Energy & Power Generation

What Future for the Global Auto Industry?

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**An upcoming Chicago Boyz group discussion**

There is much media and analyst discussion lately concerning possible sea changes in the auto industry..which would, of course, likely have major impacts throughout the economy and on society as a whole.   Some of the driving factors worth considering include:

–The government incentives put in place in many countries…in some cases not just incentives but absolute requirements…in favor of electric cars

–The emergence and growth of ride-sharing services such as Uber and Lyft

–The development of partial ‘autopilot’ functions for cars, and the anticipated development of full automatic driving at some future point

–The apparent reduction of interest among young adults and older children in driving and automobile ownership

–Technological factors, including the continued improvements in battery energy storage capacity–but still very limited in comparison to liquid fuels…the continued incremental improvements in internal-combustion engines…and the emergence of new manufacturing technologies, including 3-D printing aka ‘additive manufacturing’.

I’d like to have a group discussion of the possible future direction and shape of the industry…let’s do this sometime next week.   If you’re interested in participating, here are some links that are worthwhile thought-starters.

Vitaliy Katsenslson is a fund manager; his blog is Contrarian Edge–I generally like the way he thinks.   Concerning electric cars in general and Tesla in particular, he says:

You don’t really know the company until you buy the stock. It has happened to mea few times. We did hundreds of hours of research, bought a stock, and that act of buying activated new senses. I started seeing new angles. Something similar happened to me with Tesla, except I didn’t buy the stock, I bought a car.

His ownership experience, and the thoughts triggered by the “activated new senses”, are captured in an 11-part series of posts.   You can get it emailed to you by signing up here.

https://contrarianedge.com/signup-for-tesla-article/

Concerning self-driving cars, here are three articles reflecting various degrees of enthusiasm versus caution:   from Forbes, from Investor’s Business Daily, and from Road/Show.   Also this Financial Times article, which is about the difficulties involved in the interaction of automated systems with humans in other cars or with human pedestrians.

An interesting general discussion of AI misinformation and hype…not primarily focused on driverless cars although it does touch on that subject.

Concerning battery technology, here’s a link on the trends in $/kWh and the future possibilities.   See also my 2017 post on battery materials constraints.

Homework:   Please take a look at the above articles, at least the ones that aren’t behind paywalls..   I’ll put up a post as a place for discussion sometime next week.

Movie Review: The Current War

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This movie is focused on the interaction among Thomas Edison, George Westinghouse, and Nikola Tesla in the competition to create and build out America’s…and the world’s…electrical infrastructure.  It has gotten mixed and generally not-very-enthusiastic reviews; I thought it was well-done and definitely worth seeing.  Visually, it is striking and sometimes even beautiful, thus worth seeing on the big screen.

The movie gets the outline of the history right; also, I think, the essence of the characters.  Edison is a brilliant inventor and self-promoter who is committed to his DC-based distribution system and will do some more-than-questionable things to get it universally adopted.  Westinghouse, who had invented the railroad air brake (among other things) and already built a large company, sees the value of alternating current, which can be stepped up and down in voltage via transformers and hence can be economically transmitted over long distances.  Tesla, a Serbian immigrant and brilliant inventor, provides the missing link in the form of a practical motor that can run on AC power.  The relationships of Edison and Westinghouse with their respective wives are highlighted, and the future utility mogul Samuel Insull appears as Edison’s young secretary.

I was happy to see the movie’s positive portrayal of Westinghouse, a great man who has tended to be overshadowed by the more-glamorous figures of Edison and Tesla.  (The legions of Tesla fans may be unhappy that Tesla did not get a more central role in the film.)

If this movie sounds interesting to you, better see it soon; I don’t think it’s going to be in the theaters for very long.

