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Published on: September 28, 2010
Chitty Chitty Bang Bang: The Electric Car Industry Isn’t Going to Save Us

We all have our off days; Tom Friedman (a man I admire) had one last Sunday in a New York Times column calling for higher gas taxes and a crash program to build electric cars.  As usual, he’s worried about the right things and is even ahead of the curve.  The piece raises some serious […]

We all have our off days; Tom Friedman (a man I admire) had one last Sunday in a New York Times column calling for higher gas taxes and a crash program to build electric cars.  As usual, he’s worried about the right things and is even ahead of the curve.  The piece raises some serious questions about the future of the American middle class, our dependency on gasoline creates both environmental and security problems, and China in particular is making some long term investments in infrastructure that are likely to exacerbate some of the competitive issues we currently face. But electric cars won’t save the American middle class.  They won’t even save China.

(Credit: David Megginson)

Friedman’s column argues with his characteristic urgency that China is eating America’s lunch with a series of high-profile, high-cost investment initiatives that over time will give it a series of crushing economic and technological activities.  State-of-the-art airports, high-speed trains, gene sequencing efforts and a combination of policies that make gas expensive and subsidize the electric car industry are the secrets of China’s future success.  America needs to match these policies and investments, especially in the electric car business, or our goose is cooked.

Infrastructure and Research, Yes

Unless you are a laissez-faire purist Friedman scores some telling points.  The United States has neglected its infrastructure investments in recent decades.  President Eisenhower’s interstate highway system was a good thing; introduced in the 1950s even as Eisenhower worked to control federal spending in the shadow of our enormous war debts from World War Two and the Korean War, the interstate highway system was an important contribution to our postwar prosperity.  Infrastructure investments create jobs in the short term and in the long term they reduce costs, create new opportunities and support economic growth (bridges to nowhere excepted).  The development of high speed rail is a good thing and I’d like to see the US do some more of this; government participation in the original US rail network was not without scandal (Credit Mobilier anyone?) but it was still a good thing to have train service to California.  America, less densely populated with larger distances to cover, has always had a little less use for trains than Europe; on the whole, however, government support for this sector seems to have paid off over time.  From the Erie Canal to the present day, federal and state promotion of infrastructure development has had a lot of waste and fraud associated with it — but it has also done a lot of good.

Government support of basic scientific research also makes sense even if economic payoffs are uncertain and hard to quantify.  Medical research is worth the money even if it is financed by deficit spending; our grandchildren will thank us, not curse us, if we support basic research that enables them to live longer, healthier lives — even if they have to help pay for it.  In general basic scientific research will help promote higher living standards and better lives for everyone in the world, including the poor.  Every society has an obligation to contribute to the common human task of understanding our world in order to make it better; given our resources and our track record the United States can and should be at the forefront of this effort.

Electric Cars, Not So Much

Unfortunately we part company when it comes to electric cars.  Let me quote:

The electric car industry is pivotal for three reasons, argues Shai Agassi, the C.E.O. of Better Place, a global electric car company that next year will begin operating national electric car networks in Israel and Denmark. First, the auto industry was the foundation for America’s manufacturing middle class. Second, the country that replaces gasoline-powered vehicles with electric-powered vehicles — in an age of steadily rising oil prices and steadily falling battery prices — will have a huge cost advantage and independence from imported oil. Third, electric cars are full of power electronics and software. “Think of the applications industry that will be spun out from electric cars,” says Agassi. It will be the iPhone on steroids.

Agassi is good at making PR for his company, but he should not expect to win any prizes in formal logic anytime soon.  The fallacies follow in quick succession.  First, because the auto industry “was” the support of the American middle class does not mean that the electric car industry can or will be that support in the future.  After all, if Germany and Japan are building better cars than Detroit right now, what would make Detroit any better at electric cars than it is at the current type?  With rare exceptions, the American car industry has been incompetently managed for a generation; how will changing from internal combustion engines (a technology that Detroit at least understands) to electric ones enable GM and Ford to suddenly out-design and out-build BMW and Toyota?  If Detroit figures a way to solve the problems that have dogged it for the last generation, its fortunes will improve even if electric cars fizzle out completely.  If it can’t solve those problems, all the electric car technology in the world won’t help.

In any case, why would electric car manufacturing jobs not be outsourced to China, India and points beyond the way so many other manufacturing jobs have been?  There is absolutely nothing about an electric engine that exempts it from normal economic laws about costs and production.  If labor costs are a significant factor, electric car engines will be produced in countries like China that can combine low costs with good quality.  It would be possible to keep electric car manufacturing in the US if the technology is highly automated — but if that happens, manufacturing these cars will not create many jobs.  There is simply no way on earth that inventing electric car technology is going to rebuild the American middle class on the manufacturing model.  Alas.

Second, if and when electric car and battery technology gets to the point where electric cars start driving the Arabs out of the oil business, some strange and very complicated things will start to happen.  The “huge advantage” that Agassi predicts for the early adapters is not going to appear.  Think it through: there’s a huge worldwide investment in oil production, distribution and refining.  As the electric cars storm onto the market and both short and long term demand for oil look set to decline, panic will seize the world’s oil companies.  Ruthless cost cutting and price slashing will begin.  OPEC may collapse.  Gas could end up being cheaper than Koolaid (at the moment it’s cheaper than Diet Coke), and the big beneficiaries of the introduction of the electric car might well turn out to be the owners (and makers) of gas guzzling SUVs.  In any case, the transformation of the world oil market from a seller’s market to a buyer’s paradise is going to reduce America’s security problems connected with the oil supply whether we get in the electric car game first or not.

The big losers will likely be countries like Russia that are high cost oil producers; the Saudis can pump oil profitably at very low prices for a very long time.  The owners of electric cars, however, are not going to do particularly well.  If millions of electricity powered cars come on line, demand for electricity will skyrocket.  Amazingly, this will raise the price.  A lot.    Electric car drivers are going to pay through the nose for their power while gas-dependent drivers are getting big discounts.  This phenomenon is likely to drastically slow the rate at which electric cars replace the internal combustion ones, and makes it extremely unlikely that the first countries and/or companies to develop electric cars are going to make huge piles of money any time soon.

Third, the development of apps for electric cars may well turn out to be a good business for software companies, but I suspect that no matter where the electric cars are made, a lot of that software is going to be written in the Indian and Chinese offices of US and other world software companies.  Again, there is nothing about electric cars that changes the basic economics of software development and design.  If it’s more efficient to write software in America than in China, it will be done here — and vice versa.  More than that, if China tries to prevent outside developers from getting access to its car platforms, I suspect that various trade officials and bureaucracies will start pushing back.  Hard.  If China wants to sell its electric cars around the world, it is going to have to give the rest of the world access to its platforms.

More likely, the Chinese are going to face the same kind of pressure that led the leading Japanese and German car companies to set up large production facilities in the United States, and that has forced virtually every major multinational corporation in the world to share technology and distribute production.  China has played this game very well, forcing foreign companies to share technology as part of the price of accessing the Chinese market.  If China succeeds in building up a large and valuable technical edge in the electric car industry, other countries are going to do to China what China has done to many others: demand a share of the pie.  If electric cars turn out to be the chief engine of global growth in the 21st century, China is going to have to spread the wealth around — or watch as other countries, the US and Europe included, ban its products from their home markets, tweak their patent laws and by fair means or foul figure out a way how their economies can benefit from the technologies developed overseas.

