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	<title>Comments on: Oil on troubled waters</title>
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	<link>http://crookedtimber.org/2008/04/29/oil-on-troubled-waters/</link>
	<description>Out of the crooked timber of humanity, no straight thing was ever made</description>
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		<title>By: Richard Cownie</title>
		<link>http://crookedtimber.org/2008/04/29/oil-on-troubled-waters/comment-page-2/#comment-238415</link>
		<dc:creator>Richard Cownie</dc:creator>
		<pubDate>Fri, 02 May 2008 20:11:03 +0000</pubDate>
		<guid isPermaLink="false">http://crookedtimber.org/?p=6877#comment-238415</guid>
		<description>&quot;I think I’ve seen electric forklifts (though diesel usually), but I haven’t seen a single electric ‘plug-in’ passenger car in my life&quot;

... and the 800 EV1&#039;s out of 200M total passenger
cars didn&#039;t make a damn bit of difference to that.

&quot;And yes, AC engine is not complicated, it doesn’t need much maintenance or replacement parts&quot;

Neither do modern conventional cars with EFI and
computerized engine-management - especially
Toyotas.  Change the oil every 5K miles, the brake
pads every 40K, and the timing belt every 60K.

If you&#039;re talking GM cars, maybe it&#039;s still a lot
worse than that ... For myself I drive a 2000 
Mazda Protege with about 70K miles and the only
non-routine maintenance it has needed was new
brake pads (which a hypothetical all-electric
car would have as well).

Don&#039;t get me wrong: I&#039;d like to see all-electric
plugin cars in volume.  But it isn&#039;t going to
happen until someone gets another 2.5x factor
in energy storage capacity.  A poky 2-seater with
100-mile range isn&#039;t going to hack it.

Anyway, getting back to the issue of elasticity
of demand for oil, today&#039;s NY Times has a relevant
article, mostly about the rise in sales of 
subcompact cars:

http://www.nytimes.com/2008/05/02/business/02auto.html?partner=rssnyt&amp;emc=rss

&quot;But there are some indications that the trend toward smaller vehicles will reduce the nation’s fuel use. In California, motorists bought 4 percent less gasoline in January than they did the year before, a drop of more than 58 million gallons, according to the Oil Price Information Service.

“That is an incredible year-over-year drop,” said Tom Kloza, the organization’s chief oil analyst. “Some of it clearly has to do with changes in the vehicle fleet.”&quot;</description>
		<content:encoded><![CDATA[	<p>&#8220;I think I&#8217;ve seen electric forklifts (though diesel usually), but I haven&#8217;t seen a single electric &#8216;plug-in&#8217; passenger car in my life&#8221;</p>

	<p>&#8230; and the 800 <span class="caps">EV1</span>&#8217;s out of 200M total passenger<br />
cars didn&#8217;t make a damn bit of difference to that.</p>

	<p>&#8220;And yes, AC engine is not complicated, it doesn&#8217;t need much maintenance or replacement parts&#8221;</p>

	<p>Neither do modern conventional cars with <span class="caps">EFI</span> and<br />
computerized engine-management &#8211; especially<br />
Toyotas.  Change the oil every 5K miles, the brake<br />
pads every 40K, and the timing belt every 60K.</p>

	<p>If you&#8217;re talking GM cars, maybe it&#8217;s still a lot<br />
worse than that &#8230; For myself I drive a 2000<br />
Mazda Protege with about 70K miles and the only<br />
non-routine maintenance it has needed was new<br />
brake pads (which a hypothetical all-electric<br />
car would have as well).</p>

	<p>Don&#8217;t get me wrong: I&#8217;d like to see all-electric<br />
plugin cars in volume.  But it isn&#8217;t going to<br />
happen until someone gets another 2.5x factor<br />
in energy storage capacity.  A poky 2-seater with<br />
100-mile range isn&#8217;t going to hack it.</p>

