Electric Vehicles Will Beat Gas Cars Because They Are Better, Not Because They Are Cheaper
If your phone company offered you a shiny new rotary-dial telephone, hard-wired to the wall, but with a lower monthly bill, would you trade in your iPhone or Android? Probably not.
People did not move to smart phones because they were cheaper. Consumers migrate to a new technology because it offers them benefits they appreciate, at a price they can afford and consider reasonable—not necessarily because it is cheaper.
Five dollar gasoline certainly gets folks’ attention and does help to sell electric vehicles, but it is not an essential ingredient. As I write this (2/8/16), the average national price of gasoline is $1.78, according to AAA, and many economists predict that it will be low for some time to come.
Oil is a classic boom/bust commodity, because it is hard to scale back production and there is relatively little storage capacity, compared to the huge volumes we produce and consume every day. When the price rises, the oil industry starts drilling and discovers all kinds of ways to unlock new sources or squeeze more oil from existing wells.
Eventually, supply outstrips demand and the world is so awash in oil that there is no place to put it. Prices crash. Higher cost producers shut down and a few years later the cycle repeats.
Because of electric vehicles and the increasing efficiency of gasoline cars, demand for oil may soon peak and start coming down. This could keep the price of oil low for many years to come. Fortunately, the case for EVs is a compelling one, even in a world of cheap oil.
EVs are a pleasure to drive. They are convenient (i.e. good-bye fill-ups and most maintenance). They clean up local air and prevent climate change. They build our national security by reducing dependence on foreign oil. They strengthen the local economy because you can gather your fuel on your roof, with the help of the neighborhood solar installer. And they open the door to all kinds of innovative technologies under development.
Don’t get me wrong, EVs need to be well-priced so that people can afford them and feel like they are getting value for their money. But with so many advantages, EVs will succeed, even with $1.78 gasoline.
Plug In America
Update: 9/5/17, Jack Rickard: http://evtv.me/2017/09/canticle-of-the-sun
Some 15 refineries are going off line courtesy of Hurricane Harvey, from Corpus Christi, Texas, to Port Arthur, Texas, the Energy Department reported. The list included the largest refinery in the U.S., the Saudi-owned Motiva plant in Port Arthur, which began what it called “a controlled shutdown.”
Taken together, the closures represent about 25% of U.S. refining capacity. With 15 Houston of refineries closed as of Wednesday due to flooding, gasoline prices are rising. The national average hit $2.43 per gallon as of 2:15 p.m. Wednesday, up 7 cents from a week ago, according to consumer information site GasBuddy.com.
The irony is absurd. Would you believe the shutdown is largely a function of loss of electrical power? Once it hits the evening news, Americans across the land will rush to the local gas stations to fill up, potentially triggering a year-long “gas shortage” that makes no sense at all. We currently have a RECORD 500 million barrels of crude oil on hand – a glut by any other name would smell as light, sweet, and crude.