertain Future’ comes from the Boston Consulting Group. It looks at the future of the automobile from a business perspective.
One of the authors, Xavier Mosquet, says the study assumes rising oil prices will force some changes.
“And that the pressure from the consumer on the governments will be so high that the governments will have to take energy actions to develop green products and green cars.”
But the report notes green cars will cost more – as much as 15,000 dollars more for hybrids or plug-in hybrids compared to standard cars.
“The consumer will look at these cars and say, ‘well, these are more expensive than I can pay.’ And therefore they’re not going to buy them. So, what I think the government has to do if they want to go that way is to look at the cost of putting those technologies on the market and either subsidizing the car’s manufacturers and suppliers or helping the consumer with much more tax incentives. Otherwise it will not happen.”
So, from a business perspective, the Boston Consulting Group report suggests without government help, manufacturers won’t build more efficient cars at a price we can afford. But we’ll need them because of high fuel prices.
The University of Michigan report on cars and climate change agrees the government will have a major role.
Author Greg Keoleian says if we take climate change seriously and are committed to doing something about it, we’ll have to change driving habits, encourage innovative manufacturers and invest government money.
“We are capable of doing this and the cost of climate change to society is tremendous. And each sector needs to play a major role in addressing the needs to reduce.”
The studies look at the future of the automobile from very different perspectives, but both agree we need more efficient cars and that won’t happen without the government pushing a little and helping a lot.
President Obama's recent announcement is a clear sign that tougher fuel efficiency standards will come sooner rather than later (Photo by Ben VonWaggoner)
The Bush Administration stopped California from setting stricter fuel efficiency standards. Now, President Obama says his administration might allow the standards to go forward. Mark Brush reports it’s a sign that big changes are ahead for car makers:
Transcript
The Bush Administration stopped California from setting stricter fuel efficiency standards. Now, President Obama says his administration might allow the standards to go forward. Mark Brush reports it’s a sign that big changes are ahead for car makers:
President Obama’s recent announcement is a clear sign that tougher fuel efficiency standards will come sooner rather than later.
Mark Gillies is the executive editor of Car and Driver Magazine. He says, if stricter standards are passed, automakers will have to make big changes to their entire fleets of cars and trucks.
“It’s like a super tanker. Trying to turn the super tanker around is not easy. Trying to get cars to the point where they’re 25% more fuel efficient in 6 years is not the work of the moment. You’re going to see some car makers manage to do it and some car makers won’t be able to do it.”
Gillies says if these new standards pass, you’ll see automakers scrambling to make more electric and hybrid cars. He says it could also curb development of sportier cars.
That’s because car companies might have to spend their resources developing the greener cars of the future.
NYC has new incentives to try to get more hybrid taxis, like this one, on the road (Source: Momos at Wikimedia Commons)
When big cities think about putting more fuel efficient, less polluting cars on the road, the first color that comes to mind isn’t green — it’s yellow. There are so many cabs on city streets, they seem like a good place to start environmental initiatives:
Transcript
When big cities think about putting more fuel efficient, less-polluting cars on the road, the first color that comes to mind isn’t green— it’s yellow. There are so many cabs on city streets, they seem like a good place to start environmental initiatives. In New York City, the mayor has a plan to replace conventional cabs with gas-electric hybrids. But not all taxi drivers are thrilled about the plan. Samara Freemark talked to some of them:
Ask a New York city cabbie what kind of car he drives, and chances are, this is what you’ll hear.
“Crown Vic.”
“Crown Vic.”
“Crown Vic.”
Cabbies love this car. It’s this big, solid, safe thing. It’s got a lot of leg room. It’s easy to repair.
But it burns a lot of gas. And that means a lot of pollution, especially when you realize that there are 13,000 cabs in New York City. All that pollution contributes to asthma, heart disease, and a mess of other health problems.
And that is why New York mayor Mike Bloomberg has it in for the Crown Victoria.
Bloomberg has a plan. He wants to use market incentives to encourage cab companies to buy hybrid.
“To turn NY City’s yellow cabs green.”
Cute slogan.
But Bloomberg isn’t messing around. Just ask the reporter who challenged the idea at a press conference.
“The taxi owners who oppose your plan say it’s deeply troubling that the city is…”
“I think it is more deeply troubling that they’re trying to kill our kids.”
Tough talk, right? But here’s how Bloomberg’s plan would actually work.
A lot of cabbies don’t own their own cars – they lease them from cab companies.
Bloomberg wants to lower the fee companies can charge drivers to take out Crown Victorias. So company owners would make less money on conventional cars.
And he wants to let cab companies charge drivers more to take out hybrids. Companies that chose those cars would make more money, giving them a reason to go green.
There’s something in it for the drivers, too. Although have to pay more to rent the hybrid cabs, they’d make up that money, and then some – a big chunk, actually – in gas savings. Bloomberg says hybrid cab drivers could save hundreds of dollars a year under his plan.
It sounded like a win-win-win situation: good for cabbies, good for cab companies, and good for the environment.
So I went out to the curb to ask some cabbies what they thought of the mayor’s idea.
“I wanted to ask you about hybrids.”