	<p>Anyway, getting back to the issue of elasticity<br />
of demand for oil, today&#8217;s <span class="caps">NY </span>Times has a relevant<br />
article, mostly about the rise in sales of<br />
subcompact cars:</p>

	<p><a href="http://www.nytimes.com/2008/05/02/business/02auto.html?partner=rssnyt&#038;emc=rss" rel="nofollow">http://www.nytimes.com/2008/05/02/business/02auto.html?partner=rssnyt&#038;emc=rss</a></p>

	<p>&#8220;But there are some indications that the trend toward smaller vehicles will reduce the nation&#8217;s fuel use. In California, motorists bought 4 percent less gasoline in January than they did the year before, a drop of more than 58 million gallons, according to the Oil Price Information Service.</p>

	<p>&#8220;That is an incredible year-over-year drop,&#8221; said Tom Kloza, the organization&#8217;s chief oil analyst. &#8220;Some of it clearly has to do with changes in the vehicle fleet.&#8221;&#8221; </p>
 ]]></content:encoded>
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		<title>By: abb1</title>
		<link>http://crookedtimber.org/2008/04/29/oil-on-troubled-waters/comment-page-2/#comment-238405</link>
		<dc:creator>abb1</dc:creator>
		<pubDate>Fri, 02 May 2008 18:52:37 +0000</pubDate>
		<guid isPermaLink="false">http://crookedtimber.org/?p=6877#comment-238405</guid>
		<description>I think I&#039;ve seen electric forklifts (though diesel usually), but I haven&#039;t seen a single electric &#039;plug-in&#039; passenger car in my life. And yes, AC engine is not complicated, it doesn&#039;t need much maintenance or replacement parts. That I find revolutionary, not squeezing two different engines and a dozen computers under the hood.</description>
		<content:encoded><![CDATA[	<p>I think I&#8217;ve seen electric forklifts (though diesel usually), but I haven&#8217;t seen a single electric &#8216;plug-in&#8217; passenger car in my life. And yes, AC engine is not complicated, it doesn&#8217;t need much maintenance or replacement parts. That I find revolutionary, not squeezing two different engines and a dozen computers under the hood.</p>
 ]]></content:encoded>
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		<title>By: Richard Cownie</title>
		<link>http://crookedtimber.org/2008/04/29/oil-on-troubled-waters/comment-page-2/#comment-238395</link>
		<dc:creator>Richard Cownie</dc:creator>
		<pubDate>Fri, 02 May 2008 17:32:33 +0000</pubDate>
		<guid isPermaLink="false">http://crookedtimber.org/?p=6877#comment-238395</guid>
		<description>&quot;Well, the EV1 was a revolutionary thing, I can see that&quot;

Hardly.  We&#039;ve had niche-market all-electric
vehicles based on lead-acid batteries for a
long time - milk delivery trucks, forklifts etc.
So there wasn&#039;t much new about the technology;
and there sure as hell wasn&#039;t anything &quot;revolutionary&quot; about its impact on the market.

But then I&#039;ll agree with you that GM never took
it seriously: a combination of threats and bribes
from the government made them do it.  US 
automakers have been really badly managed at
least since 1980, always lagging behind Japanese
and even the Europeans in technology, quality,
and reliability.  I just don&#039;t see a conspiracy -
pure incompetence is an adequate explanation for
anything GM did or didn&#039;t do.</description>
		<content:encoded><![CDATA[	<p>&#8220;Well, the <span class="caps">EV1</span> was a revolutionary thing, I can see that&#8221;</p>

	<p>Hardly.  We&#8217;ve had niche-market all-electric<br />
vehicles based on lead-acid batteries for a<br />
long time &#8211; milk delivery trucks, forklifts etc.<br />
So there wasn&#8217;t much new about the technology;<br />
and there sure as hell wasn&#8217;t anything &#8220;revolutionary&#8221; about its impact on the market.</p>

