Today on Wall Street

Showing posts with label fossil fuels. Show all posts
Showing posts with label fossil fuels. Show all posts

Thursday, July 17, 2008

Green Cars Available Now

Green vehicles are not just in the future and in labs. They are right now and on a street near you with these cars and trucks.

There are lots of reasons to go green: Fuel is expensive, Pope Benedict XVI decreed environmental pollution is a mortal sin, and, surprise of all surprises, depending on how globally you consider the costs, it's cheaper in the long run. Since definitions of "doing the right thing" number like oxygen molecules in lungs full of fiery rhetoric, that concept won't even enter into the discussion.

You'll find no ethanol-burning vehicles on this list. Issues include the facts that fuel consumption increases by 25 percent when you burn E85 and that ethanol continues to be produced mostly from corn. The quantity of corn required to fill an SUV with ethanol could feed a person for a year, a point made all the more pertinent by the riots sparked by food shortages currently peppering the globe.

Before the letters roll in, let us say public transportation rocks, bicycles are great, green is good, and we take showers more frigid than Cruella de Vil's heart in order to reduce our carbon footprint.

If you're in the market for new wheels but have taken to knitting sweaters out of your cat's hair and have replaced all cleaning products in your house with Dr. Bronner's soap, consider the following choices that employ extremely different tactics in pursuit of a green agenda. A couple of these are only available for lease; the most environmentally friendly option here we'll give you if come get it the hell out of our parking lot. Of course, you could always buy a used 50-mpg 1994 Honda Civic VX, but if you need something new, here are nine green solutions.

2009 Honda FCX Clarity
With its understated shape, comfortable interior, and Accord-like ride, the only hint that the FCX Clarity is any sort of science experiment is the absence of virtually all sound while under way. The first company to bring a mass-market hybrid to U.S. streets, Honda is also one of the first to put hydrogen fuel cells in American driveways.

The FCX Clarity is indeed available but, in all likelihood, not to you. First, you must live close to Torrance, Irvine, or Santa Monica, California, where hydrogen is stored for your subsidized pumping pleasure. It also helps if you are likely to drive your Clarity to red-carpet events or if "of" precedes your last name.

The three-year, $600-a-month lease includes maintenance and insurance but no option to buy. The fuel-cell technology on board this spaceship is worth somewhere around the seven-figure asking price of the Bugatti Veyron, give or take a couple Ferrari F430s, and Honda wants it back.

Hydrogen costs five bucks a kilo, and the car holds 5.3 kilos. A $25 fill should give you 270 miles of real-world driving, making it a relative bargain. Once on the road, all you drop is a trickle of water from the tailpipe and a sizable chunk of dough for your monthly lease.

2008 Honda Civic GX
Buying the slowest available Civic with the least amount of cargo room and the steepest price might not initially smack of genius, but the $25,000 Civic GX has its upsides. First, according to the EPA, it is the greenest car for purchase in showrooms today (as long as those showrooms are in New York or California, the only states where the GX is sold). Second, it burns compressed natural gas, which is about two-thirds the cost of gasoline if you buy it at a pump (if you can find one -- do you know where your nearest CNG pump is?). Buy the in-home refueling device, the price of which is mostly offset through federal tax credit, and the cost drops further. Even using pump pricing, the EPA estimates it will cost you $1.47 to drive 25 miles in a Civic GX versus $1.91 in the gold-standard Prius.

Natural gas has lower energy density per unit than gasoline, but the Civic GX still manages an admirable 36 mpg on the highway, although acceleration suffers. Horsepower for the 1.8-liter engine falls from 140 to 113, and torque barely breaks into three digits with 109 pound-feet. The natural gas sits in a trunk-mounted tank that cuts available space in half; it and the associated hardware add more than 200 pounds to the Civic's curb weight.

Yes, the Civic GX gives up some functionality and grunt, but for about the same price as a Prius, you can buy something that pollutes less, will get you in the carpool lane in California -- an honor no longer conferred on newly purchased hybrids -- and doesn't come with the stigma of the Prius. Yes, Prius drivers, we appreciate that you're hoping to get your city mileage into the 60s by scarcely grazing the accelerator and keeping it under 40 mph; appreciate that your green fun makes people hate you.

2009 Volkswagen Jetta TDI
The day the latest TDIs hit the showroom floor, VW dealerships will feature a longer line of eager customers than would a water vendor at a cracker-eating contest. The Jetta TDI is due to arrive in showrooms in all 50 states this summer and, judging from the very similar European model, should get something around 40 mpg on the highway. Welcome to the new face of diesel: stink-, soot-, and (mostly) rattle-free.

