Dr Automotive Design and Tools

The latest startling revelation to come via documents leaked to Julian Assange's website and published by The Guardian should give pause to every suburban SUV-driver: U.S. officials think Saudi Arabia is overpromising on its capacity to supply oil to a fuel-thirsty world. That sets up a scenario, the documents show, whereby the Saudis could dramatically underdeliver on output by as soon as next year, sending fuel prices soaring.

The cables detail a meeting between a U.S. diplomat and Sadad al-Husseini, a geologist and former head of exploration for Saudi oil monopoly Aramco, in November 2007. Husseini told the American official that the Saudis are unlikely to keep to their target oil output of 12.5 million barrels per day output in order to keep prices stable. Husseini also indicated that Saudi producers are likely to hit "peak oil" -- the point at which global output hit its high mark -- as early as 2012. That means, in essence, that it will be all downhill from there for the enormous Saudi oil industry.

"According to al-Husseini, the crux of the issue is twofold. First, it is possible that Saudi reserves are not as bountiful as sometimes described, and the timeline for their production not as unrestrained as Aramco and energy optimists would like to portray," one of the cables reads. "While al-Husseini fundamentally contradicts the Aramco company line, he is no doomsday theorist. His pedigree, experience and outlook demand that his predictions be thoughtfully considered."

OPEC decided to leave production quotas unchanged in a meeting in Ecuador's capital Quito Saturday, stressing looming "risks to the fragile global economic recovery."

The 12-nation Organization of the Petroleum Exporting Countries said in a statement that the economic growth that had pushed oil to above 90 dollars a barrel this week was likely to slow next year.

That, and the challenges to the world's recovery from the 2008 financial crisis, "would negatively impact on oil demand," it said.

OPEC highlighted "the adverse risks of possible currency conflicts and fears of a second banking crisis in Europe" along with low industrial output in developed countries, high unemployment and "ample spare capacity throughout the oil supply chain."

The cartel at the same time said it was "comfortable" with current prices.

Oil futures trading Friday finished at 90.48 dollars in London trade for delivery in January. New York's main contract, light sweet crude for January, finished at 87.79 dollars a barrel.

"There is a general feeling in the market that the current prices are comfortable for producers and for consumers," said OPEC's current president, Ecuadorian Oil Minister Wilson Pastor-Morris.

He noted that, for all the "cautious optimism," though, "nothing can be taken for granted."

Stronger-than-expected demand attributed to a harsh winter hitting Europe and parts of North America was pushing oil prices higher this year, as was growth in China and other developing nations.

But OPEC said speculation was also fueling the rise.

And observers said economic uncertainties suggested the rally might not last, with fears rising that China's economy was at threat by soaring inflation.

The International Energy Agency said Friday that "global demand growth should ease in 2011, from 2.5 million barrels per day to 1.3 mbd, amid renewed structural OECD decline, and as post-recession froth in markets like China subsides," the IEA said.

OPEC's decision meant it would maintain production at 24.8 million barrels per day, the level set after a hefty quota cut in January 2009 to cope with a collapse in oil prices caused by the financial crisis.

The organization accounts for nearly 40 percent of the world's oil output.

Some OPEC members -- Iran, Venezuela and Libya -- were urging higher prices, to above 100 dollars a barrel to offset what they said were rising production costs.

But OPEC heavyweight Saudi Arabia differed, with its oil minister, Ali al-Nuaimi, telling reporters he thought "70 to 80 (dollars per barrel) is a fair price."

OPEC Secretary General Abdalla Salem El-Badri told a news conference that it was up to the markets to set the price according to supply, but noted that the dollar has been steadily losing value.

"This price we see at this time has not damaged world growth," he said.

"Yes, in Europe, it is 90 dollars. But they (the Europeans) like it because the price is very low. Who is hurting is our producer countries, because we sell our crude in dollars and buy in euros. So you see how much we are losing," he said.

He added: "The dollar is coming down almost every day."

OPEC set its next meeting for June next year in Vienna.

Iran was taking over the cartel's rotating presidency next year, the first time in 36 years it will have held the leadership.

Oil prices may soar to $200 a barrel if the world doesn’t move more rapidly to a clean-energy economy, Richard Branson, founder of Virgin Atlantic Airways Ltd., said in an interview.

“It’s certainly conceivable unless we can start to conserve energy quickly and come up with alternative fuels,” Branson said yesterday in Cancun, Mexico, where countries are meeting to negotiate a new accord to combat climate change.

Branson predicts an “unbelievably painful” economic slump if governments don’t do more to encourage renewable energy as an alternative to fossil fuels such as oil. In the U.S., where efforts to cap carbon-dioxide emissions failed in the Senate earlier this year, unemployment could reach record highs, the British billionaire said.

“We are going to have the mother of all recessions if we don’t sort out our energy policy fast,” Branson said earlier yesterday at the World Climate Summit in Cancun. “We think we’ve got it bad today. In five years time unemployment could go to 15 percent without any difficulty at all in America.”

Branson, 60, spoke alongside U.S. billionaire Ted Turner, founder of Cable News Network. Branson and Turner, 72, also will speak tomorrow at the two-day conference focused on how businesses can help combat climate change.

Balking on Kyoto

Meanwhile, negotiators from about 190 countries are grappling with how to proceed in United Nations-led treaty talks to cut greenhouse-gas emissions. Industrialized and developing nations are divided over the 1997 Kyoto Protocol.