	<p>But then I&#8217;ll agree with you that GM never took<br />
it seriously: a combination of threats and bribes<br />
from the government made them do it.  US<br />
automakers have been really badly managed at<br />
least since 1980, always lagging behind Japanese<br />
and even the Europeans in technology, quality,<br />
and reliability.  I just don&#8217;t see a conspiracy &#8211; pure incompetence is an adequate explanation for<br />
anything GM did or didn&#8217;t do.</p>
 ]]></content:encoded>
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		<title>By: abb1</title>
		<link>http://crookedtimber.org/2008/04/29/oil-on-troubled-waters/comment-page-2/#comment-238394</link>
		<dc:creator>abb1</dc:creator>
		<pubDate>Fri, 02 May 2008 17:20:27 +0000</pubDate>
		<guid isPermaLink="false">http://crookedtimber.org/?p=6877#comment-238394</guid>
		<description>Hey, watch the film, or at least read a synopsis or something. California passed the &#039;zero emissions&#039; law in 1990 and they &lt;i&gt;had to&lt;/i&gt; start building electric cars, they didn&#039;t do it to greenwash anything.</description>
		<content:encoded><![CDATA[	<p>Hey, watch the film, or at least read a synopsis or something. California passed the &#8216;zero emissions&#8217; law in 1990 and they <i>had to</i> start building electric cars, they didn&#8217;t do it to greenwash anything.</p>
 ]]></content:encoded>
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		<title>By: Great Zamfir</title>
		<link>http://crookedtimber.org/2008/04/29/oil-on-troubled-waters/comment-page-2/#comment-238391</link>
		<dc:creator>Great Zamfir</dc:creator>
		<pubDate>Fri, 02 May 2008 16:58:28 +0000</pubDate>
		<guid isPermaLink="false">http://crookedtimber.org/?p=6877#comment-238391</guid>
		<description>Funny, I always saw vehicles like the EV1 as the closest thing to a &#039;conspiracy&#039;. Car makers, and GM in particular, are very good at making &#039;revolutionary&#039; vehicles they know very well will not become serious  alternatives in the near future. It greenwashes their image, and gives a message of &#039;see, we&#039;re trying, but technology isn&#039;t their yet&#039;. Hydrogen powered cars are mostly in the same league.

More than anything, the impressive thing about the Prius is that it is NOT an experimental, only for die-hards vehicle. Even if it is not a revolutionary miracle, it&#039;s probably the biggest fuel saving advance since turbodiesels became widespread. And in the US, with less diesels, the advance looks even bigger.</description>
		<content:encoded><![CDATA[	<p>Funny, I always saw vehicles like the <span class="caps">EV1</span> as the closest thing to a &#8216;conspiracy&#8217;. Car makers, and GM in particular, are very good at making &#8216;revolutionary&#8217; vehicles they know very well will not become serious  alternatives in the near future. It greenwashes their image, and gives a message of &#8216;see, we&#8217;re trying, but technology isn&#8217;t their yet&#8217;. Hydrogen powered cars are mostly in the same league.</p>