Volkswagen emphasizes this point by marketing the TDI Sportwagen that, in addition to being sporty-looking, will scoot to 60 mph in about eight seconds. Diesel prices are currently outpacing gasoline prices by about 20 percent, but this still doesn't negate the diesel's overall fuel saving. How quickly you negate the $2000 or so premium for the Jetta TDI's diesel engine depends on how many miles you drive.

2008 Tesla Roadster
Burnouts will never sound the same. The moment the first customer took delivery of a Tesla roadster, it became the only all-electric, highway-legal passenger vehicle available in this country in years. Given the several hundred people who've plunked down deposits of varying magnitudes for the six-figure roadster over the past couple of years, you might be waiting quite a while for your example, assuming speculators weren't early investors.

The Tesla is great to look at and, with 6831 lithium-ion cells serving up electric whoop-ass, fun to drive. It offers the possibility of the greenest driving experience around, depending on what generates the electricity feeding your outlets. What separates the Tesla roadster from other EVs, other than remarkable performance, is its range -- over 200 miles, more than enough to make it a "real" car. Still need more range? If you can afford a Tesla roadster, you can afford something else with a highly efficient internal-combustion powertrain to take you farther over hill and dale to Grandmother's house.

2008 Chevrolet Equinox Fuel Cell
GM sells fewer SUVs than it used to, but profitable hopes spring eternal, especially if it can spin its behemoths as efficient crossover behemoths. SUVs are also good for packaging bulky stuff such as fuel cells and hydrogen tanks.

The fuel-cell Equinox neither looks nor drives like an exotic beast. An extra 500 pounds on top of the standard 3800-pound curb weight could be responsible for a suspension that's a bit crashy over rough pavement. The 236 pound-feet of torque move the Equinox FC from stoplights with confidence, and it takes a couple of "whoa" moments before you adjust to the nonlinear brake feel endemic to many regenerative braking systems. GM claims a range of about 200 miles using the EPA test cycle, making it realistic transportation for the 100 lucky customers who, like Honda's FCX Clarity customers, will not get to keep their fuel-cell vehicle when the lease is up. Unlike Honda's extreme locale restrictions, GM is making leases available on the Equinox FC to folks in Los Angeles, New York, and Washington, D.C.

Should the government decide it wants to invest its many spare billions in a hydrogen infrastructure, GM is confident that, in volume production, the price of proton-exchange membranes -- the reason for a hydrogen-fuel-cell vehicle's horrific build costs -- would sink to a customer-friendly price point.

2008 Roush F-150 LPI
The name Roush is commonly associated with tire-frying Mustangs and NASCAR wrastlin', but the Roush umbrella also includes engineering services and alternative-fuel vehicles. The Roush F-150 LPI burns the same stuff that torches wienies on your bottle-fed Weber. If you don't drive forklifts, city buses, or fleet vehicles for a living, you might be surprised to learn that propane is the third most commonly used vehicle fuel in the United States after gasoline and diesel, filling stations are not rare, and you can pick up accessories from Hank Hill.

You order your propane pickup from the same network of Ford dealerships that carry Roush's high-performance offerings. The base LPI package, soon to be released, will include a unique 20-gallon fuel tank mounted in place of the underbed spare tire. An extended-range version with a 50-gallon, bed-mounted tank is available now for $10,500 (plus the cost of an F-150, of course). To those who argue they can do it themselves for less, remember the F-150 LPI comes with the same three-year/36,000-mile bumper-to-bumper warranty as its gasoline-burning equivalent, involves no bloody knuckles, and is eligible for large federal and state tax credits.

The price of propane at the pump varies much more than that of gasoline or natural gas, but it tends to be about 60 to 70 cents a gallon cheaper than gasoline. If you buy in bulk, it gets much cheaper. Come tax time, the feds will give you a tax credit of 50 cents per gallon; if you travel 12,000 miles a year, that's about $500. You get a $2500 federal credit simply for buying an LPI F-150, and other credits vary by state; Utah, for example, gives $3000. Yep, you read that right: The average Utah buyer would get back $6000 in the first year.

2008 Toyota/Lexus Hybrids E-Mode
Toyota has plans to put plug-in Priuses on the road at some point with an extended range that can actually take you somewhere. In the meantime, the Toyota Highlander and the Lexus LS600hL get a button that allows you to lock the car into electric mode. Up to 25 mph, and until the nickel-metal hydride battery pack is depleted (about one mile), you are greener than a frat boy after six shots of Jäger. For up to 5280 feet, these cars are squeaky clean, no combustion products coating the tailpipe or rumbling exhaust note to startle dozing herons.