Japan, Russia and Canada have refused to sign up for a second round of emissions reductions once the current ones written into Kyoto expire in 2012.

Emerging economies such as China, India and Brazil are “completely unanimous” in their position that developed countries must agree on a new commitment period, UN climate chief Christiana Figueres said yesterday. Discord over Kyoto threatens to take attention away from talks for a new global climate agreement that includes the U.S., she said. The U.S. is the only developed nation not part of Kyoto.

Turner urged countries to reach agreement.

“Let’s do it,” he said. “Let’s do it now before it’s too late.”

At the current pace of research and development, global oil will run out 90 years before replacement technologies are ready, says a new University of California, Davis, study based on stock market expectations.

The forecast was published online on Nov. 8 in the journal Environmental Science & Technology. It is based on the theory that long-term investors are good predictors of whether and when new energy technologies will become commonplace.

"Our results suggest it will take a long time before renewable replacement fuels can be self-sustaining, at least from a market perspective," said study author Debbie Niemeier, a UC Davis professor of civil and environmental engineering.

Niemeier and co-author Nataliya Malyshkina, a UC Davis postdoctoral researcher, set out to create a new tool that would help policymakers set realistic targets for environmental sustainability and evaluate the progress made toward those goals.

Two key elements of the new theory are market capitalizations (based on stock share prices) and dividends of publicly owned oil companies and alternative-energy companies. Other analysts have previously used similar equations to predict events in finance, politics and sports.

"Sophisticated investors tend to put considerable effort into collecting, processing and understanding information relevant to the future cash flows paid by securities," said Malyshkina. "As a result, market forecasts of future events, representing consensus predictions of a large number of investors, tend to be relatively accurate."

Niemeier said the new study's findings are a warning that current renewable-fuel targets are not ambitious enough to prevent harm to society, economic development and natural ecosystems.

"We need stronger policy impetus to push the development of these alternative replacement technologies along," she said.

Some OPEC members want oil prices to rise to $100 a barrel to offset the decline in the dollar.

The value of the dollar, which has slipped 13% since June against major world currencies, means that the "real price" of oil is about $20 less than current levels, Venezuela's Energy and Oil Minister Rafael Ramirez said after Thursday's OPEC meeting in Vienna

OPEC, which accounts for 40% of global crude output, left targets unchanged and called for stronger adherence to production quotas, Bloomberg News said.

"They're concerned about the dollar because as the dollar weakens, prices go up," Nordine Ait-Laoussine, former oil minister for Algeria, told Bloomberg News.

OPEC countries are exceeding their quotas as prices creep above the $70-$80 a barrel band that Saudi Oil Minister Ali al-Naimi called "ideal."

"We would love to see $100 a barrel," Shokri Ghanem, chairman of Libya's National Oil Corp. said. "We're losing real income. Libya in particular would like to see a higher oil price."

Other countries are less certain: Kuwait's oil minister said he'd prefer a price no greater than $85 a barrel; while the Algerian minister said a price between $90 and $100 a barrel was "reasonable."


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Study suggests pollution from airplanes flying at ‘cruise’ altitudes contributes to 8,000 deaths per year globally.

In 2004, the World Health Organization estimated that about one million deaths per year are caused by air pollution, and several epidemiological studies have linked air pollution to the development of cardiovascular and respiratory illnesses, including lung cancer. Those studies tracked thousands of adults over many years to measure their exposure to air pollution while monitoring their health. Once the data were statistically analyzed to correct for other risk factors like smoking, the results indicated that increased exposure to fine particulate matter caused by air pollution is linked to health problems like chronic bronchitis and decreased lung function, as well as premature death.

The atmosphere is full of natural and man-made chemicals, including emissions from fuel combustion and byproducts of living organisms. Many of these chemicals combine in the atmosphere to form tiny solid and liquid particles known as “fine particulate matter” that are 2.5 micrometers or smaller (the average human hair is about 70 micrometers in diameter, by comparison). While it’s not clear whether all of these particles may be harmful, some are; the danger to humans comes when they are inhaled and trapped in the lungs, where they can then enter the bloodstream.

Aviation emissions contribute to this health problem, according to a new study that suggests that airplanes flying at a cruise altitude of around 35,000 feet emit pollutants that contribute to about 8,000 deaths per year globally. The research, reported online this month in the journal Environmental Science and Technology, provides the first estimate of premature deaths attributable to aircraft emissions at cruise altitudes. Aircraft emit nitrogen oxides (NOx) and sulfur oxides (SOx), which react with gases already existing in the atmosphere to form harmful fine particulate matter.

Tracking emissions

Current worldwide regulations target aircraft emissions only up to 3,000 feet. That’s because regulators have assumed that anything emitted above 3,000 feet would be deposited into a part of the atmosphere that has significantly smoother air, meaning pollutants wouldn’t be affected by turbulent air that could mix them toward the ground. Thus, even though 90 percent of aircraft fuel is burned at cruise altitudes, only those pollutants that are emitted during takeoff and landing are regulated by measuring emissions during tests of newly manufactured engines in simulated takeoff and landing conditions.

“Anything above that [altitude] really hasn’t been regulated, and the goal of this research was to determine whether that was really justified,” says lead author Steven Barrett, the Charles Stark Draper Assistant Professor of Aeronautics and Astronautics in MIT’s Department of Aeronautics and Astronautics.

