Quote of the Day: Bob Lutz on What Could Kill The Volt
by Lloyd Alter, Toronto on 10.15.08
Tyler Hamilton at Clean Break reminds us of what Bob Lutz said a month ago when I asked him if a recession could kill the Volt, much of which seems to be coming to pass a lot more quickly than anyone might have anticipated:
"Let us say that over the next 18 months the world goes into a major recession, car sales and fuel use drop dramatically, the steel companies produce less steel and therefore use less energy, China finds it main export markets drying up, so they are into a contraction and use less steel and aluminum and plastic. And at the same time Canadian tar sands come onstream, and coal-to-liquids come onstream. All of a sudden there is a reduction in primary demand in petroleum plus all these additional new supply sources… And the oil barrel drops to $25 a barrel and we’re looking at gas pump prices at $1.25 a gallon. I personally don’t think that’s going to happen, but that would be a dramatic event for the Volt because everybody would say, ‘Ha!, why should I bother?’"
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Oil MAY come down a bit more, but not to $25. While I did not think it would get below $80 again, I will be buying the oil futures if it gets below $70. No way that we do not have a crisis, but China and India are still importing more oil than last year. The CLT and biofuels and tar sands REQUIRE $40 to $60 oil to be economical and remain in production even if they do work. If Tyler had done his homework he wold know this.
The Volt is a great idea. I am going to buy one if I am not unemployed when it comes out.
maybe we should start thinking of alternative fuels as a matter of natonal security
What we need is the next President to institute a 50 cents increase in the federal gas tax immediately and have it rise 50 cents a year for the next 10 years to give people lots of warning that gas will be $8/gallon in ten years. Take the money and use it for alternative fuels, infrastructure work or general highway maintenance.
Tyler needs to do some homework, as those 'alternates' (Canadian tar sands, coal-to-liquids and the like) he mentioned do not work (cost of production) if oil goes below $60/bbl or so.
Cost for the alternatives will keep oil above that minimum, so I do not feel we have anything to worry about except GM going into bankruptcy.
At least 8 major things have to happen in the next 18 months to kill this car?
So why do I get the feeling they'll kill it anyway?
I think his scenario of oil dropping so much in price in such a short time is unlikely, but who knows?
The scariest thought is that some people would, actually, respond to such a price drop by saying "Why should I bother?" Are we really that blind?
Will someone please neuter that dog?
Dude59 is right - tar sand and other "new" sources are uneconomical at low prices. Still, we could end up with an oil glut at current production rates if a worldwide depression came about.
And if that happened, people might opt for cheaper conventional cars instead of electric hybrids.
But low-cost electric vehicles such as the NEVs might still have a chance in a depression. People might have trouble affording conventional and hybrid cars but could still afford low-cost electric vehicles like NEVs and electric-assisted bicycles. Although lower cost petrol scooters might also be very appealing in this situation.