The Energy Crisis in the Automotive Industry:

1. The Energy Crisis in the Automotive Industry: Reinventing the Wheel for a New Age By: Nicholas Lombardi

2. Overview: How do we approach the problem? • The energy crisis, due to and within the automotive industry, will be one of the most significant issues faced globally • Evidence in current actions • What is the problem? • What can be done? • What challenges must be faced?

3. What is the problem? • Hubbert’s Peak: Possible rate of extraction of oil will rise, peak, and fall. • Drop-off occurs when rate of discovery slows down. • Crisis occurs at Hubbert’s Peak • Rate of oil use is expanding as production slows

4. What does this mean? • Time oil has been used in sizeable quantities: 200 years • Estimated amount left in earth: two trillion barrels (as of 2004) – just over half of original supply. • However, vast majority of oil used was extracted in last 50 years. • Oil production today 5x rate in 1960

5. Energy & the auto industry • Theoretical peak will likely occur between 2009 and 2020. • Transportation accounts for over 50% of oil consumption • Average American drives 13 miles per day • 85% of transportation consists of personal cars and trucks • Transportation is single most important factor in energy crisis

6. Changes & Reactions • Increased sales of hybrid vehicles • Honda Insight & Toyota Prius • Decreased sales of SUVs • Poor fuel mileage, too large • Supplanted by “crossovers” • United States lagging behind in new technologies, phasing-out of SUV

7. What can be done?Current Changes • Most immediate solution: increase efficiency of existing vehicles & technologies • Variable displacement • Legislation forcing all automakers to achieve corporate average fuel economy (CAFE) 35 mpg • 40 mpg in Europe, 45 mpg in China

8. New Technologies • Hybrid vehicles: Currently in production, technology advancing • Electric motor/gas engine • Insight & Prius have given way to hybrid versions of other vehicles • Ford Escape, Chevrolet Tahoe • Chevy Volt: 100 mpg, higher emphasis on electric • Electric -Tesla: full electric sports car, 200 mile range • Break stereotype of electrics as slow, boring • Problems: space needed to house batteries • Charge times of electrics can be long (but dropping)

9. New Technologies • Hydrogen/Fuel Cells: Becoming more viable, but still years away from mass use • Zero Emissions (only water vapor and heat) • Advantage two-fold: No petroleum used, no carbon dioxide • More efficient: 64% energy created converted into mechanical energy • Vs 20% for internal combustion engines

10. New Technologies • Fuel Cells: Makes electricity from hydrogen (vs electric car, which stores electricity) • Travel farther, refuel faster than electric car • Problems: 170,000 gas stations refueling 240 million vehicles • Transition to hydrogen infrastructure: $600 billion

11. New Technologies • Problems: Chicken-and-egg dilemma • People won’t buy fuel cell vehicles that can’t be refueled conveniently, but industry won’t build stations until vehicles are on the road • Production Issues: High carbon emissions and natural gas needed to make hydrogen • Negates positives • However, alternative methods being developed • Safety issues: Hydrogen must be stored at low temperatures and high pressure • Safe means of transport and refueling must be found

12. What challenges must be faced? • Automakers hesitant to embrace new technology • Stability of current technologies easier than risking $$$ on new, untested ones • U.S. companies face losses to meet legislation, must accelerate programs • Vs Toyota: took risk, built trust in hybrids, leads market

13. What challenges must be faced? • Two types of approaches to R&D taken • Proactive: automakers that take risks, put themselves at forefront of development • GM: Volt, “Fuel Cell Concept” • BMW: 1st functional/practical hydrogen car, continues to develop (Honda now has one) • While there is a profit to be made, potential losses indicate an ecological mindset

14. What challenges must be faced? • Other automakers adapt technology to keep up • Motivated to maintain position in industry, less about alleviating energy crisis • Ford hybrids: versions of conventional cars • If all automakers were proactive, technological development would accelerate

15. What challenges must be faced? • Automakers’ actions determined by consumer trends • In U.S., SUV has lingered despite demands for higher fuel efficiency cars • Size and practicality difficult to move away from (ex – SMART car) • People must BUY vehicles made

16. To recap… • The energy crisis, due to and within the automotive industry, will be one of the most significant issues faced globally • Fossil fuels approaching Hubbert’s Peak, • By 2020 at latest • Future depends on auto industry • New technologies exist, must be developed & committed to • Challenges will arise, companies and consumers must take risk

17. Works Cited • Broder, Josh M. "Lawmakers Set Deal on Raising Fuel Efficiency ." The New York Times [New York] 1 December, 2007: . http://www.nytimes.com/2007/12/01/washington/01energy.html. • Busby, Rebecca L. Hydrogen and Fuel Cells. Tulsa, Oklahoma. PenWell Corporation. 2005. • Deffeyes, Kenneth S. Hubbert’s Peak. Princeton, New Jersey. Princeton University Press. 2001. • Goodstein, David. Out of Gas. New York. W.W. Norton & Company, Inc. 2004. • Maxton, Graeme P. and John Wormwald. Time For a Model Change. Cambridge, UK. Cambridge University Press. 2004. • Nice, Karim and Jonathan Strickland (2005). How Fuel Cells Work. 11 Nov 2008. Online. World Wide Web. http://auto.howstuffworks.com/fuel-cell3.htm. • Nivola, Pietro S. and Robert W. Crandall. The Extra Mile. Washington, D.C. The Brookings Institution. 1995.