To study the effects of cruise emissions, Barrett used a computer model that combined data about plane trajectories, the amount of fuel burned during flights and the estimated emissions from those flights. He combined that with a global atmospheric model that accounts for air-circulation patterns in different parts of the globe and the effect of emissions to determine where aviation emissions might cause an increase in fine particulate matter. He then used data related to population density and risk of disease in different parts of the world to determine how the change in particulate matter over certain regions might affect people on the ground — specifically, whether the air pollutants would lead to an increased risk of death.

Analysis of these data revealed that aircraft pollution above North America and Europe — where air travel is heaviest — adversely impacts air quality in India and China. That is, even though the amount of fuel burned by aircraft over India and China accounts for only 10 percent of the estimated total amount of fuel burned by aircraft across the globe, the two countries incur nearly half — about 3,500 — of the annual deaths related to aircraft cruise emissions. The analysis also revealed that although every country in the Northern Hemisphere experienced some number of fatalities related to these emissions, almost none of the countries in the Southern Hemisphere had fatalities.

That’s because the majority of air traffic occurs in the Northern Hemisphere, where planes emit pollutants at altitudes where high-speed winds flowing eastward, such as the jet stream, spread emissions to other continents, according to the study. Part of the reason for the high percentage of premature deaths in India and China is that these regions are densely populated and also have high concentrations of ammonia in their atmosphere as a result of farming. This ammonia reacts with oxidized NOx and SOx to create fine particulate matter that people inhale on the ground. Although agriculture is abundant in Europe and North America, the ammonia levels aren’t as elevated above those regions.

Industry reaction

Funded by the UK Research Councils with help from the U.S. Department of Transportation, the study recommends that cruise emissions be “explicitly considered” by international policymakers who regulate aviation engines and fuels. Steve Lott, a spokesman for the International Air Transport Association, a trade group that represents 230 airlines, says that aviation is “a small part of a big problem,” particularly when compared to other transportation sources of emissions, such as those caused by shipping, which a 2007 study linked to 60,000 premature deaths per year.

Lourdes Maurice, the chief scientific and technical adviser for environment at the Federal Aviation Administration, says that if the agency can confirm Barrett’s findings through additional research, then it will work with the Environmental Protection Agency and the International Civil Aviation Organization to consider appropriate regulatory action. The FAA will continue to fund research to address uncertainties highlighted by Barrett’s work, she adds.

Barrett concedes that there are many uncertainties, including how accurately the model reflects how air travels vertically from high altitudes to low altitudes. To address this, he is collaborating with researchers at Harvard to study an isotope of the element beryllium that is produced naturally at high altitudes and attaches to atmospheric particles that eventually reach the ground through air or rain. Researchers have a general idea of how much beryllium is concentrated in the atmosphere, and Barrett and his colleagues are currently analyzing ground measurements of the element to quantify the extent to which his model “gets vertical transport right.”

Barrett is a member of the Partnership for AiR Transportation Noise and Emissions Reduction (PARTNER), a cooperative research organization that completed the study. Sponsored by the FAA, NASA and Transport Canada, PARTNER has its operational headquarters at MIT.


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Carbon dioxide emissions produced by UK shipping could be up to six times higher than currently calculated, according to new research from The University of Manchester.

As the shipping industry's emissions are predicted to continue to grow in the future, the UK will fail to meet its commitment to avoid dangerous climate change if additional cuts are not made to other sectors.

According to a University of Manchester study, the global shipping industry, despite being traditionally viewed as one of the most energy efficient means of transport, releases increasing amounts of harmful emissions into the atmosphere every year.

Indeed, as the rest of the world strives to avoid dangerous climate change, the global shipping industry's carbon emissions could account for almost all of the world's emissions by 2050 if current rates of growth "fuelled by globalisation" continue.

This new report refocuses attention from the global efforts to reduce shipping emissions down to a national scale, and questions if the UK has a role in influencing its share of the CO2 emissions produced.

The dramatic change in the estimate of CO2 from UK shipping is based on the fact that, up until now, the UK's emissions are calculated using international bunker fuel sales - that is fuel purchased at UK ports.

But, according to the report, this is a misleading statistic as the majority of vessels refuel at nearby ports, such as Rotterdam in Holland, where prices are more competitive.

Scientists at The University of Manchester show that the level of CO2 emissions released by commercial ships involved with UK trade provides a fairer representation of UK shipping emissions than fuel sold.

If this representation were to be adopted, the UK's CO2 emissions allocated to shipping would increase significantly - and possibly to a higher level than the amount of CO2 released by UK aviation.

Greenhouse gas emissions from international shipping activity currently account for around 3% of total global emissions.

On the basis of its international bunker fuel sales, UK international shipping emissions for 2006 were around seven megatonnes of carbon dioxide (7 MtCO2).

However the report, prepared by researchers at the Tyndall Centre for Climate Change Research and the Sustainable Consumption Institute, claims it is fairer to calculate UK emissions on the basis of shipped goods exported from or imported into the UK.

On this basis, UK emissions rise considerably to 31 or 42 MtCO2 respectively.

Dr Paul Gilbert, Lecturer in Climate Change at the Tyndall Centre for Climate Change Research, said: Tackling climate change requires urgent emission reductions across all sectors.

Unfortunately up until now, global efforts to reduce shipping emissions have been slow, and are not keeping up with the pace of growth of the sector.

This report explores the potential for the UK to take national measures to reduce its share of shipping emissions to complement any future global or EU action.

The report also examines the role the shipping sector should play in overall emissions reduction. Dangerous climate change is generally accepted to be an increase in global average temperature of greater than 2ºC above pre-industrial levels.