	<p>More than anything, the impressive thing about the Prius is that it is <span class="caps">NOT</span> an experimental, only for die-hards vehicle. Even if it is not a revolutionary miracle, it&#8217;s probably the biggest fuel saving advance since turbodiesels became widespread. And in the US, with less diesels, the advance looks even bigger.</p>
 ]]></content:encoded>
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		<title>By: abb1</title>
		<link>http://crookedtimber.org/2008/04/29/oil-on-troubled-waters/comment-page-2/#comment-238387</link>
		<dc:creator>abb1</dc:creator>
		<pubDate>Fri, 02 May 2008 16:18:21 +0000</pubDate>
		<guid isPermaLink="false">http://crookedtimber.org/?p=6877#comment-238387</guid>
		<description>Well, the EV1 was a revolutionary thing, I can see that; Prius - no, not so much. I guess we&#039;ll have to agree to disagree.</description>
		<content:encoded><![CDATA[	<p>Well, the <span class="caps">EV1</span> was a revolutionary thing, I can see that; Prius &#8211; no, not so much. I guess we&#8217;ll have to agree to disagree.</p>
 ]]></content:encoded>
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		<title>By: Richard Cownie</title>
		<link>http://crookedtimber.org/2008/04/29/oil-on-troubled-waters/comment-page-2/#comment-238368</link>
		<dc:creator>Richard Cownie</dc:creator>
		<pubDate>Fri, 02 May 2008 13:52:57 +0000</pubDate>
		<guid isPermaLink="false">http://crookedtimber.org/?p=6877#comment-238368</guid>
		<description>So you&#039;re impressed by the 2-seater subcompact EV1 
with a range of under 100 miles selling (at a big 
loss) for $35K+ ?  Give me a f*cking break.  That was
never a car: it was a toy.</description>
		<content:encoded><![CDATA[	<p>So you&#8217;re impressed by the 2-seater subcompact <span class="caps">EV1</span><br />
with a range of under 100 miles selling (at a big<br />
loss) for $35K+ ?  Give me a f*cking break.  That was<br />
never a car: it was a toy.</p>
 ]]></content:encoded>
	</item>
	<item>
		<title>By: abb1</title>
		<link>http://crookedtimber.org/2008/04/29/oil-on-troubled-waters/comment-page-2/#comment-238366</link>
		<dc:creator>abb1</dc:creator>
		<pubDate>Fri, 02 May 2008 13:34:44 +0000</pubDate>
		<guid isPermaLink="false">http://crookedtimber.org/?p=6877#comment-238366</guid>
		<description>http://www.mininova.org/tor/888950
http://www.imdb.com/title/tt0489037/</description>
		<content:encoded><![CDATA[	<p><a href="http://www.mininova.org/tor/888950" rel="nofollow">http://www.mininova.org/tor/888950</a><br />
<a href="http://www.imdb.com/title/tt0489037/" rel="nofollow">http://www.imdb.com/title/tt0489037/</a></p>
 ]]></content:encoded>
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		<title>By: Richard Cownie</title>
		<link>http://crookedtimber.org/2008/04/29/oil-on-troubled-waters/comment-page-2/#comment-238360</link>
		<dc:creator>Richard Cownie</dc:creator>
		<pubDate>Fri, 02 May 2008 13:10:21 +0000</pubDate>
		<guid isPermaLink="false">http://crookedtimber.org/?p=6877#comment-238360</guid>
		<description>&quot;might be a way to head off the development of a truly electric car with no internal combustion engine whatsoever&quot;

But it just ain&#039;t so.  We just don&#039;t have any
battery technology with the necessary energy
storage density (KWh/kg).  Unless or until that
problem is solved, pure electric vehicles can&#039;t
achieve the necessary combination of range and
performance to compete: if you have a bunch of
big heavy batteries you can&#039;t get adequate 
acceleration; if you have a smaller lighter 
battery you can&#039;t get the range beyond about 
100 miles.

There are interesting developments - sodium-sulfur batteries, supercapacitors.  But for the
moment - even with the inherent inefficiency of
internal-combustion engines - 10 gallons of gas
gets you a lot further than existing batteries.
No conspiracy theory needed.

Meanwhile, there have been massive efforts
underway to improve battery technology, in sectors
not heavily influenced by the oil companies:
cellphones, notebook computers, and the military
(carrying batteries around is a big issue for
soldiers on foot).  And while those efforts have
improved batteries a good deal, they&#039;re also
pursuing miniature generators driven by small
piston or gas-turbine engines (I read a paper
yesterday about a 100W-output 12mm-diameter
gas turbine made of silicon nitride).  The smart
money says combustion engines will be powering
vehicles for a long time to come.</description>
		<content:encoded><![CDATA[	<p>&#8220;might be a way to head off the development of a truly electric car with no internal combustion engine whatsoever&#8221;</p>

