

Cost of converting entire U.S. to electric cars? Zero. - bdfh42
http://blogs.law.harvard.edu/philg/2008/05/27/cost-of-converting-entire-us-to-electric-cars-zero/

======
Prrometheus
Another exercise in utopian ego-centric social planning using back-of-the-
napkin stats that ignores all side effects. There are an infinite number of
these pseudo-analyses that can be done, and they're easy because you don't
need to collect any hard evidence.

For example, I propose that we start a forced diet and exercise program for
the United States. The cost of this program will be negative $25 trillion. It
will pay for itself in reduced medical costs. The present value of our
Medicare obligations are around $50 trillion, so let's say we save half of
that.

I could churn out another 50 of these in 50 minutes. It's easy - just imagine
yourself as an all-knowing dictator (and since you already think you know
what's best for everybody, you're half-way there!) and then pull numbers out
of your ear.

Let's ban alcohol! Net savings = the amount we spend on alcohol each year +
reduced health costs. And it worked so well the first time! Heck, let's ban
fast food!

Of course, all of these ignore the intrinsic value that comes from not living
in a society where some politician has control over all your consumption
choices, but Americans long ago stopped caring about their own freedom.

~~~
JeffL
Very well put, Prrometheus, but perhaps some more subsidies for electric cars
would be in order as a softer way to move in that direction and would be
justified as a measure of national defense (cutting off the funding to
terrorists and Islamo-fascists by driving down the price of oil) and
environmentalism?

In general, I'm all for free market solutions and only free market solutions,
but they don't work as well when you're talking about defense and things that
are in the commons like air and water.

~~~
Prrometheus
>In general, I'm all for free market solutions and only free market solutions,
but they don't work as well when you're talking about defense and things that
are in the commons like air and water.

I understand the "public good" argument in favor of governments, but when I
see governments producing so many "public bads" I question whether they are
doing any net good at all, let alone enough good to justify their cost.

For example, the United States "defense" department doesn't produce defense,
but rather produces useless destabilizing wars on the other side of the globe.
Is that worth the $600 billion that we spend on defense each year? Hardly.
Congress just passed a $300 billion farm bill to subsidize people with average
family incomes of over $200,000. An effective use of my money? I don't think
so. They spend an additional $100 billion or so each year to spy on me and
make sure I don't get high. I'd like my money back.

Yes, I am an anarchist. It's a pleasure to meet you.

~~~
davidw
"All right... all right... but apart from better sanitation and medicine and
education and irrigation and public health and roads and a freshwater system
and baths and public order... what _have_ the Romans done for _us_?"

------
michael_dorfman
Cute idea, but a a lot of the details don't even stand up to a basic reality
test.

For example: _"value of a used car, if exported to Latin America or China:
$5,000"_

Does he seriously think the US can sell the entire set of automobiles
currently on the road to Latin America or China at that price?

~~~
Xichekolas
I didn't see him use that number in his analysis (other than list it), so it
doesn't seem important either way.

~~~
michael_dorfman
Sure he does-- he subtracts it from the (assumed) $20,000 price of a mass-
produced electric car, to give a net price of $15,000 per vehicle.

------
pierrefar
Yes you can convert everything from oil-based to renewables, but what about
cost per kWh? At the moment, renewable energy sources just can't compete with
oil even with the current high prices.

That's not to say that entrepreneurs aren't making headway and closing the
gap... Soon. Can't wait!

~~~
ssharp
The electric grid gets cleaner even without renewables. Clean coal is a
rapidly growing area in electricity production and nuclear production
continues to increase.