To have a reasonable chance of avoiding dangerous climate change, global emissions must fall steeply out to 2050. Indeed, the report suggests that the UK should, in advance of EU or global action, consider a unilateral adjustment to its carbon budgets to reflect its share of international shipping emissions.

It concludes that action is required in both the short and medium-term to significantly reduce shipping emissions below projected levels.

An international deal to control shipping emissions is currently under discussion at the International Maritime Organisation (IMO). However, progress on this issue has been slow and the European Union has announced that it will take action at an EU level to limit international shipping emissions if the IMO has not agreed a deal by the end of 2011.

John Aitken, Secretary General of Shipping Emissions Abatement and Trading, said: This timely and thought-provoking report highlights many of the difficulties faced by those interested in reducing GHG emissions from shipping.

It is clear a global approach is most preferable. If the further research mentioned in the report identifies an apportionment methodology for "countries" which can be agreed upon by many nation states, it would greatly assist the development of a global strategy."

The Guardian



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The Gulf of Mexico oil spill disaster will hasten the adoption of electric vehicles, a leading car executive says.

Nissan’s senior vice-president of product planning, Andy Palmer, says the spill highlights the potential pitfalls of oil dependency.

“Any kind of crisis can move the needle, whether it’s price hikes or regrettably, terrorism,” he says.

“Every time you see a degree of instability it tends to help us on EV, no doubt,” he says.

“I think no one thing is going to change consumer behaviour overnight but it draws attention to the difficulties of carbon-based fuel,” he says.

He says the interest in Nissan’s upcoming Leaf electric car has been “astonishing”, with the vehicle essentially sold out until well into the second half of next year.

“We have 23,500 orders in the bank and we haven’t announced the pricing in Europe, so that’s just the US, Japan and some blind orders from Europe,” he says.

And he says that the Australian government, which has shown little interest in EVs to date, is beginning to come around.

Mr Palmer visited Australia earlier this year to speak with the federal and state governments and was encouraged by the reception he received. “We are getting a response from the federal government… we do have a level of interest and I do see some signs that Australia will be one of the next serious countries that we are looking at,” he says.

“From a demographic point of view, Australia’s perfect [for EVs]. Most of the houses have got garages, most of you have got two cars and most of the second car’s range is relatively low mileage – you’ve just written the spec for an EV, frankly,” he says.

He says that while the main advantage to Australia from EVs would be CO2 reduction, they would also play a major role in improving air quality in big cities such as Sydney and Melbourne.

“The car doesn’t emit CO2, which means you’re not emitting CO2 in a city, where most people live; moreover you’re not emitting any other noxious gases either. You’re cleaning up the environments where people live,” he says.

In April the Qatari royal family spent $2.3 Billion to buy Harrods, the high end UK department store. Now they'll have to fork over $800 in fines to remove wheel clamps from supercars worth $2.3 Million that two family members parked illegally out front of the store.

The story about these two cars alerted us to the fact that central London has become a weekly supercar show during the summer months with literally hundreds of exotics ranging from the pictured Koenigsegg CCXR “Special One” to a half dozen Bugatti Veyron, including the ultra exclusive '15-of' Sang Noir through to a dozen or so garden variety Lamborghini Murcielago LP 670-4 SuperVeloce, all wearing Qatar number plates.

Not bad for a country that was a former pearl-fishing center, was one of the poorest Gulf states and has less than half the population of New Zealand. They are now one of the richest Gulf countries, in a region full of rich countries, thanks to the exportation of oil.

The London supercar parade is a graphic illustration of what the Washington Post calls “The biggest transfer of wealth in history”.

Because we are all limited to using an Internal Combustion Engine (ICE) for propulsion, we are forced to consume 6x more energy than is needed to move a car down the road. Good if you're in the business of selling oil, not so good if you just want to drive to work.

Each time you fill your car's fuel tank remind yourself that every ICE powered car consuming all this Arab oil is only 15% energy efficient. The direct result is that $0.85 cents out of every dollar you spend at the fuel bowser gets converted into waste heat as an unavoidable side effect of the extremely inefficient internal combustion process.

On first appearances it 'looks' like Volkswagen (owners of Bentley, Bugatti, Lamborghini, Audi etc) are doing fairly well out of this transfer of wealth too, until you learn that Qatar Holdings, the same company that bought Harrods, also own 12.3% of the VW group.

The Qatari royal family members seem to be keeping it in-house, mostly buying and promoting their family owned brands. We can be fairly certain none of them would be caught dead parading around London in something like a Tesla Roadster, especially one with 'LOL OIL' number plates.

Millions of electric-powered vehicles that would slash America's dependence on foreign oil and cut carbon emissions would be put on the road under legislation approved by a Senate committee on Wednesday.

The legislation, passed 19-4 in favor, was one of several bills cleared by the Senate Energy and Natural Resources Committee that might be folded into a broader energy and climate bill Democrats are struggling to bring to the Senate floor.

The bill approved by the committee would pour nearly $3.9 billion over 10 years into selected communities to build infrastructure to charge electric cars, conduct research and provide incentives for consumers to buy plug-in vehicles.

The goal is to put the United States on a path to electrify half the country's cars and trucks by 2030, which would cut U.S. demand for oil by about one-third.

"Passing this legislation will strengthen our national security and improve the air we breathe, while relying on our abundant and diverse electricity supply to fuel our cars," said Senator Byron Dorgan, the bill's chief sponsor.