	<p>But it just ain&#8217;t so.  We just don&#8217;t have any<br />
battery technology with the necessary energy<br />
storage density (KWh/kg).  Unless or until that<br />
problem is solved, pure electric vehicles can&#8217;t<br />
achieve the necessary combination of range and<br />
performance to compete: if you have a bunch of<br />
big heavy batteries you can&#8217;t get adequate<br />
acceleration; if you have a smaller lighter<br />
battery you can&#8217;t get the range beyond about<br />
100 miles.</p>

	<p>There are interesting developments &#8211; sodium-sulfur batteries, supercapacitors.  But for the<br />
moment &#8211; even with the inherent inefficiency of<br />
internal-combustion engines &#8211; 10 gallons of gas<br />
gets you a lot further than existing batteries.<br />
No conspiracy theory needed.</p>

	<p>Meanwhile, there have been massive efforts<br />
underway to improve battery technology, in sectors<br />
not heavily influenced by the oil companies:<br />
cellphones, notebook computers, and the military<br />
(carrying batteries around is a big issue for<br />
soldiers on foot).  And while those efforts have<br />
improved batteries a good deal, they&#8217;re also<br />
pursuing miniature generators driven by small<br />
piston or gas-turbine engines (I read a paper<br />
yesterday about a 100W-output 12mm-diameter<br />
gas turbine made of silicon nitride).  The smart<br />
money says combustion engines will be powering<br />
vehicles for a long time to come.</p>
 ]]></content:encoded>
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	<item>
		<title>By: abb1</title>
		<link>http://crookedtimber.org/2008/04/29/oil-on-troubled-waters/comment-page-2/#comment-238338</link>
		<dc:creator>abb1</dc:creator>
		<pubDate>Fri, 02 May 2008 09:37:04 +0000</pubDate>
		<guid isPermaLink="false">http://crookedtimber.org/?p=6877#comment-238338</guid>
		<description>In the spirit of conspiracy-theorizing I seem to exhibit in this thread, I&#039;ll say that the hybrid technology (especially the hype associated with it) might be a way to head off the development of a truly electric car with no internal combustion engine whatsoever. In the end, with a hybrid you still need gasoline and the whole infrastructure associated with it. What amount of fuel you save with the increase in fuel efficiency you&#039;ll probably compensate (at least somewhat) by driving more.</description>
		<content:encoded><![CDATA[	<p>In the spirit of conspiracy-theorizing I seem to exhibit in this thread, I&#8217;ll say that the hybrid technology (especially the hype associated with it) might be a way to head off the development of a truly electric car with no internal combustion engine whatsoever. In the end, with a hybrid you still need gasoline and the whole infrastructure associated with it. What amount of fuel you save with the increase in fuel efficiency you&#8217;ll probably compensate (at least somewhat) by driving more.</p>
 ]]></content:encoded>
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		<title>By: Richard Cownie</title>
		<link>http://crookedtimber.org/2008/04/29/oil-on-troubled-waters/comment-page-2/#comment-238310</link>
		<dc:creator>Richard Cownie</dc:creator>
		<pubDate>Fri, 02 May 2008 01:12:39 +0000</pubDate>
		<guid isPermaLink="false">http://crookedtimber.org/?p=6877#comment-238310</guid>
		<description>idlemind - thanks for the description.  About as I thought, nothing very novel in the engine, motor/generators or batteries, but some neat electronics to tie it together and excellent
system integration.  Power MOSFETs are really a great technology and have been getting better and better over the last few years, handling big currents with as little as 10mOhm resistance. All
for a couple of bucks.</description>
		<content:encoded><![CDATA[	<p>idlemind &#8211; thanks for the description.  About as I thought, nothing very novel in the engine, motor/generators or batteries, but some neat electronics to tie it together and excellent<br />
system integration.  Power <span class="caps">MOSFE</span>Ts are really a great technology and have been getting better and better over the last few years, handling big currents with as little as 10mOhm resistance. All<br />
for a couple of bucks.</p>
 ]]></content:encoded>
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		<title>By: idlemind</title>
		<link>http://crookedtimber.org/2008/04/29/oil-on-troubled-waters/comment-page-2/#comment-238308</link>
		<dc:creator>idlemind</dc:creator>
		<pubDate>Fri, 02 May 2008 00:36:36 +0000</pubDate>
		<guid isPermaLink="false">http://crookedtimber.org/?p=6877#comment-238308</guid>
		<description>The current Prius is actually a fairly large car by international standards -- the EPA lists it as a mid-size -- though that doesn&#039;t prevent it from being smaller than most other cars in the US. It&#039;s moderately bigger than a VW Jetta, for example.

