The further to the left or the right you move, the more your lens on life distorts.

Thursday, September 30, 2010

Burger King

Last month, I wrote about the continuing anti-electric vehicle (EV) drumbeat from both the Left and the Right in anticipation of the release of the first commercial EVs within the coming months.

Walter Russell Mead continues the drumbeat by suggesting that (1) American auto companies can’t compete against foreign auto makers with internal combustion engines and therefore will not be able to compete in the EV arena, (2) that success in the EV arena would drive the price of oil down, making internal combustion vehicles more attractice from a cost of use point of view (i.e., the success of EVs will make them fail?), and (3) that the “apps” that will evolve as EVs prosper will not benefit us, but rather off-shore software developers.

Mead also suggests that success in EVs will result in greater emphasis on nuclear and coal-based power generation—a bad thing from his point of view and that the U.S might be better served by following this trend rather than leading it. He writes:
Counter-intuitive as it may seem, it is frequently a smart strategy to let other people pay the massive development costs for new technology while you sit back, wait, and then reverse engineer whatever they do to come up with some way around their patents. I’m told that McDonald’s used to spend a lot of time and money researching the best possible place for a new hamburger stand. Burger King had a cheaper strategy; it waited for McDonald’s to hire consultants, carry out extensive traffic surveys, compare several potential locations and finally build — and then Burger King simply built across the street. Burger King might not have gotten the absolute best spot, but they would come close — and for a lot less money.

The Burger King plan works pretty well in the real world; I have less confidence about the environmental benefits of electric cars. What if the heavy new demand for electricity means a politically irresistible demand for more coal-fired electricity plants? Greens want us to shift from coal, the cheapest and most secure fuel for electricity generation, toward more expensive sources like wind. If a significant chunk of the transportation system moves to electricity, I don’t think this will happen. If the electric car lobby wins out, coal (and nuclear) power could loom very large in our future. Electric car drivers will want cheap electricity just as much as gasoline-powered drivers want cheap gas — and when and if electric car ownership becomes widespread, the ‘cheap electricity’ lobby will be as powerful as the anti-gasoline tax lobby is today.

I couldn't resist a comment on Mead's piece. This is what I wrote:
Okay … we forget about EVs and instead stay in bed with internal combustion engines and oil. A war breaks out in the Middle East (think: Iran), the Gulf of Hormuz is closed (maybe for months or years), and the domestic cost of gasoline jumps to $5 – $6 dollars a gallon. Our economy takes a serious hit, and the only folks who win are the Arab oil producers, the Russians, and Hugo Chavez. Whether Mead likes it or not, that’s an energy ‘tax’ that can be levied by people who don’t like us very much.

No rational observer thinks the EVs are a panacea, but they are an important technology that should be encouraged over the next decade. EVs are one part of the energy puzzle and its perfectly okay to encourage their use.

Mead makes the unsupported assumption that technology is static, that new sources of energy generation will not arise over the coming decades. Solar and wind are expensive today, but its very likely that the prices of electric power generation using these technologies will drop dramatically over a 20 year span. In addition, it’s not outside the realm of possibility that a new electric power generation technology (fuel cells or fusion) may emerge in a 20 – 30 year time span.

Bottom line … the US is not Burger King! We’ve succeeded as a nation by innovating technologically, not following. It’s far past the time to encourage EV technologies.