We know today a few things about the future of transportation. In the wake of political debate over corn ethanol, it is widely held that we will be driving electric cars; either powered by batteries, or hydrogen fuel cells. The reason for that is twofold: for sustainability reasons, and for technological reasons. Currently, the world uses non-renewable resources for energy, particularly transportation energy.
All of the energy that is available for our consumption comes from either solar radiation, gravity, or heat from the pressure of the earth. Fossil fuels are excess condensed solar energy from the past, it is widely believed that bacteria synthesized solar radiation and carbon dioxide into oxygen, became trapped under sediment at the bottom of oil fields, and over time, with heat and pressure from the earth, those bacteria chemically converted into oil, natural gas, coal etc. What this means is we are relying on energy that has been banked for us, and we are running through it fast. It is as if we have discovered some buried treasure and spending it as if it will never run out.
But we are running out too. Despite the recent drop in oil prices, over the long run these prices have been rising and will continue to rise as reserves run out. Many Republicans maintain the “Drill Baby, Drill” strategy, however only ~3% of America's oil needs would be satisfied by opening up even if the ANWR to drilling, and this would be short lived, and would require a very expensive pipeline to be built over several mountain ranges.
We have an accurate date for when peak oil will occur (the point at which oil production declines instead of increases) but many experts maintain it will happen within the next 10 years (2025), the graph on the peakoil.org website pins the date at roughly 2015. To put it bluntly, when oil production dropped only 5% in the 1970's, prices increased almost 400%. Demand for oil is increasing rapidly, and growing economies are leading the bulk of that new demand. China's growing economy accounts for 38% of the increasing oil demand.
Increasing fuel efficiency will also not solve this problem, it has been widely known by economists that increasing energy efficiency actually increases demand (Jevons 1865), Therefore, technologies such as hybrid cars make transportation more affordable for more people, increasing total oil consumption.
Using electric cars powered by batteries or hydrogen eliminates the peak oil problem, and the technology for the production of those vehicles exists today. Gone are claims that these technologies are 10 years off. Honda is a currently leasing hydrogen car in the California market; numerous car manufactures are doing the same for battery-powered vehicles. So why aren't these cars being widely adopted, or rather, why aren't they only being sold to niche markets?
One problem is the price of batteries, however because the car costs far less to run (cost per mile, and maintenance) than an internal combustion engine, its use should increase. People will drive more, and that will help the economy. People will be less hesitant to stay home. The electric car market stretches well beyond the geography of California's zero emissions mandate. Electric vehicles also insulate individuals against oil price shocks. Companies that have fleets of vehicles, where one of the primary operating costs is gasoline, can make great use of that insulation. Furthermore, there are many individuals that are more than willing to pay more for sustainable products, and that includes sustainable delivery. One of the best examples of this is the postal service, who's runs average 25 miles, and where the vehicles stop frequently to load and unload the mail. Electric postal trucks are quickly becoming a popular option. Unless they become an option for other sectors of the economy, the economy undergo a terrible shock when peak oil occurs, and the most profitable businesses will be the ones that invested in this technology early on.
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