How will Big Oil react to widespread popularity of hybrid autos?

Great Debates
1

The 2003 Honda Civic Hybrid gets something like 10-12 times the mileage of a comparable non-hybrid. Instead of a weekly trip to the Exxon, you’ll only have to go once every two or three months.

Clearly this means less demand for gasoline. Will gas prices drop to 25¢ a gallon? Wouldn’t that be great for people who didn’t invest in hybrids?

Will Big Oil feel any pain at all? Will they reduce production to meet demand? Close down petroleum facilities and open up new hybrid battery pack dealerships?

What is the most likely chain of events following a widespread public embrace of hybrid automobiles?

2

Not everyone will be able to afford a new hybrid vehicle. Witness the number of beat-up cars of 1970’s vintage which are still on the road. Not until gasoline either becomes scarce, or too expensive, will consumers go hybrid in droves.

Americans love to show off their disposable income with huge SUVs which, as everyone knows, are gas guzzlers. Until the large vehicle fad ends, I’m sure those in the petroleum industry will sleep well.

3

The link doesn’t work for me. It seems to have some screwed up javascript. Anyway, I am very skeptic about any car being able to get 300 miles to the gallon. I’ll believe it when I see it. Much less a car which costs the same as a regular car.

In any case, the world is in a state of constant change and I do not thing this would mean any changes bigger than we have seen in the last 50 or 100 years. Whole industries disappear to give way to other industries. No big deal. The son or grandson of the man who worked in a steel mill is now a computer programmer. That’s life. People adapt to new circumstances.

4

Um, 10-12x milage? Not even close. It is rated at EPA estimated 51 MPG. Even the worst SUVs get 11-12, most get between 15 and 18. So that’s more like 3-5x, still a big deal, but not 10-12.

My Saturn gets around 34 MPH, still quite a bit lower than the Civic Hybrid but more like 1.5x. You can buy a VW Jetta with the TDI (Turbo Diesel Injection) engine that gets 55 MPH or so.

And people won’t buy them. Too expensive, too small, and not powerful enough. I wish it were otherwise, but so far it isn’t. The availability of hybrids won’t change the fact that the majority of the US car buying public isn’t interested in a small, fuel efficient car. I am, but even the Civic doesn’t meet my needs because I need a wagon or large hatchback.

There is currently a small market for these cars. Put a hybrid in a Suburban and it will increase the gas milage, but most folks still won’t buy it unless it delivers the power and towing capacity at a reasonable price. Gas costs don’t seem to enter into the buying decision at this point.

Still, a wider range of hybrid options, ie more car models, is a good thing. I think the Prius and Insight are dead-ends, the real improvement will be putting hybrids into existing popular cars, like Honda is doing with the Civic. Now if someone will just put a hybrid in a wagon…

5

Yes I read that link a little too quickly… it actually says 650 miles on a tank of gas, not a gallon.

So change that from a weekly trip to the Exxon to a bi-weekly trip.

6

Big (well, fairly big anyway) oil will be with us for many years after there is a major shift to hybrid vehicles. The need for lubricants will never go entirely away, for example. Nor is it likely that hybrid vehicles will ever (ever being sometime in the next 30-40 years (based on nothing but a WAG)) have the power to pull large loads. Diesel, for over the road and railroads, will not only be with us for a good while yet but will, world wide, grow as the need to transport more and more goods to more and more places.

The countries that depend almost entirely on the oil business are pretty much going to be out of luch however.

IMHO

7

Getting americans to buy small, underpowered cars is going to be tough (except for commuter cars), look at how little luggage you can carry in a Honda Insight, I am a pickup truck guy (and the bed is nearly empty most of the time) but I haul motorcycles (vintage British bikes mostly, sometimes they take breaks) so even if I had a use for an Insight, I would have to maintain a “real” vehicle for roadtrips (a family of four coast to coast in a hybrid with all of thier luggage, I don’t think so).

In short, I don’t think the technology is in place yet (and I don’t think it will be for a long time ~20 years).

unclviny

8

ok it gets about 2-3 times the milage. But if demand drops the supply might also drop, meaning the price stays the same. Or supply could drop further actually rasing the price.

But all in all it seem like we are moving to bigger heavier cars and trucks anyway.