Some notes on Prius&#039;s technology:

The engine has electrically-timed valves, something increasingly common in more conventional cars, but is otherwise no different than most other small ICE&#039;s (other than the modified Atkinson cycle achieved by its unusual intake-valve timing). The transmission is mechanically much simpler than conventional cars: a single planetary gearset with the ICE on one shaft, a motor-generator on another, and the drive wheels and second motor-generator on the third. Effective gear ratio is changed by &lt;i&gt;electrically&lt;/i&gt; moving torque between the two motor-generators. So computer-controlled MOSFETS and power inductors substitute for the mechanics and hydraulics of a standard automatic transmission. Battery power is applied and extracted as necessary.

The battery itself is carefully kept at a middle level of charge -- between about 30% and 80% -- which increases its life dramatically, to the equivalent of tens of thousands of charge cycles. It&#039;s otherwise just conventional NiMH cells. Since charge is entirely controlled by computer algorithms, changing to a different battery technology would be relatively simple.

Electrically-controlled hydraulic modulators (such as those used in anti-skid systems) allow regenerative breaking to occur when the brake pedal is mildly depressed, with further pressure activating the wheel brakes (which will be activated by hydraulic pressure alone even if a compete electrical failure occurs). So the car is partially drive-by-wire -- the throttle petal is a spring and position sensor, merely an input device to the car&#039;s control computer.

The synchronous motor-generators are entirely unremarkable, 19th-century technology except perhaps for their use of niobium permanent magnets. Thus the only truly out-of-the-ordinary components are the MOSFET power inverters -- handling more than 30KW at up to 500 volts in a liquid-cooled box a couple liters in volume. Complete computer control of engine and transmission function and even wired throttle are hardly unusual any more.

On the highway Prius mileage is exceptional only for a car its size -- a sub-compact might do as well. In the city there is simply nothing that can touch it; I get 44 mpg on an urban commute (with lots of lights and speed changes) where I got 17 mpg in a VW Passat, with no change in driving habits (which were already pretty mileage-aware).

I consider hybrids to be transitional technology. They are an incremental improvement over non-hybrid cars, but they are also a proving ground for mass-produced automotive power electronics and advanced computer control -- and whatever the future brings in terms of alternative energy, those are going to be a big part of it.</description>
		<content:encoded><![CDATA[	<p>The current Prius is actually a fairly large car by international standards&#8212;the <span class="caps">EPA</span> lists it as a mid-size&#8212;though that doesn&#8217;t prevent it from being smaller than most other cars in the US. It&#8217;s moderately bigger than a <span class="caps">VW </span>Jetta, for example.</p>

	<p>Some notes on Prius&#8217;s technology:</p>

	<p>The engine has electrically-timed valves, something increasingly common in more conventional cars, but is otherwise no different than most other small <span class="caps">ICE</span>&#8217;s (other than the modified Atkinson cycle achieved by its unusual intake-valve timing). The transmission is mechanically much simpler than conventional cars: a single planetary gearset with the <span class="caps">ICE</span> on one shaft, a motor-generator on another, and the drive wheels and second motor-generator on the third. Effective gear ratio is changed by <i>electrically</i> moving torque between the two motor-generators. So computer-controlled <span class="caps">MOSFETS</span> and power inductors substitute for the mechanics and hydraulics of a standard automatic transmission. Battery power is applied and extracted as necessary.</p>