A new bill that addresses climate change and renewable energy is a key priority for the Obama administration but time is running short on the congressional calendar with a scheduled August recess and congressional elections looming in November.

Senator Jeff Bingaman, who chairs the energy panel, said he was not sure if Senate Majority Leader Harry Reid would unveil his encompassing energy and climate legislation next week. The bill would be in trouble if the Senate does not pass it before the August break, according to Bingaman.

"It will be difficult to get a final bill to the president for signature," Bingaman told reporters. "The earlier that the full Senate would act the better position we'll be to actually get a bill to the president."

Congress is scheduled to work through the first or second of week of August, and then recess until after Labor Day in early September.

Reid said on Tuesday he was still grappling for consensus among Democrats to forge a new climate and energy bill.

What costs just $0.02 per mile to drive, never needs an engine oil change, is faster 0-60 than a Porsche 911 GT3 yet is cheaper to buy and can be powered 100% with renewable energy?

The as yet unmatched - Tesla Roadster, of course. Can hardly wait to see how a Toyota RAV4 or Corolla with a Tesla electric powertrain performs.

(reddit)

Over reliance on fossil fuels is driving companies to take unnecessary environmental risks as typified by the recent oil disaster in the Gulf Of Mexico.

That is the conclusion of a major new report from insurance giant Lloyd's and UK think tank Chatham House, which argues that a rapid shift towards low carbon energy sources represents the only way of tackling the energy industry's soaring risk profile.

The report, titled Sustainable Energy Security: Strategic Risks and Opportunities for Business, highlights how the risks faced by the oil industry have increased as it has been forced to shift its focus from relatively "easy" reserves to deep sea drilling sites, such as the one at the centre of the ongoing BP disaster.

The report cites a recent article from Canadian newspaper commentator Jeff Rubins, which predicts that the explosion at the Deepwater Horizon rig will impact the oil industry in manner comparable to the nuclear incident at Three-Mile Island in the US, which effectively put an end to the building of new nuclear planst for a generation.

"The real legacy of Three Mile Island wasn't what happened back in 1979, but rather what happened - or more precisely didn't happen - over the course of the next 40 years in the US," Rubins noted. "Literally overnight, the near-meltdown of the reactor core changed public acceptance of nuclear power plants. No company in the US has built a new one since."

Commenting on the report, Richard Ward, Lloyd's chief executive, said that the environmental and economic costs of fossil fuels are simply too high to justify on-going investments.

"The current generation of business leaders need to rethink their approach to energy risks or be left behind as energy becomes less reliable and more expensive," he said. "We need a long-term plan to reduce consumption and diversify our energy sources."

According to the Lloyd's report, up to $500bn a year needs to be invested in low carbon energy sources by 2050 in order to enable the shift away from fossil fuels, a transition that is likely to lead to significant business risks and opportunities.

"Businesses across the board need to make a serious assessment of their vulnerability to change and volatility on the energy scene," said Bernice Lee, research director at Chatham House. "There are huge opportunities as energy systems evolve to include users and increase resilience and efficiency. There is also the potential for heavy or even catastrophic financial and environmental losses."

BP has also admitted the similarities between Deepwater and the Three-Mile Island incident when the Three Mile Island Nuclear Generating Station in Dauphin County, Pennsylvania suffered a partial core meltdown and released radioactive gas into the local area.

Speaking at an event organised by Google last month, BP's recently appointed chairman Carl-Henric Svanberg surprised the audience by making the link. "It will be a game changer like Three Mile Island," he said, according to a report in The Times.

The Electrification Coalition today released a long-term macroeconomic analysis of the policy proposals put forward in its November 2009 Electrification Roadmap. The paper finds that the U.S. economy would benefit substantially over the long term from implementation of the Electrification Coalitionpolicy package.


Read the full report

Royal Dutch Shell expects electricity-powered vehicles to account for as much as 40 percent of the worldwide car market by 2050, Chief Executive Peter Voser said on Thursday.

Voser, speaking at The Wall Street Journal's ECO:nomics conference in Santa Barbara, said technological improvements and increases in the cost of producing gasoline will give a boost to vehicles that run on alternative power.

"We think between now and 2050, we will go from 1 billion cars to 2 billion cars worldwide," he said. "We think by 2050, roughly 40 percent of those 2 billion cars will be electric."

In the next 40 years, the market needs low-carbon fuels, more efficient engines and hybrid vehicles, Voser said.

"I think there will be room and space to develop all of them," he added.

Gasoline demand in developed countries like the United States has started to decline, partly as vehicles running on alternative fuels have entered the market. Companies such as Shell and BP are spending more money on those newer technologies, including for next-generation biofuels.

Automakers such as Ford Motor Co and Nissan Motor Co Ltd are racing to launch electric cars, betting these will be the environmentally friendly transportation of the future. Small players like Tesla Motors already sell electric vehicles.

Voser said Shell was investing 25 percent of its research and development budget into renewables, including wind power and biofuels.

Shell has bet big on ethanol by striking a deal with Brazil's Cosan to create a $21 billion a year ethanol joint venture.