Cheaters Often Prosper

Actually, the link between scientific discovery and even technological innovation and economic growth is overrated.  China, after all, is growing at 10 percent per year primarily by adapting technology invented in other places.  Over the last sixty years, many of the world’s most important scientific discoveries were made in Great Britain; this list points to such British accomplishments as the discovery of DNA, the world’s first working computer, the development of genetic fingerprinting, stem cells, the birth control pill, and on and on. Yet amazingly, countries like China, India and Japan — which made far fewer important technological and scientific breakthroughs during this period — raced ahead of Great Britain.

Counter-intuitive as it may seem, it is frequently a smart strategy to let other people pay the massive development costs for new technology while you sit back, wait, and then reverse engineer whatever they do to come up with some way around their patents.  I’m told that McDonald’s used to spend a lot of time and money researching the best possible place for a new hamburger stand.  Burger King had a cheaper strategy; it waited for McDonald’s to hire consultants, carry out extensive traffic surveys, compare several potential locations and finally build — and then Burger King simply built across the street.  Burger King might not have gotten the absolute best spot, but they would come close — and for a lot less money.

The Burger King plan works pretty well in the real world; I have less confidence about the environmental benefits of electric cars.  What if the heavy new demand for electricity means a politically irresistible demand for more coal-fired electricity plants?  Greens want us to shift from coal, the cheapest and most secure fuel for electricity generation, toward more expensive sources like wind.  If a significant chunk of the transportation system moves to electricity, I don’t think this will happen.  If the electric car lobby wins out, coal (and nuclear) power could loom very large in our future.  Electric car drivers will want cheap electricity just as much as gasoline-powered drivers want cheap gas — and when and if electric car ownership becomes widespread, the ‘cheap electricity’ lobby will be as powerful as the anti-gasoline tax lobby is today.

The Great Green Dream: A Crippling Gas Tax

Friedman next returns to the Great Green Hope: that very high gas taxes will put us on the road to a middle class future based on the wonders of electric cars.

Europe is using $7-a-gallon gasoline to stimulate the market for electric cars; China is using $5-a-gallon and naming electric cars as one of the industrial pillars for its five-year growth plan. And America? President Obama has directed stimulus money at electric cars, but he is unwilling to do the one thing that would create the sustained consumer pull required to grow an electric car industry here: raise taxes on gasoline. Price matters. Sure, the Moore’s Law of electric cars — “the cost per mile of the electric car battery will be cut in half every 18 months” — will steadily drive the cost down, says Agassi, but only once we get scale production going. U.S. companies can do that on their own or in collaboration with Chinese ones. But God save us if we don’t do it at all.

Really?  President Obama could raise gas taxes if he just had the guts?  President Obama of course can’t raise the gas tax on his own; only Congress can raise taxes, and in this case it obviously won’t.   What does Mr. Friedman think would happen if the Speaker and the Majority Leader held a joint news conference this week to announce they were fast tracking a $4 per gallon gas tax so Americans could be as happy as Europeans?  What would that do to the still shaky economic recovery?  What would happen to the stock market if the economy was about to get a cold shower in the form of a massive gasoline tax?  (Hint: the answer starts with a ‘p’ and ends in an ‘a-n-i-c’.)  What would all this do to the Democratic Party in the midterm elections?  How would the UAW, presumably a prime beneficiary of Mr. Friedman’s plan to guarantee the future of the American middle class by promoting electric cars, respond?  What would Bill O’Reilly’s guests be saying on Fox?

Energy taxes are not always bad.  I have argued before that a revenue-neutral carbon tax would be an excellent substitute for the payroll tax as a way to pay for Social Security and Medicare.  Furthermore a shift of the tax burden away from income and employment toward energy use might well accelerate America’s transformation to an economy based on services and information rather than metal bashing.  But short of a military coup by a group of fanatically green military officers, it is hard to come up with a scenario that involves the passage of a $4 per gallon gas tax or anything like it in order to subsidize the production and sale of electric cars.  Fuggedaboutit, as they say in a borough not very far from glamorous Queens.

What Would Machiavelli Do?

If your goal is to help the American economy, the smartest (if somewhat cynical) strategy is the opposite of Mr. Agassi’s program to destroy the Democratic Party in order to create a captive market for his electric cars.  To grow the American economy, keep energy prices as low as possible, and don’t lift a finger or pay a single cent to develop electric car technology.  During all the years while the new technology is being incubated and developed at great cost overseas, we will enjoy the benefits of lower energy prices than high tax countries pay.  The economy will grow faster than it would at a higher energy price, and all kinds of new products and services will come on line as people work to satisfy the consumer demand that results from the growth.  In fact, during all these years both Europe and China will be subsidizing the American economy — their high gas taxes will automatically depress energy demand in those countries, reducing global demand for oil and therefore leading to even lower gas prices (and greater economic growth) here.  All good news for a truly Machiavellian strategist.

Then, when China finally comes up with the efficient batteries and redesigned cars that will revolutionize transport, let’s start by reveling in even lower gas prices.  Europe and China will be puttering along in their electric vehicles that only make sense if the gas price is $7 per gallon or higher; Americans will be swooping over the interstates as our gas prices fall.  The Arabs and the Venezuelans will be begging us to take that black gooey stuff off their hands.  SUV sales will boom; since this is about the only car Detroit can make profitably, the US car industry will enjoy another respite from its long decline.  And when the time finally comes to go plug-in, we can reverse engineer the Chinese technology, figure out a way around their patents and, if Detroit is up to the job, make our own electric cars without paying all those huge development costs.

This is not, let me hasten to say, an environmentally sound approach.  It is not a very humanistic or high road one either.  Nor will it turn Shai Agassi into the next Bill Gates.  But it is economically and politically realistic.  It may in fact be what we end up doing by default.  To prevent that, greens are going to have to think much more deeply than they yet have done about how we can build a sustainable and prosperous future.

show comments
  • RK

    Where is the ‘like’ button? I want to click it.

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  • Haim

    Yeah, it’s time to protest the low-tech concept of this blog. No “me likee” buttons, and no sharing options. For shame, Meade!

  • Adam Garfinkle

    What say you, I wonder, about the flex-fuel car idea that Gal Luft has been trying to promote? A car that can use gas and plug in changes the economics some.

  • http://sites.google.com/site/lukelea2/thesoftpath Lea Luke

    My main criticism of Friedman? The conceited way his lower lip protrudes when he proclaims a piece of conventional wisdom.

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  • Neville

    Some sound analysis here regarding energy prices and technology for road transportation, but I can’t help but notice that your economic spectacles seem to get steamed over, as soon as you mention rail.

    Phrases like “The development of high speed rail is a good thing and I’d like to see the US do some more of this…” and “on the whole… government support for this sector seems to have paid off over time” make even Friedman’s points look tightly argued by comparison.

    Your ‘drive-by’ assertion that “America, less densely populated with larger distances to cover, has always had a little less use for trains than Europe” for instance is flat wrong – the US has an extraordinarily extensive and efficient rail system, much more so than Europe’s. It just happens to carry vast amounts of unsubsidized freight, instead of limited numbers of heavily subsidized passengers.

  • Keith

    Can’t agree more, and you left out the best argument: electric cars are a net negative for the environment as compared to gasoline engines due to the methods we use to generate electricity.

  • Cory Wilson

    Professor Meade’s analysis of China’s economic potential to challenge the U.S., linked to his deft judgement of Chinese diplomatic and military power in “In the Footsteps of the Kaiser”, displays a nuance that is often missed by other writers who worry about the rise of Chinese global power. A policy steeped in the subtlety displayed by Meade requires those who promote American exceptionalism to show some humility as to the limits of American power. Contrary to some commentators, this humility is not a display of weakness, but evinces an understanding founded in a realistic and clear reading of the situation that Meade readily shows.