	<p>The battery itself is carefully kept at a middle level of charge&#8212;between about 30% and 80%&#8212;which increases its life dramatically, to the equivalent of tens of thousands of charge cycles. It&#8217;s otherwise just conventional NiMH cells. Since charge is entirely controlled by computer algorithms, changing to a different battery technology would be relatively simple.</p>

	<p>Electrically-controlled hydraulic modulators (such as those used in anti-skid systems) allow regenerative breaking to occur when the brake pedal is mildly depressed, with further pressure activating the wheel brakes (which will be activated by hydraulic pressure alone even if a compete electrical failure occurs). So the car is partially drive-by-wire&#8212;the throttle petal is a spring and position sensor, merely an input device to the car&#8217;s control computer.</p>

	<p>The synchronous motor-generators are entirely unremarkable, 19th-century technology except perhaps for their use of niobium permanent magnets. Thus the only truly out-of-the-ordinary components are the <span class="caps">MOSFET</span> power inverters&#8212;handling more than 30KW at up to 500 volts in a liquid-cooled box a couple liters in volume. Complete computer control of engine and transmission function and even wired throttle are hardly unusual any more.</p>

	<p>On the highway Prius mileage is exceptional only for a car its size&#8212;a sub-compact might do as well. In the city there is simply nothing that can touch it; I get 44 mpg on an urban commute (with lots of lights and speed changes) where I got 17 mpg in a <span class="caps">VW </span>Passat, with no change in driving habits (which were already pretty mileage-aware).</p>

	<p>I consider hybrids to be transitional technology. They are an incremental improvement over non-hybrid cars, but they are also a proving ground for mass-produced automotive power electronics and advanced computer control&#8212;and whatever the future brings in terms of alternative energy, those are going to be a big part of it.</p>
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		<title>By: abb1</title>
		<link>http://crookedtimber.org/2008/04/29/oil-on-troubled-waters/comment-page-2/#comment-238286</link>
		<dc:creator>abb1</dc:creator>
		<pubDate>Thu, 01 May 2008 20:25:19 +0000</pubDate>
		<guid isPermaLink="false">http://crookedtimber.org/?p=6877#comment-238286</guid>
		<description>That&#039;s because oil is probably the biggest business that has ever existed. They pump 85 mil barrels/day; at $120/barrel it&#039;s $3.7 trillion/year of the stuff. Compare with the illegal drugs trade: estimated as $400 billion/year. And oil is perfectly legal. 

Imagine the amount of corruption $3.7 trillion/year business can (and does) create and how it can (and does) crush its enemies. You&#039;ll be pessimistic too.</description>
		<content:encoded><![CDATA[	<p>That&#8217;s because oil is probably the biggest business that has ever existed. They pump 85 mil barrels/day; at $120/barrel it&#8217;s $3.7 trillion/year of the stuff. Compare with the illegal drugs trade: estimated as $400 billion/year. And oil is perfectly legal.</p>

	<p>Imagine the amount of corruption $3.7 trillion/year business can (and does) create and how it can (and does) crush its enemies. You&#8217;ll be pessimistic too.</p>
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		<title>By: Richard Cownie</title>
		<link>http://crookedtimber.org/2008/04/29/oil-on-troubled-waters/comment-page-2/#comment-238284</link>
		<dc:creator>Richard Cownie</dc:creator>
		<pubDate>Thu, 01 May 2008 19:49:36 +0000</pubDate>
		<guid isPermaLink="false">http://crookedtimber.org/?p=6877#comment-238284</guid>
		<description>&quot;Nah, they’re just thinking about it differently, but I think on the whole abb1 is right.
Basically abb1 is thinking of this in terms of a Bertrand market – firms fix a price, then are ready to pretty much sell you as much as you want, while Richard is thinking of this in terms of Cournot&quot;

