I’m finishing up my last road-trip of the soccer season this weekend, and boy is my wallet happy.
My 11-year old Shannon, and are hitching a ride to Orlando this afternoon with another family from our travel soccer team... thank you Kelly & Ken! So we’re doing our part to conserve energy. My wife however, will drive up in the family truckster (our gas-guzzling Ford Explorer) tomorrow, after my older daughter winds-up the last volleyball match of her season on Saturday morning.
Driving the Florida Turnpike between Jupiter and Orlando usually saves you a few bucks on gas – and every penny counts these days! That’s because the gas stations at the state-run service plazas typically set their fuel prices a bit lower, but not anymore! Gas prices are even higher along the Turnpike now (up to $4.07/gal.) than back home in Jupiter. Thanks to the energy crunch, even this savings is long-gone.
I’m glad I filled up the truckster on Friday – for ONLY $3.95 a gallon – believe me, every cent counts with my gas-hog. But with the four of us driving back on Monday, plus luggage and soccer gear, we really don’t have the choice of “downsizing” to a smaller vehicle.
The Quest for a Fuel-Efficient SUV
My research into alternative fuels tells me that lots of progress is being made toward much more fuel efficient engines – even for large cars like my truckster. There are already hybrid-SUVs on the market, but there’s much more work still to be done to merge high-performance with high fuel efficiency.
But that means there is also more potential profit for the breakthrough companies that come up with these new technologies.
One very promising new technology, that’s just over the horizon, is plug-in hybrid cars. These vehicles are being designed right now by the big automakers, and should hit showrooms within the next two years. GM's Saturn division is developing a mid-sized SUV that runs on an innovative technology combining Lithium-Ion batteries and ultra capacitors with control electronics.
The Saturn VUE Green Line SUV is a hybrid that can be plugged into a standard electricity outlet in the garage to recharge its batteries, but still has a standard gasoline engine. In road tests the Saturn delivers high-performance – 0 to 60 miles per hour in just 6.9 seconds – that's faster than a Porsche Cayenne. And the SUV also delivers fuel efficiency in spades – 150 miles per gallon to be exact!
Replacing Our Fleet and Sticking-It to OPEC in the Process
The high-tech batteries that will power Saturn’s SUV and other cars like the plug-in Chevy Volt, are capable of 40-mile trips on a single charge. That’s typically more than enough for daily around-town driving, and even short commutes. What about the sticker-price? Estimates show that at a price of $5 per gallon for gasoline (we’ll be there sooner than you think), the price premium for these hybrid vehicles could be paid back in less-than 3 years!
Studies show that plug-in hybrids could replace 84% of America’s light vehicle fleet using existing, underutilized electric capacity. That’s 184 million cars, trucks and SUVs! Recharging the batteries would take place during off-peak hours, to keep utility rates from skyrocketing. In fact, the balance in electricity demand could actually make utilities more efficient and therefore profitable.
Talk about a potential breakthrough: a big switch to hybrid plug-in vehicles like this could reduce U.S. oil consumption by 6.2 million barrels per day, according to some estimates, cutting our imported oil in half! Watch out OPEC!
Unfortunately for me, this model won’t be available at my local Saturn dealer in time for the start of next travel soccer season in September. As Tom Petty says: “waiting is the hardest part”!
P.S. I have been writing extensively this week at what I see as the next major market shock you can profit from: the alternative energy sector. Alternatives to fossil fuel - also called "renewable", or "green" energy - has had a lot of hype associated with it over the years, but not much in the way of cash profits... however all that is about to change.
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FOREIGN WARS OR DOMESTIC OIL
If the US Government spent a trillion dollars over 8 years on domestic oil exploration and coal gasification instead of the war in Iraq gas would be $2 a gallon or less. America could quit sending billions to countries that sponsor terrorism. And reducing our trade imbalance keeps jobs in America. Every billion of trade deficit costs 13,000 jobs. $400 billion for oil last year: do the math.
How long will it take for America to produce enough synfuel to make a difference?
There are already a number of small plants being designed around America, but a large-scale national effort must involve the federal government and will take a number of years. Given South Africa's success in this field, we can assume that if the federal government became meaningfully invested in this concept, America could have a strong synfuel industry within the next decade.
http://governor.mt.gov/hottopics/faqsynthetic.asp
In the U.S., Aramco is under attack because of a highly complex tax break. The company pays Saudi Arabia the fixed price for the oil that it extracts and then collects a production fee of 25¢ per bbl. But 85% of its payments are considered Saudi income taxes, which Aramco's four parents ultimately can use to reduce their U.S. income taxes. Every time Saudi Arabia increases its oil prices, Aramco's local tax payments rise, and so do its benefits under the U.S.'s so-called foreign tax credit. President Carter has vowed to tighten up on the credits, but he has not made much progress partly because Aramco's owners argue that they need the benefits to stay competitive in world markets. http://www.time.com/time/magazine/article/0,9171,947130-1,00.html
Posted by: Michael Lewis | May 24, 2008 at 01:10 PM
While the politicians argue about stuff and campaign endlessly, it is time we Americans picked up the pitch forks and marched on OPEC. Easiest way to do that is exactly what you said, cut our fuel use. If we could buy a car that gets twice the mileage of our current car, rideshare, utilize mass transite, combine trips, work from home, or work 4-40 hour days a week, we could easily achieve this and reduce our fuel imports.
It's a no brainer, and I think folks are stepping up while the politicians dither.
Posted by: muckdog | May 26, 2008 at 03:01 AM