Having to create electricity to meet our energy demand is a fantastic problem
to have. Energy independence should be an economic goal of any developed
country. You don't want ANY foreign control of 7% of your GDP, let alone a
cartel like OPEC.

~~~
Prrometheus
>Energy independence should be an economic goal of any developed country.

Why? The whole idea of comparative advantage is that you can increase your
overall standard of living by making the things that you are best at and
importing everything else. The only reason why you would want to be
independent is if you planned on fighting a war with all the other countries
in the world at the same time (granted, this could be the policy of our
current US administration). Interdependence creates peace.

If China attacks Taiwan, they will have the huge percentage of their GDP that
consists of trade with the US on the line. So I consider outright military
conflict unlikely. However, if we were as "independent" as you suggest I think
war would be much more likely.

Why again is independence a good thing?

~~~
aggieben
Uh, sorry. I think you've got it completely backwards. Why do you think the
framers were so concerned about being "entangled in foreign alliances"? The
kind of entanglements you propose will prevent war are exactly the kind we
should be avoiding because they could very well draw us into wars we don't
want to be in.

"Energy Independence" is probably a misnomer - but the point is to change our
economics so that we aren't forced to provide advantage to our geostrategic
adversaries. Because our economy is so dependent on oil, we currently have
little choice but to fund those who currently fund our (the U.S. and the rest
of the West) enemies. The desire is simply to make oil a commodity like any
other, and not one that can make or break the U.S. In other words, we need
something to give us the ability to tell the Saudis to kiss off.

~~~
Prrometheus
>In other words, we need something to give us the ability to tell the Saudis
to kiss off.

And then we can invade the Saudis! Brilliant!

~~~
aggieben
What I'm arguing is that being able to tell the Saudis to kiss off means we
won't ever have a reason to invade them.

Realize I'm using "the Saudis" as a proxy here. But further:

Can you imagine a scenario in which the following things are true:

a) we buy, say, 40% less oil overall

b) we have the same tensions with SA and Iran as we do now

c) SA and Iran are as rich as they are now (translate: capable of financing
terror groups to fight proxy wars) ?

I can't.

------
jcromartie
The biggest problem that I see with this idea is a social one, and not an
economic one. It can be summed up in one word:

Pride.

Just look at how tenaciously consumers cling to SUVs and large luxury cars,
even though they surely know better. People who can't even afford decent food
or housing spend ridiculous amounts of money on excessive vehicles.

I'd imagine you'll have to pry the wheels of their gas-guzzlers from their
cold dead hands before they get in some cheap, mass-produced, plain-vanilla
electric transportation, virtually devoid of status and "bling."

~~~
Prrometheus
>I'd imagine you'll have to pry the wheels of their gas-guzzlers from their
cold dead hands before they get in some cheap, mass-produced, plain-vanilla
electric transportation, virtually devoid of status and "bling."

Why can't you have electric transportation AND status and "bling"?

~~~
jimbokun
I'd say it's starting to happen already.

When I see a Hummer these days, my first thought is "chump", and wonder what
the price of a fill up is at current rates. I think among some high earning
demographics, the car with the most cachet is already the Prius.

Of course, then you have the ginormous Hybrid SUVs being pushed now by
Detroit. Do people really not understand that whatever gas you save through
the "hybridness" is more than offset by the few tons of metal they're driving
around, compared to a smaller non-hybrid?

(Yes, this question is rhetorical.)

------
berryg
If all the people in the US would drive electric cars, you obviously need
electricity to do so. Let's assume the power stations use oil the generate
electricity. How much oil would you need to keep all these electric cars in
the US going? Would that be more or less oil the US consumes now for keeping
its cars running?

Let's assume we would all drive a Tesla: <http://www.teslamotors.com>. Who
will do the math?

~~~
Xichekolas
Except we are in the US, which is blessed with 27% of the world's coal
reserves (by far the largest; Russia is second with 17%).[1] So there is no
reason we would burn oil to generate power.

Even better would be generating all that electricity with Nuclear power, since
the "middle east" of Uranium is Canada and Australia, with 28% and 22% of
global production, respectively.

[1] <http://www.eia.doe.gov/neic/infosheets/coalreserves.html>

[2] <http://en.wikipedia.org/wiki/Uranium#Supply>

~~~
berryg
Of course there are better options than to use oil to generate electricity.
But what I am interested in is: what is more energy efficient? x million
combustion engines or a few centralized power station plus x million electric
cars?