9

The market for teh hybrid civic is pretty much the same market as for the refular civic. The cars are identical in style and size, though the hybrid loses a little trunk space. The hybrid has quite sufficient power to compete in the “economy class” playing field. The price point is a few thousand dollars higher for teh hybrid, which is oviously a problem, but that is offset by both tax deductions in the year of purchase and by long-term savings in fuel costs. Another selling factor for some folks is the cleaner emissions profile of the hybrid engines. In short, I expect hybrids to become respectable players in the small/economy car market, but I hardly expect them to banish SUV’s from our streets.

As for big oil, I doubt they care one way or another. The only way I see hybrids commanding a large enough market share to concern big oil is if disruption in international oil suipplies cause extended shortages and sever price hikes. In that situation, I don’t think concern over the market penetration of hybrid engines will be high on “big oil’s” list of concerns.

10

I agree with Spiritus Mundi for the most part. I will only add that “Big Oil” is not a completely monolithic entity. Exxon-Mobil has invested little in renewables and continues to be quite intransigent (although somewhat less so with time) in regards to the issue of global warming. On the other hand, BP has embraced Kyoto and has actually implemented slightly stronger reductions within their company than Kyoto mandates for the industrialized countries…8 years ahead of schedule and at negative net cost, i.e., they claim that the money saved through energy efficiency more than offsets the costs involved (See this article.)

11

BP is also investing heavily in fuel-cell technology.

As noted, most of the “big oil” companies are not, these days, wholly and purely crude-oil refiners. Some deal in natural gasses, some own (whole or in part) hydroelectric installations, most have some sort of large-scale R&D project like solar arrays or geothermal in the works.

And again, also as noted, there will always be demand for lubricating oils, even if the car is purely solarelectric powered. Lube oil, grease, motor oil, plus all the synthetics derived from petroleum feedstocks, like plastics and polymers, of which we use more and more every day.

And besides all that, we still use vast amounts of oil for electrical generation and other heat sources, so the bottom line is, at best, the end result and/or overall mix of produced products might change with the advent of a large-scale hybrid or electric vehicle, but it won’t by any means spell the death knell for so-called “big oil”.

12

Gee, the 1985 or 1986 Honda CRX HF got better mileage than the hybrid did (IIRC it was 52 city/57 highway in 1985?). Hell, my old FIAT almost got that mileage, and it was a piece of shit too. Somehow, I don’t think this is going to be enough to make the mythical “big oil” worry about lost revenue.

13

Anthracite:

Yeah…I was thinking the same sort of thing recently. I thought I recalled that a special version of the Honda Civic with a VTEC engine that was being sold at the time I was last car shopping (spring 1992) got something like mid 40s city and over 50 on the highway.

I was wondering what the deal is that one needs hybrid technology today just to get back to about those same values. My guess is that the modern Civics are somewhat bigger and have better acceleration but I’d really like to get a more definitive explanation on what the the tradeoffs are that have been made.

14

Well, I think hybrids will play a bigger role than you think, because electric motors are very useful. For instance, a hybrid sports car could combine electric boost off the line, because electric motors develop max torque at low RPM. So by coupling a powerful electric motor with a 300HP 2.5L engine with a huge turbo. No turbo lag, and great mileage around down when the gas engine basically runs sans turbo all the time and feeds power to the batteries.

Then there’s the GM ‘Contractor Special’, which is a hybrid large truck which takes advantage of the ability to generate huge gobs of energy. Mated with a diesel engine, the truck can be driven to the job site and once there it turns into a powerful electric generator that can run all day and prove power to all the tools on the site. A lot of hammer jockeys are going to want that one.

But overall, the net effect of having even 20% of the cars on the road being hybrids and getting 50% better gas mileage is to lower the demand for gasoline for cars by maybe 10%. And the demand for gasoline for cars is only a portion of the demand for petroleum. And that slight decrease in demand will probably be made up by increased demand from developing nations.

15

Sam, there are significant technical hurdles to overcome before electric engines have any place in high performance cars. For one, the discharge rate of most storage cells is nowhere near high enough to accelerate quickly until the turbo kicks in (although I suppose you could put one enormous capacitor in, and then charge it off the ICE engine ASAP). I’m sure Una or another more engineer-like person than myself can provide harder details.

16

I dunno, here is an electric car that does 0-60 in six seconds.

