Wednesday, August 6, 2008

Do you believe in the market or in CAFE?

With fanfare and political posturing the Congress jacked up the mandatory fuel economy from 25 mpg to 35 mpg just this year. Despite wailing and gnashing of teeth from the auto industry, it is perfectly possible to build 35 mpg cars today. In fact, you can buy an Aveo, a Yaris, or a Prius today and obtain 35 mpg or better. In a 35 mpg only world, you are limited to tiny econoboxes or pricey hybrids.
Automobile technology has been pretty well worked out since Henry Ford's time, and there is only so much you can do with it. After 100 years, the technological avenues are worked out and well known. The only way to get 35 mpg is build a very small light car (Aveo & Yaris), or install dual propulsion machinery, gasoline engine and battery electric, (Prius) which doubles the cost. Or do like the Europeans, soften the emissions requirements to permit diesel cars. The diesel Rabbit did 40 mpg back in the 1970's.
Of course, if you want a bigger vehicle to bring the kids along, bring sheet goods home from the lumberyard, or furniture back from the auction, you are out of luck.
Market demand causes the car makers to build everything from tiny econoboxes to Hummers, giving citizens the right to buy what they want. 35 mpg CAFE standards pretty much outlaw anything bigger than econoboxes. Me, I'd rather live in a country that allowed citizens to spend their money the way they like.

Tuesday, August 5, 2008

Where does all the oil go?

I totaled up my personal oil consumption, furnace oil and gasoline. Last winter the furnace used 616 gallons, and the car took 370. Call it a thousand gallons for the year in round numbers. Call it three gallons a day, again round numbers. For a ball park estimate make the average family size three, divide the population of the country by three and get 100 million families, using three gallons a day,or 300 million gallons a day. Divide by 55 to make it barrels and get 5.4 million barrels a day for consumer use. Actual US crude oil consumption is far higher than that, 20 million barrels a day.
That makes 14.6 million barrels a day going into industry. I wonder where it all goes and how much is necessary. Can we find ways to economize in industry?
For instance, A TV ad this morning claims 60 billion pounds of plastic bottles are made each year. Convert that to barrels per day assuming 7.5 pounds per gallon. I get 400,000 barrels per day. That's 2% of daily oil consumption going into plastic bottles. Suppose we went back to real glass bottles, the kind you return, wash and refill?
Where does the 14.6 million barrels per day industrial use really go? Can it be reduced?

Why CAN'T we drill our way out of the oil shortage?

The democrats and Obama keep saying it. "We can't drill our way out of it". Why not? Estimates of the size of oil reserves in US territory start around 20 billion barrels and go up to 83 billion. There is every reason to believe that more will be found as we drill. The country only uses 20 million barrels a day. That's enough oil to fill ALL our usage for 3 to 11 years, going from today's figures. When drilling finds more reserves, which it always does, then we get even more time.
Granted, 3 to 11 years isn't for ever, but it's a long time, long enough to do a lot of things.
Up here we can't run the furnace on alternative energy and we can't drive to work on it either.

Sunday, August 3, 2008

The rebels had it right (on some things)

Been reading Shelby Foote's Civil War book[s]. Right after secession, the Confederate government wrote a Constitution for the Confederacy. As one might expect, it borrowed heavily from the US Constitution but there were some worthwhile improvements.
Each bill brought before the Confederate Congress must address only one subject, announced in the title of the bill. That should eliminate those scummy "riders" attached to important bills. And, the Confederate President had the line item veto, he could cross out porky items in appropriation bills without vetoing the entire thing.
Things never change much. These issues from 1860 still resonate in 2008.

Saturday, August 2, 2008

Whither GM, and whose fault is it anyway?