  • gmcinva

    I wonder what needed infrastructure we are failng to properly invest in. We seem to have effective seaports, airports, freight railways, highways, universities, research facilities, etc. What are we missing? China’s gains are largely due to semi-skilled and skilled labor that works for approximately 10-20% of our costs, and an almost total lack of environmental and labor protective regulations combined with an undervalued currency to promote market share gains. U.S. infrastructure has little if anything to do with it.

    If high speed rail is a worthy undertaking, someone should be able to make an economic case for it. If it will not return at least the cost of capital in 30 years of more, why is it a good idea? So far, no case has been made that even approaches that standard.

  • Odysseus

    Ahhhhh . . .Professor Mead knows not what does by dissing the EV fanboys.

  • juandos

    Tom Friedman (a man I admire)“…

    Pray tell, what’s admirable about Friedman?

    The man (and I use that term losely) is a pathological liar, hence a liberal…

  • ajb

    Biggest flaw in this article: using the words “greens”, “think”, and “deeply” in the same sentence.

  • ScottE

    “Think of the applications industry that will be spun out from electric cars,” says Agassi. It will be the iPhone on steroids.

    Hilarious, what, gasoline cars aren’t computerized now? Why would you want to buy a car app you can’t take with you like your phone?

    You can only sell so many car ‘apps’ that make your car’s horn play ‘Dixie’.

  • Jacksonian Libertarian

    Government interference in the free enterprise system never works. They try to pick winners based on politics, instead of consumer desires. Remember the 1980’s in Japan; everyone around the world was terrified of MITI, Japan’s Ministry of trade and technology. They were going to take over the computer industry, blah, blah, blah, etc… Only Governments are monopolies, and monopolies always suffer from corruption and inefficiencies that grow worse over time. Governments quite simply cannot pick winners in a free market; they can’t even pick good potential research targets.
    New technology (developed by private industry) has driven the development cost of natural gas way down, and vehicles can be made to run on natural gas. Add a compressor to the gas line in your home and fill up your tank and only pay one monthly gas bill. This seems like more of a free market solution than any Government backed electric car boondoggle.
    Government interference should be limited to infrastructural projects based on fully matured technologies, ports, airports, highways, power grids, pipelines, waterworks and such, which is more than enough for them to screw up.
    An Elephant is a mouse built to government specifications.

  • http://www.cosmicconservative.com/weblog CosmicConservative

    Can’t say I agree much with the first half of your piece Walter, but the last half is dead on. I’ve been telling people for years that as much as I oppose the “Don’t Drill Here” policies that the Democrats have promoted, one benefit of it is that if peak oil ever does happen, then we’ll have a supply of oil that we can rely on since we spent the previous fifty years driving our economic engine on foreign oil that ran out, leaving those countries holding the bag, so to speak.

    This is a similar unintended consequence of current policies.

    But your dismantling of Friedman’s piece doesn’t go far enough. If the whole point of electric cars is to reduce carbon “pollution” then the only way that’s going to happen is if the USA suddenly builds a couple hundred nuclear or hydro power plants, or a couple thousand wind farms to provide all that electricity. Otherwise it will just come from coal, which doesn’t reduce the carbon, it just moves it out of the cities. And since there are thermodynamic realities about energy loss when transporting and converting energy, the resulting loss of efficiency will actually mean MORE CO2 in the air from electric vehicles, not less.

    Sometimes the sheer technical illiteracy of the Left makes me shake my head. Other times I look at who they vote for and just say “it figures.”

  • Anna Keppa

    When the Green Weenies wake up to the fact that their drive to popularize electric cars would simply trade one dependency (foreign oil) for another (rare earths and other exotic materials that China has lots of but we don’t), and when the US gets involved with big-time political/military conflicts with the Chinese, will we see the pony-tailed trust funders turning up in their Priuses, Leafs, Volts and the like to chant “NO BLOOD FOR LITHIUM!!!”)??

    If so, I expect they will not see the irony.

  • Rick Rezabek

    Walter,

    Great insights on the future of the one dimensional Green revolution in cars. So many folk don’t even make an attempt to think through the dynamic behaviors of a new technology. The rest of the world won’t sit around static.

    One gripe though.
    Please help stop the lie of the ‘bridge to nowhere’. Go to Google earth. Look up Ketchikan, Alaska. Notice the town’s commercial airport across the channel from the entire town. Also notice the fleet of cruise ships docked at the piers.

    Now imagine the size of the bridge necessary to give clearance for those cruise ships. Quite a tall bridge I imagine. Probably very expensive. Not gonna happen on the backs of a single inland passage town, thus the search for funds.

    Gov. Palin had it right though, when she said, if Alaska decides we need a bridge there, we’ll build it without Wash DC’s ‘help’.

    Hardly a bridge to nowhere. A sad tale imposed on good people.

  • http://chrisbolts.wordpress.com Chris Bolts Sr

    I disagree with the assertion that we need more high speed rail. If there is a market for rail, then investors would be lining up to invest in it. However, Mr. Mead, you provide the primary reason why rail never took off in this country: with the alternatives (cars for short to medium distances and planes for longer distances) traveling by rail is not economically practical. Now, for carrying goods across the country it might make more sense, but even trucking is cheaper than rail. After all, for the price of just laying down rail for the train you can buy a fleet of trucks and have them navigate the roads within the major cities (you still have to load the trucks at the train station, right?).

    And here’s a possible answer to the “neglected infrastructure”: perhaps we have something akin to the tragedy of commons where because the roads and highways in the country are public owned and primarily financed by the federal government, no one has a compelling interest to go out and fix the roads. At the time, it might have been politically sound for Eisenhower to get highways funded by the government, but it was another blow against constitutional governance, something that we’re moaning about right now.

    I think you give the government too much credit for financing basic medical research. Was there government programs to finance the cures for malaria and polio? For flu and chicken pox vaccinations? How about for chemotherapy and the like? Do you see kids running around thanking the government for getting a chicken pox vaccine? I sure don’t and I know I didn’t thank the government that I got that vaccination.

    The rest of your article regarding electric cars is spot on. We’ve had electric cars in the past and we switched over to gasoline because the physics of the vehicle demanded it. I do not see an instance where an electric battery will be able to viably move 2600 pounds of steel and an average of 400 lbs of weight (a family of four).

    Once you’ve decided that “government should” all other thinking stops. Perhaps we should try the other thinking before we adamantly conclude that only “government should” do it?

  • Mike

    The nice thing about free markets, which escapes so many, is that in the early stages of a new technology there is no single point of failure. No single person or group making the critical decisions. Therefor no single bad decision will lead to ruin. Any real economy (say somewhat more advanced than the Neolithic) is too complex for any one person or group to understand. There is a branch of mathematics called complexity theory that deals with this. I think economists and those who comment on it should study it.

  • Texas

    OK, your analysis isn’t as stupid as Friedman’s (other than the highspeed rail foolishness) – but that’s not saying much, is it?

    1. Any assumption that gasoline demand is going to decrease is silly. The sheer number of cars, the exhibiting ICE infrastructure, the superiority over electric vehicles (batteries aren’t going to get THAT much better than today’s, “Moore’s Law” will never apply to battery improvement) – all of these factors mean the ICE is here to stay in large numbers for the next century.

    2. Peak oil – stupid idea; we have no real idea how much oil might be recovered from both known and unknown. Anybody want to tell me about what happened to the peak natural gas projection a few years ago? I remember in the 70’s when there were articles saying all the oil would be used up by 2000.

    3. Let the markets work, taxes are inefficient and can you imagine the quality of life costs if we imposed a big gas tax (not to speak of what the government would waste the revenue on).

    4. As I understand it, China and Bolivia have a lock on the rare earths needed for the car batteries. Why is this any better than oil – which in today’s world is a broadly produced and traded commodity? Seems to me it’s a lot worse political situation.