Once those batteries are depleted (or you give the accelerator anything more than the most modest poke), however, the gas engine purrs to life, and the situation gets a bit more carbon-black. In the case of the LS600hL, the accusation of "greenwashing" is well documented by a combined fuel mileage of 21 mpg and the fact that it produces more than twice the C02 emissions of the Prius. If Toyota allowed you to lock the Prius into electric-only drive, it would be on this list as a viable green option.

If your commute is less than one mile and requires nothing beyond first gear, you could indeed be greenish in a Highlander hybrid or LS600hL. You could also walk.

The C/D Solution: 1972 Honda N600
Santa Fe-based artist Pippa Garner, whose scribblings have adorned the pages of C/D for more than a decade, set about making the Honda N600, the first Honda imported into this country and still one of the more-fuel-efficient cars ever sold here, into the "World's Most Fuel-Efficient Car!" That's what the block letters artlessly paraded down the side of the car say, anyway.

Pippa removed the little air-cooled two-cylinder engine, the chain drive, the fire wall, and the floor and, in doing so, a full 500 pounds from the 1100-pound N600. In went two mountain-bike drivetrains flipped upside down, spinning a jackshaft connected to the car's left-front CV joint. Who says it's not a car? Strap Lance Armstrong and Mario Cipollini to the pedals, and we wager it'll beat a Smart Fortwo up an onramp.

The C/D Solution: 2000 Toyota Celica GT-S
After extensive analysis of carbon footprints and the environmental costs of manufacturing, operating, and maintaining vehicles, Car and Driver has made a startling, perhaps paradigm-shifting discovery. In our own parking lot. Before snipers from Big Oil arrive to take us out, let us assure you our example is in-house and staying here. Until we move our Ann Arbor offices the first week in May, anyway. We will, however, assist others in possessing the technology at little or no cost. Unlike every other vehicle on this list, this car's daily existence requires exactly zero petroleum products or electricity.

Old boy racer Tony Swan's 2000 Toyota Celica GT-S is an oasis of green. The 1.8-liter engine blew five years ago, and the car has been sitting in the Hogback Road parking lot ever since. Once proud Hoosier racing slicks are dry-rotting and slowly leaking air, but these emissions are forecast to taper off in the next year.

The GT-S, moreover, is now the happy home of multiplying mud wasps that are deftly sealing all available crevices with local soil and their young. As soon as the neoprene plugs sealing the fire wall fail, the interior will quickly transform into a wind-and-predator-proof habitat for chipmunks, field mice, and adventuresome swallows. Soon, like a ship sunk at the Great Barrier Reef, the Celica will be teeming with wildlife, awash in the green to which Toyota so desperately aspires.

Article By Holstein of Car & Driver Magazine

Tuesday, July 1, 2008

The Light at the End of the Tunnel

Hybrids Take the Next Step

With gasoline now over $4.00 per gallon in many states and oil prices continuing to rise, the question on the minds of most consumers is how long they will have to spend an increasing share of their income on energy in general and gasoline in particular.



Our reliance on a 19th century technology (the internal combustion engine) and a single fuel for our transportation needs has brought us to a point where there don’t appear to be any good choices. However, looks can be deceiving, the next clear choice for consumers will be alternative energy.

Converting Electricity to Fuel

The problem with clean energy sources like wind and solar has always been that they can only be used to produce electricity. Until recently, covering the U.S. with wind turbines and solar panels would do little to impact the demand for oil. Oil and the fuels produced from it used to be the only practical way of powering vehicles. However, aging petroleum reserves around the world and the lack of major new discoveries have made it increasingly difficult for oil production to keep up with demand. Combine this with the additional problems of unstable sources of supply and concerns over climate change, and it’s becoming increasingly apparent the only realistic solution to these problems is to find another vehicle fuel.

Of the fuels under consideration, electricity appears to be the best alternative. The infrastructure for electricity is already in place and all we need is available from a wide variety of domestic sources. It is also the only fuel that consumers can produce themselves. Other fuels under consideration including hydrogen and ethanol have numerous problems including the lack of infrastructure and a price that will always be too high. When used to power a vehicle, driving costs of a few cents per mile will eventually make it impossible for other alternatives, including gasoline, to compete.

Hybrids – the First Step

One of the most important things hybrids have done is take the first step toward using electricity as a power source. Once a driver takes their foot off the gas, a hybrid is powered by electricity. In addition, regenerative braking is used to capture the energy used in braking to recharge the battery. By combining two power sources, hybrids offer better performance and more horsepower while also increasing fuel savings significantly. In addition to better gas mileage, hybrids have more horsepower and are more fun to drive than the original. Marketing these should be a slam dunk.