I&#039;m not familiar with the terminology.  But I think that abb1 and I agree that there *is* a demand curve.  And I choose to emphasize the fact that we&#039;ve seen quite a lot of medium-term elasticity of demand in the past (e.g. after the 1970s oil shock); where he emphasizes the short-term inelasticity of demand.  But surely no-one thinks consumption patterns would remain the same at $500/barrel ?  At some price level whole sectors of the economy just become unprofitable and have to shrink dramatically (e.g. airlines, selling SUVs).  Think of the most inelastic commodity imaginable: air for breathing.  Everyone would pay whatever they have for that.  But even so, if the price is more than they&#039;ve got, they&#039;ll just die and thus reduce demand.

Indeed, a recession, with a total reduction in economic activity - with the heaviest reduction in oil-consuming sectors - is precisely the 
&quot;economic emergency&quot; that we might be concerned about.  Perhaps the real difference between abb1 and myself is that I see a lot of potential to reduce oil usage with little effect on GDP, whereas he seems less optimistic.</description>
		<content:encoded><![CDATA[	<p>&#8220;Nah, they&#8217;re just thinking about it differently, but I think on the whole abb1 is right.<br />
Basically abb1 is thinking of this in terms of a Bertrand market &#8211; firms fix a price, then are ready to pretty much sell you as much as you want, while Richard is thinking of this in terms of Cournot&#8221;</p>

	<p>I&#8217;m not familiar with the terminology.  But I think that abb1 and I agree that there <strong>is</strong> a demand curve.  And I choose to emphasize the fact that we&#8217;ve seen quite a lot of medium-term elasticity of demand in the past (e.g. after the 1970s oil shock); where he emphasizes the short-term inelasticity of demand.  But surely no-one thinks consumption patterns would remain the same at $500/barrel ?  At some price level whole sectors of the economy just become unprofitable and have to shrink dramatically (e.g. airlines, selling SUVs).  Think of the most inelastic commodity imaginable: air for breathing.  Everyone would pay whatever they have for that.  But even so, if the price is more than they&#8217;ve got, they&#8217;ll just die and thus reduce demand.</p>

	<p>Indeed, a recession, with a total reduction in economic activity &#8211; with the heaviest reduction in oil-consuming sectors &#8211; is precisely the<br />
&#8220;economic emergency&#8221; that we might be concerned about.  Perhaps the real difference between abb1 and myself is that I see a lot of potential to reduce oil usage with little effect on <span class="caps">GDP</span>, whereas he seems less optimistic.</p>
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		<title>By: abb1</title>
		<link>http://crookedtimber.org/2008/04/29/oil-on-troubled-waters/comment-page-2/#comment-238129</link>
		<dc:creator>abb1</dc:creator>
		<pubDate>Wed, 30 Apr 2008 21:37:31 +0000</pubDate>
		<guid isPermaLink="false">http://crookedtimber.org/?p=6877#comment-238129</guid>
		<description>Great Zamfir, exactly. 

Notsneaky, actually, when I thought about it more I realized that in a pure one-firm/fixed-price/no-limit scenario you should probably see the product selling for exactly the asking price every time. If I own all the oil and I say the price is $500/barrel for as much as you want - then it&#039;ll be sold for exactly $500/barrel. In reality we see people bidding higher than the asking price, and that is a good argument against the price-fixing theory. Now, retail gasoline is a different matter, you buy it for exactly the asking price, this could be a price-fixing situation.</description>
		<content:encoded><![CDATA[	<p>Great Zamfir, exactly.</p>

	<p>Notsneaky, actually, when I thought about it more I realized that in a pure one-firm/fixed-price/no-limit scenario you should probably see the product selling for exactly the asking price every time. If I own all the oil and I say the price is $500/barrel for as much as you want &#8211; then it&#8217;ll be sold for exactly $500/barrel. In reality we see people bidding higher than the asking price, and that is a good argument against the price-fixing theory. Now, retail gasoline is a different matter, you buy it for exactly the asking price, this could be a price-fixing situation.</p>
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