    5. You’re right we should not worry too much about development by other countries of the technology, but that does not mean we should ignore it entirely. We need to have some level of expertise, but let them be the pioneers with the arrows in their backs.

  • egoist

    Gov supported science sure has taken an anti-American turn. Global Warming is exactly what you’d expect from a research system that rewards hyper-hype.

    What about the “rare earths” stories we’ve been hearing of late? Do you think that that too torpedoes the e-cars?

    I think the perfect icon near the charge-port on these cars ought to be a lump of coal.

  • JKB

    Where is this 18 month doubling in battery capacity? The EVs today have the same range as the EVs of 1909. Granted with heavier chassis and a slightly higher speed but still without heat or A/C. BTW, that speed for the 100 mile range is 30 MPH.

    And these apps for the EV, the ones that consume battery power to run? The ones that will do all kinds of things except, provide heat in the winter or A/C in the summer unless you want your range severely cut.

  • West

    I like your plan. Can we keep in the part about destroying the Democratic party?

  • http://tmancensored.blogspot.com/ Tman

    I agree with your assessment about a patient long term economic strategy for handling our transition from gas to whatever the fuel of the future may be. I especially liked the Burger King/McDonalds analogy, very apt.

    However, I don’t understand how you can apply the same insightful viewpoint to the train industry and come out supporting high speed rail. It fails for all the same reasons electric cars will. You can count on one hand the number of high speed rail lines around the world wherein the price of the ticket covers the cost of your ride (including government subsidies for the tracks). Amtrak is the closest we have and it is a financial disaster that in 2008 was subsidized to the tune of $32 per average passenger.

    When I apply your excellent analysis of the electric car industry in this article to high speed rail, I get a different answer.

  • Nathan

    I’m surprised you let the comment on Moore’s Law go unchallenged. Yes, for transistors, they’ve been following Moore’s Law — the exponential growth of things being roughly 2x better every 18 months. That’s why the average smartphone has more power than what NASA had during the moon program.

    But, capacity of batteries has barely been growing linearly. Over the past few decades, battery capacities have NOT been anywhere near Moore’s law. A 2x growth in battery capacity per decade would be an improvement over the sluggish pace we’re at now. Don’t ever let someone try and compare transistors to energy storage. They’re nowhere near each other.

  • Randy

    As CosmicConservative observes, Mr. Mead only scratches the surface of Tom Friedman’s hopium addiction. When it comes to energy, don’t waste your time listening to anybody that hasn’t studied thermodynamics.

    Love ajb’s comment.

  • http://sites.google.com/site/lukelea2/thesoftpath Lea Luke

    Nathan’s gotta be right about no Moore’s Law for battery technology.

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  • John C.

    Regarding fast rail for passengers, I suspect that more people would use it if they could take their cars with them; in other words, if you were headed across the country, you pack the car, drive to the train station, have it loaded onto an automobile-carrying car, and you enjoy the trip. When you get to the other end, your car is already packed, and you don’t have to rent a car. If the trains are reasonably fast and offer amenities that make up for the fact that they AREN’T as fast as airplanes, taking their cars on the train might appeal to people instead of putting up with the unpleasantness of modern air travel and car rental.

  • Kirk Parker

    Speaking of off days, today is yours, too, for holding up Friedman as someone whose opinions are worthy of respect, rather than being (in the words of an Instapundit correspondent) “dean of the dim-bulb center-left beltway conventional wisdom crowd”.

    We *are* talking about the same T. Friedman, right? The one who recently gassed on about how much better off we would be if we could emulate China’s form of government???

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  • mf

    the author requires a lesson in fifth grade math. Spreading current western civilization and its automobile to asia would require that the production of oil doubles or perhaps even triples, on a sustainable basis. This will not happen. One does not need to be a peak oil theorist to doubt this, just look at current production patterns. Thus, if one supposes that other countries develop some alternatives to oil, the price of oil will not drop, but rather continue to rise due to rising demand worldwide. So, the US will miss on the new industry, *AND* continue to suffer from high oil prices.

  • Robert Speirs

    I ride an electric scooter to work every day. I love it. But there’s no technology in that bike, except for a transistorized charger, that wasn’t available 100 years ago. And no one else in my complex of thousands of workers, a good number of whom no doubt live as close as I do, has copied me, after a couple of years. Electric vehicles are fine. But they have limited appeal and convenience issues. My scooter does use a tiny amount of juice, but a fully-functional electric car will use much, much more.
    About Europe: I’m going to Britain in a few weeks. I had planned to get around on public transit, about which I’d always heard the nanny-state regimes were so enthusiastic. But my English cousins are telling me, “You’d be much better off renting a car.”

  • Jack Kalpakian

    So, let us do absolutely nothing, until oil hits 200 dollars a barrel, and even then I am sure Meade will argue that it is a bargain. The reality is that Government shaped technology and markets from the time of the revolutionary war with contracts to Du Pont to our day. It also pays immense subsidies to the car industry in the form of road structures. So ICE technology only exists because of governmental subsidies, not due to some “natural” market outcome.

    If we carried on as Meade suggested, the US would have been forced to rejoin the British Empire to stave off takeover by a more progressive Mexico.

  • Brian K

    I guess you’ve never read into electric cars that much because the problems you put forth are not the ones I’m always reading about.
    -Your simple idea that electric prices will rise is a bit true but if you read about better place the idea is to buy the energy at night when electric prices are low.
    -The car is good at commuting and better has said that while the tech is still new family’s will have a gasoline and electric car.
    -The major problem I see is that as demand for electric cars goes up so does Lithium (batteries). This will cause the price of the car/battery to increase.
    -Also since the increased energy use would be in the United States more energy extractions such as coal and natural gas will increase.
    -Its more of a niche market that will work will in places that oil is expensive(Island countries)

  • Brian Gulino

    I wan in China concurrent with Mr. Friedman. What is striking in the major cities is not the prevalence of automobiles or the electric car industry, rather the popularity of the electric scooter. They cost $300 American and they are all over.

    Perhaps the answer to the personal transportation problem lies in not lugging around 3/4 of a ton of metal everytime you want to go somewhere.

  • hamsamwich

    Get the busy-body politicians out of an industry and it will right itself. That’s how you get wind power at $85/kwhr instead of $0.06kwhr by burning our trash to fuel power plants.

  • jz

    You lost me when you supported gov sponsored rail. Name a single place on the face of the planet where passenger rail makes financial sense. And when you find that one rail line (in Japan) go find me 5 others. THEY DON’T EXIST! Stop it with all this rail nonsense…

  • Roger P.

    Okay … we forget about EVs and instead stay in bed with internal combustion engines and oil. A war breaks out in the Middle East (think: Iran), the Gulf of Hormuz is closed (maybe for months or years), and the domestic cost of gasoline jumps to $5 – $6 dollars a gallon. Our economy takes a serious hit, and the only folks who win are the Arab oil producers, the Russians, and Hugo Chavez. Whether Mead likes it or not, that’s an energy ‘tax’ that can be levied by people who don’t like us very much

    No rational observer thinks the EVs are a panacea, but they are an important technology that should be encouraged over the next decade. EVs are one part of the energy puzzle and its perfectly okay to encourage their use.

    Mead makes the unsupported assumption that technology is static, that new sources of energy generation will not arise over the coming decades. Solar and wind are expensive today, but its very likely that the prices of electric power generation using these technologies will drop dramatically over a 20 year span. In addition, it’s not outside the realm of possibility that a new electric power generation technology (fuel cells or fusion) may emerge in a 20 – 30 year time span.

