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"Future Energy" Touts PHEVs: Book by Ex-Wall St. Journal Reporter Bill Paul

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  • Felix Kramer
    Future Energy: How the New Oil Industry Will Change People, Politics, and Portfolios, is a just-published book that places plug-in hybrids right in the
    Message 1 of 1 , Feb 2, 2007
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      "Future Energy: How the New Oil Industry Will Change People,
      Politics, and Portfolios," is a just-published book that places
      plug-in hybrids right in the middle of its projections for how the
      energy and transportation industries will change. It provides a fresh
      and unusual look at subjects that may have become overly familiar.

      Bill Paul, its author is described on the jacket as "a noted
      journalist with over 30 years' experience writing and reporting on
      energy and the environment and the economic and political impacts of
      both. he was a Wall Street Journal staff reporter from 1970 to 1990,
      based in Europe and the United States. Paul was also CNBC's special
      energy correspondent."

      Here are excerpts from the book announcement:

      A new book due out at the end of January describes how an energy
      technology revolution the equal of the information revolution of the
      1990s is about to transform the global energy industry and can free
      the United States from its deadly dependence on foreign oil within 5
      to 10 years.

      Future Energy: How the New Oil Industry Will Change People, Politics,
      and Portfolios (John Wiley & Sons) describes how a combination of
      high prices, national insecurity and environmental anxiety is causing
      the world to move away from a politically and economically vulnerable
      single-source (crude oil) transportation system to a multi-source
      system which, in addition to providing energy security for every
      nation, should benefit the global economy and environment - a win-win-win.

      Future Energy features a detailed list of "100 companies to watch,"
      including many that make this not your father's oil industry.

      The book stresses the need for Washington (hopefully in partnership
      with Beijing) to accelerate the first major technological
      restructuring of the oil industry in over 100 years through a
      Manhattan Project-style program. The book argues that such a program
      should more than pay for itself by saving the U.S. billions of
      dollars currently spent on insuring that America's imported oil
      reaches its destination. (Translation: there's no need to raise
      gasoline taxes.)

      Among the book's predictions: garbage will be turned into liquid
      transportation fuel (think Back to the Future); wireless providers
      will provide the communications backbone of a new method of wealth
      creation that utilizes energy efficiency to put money in the average
      Joe's pocket. Big Oil will still rule the energy world (but in a
      brand new way). #

      We were impressed at how up-to-date the book is -- the author picked
      trends accurately when he submitted the manuscript some months ago. I
      may have helped that he got insights from experts we often quote in
      CalCars-News: Brad Berman (HybridCars.com), Michael Millikin
      (GreenCarCongress.com) and Philip Reed (Edmunds.com). We also can't
      help being partial to the book because he highlights CalCars. The
      author went a bit overboard in his section where he picked "The
      Complete List of 100 Companies to Watch." He told us that though he
      knew we were non-profit, we still belonged in the category of
      Consumer Information Providers and Hands-on Companies. This will
      surely be the only time CalCars appears in a list with Alternative
      Energy Store, Google, Home Depot and Lowe's!

      Here's less than 25% of Chapter 5, "The Power of Efficiency".

      It is important to draw a very clear distinction between the
      advantages of plug-in and non-plug-in hybrid vehicles.

      Both enable a vehicle to go farther between liquid fill-ups. Both
      help reduce the emissions a vehicle generates. But while a
      non-plug-in vehicle is still at the mercy of whatever liquid fuel is
      being sold at the corner gas station, plug-in capability frees that
      vehicle from its involuntary servitude.

      Basically, plug-in capability makes it possible for America's
      transportation system to tap into virtually all of America's domestic
      energy resources by utilizing the full range of energy sources that
      are used to make electricity.

      Remember what I said in Chapter 1 about how the revolutions in mobile
      and stationary energy consumption will increasingly be seen as two
      sides of the same coin? Plug-in hybrids are the main reason why.
      Plug-in capability is the connector, the bridge between our two
      energy universes, the one we inhabit when we are moving and the one
      we inhabit when we are standing still.

      With plug-in capability, it becomes possible to keep a vehicle fueled by:
      * Coal, both indirectly in the form of electricity and directly in
      the form of synthetic gasoline.
      * Natural gas, again both indirectly and directly.
      * Solar power.
      * Wind power.
      * Geothermal power.
      * Nuclear power.
      * Garbage power.
      * Synthetic gasoline made from tar sands or oil shale.
      * Gasoline made the conventional way from crude oil.

      Just as diversity through electricity was the key to America's
      industrial sector being able to increase productivity without
      increasing oil consumption, so too is it one of two keys (the other
      being diversity through biofuel) to fueling the growing number of
      vehicles expected on global highways without adding to the strain on
      global oil supplies and without everyone choking on their own exhaust.

      If that doesn't sound like advantage enough, consider this: By
      exchanging a single-source (oil) transportation system for a
      multisource system that makes greater use of the nation's
      domestically obtainable fuel sources, America automatically enhances
      its national security, which in turn reduces the financial burden of
      having to defend America's sources of imported oil, which in turn
      frees up billions of tax dollars for more worthy endeavors.

      Now that's a sweet spot.

      Certainly, non-plug-in hybrids have their own sweet spot that makes
      them a worthy addition to a nation's fleet of cars and trucks. Still,
      while one of non-plug-in hybrids' celebrated selling points is their
      environmental friendliness, a case can be made that plug-in hybrids
      are even friendlier in the sense that the fuel one puts into his car
      or truck can be the "green" power one makes himself at home. More
      specifically, it can be the electricity one generates by putting
      solar panels or solar roofing shingles on top of his house, or by
      installing a geothermal heat pump or wind turbine in the backyard.
      (Before long, another option may be small wind turbines that go on
      top of a house like a weathervane.) Indeed, a case can be made that
      plug-in hybrids will accelerate peoples' use of environmentally
      friendly green power sources, which at present are catching on thanks
      to the revolution in stationary energy.
      Depending on who you asked, in 2006 plug-in hybrid technology either
      was ready to go right now, close to a breakthrough that would make it
      ready, or still in need of considerable development.