------
josefresco
Wired published a quick oil reserves map the other day:
<http://www.wired.com/special_multimedia/2008/oilreserves>

Most interesting find: Canada is #2 in the world with 179 billion barrels. Why
are we getting our oil from the middle east? And what % comes from up north?

~~~
aggieben
See the Dilbert toon on
fungibility:<http://dilbert.com/strips/comic/2006-02-19/>

~~~
run4yourlives
That is the most retarded use of flash ever.

~~~
aggieben
Agree, but the old site is inaccessible.

------
iamelgringo
Why make the government pay for the entire thing? As oil and gas prices
increase, the costs of purchasing an electric vehicle are going to be on
parity with the costs of purchasing an electric vehicle. I imagine that the
Big 3 in Detroit are wringing their hands over Toyota's success with the
Prius.

And, with the bevy of new electric vehicles that are getting released in the
next couple of years, you're going to be seeing more and more of them on the
roads. even without massive governement intervention.

I for one am actually glad that gasoline prices are increasing. I think that
we should tax gasoline heavily like most of Europe does. Do you think they
drive around in those tiny little cars because they are comfortable? Increased
gasoline prices decrease consumption, and increase innovation in fuel
efficiency and alternative energy vehicles.

------
edw519
During WWII, we were cut off from natural rubber, so we invented synthetic
rubber.

In the ecology movement of the late 1960's, the federal government mandated
removal of all lead from gasoline by 1975. We made it. (Anyone remember
"Leaded or unleaded"?)

In the first oil scare in 1973, Detroit responded by pulling 2 old inventions
off the shelf, front wheel drive and fuel injection. Effectively doubling the
world oil supply within 5 years.

Why should now be any different? If the federal government mandated all new
vehicles being electric only by 2014 (grandfathering in all existing
vehicles), we'd make it. And the problem would gradually resolve, like every
other problem.

The only thing stopping it is special interests. Anyone in congress supporting
this would probably cut off his own fundraising lifeline.

~~~
Prrometheus
>Why should now be any different? If the federal government mandated all new
vehicles being electric only by 2014 (grandfathering in all existing
vehicles), we'd make it. And the problem would gradually resolve, like every
other problem.

How about if we wait for the technology to be ready instead of setting an
arbitrary deadline? And what's so important about switching to electric cars
that it can't wait 10 years?

~~~
edw519
Sometimes, the arbitrary deadline is the thing that forces the technology to
be ready.

Do you think JFK had any idea if the technology would be ready when he
declared the goal of a man on the moon before the end of the 1960s?

We need more vision and less debate.

~~~
Prrometheus
> We need more vision and less debate.

If "vision" means rash feel-good actions and "debate" means thoughtful
consideration of all view points, then I respectfully disagree with you. I
think we need more debate and less "vision".

------
rms
You'd want to do this transition over time and give the cars away in a
lottery, in a way calculated to upset the financial markets as little as
possible. Saudi Arabia would NOT be happy with this arrangement. They would be
very, very angry in fact; we have been such close allies. I would not like to
see them angry.

------
JeffL
Cost of bureaucracy, inefficiency and fraud in such a huge government program:
$2 trillion

------
andresvi
Little over simplifying the situation but its fun to read and think the way he
does.

------
TrevorJ
so we charge those cars with what? Pedal power? No, more than likely we charge
them by burning fuel in some power plant miles and miles down the grid, losing
energy in the process due to storage and conversion.

------
mattjung
Cost to produce the energy? Cost to upgrade the existing stations?

~~~
ph0rque
The cars can be charged at night, when the base power stations are producing
electricity far below their capacity. (In many places, electricity is cheaper
at night for that very reason). I remember reading somewhere that 70% of the
US fleet can be converted without needing more power plants.