So Why Aren’t Hybrids More Popular?

Toyota currently has the state of the-art hybrid technology and this has been licensed to several other auto makers. However, their marketing department appears to have a major brain cramp when it comes to selling these. By mostly selling hybrid versions of existing vehicles with too big a differential in price, consumers can see immediately that it will take longer than most plan to own the hybrid to recover the difference in price from fuel savings. By creating this comparison, Toyota and the other hybrid manufacturers produced a huge reason not to buy a hybrid.

As mentioned previously, hybrids have more horsepower than the original because they combine an electric motor with a combustion engine. However, the environmental movement appears determined to make Americans drive ugly little underpowered cars and they seem to go into a hissy fit when auto companies try to appeal to the mass market by producing faster cars that are more fun to drive. Because of this, the one thing that might have made consumers more willing to pay the price differential wasn’t mentioned. The result is a technology that should be taking the auto industry by storm accounts for only 3-4% of the market. To reinforce this point, it’s worth noting the Prius is the only one without a non-hybrid version, and this has become their most popular hybrid.

However, rising gas prices appear to be overcoming poor marketing, and hybrid sales are picking up. Fortunately, more auto companies such as GM and Nissan/Renault are ramping up to produce hybrids and the premium may decline to $2,000 in a few years. The companies likely to be the most successful will probably be the ones that create distinct hybrids instead of trying to revamp existing models.

Better Batteries to the Rescue

To date, the battery material used in hybrids has been nickel. While this is a slight improvement over the old lead batteries, these still have poor energy density which adds too much weight to a vehicle. For perspective, 100 pounds of lead turned into a battery will produce enough power to drive a vehicle 10 miles while the same weight in nickel will increase the range to 15 miles. However, 100 pounds of lithium produces a range of 40 miles.

Because of this, lithium has become the material of choice for smaller applications including computers and cell phones. However, beginning in 2008, the world’s major battery makers are ramping up to mass produce large format lithium batteries for vehicles. By replacing nickel batteries with lithium batteries the same size, the combination of more energy density and less weight make it possible to dramatically increase the range of a vehicle powered by electricity and significantly reduce the demand for gasoline.

After Market Conversions

Even though the technology exists right now to produce a plug-in hybrid, 2010 appears to be the earliest that major automakers will bring one of these to the market. The good news is that consumers don’t have to wait. Companies are currently lining up to do after market conversions. Most are starting with the Prius because there are more of those on the road, but conversions are expected to be available for other hybrids within the next year. Current conversions are relatively expensive, priced at around $10k or more. However, with large format lithium batteries going into mass production, the price is expected to drop by 75% or more in the next few years.

A Modest Proposal

With private companies now doing what Toyota claims isn’t possible yet, the world’s largest automaker is probably a tad embarrassed. Their reaction has been to raise safety issues about lithium batteries that have been long since resolved and threaten to void the warranty on any conversions. However, this shouldn’t necessarily cause hybrid owners to wait until the warranty has expired before converting. The decision will be based on balancing the expected fuel savings against having to pay for parts no longer covered by the warranty. In this case, a vehicle that has historically needed the fewest repairs would be the best candidate for a conversion.

For those considering the purchase of a hybrid right now, I suggests a modest proposal. Dealers are currently charging a premium because of strong demand, so why not buy a used one, take the savings, and spend it on an after market conversion to a plug-in? Your range should be around 50 miles before having to use a drop of gasoline. With the first plug-in coming to market from Fisker Automotive in 2009 and priced at $80K, this might be the best way to get one for a reasonable price without having to wait.


Source: U.S. Department of Transportation, Federal Highway Administration, 1990 Nationwide Personal Transportation Survey (NTPS), Volpe National Transportation System Center, Cambridge, MA 1991

If you think driving 50 miles without using gasoline isn’t a big deal, think again. It’s huge. Approximately 80% of Americans drive 50 miles per day or less; this is the light at the end of the tunnel. Imagine going from the current situation to telling the loosely wrapped collection of despots that control world petroleum reserves, to put their oil where the sun doesn’t shine.

It won’t happen immediately, but the technology finally exists to power our vehicles with a renewable fuel that can be made from multiple domestic sources including wind and sunshine. Even better, it will reduce driving costs dramatically, and finally allow us to give the Middle East the lack of attention it deserves.

Saturday, June 14, 2008

Fire Sale in Clean Energy?


Is the Stock Market Over-
looking the Fundamentals?