Ayiti Pa Nimewo Yo

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I. Departure

Our transportation to Aéroport International Toussaint Louverture was a decrepit Honda Civic with no working inside door handles, no exhaust system, and a barely functional starter. The guesthouse driver poured a liter of water into the radiator immediately before starting the engine so that it would not overheat, even though the drive was only 3 kilometers. Our luggage proved too big for the trunk, so most of the team’s belongings were wedged in beneath the open trunk lid, which was not secured by so much as a single bungee cord. Threading through the remnants of at least a dozen barricades on Avenue Gerard Téodart half an hour before sunrise, we high-centered on some rubble and dragged a sizable rock for several hundred meters before the driver backed the car up to dislodge it. After we made the turn onto Boulevard Toussaint Louverture, there were no more barricades, thanks to the proximity of a MINUSTAH logistics base and a Police Nationale d’Haïti station. There were pedestrians, of course—Port-au-Prince is very much a city that never sleeps—but not many, and few vehicles thanks to severely interrupted fuel deliveries, which had nearly stranded us altogether. One of the team members riding in the back seat later told me that the gas gauge was on “E.”

What is happening when a Third World country loses a key component of its energy supply, and what might be the lessons to learn for those apprehensive over a significant breakdown of logistics in the US?

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Journalists

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Financial Times recently had an article about a projected luxury dirigible.  Being an airship fan, I wish the venture success. I was struck, though, by a paragraph in the article contrasting the planned aircraft, called the Airlander, with the airships of the 1930s with their “flammable hydrogen fuels.”

Uh…no.  None of the airships of the 1930s used hydrogen as a fuel.  Some of them used hydrogen as a lifting gas, which is a totally different thing from the fuel consumed to power the craft forward. And most American airships didn’t use hydrogen for any purpose…the American airships that came to bad ends mostly did so as a result of weather-related structural failure…which point, one would have thought, might have been relevant to someone writing about the possible future of airships.

But airships are a pretty esoteric subject, after all, so maybe it’s unreasonable to expect a journalist to spend (or get his assistant to spend) half an hour actually learning something about whatever he is writing about.  So let’s talk about something that isn’t esoteric at all, but rather about as timely and important as it gets.  Energy.

I’ve noticed that in articles about energy storage…of which there have been a lot…the writer rarely seems to grasp that kilowatts are not the same thing as kilowatt-hours, and you can’t express the storage capacity of a battery or other storage system in kilowatts. It would be like stating the capacity of your car’s gas tank in horsepower.  (The same principle applies to megawatts and megawatt-hours, or gigawatts and gigawatt-hours)  Yet all the time, I see articles…not just in the general media but also in the business media…talking about the wonderfulness of a battery or whatever that can store 4 megawatts.

For example, here’s a Barrons article referring to a town which has installed batteries “that can hold two megawatts of power.”  Actually, the batteries at this facility can hold 3.9 megawatt-hours of energy…the 2 megawatts of power is about the rate at which energy can be added to or drawn from the system, and has nothing to say about the amount stored.  So if you withdraw power at 2 megawatts, you can do so for a little under 2 hours before the battery storage is exhausted. You need the megawatt-hour number to know that; “2 megawatts” tells you nothing about the storage capacity.

Turning now to television journalism:  I think Tucker Carlson is far superior to most TV commentators in terms of focusing on issues in some depth, rather than just obsessively circling in on whatever is hottest at the moment.  But when recently introducing a guest who was going to talk about a highly-questionable sale to China that was made during the Clinton administration, he said that sale had been of “machine parts.”  Actually, it was of machine tools, as the guest correctly explained.

Machine tools are one of the essential cornerstones of industry, and have been for a long time.  Shouldn’t a person who frequently writes and/or speaks about economic issues know what a machine tool is and why it matters?  Maybe I’m misinterpreting, but I think Tucker’s “machine parts” phrasing indicates that he has no such awareness.

Ben Rhodes, an Obama operative, said of the current generation of reporters:  “The average reporter we talk to is 27 years old, and their only reporting experience consists of being around political campaigns. That’s a sea change. They literally know nothing.”

No doubt true of a large number of those younger reporters who Rhodes manipulated while feeling contempt for. But there are journalists–older and younger–who do have a pretty good grasp of history, geography, and comparative political systems…some of them even have some education or reading in political philosophy.  But even among these, knowledge of technology–and by “technology” I do not mean just “computer stuff”–is pretty close to nonexistent.