      For supporters like Felix Kramer, the technology was ready to go.
      Existing batteries were "good enough," he told me, and "can only get
      better." President Bush, in his Earth Day speech and in another
      speech to the National Association of Manufacturers, basically said
      we are close to a breakthrough. (The president talked about plug-in
      vehicles providing 40 miles of all-electric power without looking
      like a golf cart.) But there was more than one automotive engineer
      who publicly said that plug-in technology was still years away.

      There was, however, a common thread here, namely, that plug-in
      hybrids are coming.
      Think about it. In 2006 oil markets resembled a roller-coaster.
      Prices surged to nearly $80 a barrel, then plunged to below $60 a
      barrel, during a time when there was no oil shortage, just fear of a
      possible shortage caused by a natural or manmade disaster. There is
      every reason to believe that this unprecedented volatility in prices
      will become a permanent feature of global energy markets. As more of
      America's critical energy infrastructure-both oil and natural
      gas-gets concentrated in the hurricane-exposed Gulf of Mexico, and
      with the memory of Hurricane Katrina unlikely to fade anytime soon,
      fear of a weather-related energy catastrophe should worsen. With
      Osama bin Laden and the legion of terrorists he has spawned
      well-known for their patience in planning an attack, fear of another
      terrorist attack-this time maybe on U.S. soil-will not abate.

      Enter plug-in hybrid vehicles, which, as the president indicated,
      have the potential to make it possible for people to not use gasoline

      How many vehicles are we talking about? How many people are likely to
      make the switch and for what reasons? What are the most likely
      cities, states, and regions of the United States to feel the impact
      of plug-in technology? How might this impact oil companies' imbedded
      infrastructure? What could be the impact of that prediction made by
      the author of the Reason Foundation study on traffic congestion that
      over the next 25 years the number of cities where congestion causes
      peak-hour traffic trips to be delayed by more than 50 percent will
      grow from 4 to 34?

      While it isn't known when plug-in hybrids will arrive, it could be
      before 2012, even without a Manhattan Project-style program. Will the
      United States be prepared? Will there be a sitting government panel
      or task force made up of the best minds in energy, transportation,
      national security, agriculture, and so on? Will that panel have had
      time to analyze the mega policy issues that plug-in capability (and
      also biofuel) raise?

      Or will there instead be a hodgepodge of competing interests trying
      to spin the public and the politicians? In the absence of a clear and
      coherent government policy for incorporating plug-ins (and biofuel)
      into America's transportation system, there could be more frequent
      oil price gyrations as traders face the new uncertainty of trying to
      predict how much gasoline Americans are going to consume in their
      cars and trucks versus how much electricity and how much cellulose
      and grains. This planning must extend to global commodities markets,
      for in the new oil industry there will be unprecedented linkage
      between agricultural and energy commodities. Perhaps it is time for
      the White House to merge the departments of energy, agriculture, and
      transportation. (Don't forget about coal as a jet fuel.) It
      definitely is time for financial markets to have more reliable energy
      and agricultural statistics from China, India, Russia, and so on.

      As energy analyst Glenn Wattley put it, this stuff is too complicated
      for Adam Smith.

      To be sure, plug-ins may arrive in China without all this planning.
      When I asked Goldman Sachs vice chairman and China business expert
      Bob Hormats if he thought China was keen on plug-in hybrids, he said
      he had not seen any sign of it yet, and then added that if the
      Chinese government wants to go that way, it will just go ahead and
      install external wall outlets in convenient places.

      China might want to first think things through, lest it wind up
      roiling global energy markets.
      An extremely upbeat forecast specifically of hybrid technology's
      overall potential was offered in a June 2006 research report from
      AllianceBernstein L.P., the global investment banking firm. The firm
      predicted that the world is "on the cusp of a major transition to
      hybrid-power vehicles," basically because of hybrids' fundamental
      superiority over gasoline-powered vehicles. The report described
      hybrids as a game-changing technology that will significantly reduce
      oil demand by making electricity the primary energy source for
      transportation. The report went so far as to say the advent of
      plug-ins could reshape the foreign policies of the United States,
      China, Japan, and other major oil-consuming countries.

      Importantly for investors, the report concluded that technology and
      utility companies will gain the most from hybrid technology,
      oil-related companies will lose the most, and leadership in the auto
      industry will depend on leadership in hybrid technology. While the
      report concluded that all automakers will produce hybrids, it echoed
      others' feelings toward Toyota and Honda, noting that the other car
      companies "will have to act fast since Toyota and Honda will soon be
      on their third-generation hybrid systems."

      The report said that plug-ins will become popular on the heels of
      development of batteries that offer significant electric driving
      range. It also broke down the investment potential along sector
      lines, not surprisingly finding that the sector with the best
      combined near-, medium-, and long-term prospects is hybrid battery
      manufacturers. Importantly, the report concluded that electric
      utilities also have excellent long-term prospects, as do electronic
      automotive suppliers and power-semiconductor suppliers.

      -- -- -- -- -- -- -- -- -- -- -- --
      Felix Kramer fkramer@...
      Founder California Cars Initiative
      -- -- -- -- -- -- -- -- -- -- -- --
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