The article I’m quoting/linking to here is a thought exercise more than anything, but, as such an exercise should do, it is thought-provoking. Philip Greenspun asks: “How much would it cost to convert the entire U.S. fleet of passenger cars, which collectively burn 40 percent of the oil that we use, to electric cars?” He then goes on to provide us with some very nifty numbers:
- total oil consumption in the U.S.: 21 million barrels every day (CIA Factbook)
- cost per barrel: $130
- days in year: 365
- total spent per year: $1 trillion
- percentage of oil consumed by passenger cars: 40 (source)
- total spent per year on oil for passenger cars: $400 billion [refining into gasoline, distributing, and retailing add even more to this; looking at the 138 billion gallons the U.S. consumed in 2006, at $4 per gallon this is about $552 billion every year (subtract perhaps 5 percent for gasoline used by non-diesel trucks; add 1 percent for oil used by diesel-powered cars)]
- at 5 percent interest, how much we could we borrow and pay $400 billion every year in interest: $8 trillion [current 10-year T-bill yields enable government to borrow at 3.84 percent]
- number of registered cars in the U.S.: 250 million (Wikipedia)
- cost of a new electric car, if mass-produced: $20,000
- value of a used car, if exported to Latin America or China: $5,000
- cost to upgrade average existing American car to a brand-new electric car: $15,000
- number that could be converted for $8 trillion: more than 500 million cars (i.e., twice as many as we have now)
Those bits of data are very interesting, and the author goes on to examine this data in greater depth. The comments are where things really heat up though. A great discussion sprang up surrounding this article; people began trying to poke holes in the argument, which is the whole idea of a post like this. Arguments about the availability of the $8 trillion needed to pull off this conversion (interesting to note we’ve probably spent that much on the Iraq war, as the author mentions), as well as the time & effort required, where we would be expending a great deal of money on both oil and converting to electric cars.
The market for automobiles is definitely changing more drastically now than it has in the last 50 years. Companies are realizing that people are socially conscious, and being green is not only a solid investment in the Earth, but actually generates greater ROI. This sort of sea change can only be a Good Thing™ for our economy as well as the environment. Hopefully the trend continues, with new technologies eventually replacing our crippling dependence on oil.