    Bottom line … the US is not Burger King! We’ve succeeded as a nation by innovating technologically, not following. It’s far past the time to encourage EV technologies.

    • cesium62

      Correction: solar and wind are not expensive today. But you’re right that the price will benefit from an additional 30 years of scaling up mass production.

  • JohnR22

    My main gripe with Friedman, and Left wing Statists like him, is that they think the govt is actually capable of effectively implementing ANY strategy. Even if Friedman’s ideas were politically do-able, I promise that our Rube Goldberg govt bureaucracy would screw it up; trillions spent with virtually nothing productive at the end.

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  • mredder4

    Pure haters can be identified by their insistence on denigrating every possible new idea as a “certain failure” while not offering up any solutions of their own. “The electric car won’t save us.” Why? Because the combustion engine is doing so many good things for us? Because of the combustion engine, we’re tied financially to the Middle East, which produces the most anti-American terrorists. The pollution factor should also be considered. But what cracks me up the most is this can’t-do attitude that people like Mead have about America. And like a self-fulfilling prophecy, people like Mead have quietly led America into incompetence and complacency by constantly telling people “Oh, well that just won’t work, whatever it is.” Maybe, like Facebook, there should be an “Ignore” button for articles (and writers) like this one.

    • Walter Russell Mead

      To say that one particular idea is a stupid idea isn’t to say that all ideas are equally hopeless. To say that the deep conceptual flaws in a particularly dumb strategy make it unlikely that we will succeed at it does not imply that I think that the United States can’t do anything right.

      The besetting sin of the environmentalist movement is intellectual laziness when it comes to policy. I’m sorry that you feel that pointing this out is an expression of pure hatred.

  • Ron B

    We should not leave advances in the development of highly effecient gasoline engines. Detroit would be better serve to continue their efforts on that path and let others spend their money on electric. Also, I can’t help but think about the cost of copper when we develop the charging stations for all of these energy savers. What gauge will those copper cables be that will be needed to charge all of those cars and man will the vagrants and winos be in the green when they find a new source of copper to take to the scrap dealers! All of these unintended consequences what are we to do.

  • JmMD

    Stumbled upon this [obscenity expressing contempt deleted — ed] site accidentally and can see that the typical CON-servative group think is making you guys happy.

    [disgusting exhortation ironically intended removed — ed]

    In the real-world liberal entrepreneurs like me are starting companies without Machiavelli (or any other conservative sociopath) as a guide – and thank you very much Mr Mead but we do so by putting a little more into strategy then relying on what worked 100 years ago.

    Hey Mr. juandos – what have you done lately other than call half the country pathological liars? – How original! – How intelligent!

    You guys enjoy drinking each others bath water and reveling in your – ‘who do we hate most today’ – worldview. For the rest of us – as we’ve done over and over in history – will have to clean up after the CON-servative mess – (read T. Roosevelt, F. Roosevelt, JFK, LBJ, B. Clinton – and now its Barack Obama’s turn).

  • CTObserver

    A well written column, but overall disappointing – far from WRM’s usual quality thinking. Why start with the assumption (not even needing to be stated) that electric cars are the way of the future, and that “enivornmental soundness” requires them? Why not a bit more deconstruction on the economics of electric cars vs. gasoline, and a bit more thought about the effectiveness of governments steering research and technology development, or of their picking the right areas for investment?

    Remember how, 20 years ago, the Japanese were “eating our lunch”, and destined to overtake us by smartly joining business and government to steer investment into targeted growth areas? I believe the two big targets were artificial intellligence and biotechnology – how has that worked out? Why is it smarter now to target electric cars?

  • Martin W. Abel

    The electric car is a hoax, a fable! It can NOT save energy at all! It should be ovious to ANYONE that the batteries STORE energy, they do NOT PRODUCE it! The electric energy that is stored ulimately comes from an electric generator that is driven by engines that use fossil fuels! Why can’t anyone see that?!!!

    • cesium62

      Perhaps because some of us have read and studied about energy conversion efficiency. Perhaps you would benefit from reading more too. The electric car converts fossil fuel energy into mechanical motion more efficiently than the gasoline powered car.

      • Andrew Allison

        Anybody with a passing knowledge of the Laws of Thermodynamics understands that it is impossible for an electric car to convert electricity into mechanical motion more efficiently than a gasoline powered car.

  • MH

    There are TWO factors that drive price: demand and SUPPLY. This article ignores the supply portion of the equation. Yes, electricity prices will go up if demand increases without a commensurate increase in supply. That’s why we need to build out the electrical infrastructure, including building more nuclear power plants. If we don’t address our energy supply we will always be at the mercy of the countries that do.

  • AAllison

    Re:”Sure, the Moore’s Law of electric cars — “the cost per mile of the electric car battery will be cut in half every 18 months”

    Mr Agassi knows more about self-promotion than about technology. He confuses (and misquotes) Moore’s Law with the discovery during WWll that cost of production declines by a constant amount each time that cumulative production doubles.

    The only thing that’s missing from this critique of the electric car fantasy is a careful look at the “well-to-wheels” carbon footprint. A cursory examination shows that electric cars are an environmental disaster.

  • So Cal Mike

    WRM, you can keep the Carbon Tax.

    It really is based on the fraudulent pretext that it’s ok for government to tax people for exhaling.

    Keep the Change!

    • cesium62

      A coal burning power plant burns carbon that was stored underground 100 million years ago. A human burns carbon that comes from plants that were grown mostly within the past year.

      Humans exhale less than 10% as much carbon dioxide each year as is created by burning fossil fuel. http://www.slate.com/articles/news_and_politics/explainer/2009/08/7_billion_carbon_sinks.html

      Do you really think that a highly profitable corporation should be allowed to dump whatever wastes it wants to into the air you have to breathe? Or should they pair a fair share to use the common resource?

  • hoover

    A question on the “electricity prices will skyrocket” part: with oil prices collapsing, won’t the oil then be used to make electricity (perhaps more efficiently than in automotive engines!), keeping oil prices somewhat steady? Any way you look at it, won’t demand for energy of any kind only continue to increase?

  • Foncool

    One thing that Friedman and the advocates of Electric cars always seem to leave out, is that the batteries for these cars are Lithium based and that over 50% of the world’s Lithium supply is found in Bolivia and Chile.

    There have also been reports of large quantities of Lithium in Afghanistan.

    And these people complain about the stability of the oil supply.

  • Rod

    Lots of electric cars or hybrids on the road tells me lots of people have little knowledge of physics, and in particular, conservation of energy. Conservation of Energy is so basic in physics that it is a law all by itself. If you intent to push 1000 pounds for 100 miles, you must expend so much energy, whether it be electric or petroleum based. Electric power is obtained primarily from natural gas in the United States. An electic car merely subsitutes natural gas for gasoline as its fundamental power source. But, in fact, an electic car uses MORE energy than does a gasoline powered car because there is a large loss converting from natural gas to electric. The natural gas turbine that generates electric power loses significant amounts of heat that cannot be recovered.

    • cesium62

      You should try doing a bit of googling and reading. The standard gasoline engine is horribly inefficient: about 35% efficient.

      A hybrid car can operate it’s gasoline engine in the most efficient range and so wins out over a standard engine even if it converts gasoline energy to electric energy and thence to mechanical energy.

      A natural gas burning power plant is going to be around 60% efficient converting chemical energy into electric energy.

      Yes, there are losses converting natural gas energy into electrical energy, transmitting it into your battery, and converting electrical energy to mechanical energy. Those losses are less than converting gasoline energy into mechanical energy in your car.

  • Charles Greenwood

    Your logic would appear to suggest that we should have waited until the Chinese went to the moon before we attempted such an “out-of-the-box stimulus program” ourselves.