“Hybrid taxi? Yes.”
Sukhinder Singh hadn’t heard about Bloomberg’s plan, but he liked it.
“That’s not a bad idea. You’re not spending any extra money. 3, 4 dollars or 10 dollars extra, you know that later on when you go home you get it back because if you spend less on gas. It helps also for the pollution too. Lot of cabs around NYC, so all pollution.”
But a lot of cab drivers – especially veteran drivers – are not that enthusiastic. They are worried that hybrids aren’t safe. They are worried that hybrids are too small. They are worried about the time and money it takes to repair a hybrid. And most of all, cab drivers like Lal Singh are worried about giving up their Crown Victorias.
“Of course we wish not to pay more money for the gas. But I prefer to keep this poor Crown Victoria. This car makes us live. This Crown Victoria is a very big time strong car. These hybrids, they are not for taxi. They are very small, very unsafe, very unfit.”
So you get the idea – he doesn’t like hybrids.
And there’s one more problem with Bloomberg’s plan. It looked pretty good when it came out, when gas was 4 dollars a gallon. But prices now are about half that. That means cabbies don’t save that much money when they pick a hybrid. And so they have even less reason to give up their beloved Crown Vics.
Honda rolled out the 2010 Insight for it's world premiere (Photo courtesy of the North American International Auto Show)
Car makers are showing off new
models at the North American International
Auto Show in Detroit. Domestic automakers
are rolling out hybrids and coming plug-in
hybrids. Foreign manufacturers have a
little more experience with hybrids.
Toyota has been doing well with its hybrid,
the Prius, and the Japanese company plans
to release a plug-in version early next year.
Lester Graham talked with Julie Halpert.
She’s a reporter who’s been covering the
preview of the Detroit Auto Show (opens
Saturday January 17th). She says
Honda, which started this hybrid trend,
hasn’t done much lately, but it is now:
Transcript
Car makers are showing off new
models at the North American International
Auto Show in Detroit. Domestic automakers
are rolling out hybrids and coming plug-in
hybrids. Foreign manufacturers have a
little more experience with hybrids.
Toyota has been doing well with its hybrid,
the Prius, and the Japanese company plans
to release a plug-in version early next year.
Lester Graham talked with Julie Halpert.
She’s a reporter who’s been covering the
preview of the Detroit Auto Show (opens
Saturday January 17th). She says
Honda, which started this hybrid trend,
hasn’t done much lately, but it is now:
Lester Graham: They’re paying a lot of attention to the Detroit Auto Show this
year because of the bailout and because of the new green cars that are being
displayed. Julie Halpert’s been covering the Auto Show. Julie, there’s a lot of
talk about the domestic automakers bringing on board hybrids and plug-in
hybrids in the near future, but it appears the Japanese automakers are coming
out ahead.
Julie Halpert: What’s interesting is the Japanese automakers feel it’s more
important in the near future to focus on regular hybrids. For example, Honda is
coming out with a new version of its Insight, that is comparable in size to the
Prius. And, it’s going to be the most affordable Hybrid. Priced under $20,000,
which makes it very attractive. Their argument is, these electric cars are
interesting, but there’s a lot of work to be done on the battery, and, so they would
rather see lots of people in hybrids, near-term. They think that’s going to make a
bigger difference environmentally than coming up with these plug-in hybrids,
which are going to be more expensive, and aren’t going to be offered for the next
couple of years.
Graham: If oil prices stay low, I’m wondering if domestic automakers will stay the
course of these more energy efficient cars. It sounds like they want the
government to force consumers into that market.
Halpert: Well, the government’s obviously placing a priority on this. And what
they’re very much hoping is that the government fuels demand by creating tax
incentives for these vehicles – they have the ability to do that, Congress has the
ability to do that. I think they’ve invested so much now, there’s really no
reversing course. The problem is that customers are very fickle. If gas prices
are low, they’re going to go back to their conventional internal combustion
engines. When gas prices were high, this past summer, there was a huge cry for
these alternative, more fuel efficient vehicles. The problem is that automakers
need to plan months and months in advance to bring out these vehicles. So
now, they’re on course to do that, it would be very difficult for them to switch
course at this point.
Graham: While Honda’s coming out with this new version of the Insight, Toyota’s
coming out with a third generation of the Prius, GM’s trumpeting the Volt, Ford is
going after smaller engines with turbo power. Why are they taking that
approach?
Halpert: Well, it’s actually quite a prudent approach. They’ve got this hybrid
Ford Fusion, which gets 41 miles per gallon. And, they’ve got this super turbo-
charged engine, which can boost fuel efficiency by 20-30%. And, their argument
is, let’s use more conventional motors to do this, because it gets into an
affordability issue. They can basically provide the power of a V8 engine in a V6
engine. And, consumers still want that power. They want low costs. So, they
figure, this new technology can go quite far in getting a lot of fuel efficiency and
not requiring consumers to pay this up-front premium that other hybrids cost.
Graham: That’s Julie Halpert, who’s been covering the Detroit Auto Show.
Thanks, Julie.
Today almost everything that goes into your car's gas tank started as oil (Photo by Shawn Allee)