~~~
anamax
That works so well for folks who vacation by car.

~~~
ph0rque
How often do you vacation? You can rent a gas guzzler for those two weeks of
the year.

~~~
anamax
I vacation more than two weeks a year. I take trips on weekends too.

------
nazgulnarsil
yeah, because the markets often do things where no profit is involved right?
there's no evil conspiracy. people want gasoline, companies supply it and make
money.

~~~
rms
Exactly, this is a clear example of the imperfections of capitalism. Do you
think it would be good for a powerful globalized government to fund free
electrical cars for the people?

~~~
nazgulnarsil
see this is the problem I have with progressives. Your entire paradigm relies
on collectivism. No, the government shouldn't take my money and decide how to
spend it "for the good of the people". People should decide for themselves and
the market will be forced to reflect people's real desires rather than some
artificial notion of "good". Who are you to decide what's good for me?

Gasoline isn't a problem. Eventually supply will be constricted and demand
will slow down. It's not going to be The Grapes of Wrath overnight, we'll be
forced to gradually move to more efficient transportation. Economics trumps
feel good social programs.

~~~
rms
I'm only 20% collectivist, the rest is ideal Austrian economics.

------
newt0311
One by one:

Problem #1: (Price/Barrel: $130) Does he seriously think that there is no
chance that the price of oil will ever reduce from this plateau?

Problem #2: (5% interest) The interest payment for a long term loan of $8
trillion are going to be a lot more than just 5%.

Problem #3: (cost of a new electric car, if mass-produced: $20,000) So... an
electric lexus can be mass produced and sold for $20,000. How about a Ferrari?

Problem #4: Administrative costs: Who does the book keeping.

Problem #5: Who pays for the massive amounts of electricity used by these
electric cars?

Problem #6: Who pays for the infrastructure required to keep these cars
charged?

Problem #7: Who pays for the massive infrastructure to maintain these awesome
cars after they are manufactured and bought?

Problem #8: If it really was so cheap and efficient to convert straight to
electric cars? why isn't anybody doing this in scale?

In total: A very haphazard analysis of the cost of converting to electric
cars.

~~~
rms
1: certainly I would bet on the price of oil increasing over time

2: The US government bonds aren't very high interest rate.

3: $100,000 for something Ferrari class in speed, see the Tesla Roadster

4: The government

5: The consumers and electricity companies. The coal lobby would be in favor
of a plan like this, they are itching to start burning all the extra coal we
have in the USA.

6:The consumers

7: The consumers and the mechanics repairing the cars in the free market.

8: Because this type of thing requires strong government authoritarianism.

~~~
Prrometheus
>2: The US government bonds aren't very high interest rate.

Currently US government bonds have a low interest rate. However, we also would
be doubling our debt on this plan, and inflation expectations have been
ticking up. Furthermore, such desperation for energy independence might be
looked down on by international investors who already view the actions of the
US government as reckless. What might the US be planning in the Middle East
that they need to take such rash actions to get off of oil for?

All these factors could swing interest rates higher.

> 4: The government

Administrative costs by the government will be non-zero.

>8: Because this type of thing requires strong government authoritarianism.

Actually, I just don't think the technology is there yet. If scale production
was the only obstacle in the way of the electric car right now, then it would
require an investment in the $1 billion magnitude to start up efficient
production, something within the reach of modern car companies. Economical,
comfortable, useful, and safe electric cars are not available with modern
battery technology. As soon as the technology is ready to make an attractive
electric car, I expect to see consumers converting to them voluntarily and at-
scale in the free market.

Now if we want to force everybody to convert to an inferior and immature
product right away, then we do need strong government authoritarianism, yes.

------
weegee
the technology exists, it's been done, the oil lobby will not allow this to
happen, too many rich people (Hi George W. Bush and family) would lose their
fortunes...

<http://en.wikipedia.org/wiki/Toyota_RAV4_EV>