    EV’s are and will be a small market, but the miracle contained within a gallon of gasoline is not without its dark side. How about valuing it at its REAL COST (including wars) and let the market decide?

  • JmMD

    ‘My main gripe with Friedman, and Left wing Statists like him, is that they think the govt is actually capable of effectively implementing ANY strategy.’

    JohnR22 why are you so angry at half of the Americans around you? I am a liberal not a ‘Statist” – why are you so incapable of understanding the difference?

    Perhaps it is because your brain is different AND you hang out with people with similar brains.

    Using accepted research protocols and brain function testing (OK, I know I am getting into science and that science is a problem for CONservatives) it has been shown that liberals were more open to new information, whereas conservatives were more likely to block potentially distracting information.

    So the double-whammy of nature (your brain was born different) and nurture (you’ve probably been surrounded by similar brains for most of your life) makes it very difficult for you to understand that people can have different opinions on the value of government.

    Since you’re genetically incapable of figuring some things out yourself I’ll provide a short list of effective strategies implemented by the US government.

    (1) The US government under President Lincoln ended a treasonous insurrection by southern conservatives whose brains did not allow them to be open to the idea that slavery is wrong.
    (2) The US government under President Roosevelt led a coalition that ended a world war initiated by Fascist conservatives in Germany and Japan whose brains did not allow them to be open to the idea that they were not genetically and morally superior to other races and cultures.
    (3) The US government under President Kennedy said it would put a man on the moon and did so.
    (4) Other US Government achievements: The Panama Canal, The strongest military in the world, the polio vaccine and the basic science underlying almost EVERY medical breakthrough in the 20th century, Hoover Dam, the interstate highway system, NASA, The list is practically endless. I have worked for three different Fortune 500 companies prior to quitting to start my own companies and the idea that most of these organizations are any better than the government at getting important things done is laughable and could only come from Fortune 500 PR men like Mead and those mesmerized by the stock ticker on CNBC. There is a SIGNIFICANT role for BOTH in a healthy society. As correctly described by mredder4 – Mead and others like him do great damage to the USA. On the one hand they proclaim to love the USA on the other they attempt to destroy support for the idea that the United States Government – the Government of Washington, Lincoln and Roosevelt has and will continue to do great things.

    Why can’t they appreciate this extraordinary disconnect? The studies show that ‘conservatives were more likely to block potentially distracting information’ – that explains it – the brains are fundamentally different – liberals are open to new information leading to hope in and acceptance of new ideas while conservatives are trapped in their no new information – no distractions – change is bad, what is so bad about slavery, lynching, racism, Jim Crow, separate but equal, privacy is not a right, redistribute wealth to the top 5%, White Anglo-Saxons first, who do I hate most today world view.

  • Kevin

    I take exception to the mention of Ford designs as inferior to Japanese or German automakers. I recently selected a Ford product over a Japanese automaker as superior in all respects.

    Not only did the fit & finish match or exceed its foreign competitor, but the technology was unmatched as well. No automobile I have purchased in the last 10 years could have drawn as high an initial satisfaction rating as my new Ford.

    This is my first domestic automobile since the 1980’s.

    You contention of inferior American technology, at least when it refers to the Ford Motor Company, is both dated and ill informed.

  • PerryM

    Dummycrats are always picking winners and losers in all kinds of areas; they are always wrong – always.

    There is so much oil to burn that the need for an electric car is just not needed – maybe on the moon but not on earth.

    So short the Volt and all the other electric car companies – even the ones that seem to be doing good now – nobody needs them and the gas stations aren’t going to add electrical plugs for electric cars.

  • Kirk Parker

    It also pays immense subsidies to the car industry in the form of road structures.

    Oh, good grief. That’s like saying the government pays enormous subsidies to the consumer electronics industry in the form of the electric power system. Nonsense, of course. We the users pay for the road system by means of our fuel taxes (etc.)

  • Mark Stracka

    A large transition to electric cars will require a larger increase in electric generating capacity. This increase in capacity will necessarily have to be from clean generating sources, like nuclear. Wind and solar would likely not keep up with the demand that these cars would impose. Yet, geniuses like Friedman fail to even mention this requirement. They leave me feeling that they know nothing about where their electricity comes from. Fact is, half of our electricity comes from the burning of coal, a third comes from natural gas and hydro (dams), and about a fifth from nuclear. Americans have turned up their noses at nuclear, hate coal burning, whine about natural gas burning, and are in love with wind and solar. Wind and solar currently account for less than 1% of electric generation. Therefore, until some agreement is reached on building more nuclear plants, I see no future for the electric car in this country.

    • cesium62

      That’s right. We’ve always burned coal, we always will burn coal. Ain’t no new fangled technology going to come along and change things. The way it always has been is the way it always will be, change is impossible.

  • R. L. Hails Sr. P. E.

    Electric cars are over one century old; they are not the wave of the future. They lost out to Henry Ford’s car, because of puny batteries. Today, batteries are still puny, relative to gasoline engines. Those who assess advanced technology, me, judge that batteries will get weaker, and more expensive, relative to advances in gas engines.
    There are few reasons to buy an electric car, from an environmental view point. If our vehicle fleet changes to batteries, we will need many more coal fired power plants, and nukes, as they still are cheaper than the green technologies, and always will be barring a technical break through.
    Americans should not listen to journalists, lawyers, and pundits, about energy.
    Electric golf carts work, but exhibit the limiting characteristics of this technology, whether you like it or not.

  • JohnMc

    First, Freidman must be playing footsie with a chinese call girl. Its the only way to explain it. His whole article is wrong.

    Alas I have to call you on a few items as well. Overall your assessment is on point. But your end game is all wrong. —

    * Battery technology as it now stands and in the foreseeable future depends on Lithium and rare earth compounds. Well China is the largest source of rare earth compounds. Bolivia is the worlds largest source of Lithium ore and the Chinese have bought into large chunks of those operations. So essentially we would be trading one set of despot sources (Middle East) for another (Red China). There is no geostrategic win there.

    * I find it odd that you did not mention the most glaring consideration — prime mover source. You don’t dump electrons into a battery without a prime mover fuel to get them. That is currently coal for a good chunk of the country. We got plenty of coal. But the enviros make it harder to use it every day. But that is not the only restriction to using it —

    * To increase the prime mover fuel to fuel the elec cars requires power plants to do the conversion. So if the enviros won’t let us use coal the next best solution is Nuke. But to use that would require we build hundreds of these puppies. I don’t hear that on the drawing board in any discussion at the present time. Uhoh!

    * The cost would have to come down drastically. Like you point out in your post, those cost savings will be from overseas. But here is a very interesting rub. An electric car might have bigger issues about import rules than a IC based car would. Domestic Content rules might become a big issue.

    * Last I would be too sanguine that the price of unleaded regular would drop to .87c/gallon. There are factor of economy of scale and substitution of purpose to consider. There is a best EOQ for the production of any mix of product. If the refineries could make more money by cranking out more asphalt than Exxon regular, well asphalt roads will be everywhere and gas will still be $2.40/gal.

    Something to consider.

  • anon

    They are opposed to new highways.

    You don’t get it. The purpose of environmentalism is to lower the standard of living. They will say anything, true or untrue that will further this goal. This is because they assign finite value to means but infinite value to ends, just like another radical leftist ideology that “racists just invented”.

  • CEBVA

    Every discussion of the merits of electric cars leaves out the obvious – how do we generate the electricity? Unless there is a firm commitment to building new nuclear plants, a switch to electric cars will mean more not less dependence on oil and coal. Mention nuclear power and the libs scream. That exposes their true agenda – to punish consumption.