Here’s an electric sports car that claims to go 0-60 in 4.68 seconds. That’s supercar territory.

And we’re still at the infancy of electric technology. New hardware like continuously variable transmissions like the one in the Murano can handle higher power. Batteries are getting better. Motors are getting better.

I wouldn’t be surprised at all if there’s a hybrid electric supercar in a few years.

17

There are several current major flaws with electrics and hybrids. Right now, though, it mostly comes down to money.

Firstly, of course, they are several thousand dollars more expensive than a comparable vehicle running on gasoline. This is partially offset by various rebates.

Secondly, the major fact is, the car battery dies after four to seven years. With five most likely. It’s ten thousand dollars worth of battery that must be replaced. These cars have no resale value at all.

There’s also the minor issue of the increased weight and lack of cargo capacity, but that’s only a daily hassle, not a death sentence.

18

Part of it is the “safety craze” of the 1990’s. Airbags, crash resistance upgrading, etc. all add to the weight. I do not know if it is true, but I have been told that all of the equipment needed for the dual airbags on my Mustang adds about 55-60 pounds to the car. On a CRX HF, that would be a significant weight addition.

Another thing is NOx. I think the HF produced quite a bit, although its catalyst brought it to within specs. Under current emissions laws, it might be more difficult. But what if, with current technology, we could get 70+ mpg out of a CRX HF, but with a little higher NOx than we want - what does the most harm to the environment? The NOx, or the CO2, from a car like that? If it met 1980’s emissions, but was that miserly with gas, I would imagine that the extra NOx would be a much lesser of two evils.

But come on, automakers! There was even a Honda in the 1980’s that got 60 mpg highway - surely there must be some way to return to that level of performance? And the CRX HF, while small, was not oppressive like a SMART car, and it did have decent throttle response…in short, if someone gave me one in great shape, I would drive it as a commuter car, forsaking my 300 ft-lbf of torque Mustang for most cases…

19

Bigger. It’s not “somewhat”, it’s considerably. The difference between a modern and 1980s Civic is considerable. Maybe twenty percent larger.

Safer. More structural rigidity, airbags, and so oon.

More horsepower. That 1980s Civic was lucky to make 70hp. Base models now make 110.

Bigger tires. From the 10 inch wheels of the 1980s to the 15-17s of 2000. Which gives better traction and handling… but does bad things to rolling resistance.

More electronics. They eat power. Including standard AC.

And most importantly, the damn things sold like crap and had no resale value.

Finally, every five percent improvement is a major jump. In the 70s, we had a great leap forward in fuel efficency, with a correspoding complete lack of power to the car. In the 80s, power began to come back. In the late 90s, efficiency began to climb again, but it was overshadowed by the larger cars. Now, the small cars are getting attention again… and the hot rods are making 34 mpg. The modern equivalent to the GT350 or Dodge Charger Daytona; the Focus SVT, the Mini Cooper S, the Saturn Ion, the Neon … is it SVD? The Civic Si (Horrible car), the New Beetle Turbo all make 30+ MPG. (It’s a darn good time to like to drive, by the way)
Making 40 MPG isn’t impossible. Put a new-gen diesel in (Oh, yes, the improved emissions standards have done bad things to efficiency… cleaner it has to be, more carefully you have to burn it… especially for diesels), or reduce the coefficient of drag, take out all the comfort features.
For 50, you need low rolling resistance tires, removing the added structural reinforcements, and very skinny drivers. As well as a tiny car.

Above 50, it gets tricky. Those low rolling resistance tires, by the way, are lethal in the rain or snow. As in, they kill you.

20

I’ve heard this claim made before but I have also heard the claim that they will probably last the life of the car and Honda and Toyota are giving fairly long warrantys on the battery packs. Honda’s is 8 years / 80,000 miles. Here is what Honda says:

And here is the Prius’s warranty (http://www.toyota.com/html/shop/vehicles/prius/):

And here is what they say in their FAQ about battery life:

Admittedly, I’d be more comfortable if Honda claimed the batteries would last 12 or 15 years. But, it doesn’t sound too bad. Also, I would guess, given the warrantys, and the fact that Honda and Toyota probably don’t want to screw up its rep for reliability, that this 10 year estimate may be a tad on the conservative side.