After scorching the stock market in 2007, clean energy stocks are currently on sale. The WilderHill Clean Energy Index (symbol ECO) produced a return of 58.87% in 2007. However, in the first five months of 2008, investors have taken profits. Through 5/31/08, this index is down 18.68% for the year and it’s hard to find a group of stocks that have done any worse. Is this a buying opportunity, or were these stocks just a flash in the pan last year?

The Next Big Thing?

In the 1980s it was biotech. In the 1990s, it was the Internet. This decade, there’s a very good chance it will be alternative energy.

Clean energy stocks have the problem of being small and speculative in a declining market that usually makes investors gravitate to quality. However, the most attractive companies in this area have continued to grow while their stock price has declined. Some companies have several years’ worth of orders and their biggest problem is keeping up with demand. When it comes to finding companies that will benefit from oil over $100 per barrel and will also be helped by a likely turn to the left in national politics in 2008, clean energy stocks are at the top of a short list of companies.

The Two Main Catalysts:

Fossil fuel production will be unable to keep up with demand. Oil prices continue to break records and the rise in prices comes back to basic supply and demand. There have been no major oil fields brought into production for decades, while demand continues to rise. As older oil fields begin to show their age, it becomes increasingly difficult to produce the same amount of oil. World oil production will peak in the not too distant future, if it hasn’t already while demand for oil will continue to grow. Energy alternatives will be the only way to make up the shortfall.

Rising oil prices have done what government programs were unable to. Alternative energy is becoming competitive. The increasing demand for wind and solar is bringing down the price of those technologies while fossil fuel prices continue to increase. Wind technology already produces electricity for a price that’s competitive with a utility burning fossil fuel. According to First Solar, the current low cost producer of electricity from sunshine, they will be competitive in two years. Once the need for government subsidies is eliminated a huge potential market opens up. Many countries have chronic power shortages and would prefer to satisfy their needs with a technology that doesn’t leave them dependent on others.

Breaking the Conundrum

In the past, clean energy technologies could do little to impact the demand for oil from the Middle East. The problem was that wind and solar technologies produce electricity, while world oil supplies are primarily used as a transportation fuel. As long as the U.S. needs gasoline and diesel to power its vehicles, we’re dependent on the countries that control world oil supplies.

Without much fanfare, this problem is in the process of being solved Electricity is likely to become the next transportation fuel, and two types of vehicles that can be powered by electrons instead of gasoline are going from concept to reality. This year (2008) will mark a watershed for this technology as Tesla Motors will begin shipping the first electric vehicle that’s fun to drive in first half of this year. It’s a sleek roadster that will turn heads and perform like a high end sports car.


Watch the video to learn more about the Tesla electric roadster.

However, electric cars still have limitations including range and the lack of charging stations. Until something like a recent breakthrough by a Stanford scientist extends the range of EVs, plug-in hybrids appear poised to become the next major market in the auto industry. The switch from nickel to lithium batteries will allow plug-in hybrids to go 50 miles before requiring a drop of gasoline. Once the battery power is exhausted, these will have the range of any other gasoline powered car. What makes these compelling is the vast majority of Americans drive less than 50 miles per day, and consumers can benefit from very low electricity prices that will result in driving costs of pennies per mile if they plug in their vehicle overnight.

Electric cars and plug-in hybrids will also increase the demand for solar panels, as these will allow consumers to make their own fuel. It’s one thing for a homeowner to install solar panels on the roof and reduce or eliminate their electricity bill. However, if that same homeowner can eliminate their electricity bill and produce a lifetime supply of fuel for a vehicle, the economics of solar become much more compelling.

Too Much Money, Too Few Stocks

I believe these technologies will become the next big thing because of economics and not because of doomsday forecasts about global warming. However, concerns over the impact of climate change appear to be the primary driver of the first initiative to invest public retirement plans in clean energy technologies. California, New York, Pennsylvania, and Oregon are the first, but almost certainly not the last, to announce plans to invest more than $1 billion in clean energy companies.

Odyssey Advisors maintains a database of publicly traded companies that derive most or all of their revenues from clean energy. At present, there are fewer than 100 companies, including ADRs. Eliminating companies that are the equivalent of the Roach Motel (you can check in, but you can’t check out) because of their small size reduces the list to less than forty. Of what’s remaining, three qualify as large companies. Right now, that’s the clean energy universe for banks, trust companies, and other institutional investors that limit their investments to the large cap segment of the stock market. Value investors that aren’t fussy about company size currently have five to choose from, one of which is an ADR.

Ultimately, what caused internet stocks to skyrocket in the 1990s was too much investor money chasing too few investment quality companies. It wouldn’t be too surprising to see the same thing happen with clean energy. With state retirement plans and institutional investors now starting to line up to invest in clean energy, there are far fewer stocks available.