t's time to stop kidding ourselves about cheap oil. Prices are going up - in international markets and at the pump - and aren't likely to come down. As reported in the New York Times a few weeks ago, even the prodigious petroleum reserves of Saudi Arabia - long a moderating influence on prices so long as the prickly royal family is in a good mood - may no longer be sufficient. The discovery of new "large" oil fields has dwindled over the past five years to almost nothing. Driving accelerating demand are the rapidly growing economies of China and India where new wealth means many more automobiles on the road. Last year China increased its oil imports by 30% and it is set to do so again this year. Only second behind the US in imports, it now leads Japan as an oil buyer.
None of this is to say that oil will run out. But the costs of recovering it, protecting the sea lanes where it is shipped, and propping up governments that we'd otherwise wish away but for their fossil fuel resources are rising quickly. Because just about all of transportation in the US is propelled by oil, the prospects for severe economic impacts are higher than at anytime since the oil crisis of 1973. Here are the numbers: over 130 billion gallons of gasoline and diesel fuel were consumed last year in the US alone (growing at 2 - 3 % per year), with almost 2/3 of that amount derived from the 4 billion barrels imported in 2003 at a cost of roughly $150 billion (not including the military expenditures in the Gulf). There is little hope that US ethanol production (about 3 billion gallons last year) or biodiesel (a few million gallons) can displace much of that petroleum. And the National Academy of Sciences believes that under the most optimistic assumptions, hydrogen-powered fuel cell automobiles are decades down the line (not even factoring in the problems of making, transporting and storing hydrogen, all of which require enormous consumption of energy in their own right).
But there may be an answer to a big part of our energy worries: advanced "heavy" hybrid vehicles. These are an extension of the already successful "light" hybrids that have been running around highways in Japan and the US for 6 years, but with a twist: much more electric storage capacity through a new class of batteries that result in no compromise in performance, while providing reductions of 75% or more in gasoline consumption. The energy replacing inefficiently burned gasoline comes from the electric grid.
Prof. Andy Frank of mechanical engineering department at the University of California-Davis has been building hybrids for 30 years. But over the past 10 years, he and his students have turned out heavy hybrids in the styles and sizes that most Americans insist on: large sedans and SUVs. Prof. Frank 's Mercury Sable, Ford Explorer and Chevrolet Suburban all go 60 miles on electricity alone (including at highway speeds) before needing a recharge from a typical 110 volt outlet (the batteries charge fully overnight). That 's more "electric-only" range than the daily commutes of 80% of US drivers. When the batteries go low, a small gas engine keeps them at about 20% of peak charge.
And, when combined with the mechanical, continuously variable transmission that Frank has perfected, the gas engine maintains cruising speeds of up to 80 mph while the batteries provide an additional 200 horsepower for the brief times needed for passing or hill-climbing. Cheap but sophisticated computer chips scattered throughout the car manage the energy flows and recharging. To the driver, aside from the noise reduction in the passenger compartment, there is no perceptible difference in handling or acceleration. Even energy that is normally lost as heat during braking is recaptured in the battery packs.
It takes about 15 kilowatt-hours to charge the batteries (about a dollar's worth of electricity), and electric motors are 6 or 7 times as efficient as internal combustion engines (and more than twice as efficient as fuel cells). Thus, the fuel costs are about 1.6 cents per mile (as compared to 7 cents per mile with gasoline prices at $2.00 in a sedan, and 10 cents per mile for an SUV). Much less maintenance and lubricant oil is needed for the small gas engine, as it is optimized to run at a more-or-less fixed rate while the batteries take up the slack when additional power is required. And don't worry too much about where the electricity will come from. Even if tomorrow 10% of all cars were plug-in hybrids, only about 1% of US electricity generation would be needed to power them.
Multiple surveys have shown that most (though not all) Americans would love to have such a car, if only for the added benefit of being able to avoid going to the gas station every week. So why can't you go out and buy one now? American car companies don't want to take the short-term risk. Prof. Frank and many economists note that because consumers would be willing to pay a few thousand extra dollars for a heavy hybrid, manufacturers could make a profit on these vehicles, but not as much profit as making the same product that they always have. Battery costs are still a bit high, but will come down quickly if hundreds of thousands of packs are made a year, allowing car manufacturers to recover their investment.
Perhaps this is the perfect situation for a temporary Federal subsidy: a two or three year $2,000 tax credit for purchasing a hybrid (of any body size and style) that gets at least 60 miles on a single electric charge before the gas engine kicks in. This should be sufficient incentive for car companies to get over their risk-aversion and for battery-makers to compete for the large, new market. It will also stimulate research into yet better (and cheaper) batteries, making possible plug-in hybrids with ranges of several hundred miles, eventually eliminating the need for the fossil-fuel burning engines altogether. The money to pay for it can come from scaling-back the Fed's oversold hydrogen fuel-cell initiative or adding a few pennies to the tax on gasoline.
Or, we can engage in business-as-usual and just wait for the Japanese to do it, watching as they capture another lucrative market - the one made a sure bet by several hundred million Chinese and Indians who, like us, want to drive cars too.