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1: certainly I would bet on the price of oil increasing over time

2: The US government bonds aren't very high interest rate.

3: $100,000 for something Ferrari class in speed, see the Tesla Roadster

4: The government

5: The consumers and electricity companies. The coal lobby would be in favor of a plan like this, they are itching to start burning all the extra coal we have in the USA.

6:The consumers

7: The consumers and the mechanics repairing the cars in the free market.

8: Because this type of thing requires strong government authoritarianism.

>2: The US government bonds aren't very high interest rate.

Currently US government bonds have a low interest rate. However, we also would be doubling our debt on this plan, and inflation expectations have been ticking up. Furthermore, such desperation for energy independence might be looked down on by international investors who already view the actions of the US government as reckless. What might the US be planning in the Middle East that they need to take such rash actions to get off of oil for?

All these factors could swing interest rates higher.

> 4: The government

Administrative costs by the government will be non-zero.

>8: Because this type of thing requires strong government authoritarianism.

Actually, I just don't think the technology is there yet. If scale production was the only obstacle in the way of the electric car right now, then it would require an investment in the $1 billion magnitude to start up efficient production, something within the reach of modern car companies. Economical, comfortable, useful, and safe electric cars are not available with modern battery technology. As soon as the technology is ready to make an attractive electric car, I expect to see consumers converting to them voluntarily and at-scale in the free market.

Now if we want to force everybody to convert to an inferior and immature product right away, then we do need strong government authoritarianism, yes.

"The coal lobby would be in favor of a plan like this, they are itching to start burning all the extra coal we have in the USA."

I'm surprised the Republicans have not jumped all over this.

This could give them a card to play in the energy independence debate. There's a lot of coal in some so-called swing states, and coal miners and their friends and neighbors are part of the demographic that have been voting Republican on "social" issues but are now swinging Democratic on "Bush is utterly incompetent" issues. Proposing a program to transition the country to coal powered electric cars would go over well with this group.

To the rest of the country, it could be sold as more pragmatic than trying to generate all our energy from solar and wind in the near term, while still offering a path to energy independence. They could play up arguments about how coal generated electricity is already less carbon emitting than the gasoline engines in autos.

This might not be as easy a position to take for Democrats, because the staunch environmentalists on their side may not be happy about increased coal burning.

Apparently the consumers aren't so eager to invest in this. It's a chicken and egg problem on many levels:

- To be able to finance this you need the money you pay for oil. To use those money you already need the solution.

- To have many electric cars on the streets means you need the distribution system (ie gas stations). To finance the new electric stations you need enough cars on the road.

- To get the consumers to buy electric cars they need to have lower prices and better autonomy. To get to lower prices and better autonomy you need economies of scale and a few generations of cars to develop the technology.

This chicken&egg problem it's specific to this. Pretty much any successful entrepreneur just found a way to solve one in his domain. If nobody invested money and time in this it just means there are better ways to invest - i.e. it's time hasn't come yet. When it will, you'll see people coming with the money.

And about forcing the government to invest into a venture private capital doesn't dare enter yet it's ... not a good idea. This rarely works, and only for some special cases. Remember the government is always less efficient then private capital, so there'd better be a good reason to succed where free market failed.

Another big problem: hypothetical $20,000 electric car with acceptable range doesn't exist yet. The closest thing we have is the Tesla, which costs $100K, carries two people, and... well, still doesn't exist yet.

It's no good saying that the price would magically come down immediately if they were produced in sufficient quantities. If anyone had the ability to build a $20,000 long-range four-seat electric car they'd sell millions of 'em anyway.

The technology for cheap and practical electric cars will arrive eventually, but it's probably still a decade away. When you can buy a decent electric car for $20K then people are going to convert anyway, with no need for a huge scary government program forcing them to do so.

There are already $30,000 electric cars with dandy range for commuting. (The Aptera.) These are only two seat, but they would suit my needs just fine. It seems reasonable that this could hit $20,000 if produced in volume.

A more realistic goal would be the incremental replacement of internal combustion cars with electric cars. Something like 30% in 10 years would be a tremendous good and would seem possible. I think the ultimate goal should be 85% electric vehicle use. I suspect that there will be a last 15% of uses for which the IC engine will still be the most cost effective solution.

The Aptera, eh? I hadn't heard of it before, but I looked at their website and they have a "Reserve Now" button combined with a FAQ which says "We are currently in the process of setting up our production facility". I think that moves it out of the "already exists" category and into the "vaporware until proven otherwise" category.

Actually you can right now get electric cars from Zap or GEM for less than $20K which are suitable for commuting provided your commute is very short and very slow. I'd be tempted to get one myself if I actually had a garage. But we're nowhere near anything that could be called a replacement for a real car, rather than a supplement to one.

There are real working models, so they are not vaporware. They are instantiated-but-not-yet-coming-off-an-assembly-line-ware.

Well okay, I'm not sure whether having a working prototype actually makes it officially not-vaporware, but until there's something I can actually buy I remain skeptical about the range and price.

Range has been verified, I think. If it hasn't already, the range of the hybrid version will be verified by automotive X-Prize officials.

RE the oil price: at status quo, prices will go up, since Chinese and Indians are learning to spend like Americans.