The 50-50 joint venture, with almost 4,500 filling stations nationwide, will better position Cosan and Shell to compete with the two top players in the market, state oil giant Petrobras and Ipiranga, a unit of Brazil's Grupo Ultra

U.S. Secretary of Energy Steven Chu announced today that the Department of Energy has closed its $1.4 billion loan agreement with Nissan North America, Inc. to retool their Smyrna, Tennessee factory to build advanced electric automobiles and an advanced battery manufacturing facility. The two projects are expected to create up to 1,300 American jobs and conserve up to 65.4 million gallons of gasoline per year – an amount equal to six times the oil spilled by the Exxon Valdez in 1989.

“This is an investment in our clean energy future. It will bring the United States closer to reducing our dependence on foreign oil and help lower carbon pollution,” said Secretary Chu. “We are committed to making strides to revitalize the American auto industry and supporting the development of clean energy vehicles.”

Nissan plans to use the proceeds from the loan to produce its all-electric vehicle, the LEAF, at its existing Smyrna, Tennessee plant. Nissan will offer electric vehicles to fleet and retail customers, and plans to ramp up production capacity in Smyrna up to 150,000 vehicles annually.

Nissan is pursuing a global strategy of transitioning to electric vehicles. Building a state-of-the-art manufacturing plant in Smyrna, to produce 200,000 battery packs annually, is a significant part of that strategy. Nissan is also laying the groundwork in developing an infrastructure in the US to support electric vehicles. The company has formed partnerships with states, counties, municipalities, and electric utilities to prepare markets for the introduction of electric vehicles including the installation of charging stations.

Today’s announcement marks the third loan arrangement agreement signed by DOE with an advanced technology vehicle manufacturer. In September 2009, DOE signed its first loan agreement for $5.9 billion to Ford Motor Company. Last week, DOE also signed a $465 million loan agreement with Tesla Motors, which will be used to build manufacturing facilities in California for electric power-trains and Tesla's Model S electric sedan. The Department has also signed a conditional commitment with Fisker Automotive to build plug-in hybrid electric vehicles. Tenneco, Inc. became the first advanced technology component manufacturer to obtain a conditional commitment from DOE in October of last year.

The Department was provided $7.5 billion for credit subsidy costs by Congress to cover up to $25 billion in direct loans to companies making cars and components in US factories that increase fuel economy at least 25 percent above 2005 fuel economy levels.

The agreement was negotiated and signed through the Department’s Loan Programs Office, which supports the development of innovative, advanced vehicle technologies to create thousands of clean energy jobs while helping reduce the nation’s dependence on foreign oil.

The nation needs to muster the same economic might that brought about the explosion in personal computing, the Internet and cellular phones, and apply it to electric vehicle technology to help wean the U.S. from its dependence on foreign oil, Gen. Wesley Clark said this afternoon at "The Business of Plugging In" conference.

Freeing the U.S. of its petroleum-dependence is crucial to national security interests, said Clark, former supreme allied commander for NATO. He noted that the past few wars -- from the first Persian Gulf War to the 2003 invasion of Iraq -- had securing U.S. access to oil among their motivations. Climate change could also put extra burdens on national security, as well, if it brings about storm-related catastrophes that require military assistance.

"It's absolutely dead center of the bull's eye of national security," said Clark, who was the keynote speaker at the three-day event at MotorCity Casino-Hotel. "It's a tragedy. It doesn't have to be that way, but it is."

Much of the oil imported -- about 12 million barrels a day -- goes to fueling our nation's 240 million vehicles with the U.S. spending $300 billion to $500 billion each year to pay for it, he added.

All that could be money better spend invested here to create jobs and stimulate the economy, he added.

"We need the next big thing for America. It could be in electric vehicle technology," Clark said.

At a morning session on readying cities for electric vehicles, speakers said moving electric vehicles into the mainstream will be crucial for reducing carbon emissions, but their adoption will largely depend on making the transition easy for consumers who want to plug in to their homes or workplaces.

"You can't have a meaningful effect with just a couple of cars," said Britta Gross, director of global energy systems at General Motors Co., who moderated the session.

Simplicity is key to making this new technology understandable to consumers who may be reluctant to plunk down tens of thousands of dollars on a vehicle when they don't know where to charge, how long it will take and whether they have the necessary equipment at home, said Mike Ligett, director of emerging technologies at Progress Energy Corporation, a utility in Raleigh, N.C.

He cautioned industry and government against being overly ambitious in the early years because it could end up confusing customers and stalling sales.

"We do not need a smart grid to make this work," Ligett said.

Rather, a customer needs to know a 110-volt outlet will be available when the electric vehicle arrives home from the dealer.

At the same time, not all homes have external 110-volt outlets, and installations will have to be made. Cutting down the time it takes to get residences and workplaces ready is also needed, said Enid Joffe, co-owner of Clean Fuel Connection, an Arcadia, Calif.-based installer of charging stations.

With existing systems, it could take anywhere from 30 to 45 days to install a charging station, she said.

"No one wants to wait 30 to 45 days to install their infrastructure" after they buy a new electric car, she said. "Part of what we need to do as an industry is we really need to reinvent this process."

Patrick Davis, program manger for vehicle technologies at U.S. Department of Energy, said he sees plug-in electric hybrids -- which run on electricity for a limited distance before switching to the gas engine -- as a transitional technology to gradually phase in pure electric vehicles, which use no gas.

Eventually, as the infrastructure is built out and charging stations become readily available, customers warm to the pure electric vehicles, which will go finite ranges on a single charge but have no carbon tail pipe emissions.

"Right now, we have range anxiety," he said.

In an earlier morning session on the electrification of vehicle, Peter Darbee, CEO of Pacific Gas & Electric Corp. in California, said demand for plug-in electric vehicles is likely to surpass industry estimates, and utilities should brace for a sharp increase in electricity use once these vehicles hit the showrooms.