And with the vastly increased influence of government over all aspects of the economy–and the even greater (much greater!) influence being sought by the current Democratic Party–such knowledge is pretty important.

Summer Rerun–Of Energy and Slavery

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(edited, with updates)

Democratic candidates are demonizing the energy industryBernie Sanders even called for the criminal prosecution of fossil fuel executivesbelieving or at least implying that America uses fossil fuels only because it is to the benefit of these companies, never considering the vital service that these fuels provide to millions of Americans and indeed to the entire world…which reminds me of an earlier article and discussion.

Christopher Hayes, writing at The Nation in 2014, asserted a connection between human slaveryin particular, human slavery as practiced in the US prior to 1865and the use of fossil fuels. Specifically, he argues that the reluctance of energy companies and their investors to lose the financial value of their fossil-fuel assets is directly analogous to the reluctance of pre-Civil-War southern slaveholders to lose the financial value of their human “property.”He also asserts that environmentalists attacking the use of fossil fuels are in a moral and tactical position similar to that of the pre-war Abolitionists.

His article reminded me of a few things.

1) Sometime around 1900, a young PR man who had recently been hired by GE in Schenectady realized that he had a problem. He had gotten his job through glowing promises about all the great press coverage he would get for the company. But his boss had called him in and announced that he had “a terrific front-page story” about a 60,000-kilowatt turbine generator that the company had just sold to Commonwealth Edison. The PR man accurately realized that this story would get maybe a paragraph on the financial pages. Looking for ideas, he went to see GE’s legendary research genius, Charles Steinmetz, explaining that headlines need drama, and “there’s nothing dramatic about a generator.”

Steinmetz picked up a pencil, did a little calculating, and quickly determined that this one rotating machine could do as much physical work as 5.4 million men. The slave population in the US on the eve of the Civil War had been 4.7 million. To the young PR man, Steinmetz said: “I suggest you send out a story that says we are building a single machine that, through the miracle of electricity, will each day do more work than the combined slave population of the nation at the time of the Civil War.”

2) Frederick Douglass, himself a former slave, visited a shipyard in New Bedford shortly after obtaining his freedom. Here are his comments on observing a cargo being unloaded:

In a southern port, twenty or thirty hands would have been employed to do what five or six did here, with the aid of a single ox attached to the end of a fall. Main strength, unassisted by skill, is slavery’s method of labor. An old ox, worth eighty dollars, was doing, in New Bedford, what would have required fifteen thousand dollars worth of human bones and muscles to have performed in a southern port.

3) Speaking of GE, Owen Young was a farm boy who grew up to become chairman of that company. To his biographer Ida Tarbell, he provided a vivid word-picture of what life had been like for a farm wife back in the slightly earlier times. Here, he remembers Mondaywash day:

He drew from his memory a vivid picture of its miseries: the milk coming into the house from the barn; the skimming to be done; the pans and buckets to be washed; the churn waiting attention; the wash boiler on the stove while the wash tub and its back-breaking device, the washboard, stood by; the kitchen full of steam; hungry men at the door anxious to get at the day’s work and one pale, tired, and discouraged woman in the midst of this confusion.

The reality is that non-human mechanical energy has been and continues to be a liberating force for humanity. A society which makes little use of nonhuman energy can maintain a small and wealthy aristocracy, but broad-based prosperity requires extensive use of nonhuman energy sourcesand with today’s technological realities, a large portion of this energy needs to come from fossil fuels.

Hayes does not seem to understand, or want to recognize, that the benefits of an energy source accrue not only to the companies and individuals who develop and own that energy source, but also to the people of the society at large. (The benefits of the coal and oil (and later natural gas) burned to power the turbines made by Owen Young’s company did not go only to the resource owners and to GE and the utility companies, but also to the farm housewives about whom he spoke.) At one point in the Hayes article he seems to reach the edge of this understanding — “Before fossil fuels, the only way out of this drudgery was by getting other human beings to do the bulk of the work that the solar regime required of its participants” — but does not really follow up on it. The thrust of his article is that the elimination of fossil fuels would require energy companies to give up something like $10 trillion in wealth. He does not focus on what the American people as a whole would have to give up.

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