But if the US spent 8 trillion scrapping its entire auto fleet, that would probably have a chilling effect on oil prices (incidentally making the entire effort less meaningful)

Oil prices will continue to rise in the long term because Oil reserves are finite, prices reflect cost to extract a barrel or oil not the cost to produce a barrel of oil.

And people forget that oil has another important uses that aren't related at all to energy, it is used as base material for a most plastics, lubricants and so on.

#3: Simple - we just all drive the same car issued to us by the government. This has the added benefit of reducing class disparities in transportation.

Viva la revolution!

The revolution will be canceled due to road construction.

I will employ a driver then.

Problem #9: If we are sending all of our gas-consuming cars to Latin America how does this solve any environmental problems?

Problem #10: This neglects the energy costs of producing a new car.

As long as we're being completely hypothetical, wouldn't it make more sense to just mandate that all new cars must be electric after a certain date?

Electric cars are important to the United States because of the economy and energy independence, not because of global warming. Remember, the people making energy decisions don't "believe" in global warming.

Problem #1: We'll see probably $200 this year and even higher in the next years. This can only be slowed down and nothing else... http://en.wikipedia.org/wiki/Peak_oil

I don't know a single person who takes near-term Peak Oil seriously who is not some random blogger or pop star.

Edit for the down-modders: Our "years of consumption" for oil, which is known oil reserves divided by current usage, has increased pretty constantly since 1920. In 1945 we had about 20 years of consumption left, in 2000 we had about 40. You can find this stat as figure 66 in "The Skeptical Environmentalist" which sites the primary source. "Peak Oil" is an unproven baseless scare-mongering prediction about the future.

It should also be noted that these kind of simplistic doomsday predictions have been going around since at least 1865, when Stanley Jevons predicted that England's coal supplies would run out and torpedo the industrial revolution. He failed to account for the incentive effects of rising coal prices.

But you know what they say about those that do not study history...

Perhaps the Shell geoscientist, Dr. Marion King Hubbert?

I've seen Congress people talk about it at length on CSPAN. Granted, not necessarily a great vote of credibility, but does not fall under the headings of blogger or pop star.

Arguably pop star :)

Maybe "celebrity" would be a better fit.

These days, random joe blogger has more credibility than Congress.

Lots of people aren't happy with President Bush - he's got approval ratings somewhere in the low thirties, I think. Even less people are happy with Congress - they were in the 14% ballpark recently. I'm tired of the whole lot. There are some good Republicans, but I'd sacrifice them to wipe the slate clean.

Term limits!

Not that I disagree, but what makes you think Congress will ever vote themselves out of office with term limits?

I don't know. You can amend the constitution without congress, but that would require quite a lot of organization and "grass-roots" (I hate the phrase, but to use another cliche, it's used for lack of a better one) efforts. You could probably get started by picking off a few active and former members of congress to sort of "lead the charge", but the effort would have to be sustained through several election cycles, I think. You'd also have to make sure you leverage the precedent set by the 22nd amendment (presidential term limit).

It's a bootstrapping problem, and a particularly difficult one because there is a reasonable argument against it (people should be free to elect whomever they want).

It'll never happen, that's the reality. I wish it would, but at this point I have very little faith in government, in fact I have none. They're corrupt and the system is setup to keep it that way. The foxes have been running the hen house for a long time.

Only popstars and random bloggers?

http://video.google.com/videoplay?docid=-8183966529898602701

I've seen the hearing at the congress last week, these excutives didn't look and sound very confident to me...

My understanding is that this prediction of oil running out (always a few decades in the future) has been commonplace for almost a century. How is it possible to know what will or won't be discovered, either by way of new deposits or new technologies? 30 billion (estimated) barrels were just discovered in Brazil.

I should perhaps add that I don't have much of an opinion one way or the other. I just like being skeptical, and I smell ideology in these predictions.

It's not about oil running out, it's about supply peaking and not being able to keep up with demand. That's happened, China and India demand is only going to continue rising. Short of some new technology, prices will continue to rise from now on.

At a certain price, there is always enough supply for the demand.

Of course, but then you can't expect low prices, demand dictates price which is exactly what we're seeing now.

Fair enough, but these predictions have a way of turning out wrong. I think the ideology driving the prediction is the operative factor.

Edit: I'm being too hasty this morning. How exactly does "supply peaking" not have to do with "oil running out"?

Supply and demand are the operative factors, price is up because demand is up while supply remains steady. Ideology has little to do with it.

I look at who's making the predictions, what else they think, and what agenda they have. From that perspective, ideology has a great deal to do with it.

Which means little once the predictions start coming true. Look around, peak oil isn't really a prediction any more, it's happening, demand has sky rocketed beyond what supply can handle. When pieces of sky are hitting you in the head you don't stand around questioning Chicken Little's ideology

http://en.wikipedia.org/wiki/Image:Oil_Prices_1861_2007.svg

Demand trails price and production trails demand by several years and it's related to politics. So it's hard to make real predictions. In the end politics plays a huge role in today’s oil prices and long term we can manufacture it from other sources for less than 200$ per barrel. Granted we use a lot of oil so infrastructure costs are huge so the major players are going to be vary conservative.