He said he believes plug-in electric vehicles will be incredibly popular in Northern California where hybrid vehicles, like the Toyota Prius, have had strong market penetration.

An uptick in new electric vehicles could tax the grid in new ways, especially since a plug-in electric vehicle -- drawing electricity from a 220-volt outlet -- is like adding the equivalent of another home to the system. Add on top of that a hot day when drivers come home, turn on the lights and air conditioning and then plug in the vehicle, and "you would create a peak load on top of the peak load," Darbee said.

"What happens if three to five vehicles show up in one neighborhood," he said. "You're going to overwhelm the circuits."

To prepare, utilities must work with the automakers in building out the infrastructure, as well as consumers to encourage electric vehicle owners to plug in at off-peak demands.

Similarly, dynamic pricing will also be critical to evening out electricity use by giving customers a financial incentive to plug in at night when demand is low and prices are cheaper, he said.

Peak oil supply will be hit this year after the economic crisis and low prices in the first quarter of 2009 slashed much needed investment, a senior executive at Australian investment bank Macquarie said.

"This is our view -- capacity has pretty much peaked in the sense that declines equal new resources," Iain Reid, head of European oil and gas research at Macquarie, told Reuters.

The peak oil theory that oil supply is at or near its peak was long considered marginal.

It gained currency when prices zoomed towards their record of nearly $150 hit in July last year, with leading exponents suggesting various dates for the supply peak to be reached.

Some oil majors have acknowledged the prospect of dwindling production, but others have argued better extraction techniques and other technological advances will offset any decline.

Reid's latest research report -- The Big Oil Picture: We're not running out, but that doesn't mean we'll have enough -- sees global oil production capacity topping out at 89.6 million barrels per day (bpd) this year, a far more pessimistic view than most other banks or traditional forecasters.

Underinvestment in mature fields, rising resource nationalism, and the cost and difficulty of retrieving oil from discoveries in ultra-deep water could see global production capacity fall to 87.3 million bpd by 2015, according to Reid.

Reid, who spent 16 years with oil firms Shell and Amerada Hess, saw the current spare capacity cushion of around 5.2 million barrels wiped out by 2012. "With the reduction in spending on mature fields, that's the major driver. Then really it's about, 'where do the new sources come from?'," Reid said, adding the economic crisis had further restricted investment.

"If you look around the world it's either locked up in countries which are difficult to access or it's locked up in countries where they are tightening access or it's in these huge mega-structures which are very difficult to develop technically and cost-wise."

The International Energy Agency, adviser to 28 industrialised nations, has predicted global supply will continue to rise through 2015, but that demand might grow faster than that.

Macquarie saw the potential for a huge supply deficit to emerge, with global oil demand predicted to rise to 90.9 million bpd by 2015 from 84.2 million bpd today because of rising consumption from China and other emerging markets.

"Adding sufficient productive capacity on time is nearly impossible," Reid said in his report.

PRICE TO RISE, BUT NOT SO MUCH

Episodes of higher oil prices would be an obvious consequence, without either a greater political push for efficiency savings or new technological advances, he said.

But his price forecasts were still relatively conservative.

He expected the benchmark U.S. crude contract will average $84 a barrel in 2012, compared with around $71 now. The bank's "long run" forecast is for an average price of $75.

The level of nearly $150 hit last year was unlikely to be repeated, Reid said, because of its immediate damaging effect on the world economy and on fuel demand.

"One hundred dollars a barrel is perhaps liveable with in certain scenarios, but I would say gasoline will reach the $4 level again and that will naturally force more efficiency in the United States," Reid said, adding it was difficult to forecast when such levels would be hit.

Eventually, the trend could be towards peak demand, rather than peak supply as higher prices drive the quest for greater efficiency and alternative energy sources.

"(Oil near $150) would very soon create another set of global economic drivers which would spell much lower demand in the future," said Reid.

"In the very long term we can see demand for oil falling quite substantially."

Driven by factors such as volatile oil prices, energy independence goals of many countries, and global warming concerns, the North American passenger electric vehicle (EV) market has taken a quantum leap forward. The price of oil expects to be relatively high over a longer term, boosting the value proposition of hybrid and electric vehicles, and driving their uptake. These new dynamics have revived consumer and vehicle manufacturer interest in electric vehicles, revving up growth in the EV market and ensuring its emergence as a mass market in the foreseeable future. The unstable geopolitical situation also encourages the active pursuit of energy independence.

New analysis from Frost & Sullivan, Strategic Analysis of North American Passenger Electric Vehicle Market, expects the total EV market to show a favorable growth due to a host of new technological advancements.

"Compliance with federal regulations and corporate average fuel economy (CAFE) standards remains one of the most challenging issues the automotive market faces," says Frost & Sullivan Research Analyst Niranjan Manohar. "Governments worldwide are progressively tightening emission and fuel efficiency standards for motor vehicles. U.S. federal regulations too require vehicle makers to meet CAFE standards."

With governments at the federal and state levels providing subsidies and incentives to manufacturers and consumers for the manufacture and purchase of alternate fuel and pure electric vehicles in pursuit of their clean environment goals, automakers are considering design changes and a shift toward alternate fuel technologies. This is enabled by strategic business models leveraging cost effective sourcing and manufacturing technologies.