Megan McArdle offers this gloomy forecast for GM's future. She thinks they will be bankrupt inside of ten years. She may well be right. Skimming thru the raft of comments, and finger pointing following her post, I find a couple a things missing.
Most important cause of GM's trouble is simple; lousy cars. They have small sedans, but who wants 'em?. Styling varies between drab and ugly. Gas mileage no better than my 99 Caddy DeVille. Mostly painted grey. Reputation for breaking down often, followed by GM's reputation for gouging on repair part prices. Same car sold under multiple names which dilutes the effectiveness of advertising and blurs the brand names together. Cars sold under new made up silly sounding names that nobody has ever heard of. Awful dealer service. Lousy resale value. Everyone would rather buy a Toyota Corolla or a Honda Accord than anything in GM's lineup.
This is management failure, the union doesn't control this. GM needs a real car guy like old Lee Iacocca. He is the guy that invented the Mustang, the K cars, and the minivan. Revolutionary cars, that no committee would ever have approved, but Iacocca pushed them thru and they all sold like gangbusters. The few car guys at GM are doing Corvettes and Camaro's, nice enough cars, but niche markets. There aren't enough guys with Corvette/Camaro money to keep a behemoth like GM running. So, number one GM problem, crummy cars. Fix that and a lot of things get better.
Number two problem is expensive labor. UAW workers get twice as much pay and fringe benefits and Toyota and Honda workers. That's Toyota and Honda workers in the US. This is a legacy of wimpy management in the past. Back then, GM management caved to the UAW by promising rich retirements, rather than a pay hike. The retirement benefits wouldn't come due on their watch, whereas a pay hike takes money now. Back then, gutsy management would have taken a strike to hold wages down, in fact, wimpy management kicked the can down the road. That's history now. We are down the road now, and that can is right there, big as ever. GM cannot pay the rich retirement and health care deals promised in the past, one way or another the company will welsh on it's commitments. Bankruptcy is one way to skip out on your debts.

A400M, new Euro transport, twice as big as C130

Cover of the new Aviation Week shows the A400M rolled out on the ramp. It looks like a C130 only with bristly looking 8 bladed propellers. It's a join Euro project finally coming into production. Hasn't made it's first flight yet, but that's scheduled shortly. About time too.
The A400 project started 26 years ago and still has a ways to go. Lockheed was originally a member of the consortium, got tired of all the delay and dropped out to do it's own C-130J project.
Interesting thing about the A400M is the size. It's roughly twice the aircraft that a C130 is, twice the engine power, twice the payload, longer and wider. Now the 50 year old C-130 is one damn big airplane, even today. You gotta wonder about the market for one twice as big. They have commitments for 200 aircraft from the various European airforces. Whereas, Lockheed has already delivered some 180 C-130Js by now. No interest from USAF, who has plenty of C17 jets, and plenty of C130's. That won't help the A400m sales effort, lot of countries think USAF service is a good house keeping seal of approval, if the Americans fly it, it must be OK.
The A400m reminds me of the big old C133, a troubled aircraft. It looked like a C-130 but was twice as big, with 10,000 hp turboprop engines swinging humongous 18 foot three bladed propellers. The 133 was such a maintenance nightmare that USAF retired them all thirty years ago. I'm sure Lockheed is secretly hoping the same fate overtakes the A400M.

Friday, August 1, 2008

Where is Obama coming from?

On TV Obama stated that it will take 10 years minimum and maybe 20 years to bring in a new oil well. This is completely false. Drill rigs make the hole deeper by tens to hundreds of feet a day. That gets down a thousand feet in ten to 100 days. Ten thousand feet (really deep) takes a hundred to a thousand days. Allow 6 months to drill the average well and another six months to put in the pipeline or tanks and loading facilities to get the oil out to the refinery. Say a year. You probably don't commit to constructing the pipeline/loading equipment until the well actually comes in. Spending all that money and then have the well turn into a dry hole doesn't make a lot of sense. But still, a well will come into production in a year or two.
Obama ought to know this. If he doesn't, he is ignorant and been listening to the wrong folk. That's a down check as far as this voter is concerned. A president ought to know a few things. Or, he knows the truth but is saying ten to twenty years because he thinks it will get him elected. That's a down check for two reasons. First 'cause saying things you know are not true is a character flaw. Second, he must figure there are more rabid greenie voters than there are plain folk who just want gasoline to drive to work and fuel oil to heat the house. If he really thinks the greenies have more votes than ordinary people, then he is out of touch with the voters. Either way it's down check.

Plus, just announcing the start of drilling will bring the price of crude down even if the well won't come in for a while.