    • cesium62

      I know, right. ‘Cause wind power is a hoax. And even though nuclear is damn near free, those knee-jerk liberals won’t let T.Boone Pickens build nukes up and down the great plains and stuff his pockets with cash.

  • vagabond trader

    One other consideration. We love to drive in American.Some of us must drive vast distances to meet the needs of daily living. Charging up a battery is a bit more time consuming than we are willing to accept.

  • http://crooksshadow.blogspot.com Mike H

    I have to politely disagree, especially on the electricity price argument. If EV’s were charged during off peak hours, there might not need to be any requirement for additional supply and prices might not have to go up any to charge our electric cars.

    This will be a rather simplistic model, but good for illustrating a point and getting us some ballpark numbers.

    The US power grid has a net summer generating capacity of 1,010,171 MW. On average, from the hours of 11:00pm to 4:00am we use about 55% of that. This gives the US over 400,000 MW of excess capacity during these hours.

    Using the Chevy Volt as an example (I know, dot start yelling) an EV gets approximately .4KWh/mile, this is about double the Nissan Leaf’s consumption of .24kwh/mile, but we will use the Volt for this example.

    Taking in for transmission losses (about 10%) and battery charging efficiency (another 20%) we can use the five hours of off peak capacity to charge about 4 billion miles worth of vehicle travel. Americans drive about 8.3 billion miles a day. So we could cut our gasoline consumption by 50% under this model.

    Considering we bundle up hundreds of billions of dollars and send them to hostile and unfriendly nations each year to cover our gasoline addiction, it would seem prudent to cut this back as much as possible.

    • cesium62

      You’ve shown that we wouldn’t need to build new transmission lines (capacity). We would have to increase the total number of electrons that are transmitted over those lines.

  • scunky

    Do any of these EV proponents live in a real city? I do and let me tell you – the days I can come home and park in front of my house are few and far between. Where do I charge my car? Given the range of EV’s currently they are best used for short to mid length trips. Guess what those are people who live in cities. I don’t have a garage or a driveway. I park in the street wherever I can. Where the heck do I plug in?

    • cesium62

      We plug in at work, fill our cars with solar electricity during the day, and don’t pay a dime for the employer-paid fuel. ;-) Ah, suburban parking malls.

  • Ron A.

    Ask yourself this. Where does electricity come from? Gas, Oil and Coal with a few exceptions. What happens when everyone in the world plug in their cars? Liberals have no logic whatsoever……

    Fail!

    • cesium62

      Almost no electricity in the U.S. comes from oil. Oil is way too expensive for that. The nice thing about electric cars is they let you use the lowest cost energy. The other nice thing is that an electric engine is far more efficient than a gasoline powered engine. So if you build oil burning power plants to power your electric cars, you’ld still be better off than you are now.

      In the meantime, it will take 30 years to transition the U.S. from gasoline engines to electric engines — it takes 20 years to turn over the U.S. car fleet. Seems like we can probably erect a few wind turbines over the next 30 years. And maybe put up a few more solar panels.

      Too bad conservatives can’t model the future.

  • Alan Davidson

    Maybe I missed it, but while the author states: “If millions of electricity powered cars come on line, demand for electricity will skyrocket”, he doesn’t mention the big elephant in the room.

    How do we generate electricity here in the USA?

    This is how: http://en.wikipedia.org/wiki/File:2008_US_electricity_generation_by_source_v2.png

    So if almost 45% is produced by coal today, Imagine how much more coal will have to be mined and burned. Not such a attractive thing for all things liberal and Gore fans.

  • GarandFan

    I wouldn’t be so hasty as to getting rid of ‘metal bashing’, as you put it.

    Unless of course, you’re advocating that we buy all our metal products; cars, trucks, heavy machinery, airplanes, etc overseas. “Services” and “Information” also are subject to the same economic laws as “metal bashing” industries.

  • Engineer

    Many mild disagreements amidst an overall thoughtful, hmmm.

    1) The US rail system is optimized for freight. To optimize a system for passengers you have to de-optimize it for freight. Our system works well at moving freight around. As many others have commented, an economically viable high speed rail system would be built by private capital ergo, high speed rail is not really viable.

    2) Electric cars: I am a profound EV skeptic. The batteries are dirty to make and dirty to dispose of. To charge the vehicles you simply export the pollution to rural power plants that are still predominatly coal and other fossil fuel fired. A better bet in the short term (as far as I’m concerned) are the Blu-tec diesels from MB and VW. They get nearly the overall mileage of the hybrids without the battery life cycle pollution and are still relatively clean for an internal combustion engine.

    3) I’ve heard the McDonald’s story before, but in the version I got it was Holiday Inn and Motel 6.

    4) I don’t tend to give “green” considerations very much weight. The data are pretty clear that we are almost certainly warming. (It’s not all faulty and manipulated data). The amount and reasons for the warming are less clear. Our understanding of climate is far from satisfactory, especially in terms of being able to reliable model a century into the future. I tend to agree with Lomborg in terms of practical policy that we should focus on growing the economy as much as possible so we have more wealth to mitigate climate issues after we have the research more mature and our ignorance considerably reduced.

    I like the comparative advantage argument for keeping energy prices low. It plays nicely into the Lomborg growth argument without giving way to a totalitarian temptation to get us all into green sack-cloth and ashes no matter what the voters want.

  • John Davis

    With the government involvement in the auto industry, I am especially skeptical of the electric car industry “saving” America. It is more likely that government regulations and interference will drive them to make cars that people won’t drive.

    And for those who think electrical cars will help us escape from “oil dependency”, do you know that a large number of the electrical power plants are run with fossil fuel? And I doubt the environmental movement will allow any nuclear plants to be built (hasn’t it been about 30 years now?).

    • cesium62

      Dude, burning more coal does allow us to escape from a dependency on oil. Burning more coal may be bad for lots of reasons, but it does reduce oil dependency.

  • jrr

    Because of the challenge from the likes of Toyota Prius, Ford and GM are now offering good cars, such as the Fiesta and the Cruz, that can score 41 MPG and still deliver good performance, for well under $20,000. I imagine the pure electric cars will help keep the pressure for greater fuel economy from conventional cars. No one expects them or the fossil fuel economy to go away – not for the next 50 years anyway – but electric cars are part of the evolution toward a greener economy.

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  • Joe Roberts

    Great article, and always love to see the smug Friedman picked apart. I have read his articles about raising gas taxes for years, and you’d think the guy would have a better sense of the politics of the thing—- but it would take a politician with a death wish to stand up and say “Let’s raise gasoline taxes!!” Now a Pigovian gas tax increase, where the revenues were used to offset another tax, such as the payroll tax, might have a chance. Gregory Mankiw and others have been advocating this.

    I have often used the site selection parable concerning McDonald’s, and I believe the correct reference is to Wendy’s rather than Burger King. In my town, as just one example, Wendy’s is located right across the street from the main McDonald’s. Have seen this in many other locations too.

  • Tim

    The most wise thing to do is permit oil drilling in USA. Oil finances all the people who have declared themselves enemies of the US: Iran, Venezuela, the Sunni middle-east. It lowers the cost of fuel for poor farmers around the planet (esp. Africa, which could really use the break), improves our balance of trade.

    This article doesn’t mention that the USA is now exporting massive amounts of natural gas – it’s pretty easy to convert existing cars to LNG. Why not do that instead? Batteries are a big hazmat disposal problem – how can you be “green” and generate so many tons of toxic waste?

  • noDebate

    Who says the electric car industry was ever intended to ‘save us’ ? Next you will start complaining that Snake Oil can not cure all. (or any, for that matter.)