"As the automotive industry advances towards alternate fuel vehicle solutions, the need for fuel-efficient and cost-effective technologies is on the upswing," says Niranjan. "Automakers are trying to differentiate their vehicles based on the technologies offered, and suppliers see this as an opportunity to penetrate this volume-driven vehicle market."

The market has to be self sustaining and incentives have to be offset by cost reductions. The cost price reduction is expected to come from batteries.
Proven technological developments in Lithium Ion (Li-ion) batteries are giving shape to the goal of an affordable and capable electric vehicle. The performance attributes of Li-ion technology make it the ideal energy solution available currently. However, the technology is in the fledgling stage and costs are high. At current prices, the battery accounts for about a third of a plug-in hybrid electric vehicle (PHEV) cost.

Although the battery prices expect to decline as volumes increase and technology matures, the current high price is the biggest bottleneck for the electric propulsion systems market. Charging infrastructure remains vital for the adoption of EVs. Typically, the full-charge of City Electric Vehicles is approximately 6 hours, to offer 100 miles.

"Access to charging stations, range-anxiety, and long charging time are seen as major restraints to the development of a viable electric vehicle market," observes Niranjan. "Strategic alliances, including joint ventures between utility companies, automakers, and cities to develop a charging infrastructure that supports the electric vehicle market is crucial."

Another matter of concern is that Li-ion batteries are inherently prone to exploding in the event of a thermal run out. A major safety incident could damage a manufacturers brand and dent consumer acceptance. These issues have raised concerns over consumer acceptance of EVs. Hence, participants in this space must scale up productivity and enhance safety, reliability, and robustness in all battery systems.

The TIMES ONLINE have published a story by guest columnist and former editor of The Economist Bill Emmott on why, despite the barest of financial green shoots following the largest financial correction in a generation, OPEC are still restricting oil supply in an effort to raise the price of oil. Even with demand still down significantly the price of oil has doubled in the last 6 months and is seven times higher than just a decade ago.

We have previously reported that OPEC has made their intensions clear that they will not raise production until oil returns to $100 a barrel. The oil producers’ cartel has deliberately cut production by nearly five million barrels a day, which is more than the drop in global demand, to keep prices high.

Mr Emmott explains that if the cartel continues to over play it's hand the oil age will end, not because they run out of oil but because oil consumers run out of patience with greedy oil producers, and develop substitutes instead. We tend to think that this trend is already well under way, gathered significant momentum in September 2001, and is basically already unstoppable.

Citibank commodities trader Andrew J. Hall has suddenly appeared as a massive blip on the radar as news spreads of the banker bonus to top all bonuses. Mr. Hall, the 58-year-old head of Citigroup owned Phibro, a small commodities trading firm in Westport, Conn is due a $100 Million payday as a result of his efforts in the oil market.

The US Treasury Department’s czar of executive pay has the unenviable task of having to deal with these ridiculously greedy bankers with their snouts in the trough. In the same year Citi put it's hand out for $45 Billion in public aid to save itself from it's own recklessness, one of the leading players in the inflationary run up that causes the meltdown expects to talk his way into claiming his supposedly contracted payout for doing such a good job of putting the squeeze on the global economy.

Reading this guys profile is like the story of a real life Gordon Gekko on steroids. According to securities filings Mr. Hall's compensation has totaled well over a quarter-billion dollars over the past five years. He owns a 1,000 year old Castle in Germany just to house his $100 Million art collection.



Citi already has a solid track record of being a central player in just about every record breaking financial meltdown in the last decade, from Worldcomm, Enron to sub-primes and, of course, the oil market. Citi in fact have set all time records for the Billions in fines paid to the SEC for getting caught over and over again blatantly breaking securities laws, yet somehow dispite such corrupt behaviour the show goes on.

We will now have to tolerate a stream of boot licking media commentators who argue the fact that Citi are contractually obligated to pay, conveniently forgetting the fact Citi are technically bankrupt and the US Government now owns 34% of them. Citi stock is such a bad bet they couldn't sell their stock to anyone but the US government on the logic that a large bank failure would spread 'panic'. How about the government bailout spreading 'disgust'? Without a lazy $45 Billion injection there would be zero discussion about the entire pay subject. These guys are living on welfare!

They can talk about a profitable division needing reward all they want, it's owned by a company that is broke, he has to cop a loss like the rest of the world. The standard Wall Street line that this Brit will take his bat and ball somewhere else is getting extremely tired too. He's not going to earn that kind of money elsewhere because, as a direct result of him being so good at his job, the bottom has quite literally fallen out of the oil market. This bloke started his career at BP and is an oil specialist. He is effectively unemployable till the next oil squeeze play generates a peak which, with the global push for renewables, may never happen.

For sure he's not the only commodity trader who reached billionaire status manipulating oil supply but I guess we can all thank Hall for helping to speed the transition to EVs. Unfortunately we may not have heard the last of him even once oil dependency has been broken as this commodity leach has twice in the past decade assembled big stockpiles of rhodium, a rare metal used in catalytic converters, and extorted the market to make 10x his money each time. Lets hope he doesn't get the opportunity to exploit lithium supplies to keep him in the manner to which he has become accustomed.

If Andrew J. Hall takes this to court insisting on his $100 Million payment perhaps his just reward should be payment in Citi stock. It's only sunk from an all time high of $57 less than 3 years ago to $4 today, up from it's all time low of $0.97 in March, which was a drop of 95.56% from the same period last year. There's nothing as just as aligning pay with performance, like in the real world!


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