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  • Paul Gorned

    Have you seen these postings on the web? This blows the whole thing wide open and shows what the real agenda of these people is-

    “The recent electric car production announcements were a sham to cover a bigger scam. Certain groups used extraordinary non-transparent leverage to acquire “favored nations” or “sweetheart status” access to the massive lithium fields in Afghanistan and nearby countries. Lithium is the oil of the electric car world. Lithium is required for most electric car energy storage. By manipulating who got electric vehicle funding, these cabel groups manipulated who got to place the next largest Lithium orders in human history, estimated to be worth TRILLIONS of dollars over the next 15 years. By controlling who made the cars, certain parties controlled who profited from the Lithium fields. But they did so with taxpayer (your money) dollars.

    From Stanford Research Coalition & Wikipedia and blog postings:

    Ener1 Battery Systems who got zillions of the dollars from DOE per the Loan Guarantee and Section 136 ATVM funds Is controlled in part by Russian “business man” Boris Zingarevich, who is best friends with the Russian Dmitry Medvedev who came to Silicon Valley recently to meet with venture capitalists on June 22, 2010.

    Dmitry arranged for all of Russia to extend current agreements signed with foreign automakers between 2005 and 2008 granting preferential duties on imported components for eight years in return for sourcing 30 percent of parts locally, the Industry and Trade Ministry said. Once those arrangements expire, the carmakers would need to commit to buying 60 percent of components in Russia within six years to get more tax breaks. Dmitry also appears to own interest in lots of Lithium processing and mining company technology in Russia. Russia is right by Afghanistan.

    “Afghanistan is: the “Saudi Arabia’ of lithium”. American geologists have discovered huge mineral deposits (possibly $1 trillion worth) throughout Afghanistan, according to the New York Times. Lithium, gold, cobalt, copper, iron, among other valuable minerals are lying beneath what is already a war-torn country with little history with mining. Off and on over the decades, geologists—Soviet, Afghan, American—would investigate and chart some of Afghanistan’s mineral wealth, only to put the work on hold as violent conflict erupted. Now, corruption, in-fighting between the central and district governments, foreign interests, and greater zeal from the Taliban might come into play to disrupt a potential economy evolving around these natural resources. With the Ministry of Mines, a Pentagon task force is now helping organize a way of handling the mineral development and bidding rights. How this unfolds socially, environmentally and politically should be interesting.”

    The New York Times reports: The value of the newly discovered mineral deposits dwarfs the size of Afghanistan’s existing war-bedraggled economy, which is based largely on opium production and narcotics trafficking as well as aid from the United States and other industrialized countries. Afghanistan’s gross domestic product is only about $12 billion. The two most prevalent minerals are copper and iron. Niobium, used for making superconducting steel, has also been found.

    As for lithium, an important metal used in computer and hybrid car batteries, Afghanistan’s potential stores in Ghazni Province in the west might be bigger than in Bolivia, which according to the U.S. Geological Society, has an estimated 5.4 million tons.

    The effort to get that money for Ener1 was strong armed by Republican Sen. Richard G. Lugar, one of the deans of Congress, and his junior colleague, Democratic Sen. Evan Bayh.

    Richard Lugar and Lachlan Seward co-managed the Chrysler Bail-out.

    Lachlan Seward was appointed by George Bush to run all of the tens of billions for the ATVM and Loan Guarantee Programs. He gave most of the money away to his closely aligned interests and negated competing applicants.

    Another place near Afghanistan that there is lot’s of Lithium is in Mongolia.

    Blum Capital has targeted the Lithium fields in Mongolia, next to Afghanistan, said to be the second largest fields after Afghanistan in the region.

    Mongolia touches Russia so mining and equipment access could first take place there via Russia. China wants the Mongolian Lithium too so there is some two-way bidding that each country (Russia and China) do not know about. The owner of Blum Capital is Senator Feinstein’s husband. She recently helped make him the Goodwill Ambassador to Mongolia… China halted export of Rare Earth Metals:

    http://www.popsci.com/technology/article/2010-09/china-has-halted-rare-earth-eCOMPANYorts-japan-reports-times

    But this is huge because of this revelation-

    Shortage of Rare Earth Minerals May Cripple U.S. High-Tech, Scientists Warn Congress

    Until 1948, most of the world’s rare earths were sourced from placer sand deposits in India andBrazil.[6] Through the 1950s, South Africa took the status as the world’s rare earth source, after large rare earth bearing veins were discovered in Monazite.[6] Until the 1980s, the Mountain Pass rare earth mine in California was the leading producer. Today, the Indian and South African deposits still produce some rare earth concentrates, but they are dwarfed by the scale of Chinese production. China now produces over 97% of the world’s rare earth supply, mostly in Inner Mongolia.

    Per Wikipedia: Blum’s wife, Senator Dianne Feinstein, has received scrutiny due to her husband’s government contracts and extensive business dealings with China and her past votes on trade issues with the country. Blum has denied any wrongdoing, however. Critics have argued that business contracts with the US government awarded to a company (Perini) controlled by Blum may raise a potential conflict-of-interest issue with the voting and policy activities of his wife. URS Corp, which Blum had a substantial stake in, bought EG&G, a leading provider of technical services and management to the U.S. military, from The Carlyle Group in 2002; EG&G subsequently won a $600m defense contract. In 2009 it was reported that Blum’s wife Sen. Dianne Feinstein introduced legislation to provide $25 billion in taxpayer money to the Federal Deposit Insurance Corp, a government agency that had recently awarded her husband’s real estate firm, CB Richard Ellis, what the Washington Times called “a lucrative contract to sell foreclosed properties at compensation rates higher than the industry norms.”
    In 2009 the University of California Board of Regents, of which Blum is a member, voted to increase student registration fees (roughly the Univ. of California equivalent of tuition) by 32%. Shortly thereafter, Blum Capital Partners purchased additional stock in ITT Tech, a for-profit educational institution. These events suggest a conflict of interest on Blum’s part.”

  • http://sites.google.com/site/lukelea2/thesoftpath Lea Luke

    Dear Mead: How about shorter posts and more of them? Your readers miss seeing you on a regular basis. Your blog will lose traffic and influence if you don’t post more frequently. A fan.

    • Walter Russell Mead

      There’s not a lot I can do about the posts: I keep writing until the post is finished — and that’s how long it turns out to be. I will try to speed up the posting; this is a very tough semester. I’m still teaching at Yale part time and carrying a full load at Bard. Blogging isn’t a chore; far from it. But there are only so many hours in a day.

  • Steve

    I would like to see more studies related to the price of oil as the world switches from oil to electrons for its transportation needs. I too see a swing in supply/demand pricing that will disrupt a smooth transition due to fluctuations in oil prices. If/when it appears there will be a declining demand/need for oil, I believe it will become difficult to find money for future exploration and development of existing reserves. At the same time, that money will be flowing faster than needed into the “next big thing” being electron production, electron storage and related needs.

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  • cesium62

    Wind is more expensive than coal? Where do you get your numbers from?

    Wikipedia, quoting the EIA, http://en.wikipedia.org/wiki/Cost_of_electricity_by_source , suggests that wind costs about the same amount as coal, natural gas, and nuclear. If you factor in the deaths caused by burning coal and dumping the residue in the atmosphere, wind easily comes out ahead.

    Machiavelli would encourage at least some work on developing electric cars. * America needs a high tech work force and creating high tech research and development jobs will help American business and power over the long term. * Investing in diverse solutions gives one more options over time. * Investing in wind and solar powered electric cars provides America with a bully pulpit from whence it can lecture China and India on coal-fired electricity consumption and pollution. This may be useful down the road when we want to find a way around Chinese patents and we place a coal tax on imports from China and India.

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