Peak Oil and Electric Cars

In last weekend’s Kelly Letter, I published a report on Peak Oil that examined key points of a presentation three weeks ago to the Minnesota House of State Representatives by Matthew Simmons. From my report:

Recently, two separate sources that are not peak oil adherents, the International Energy Agency (IEA) and former Saudi Aramco exploration and production chief Sadad Al-Husseini, suggested that the world will hit its first critical oil supply emergency in 2011. While that in itself is reason for concern, plenty of analysts say it’s too optimistic and that we’re going to have trouble earlier than that, including Charlie Maxwell (2008), Jim Kingsdale (2009), and David Strahan (non-OPEC in 2010).

Mr. Strahan, speaking at the World Energy Summit in Abu Dhabi on Feb. 7, said the consequences of peak oil will be a severe drop in the availability of conventional oil, a spike in oil prices, and a subsequent financial and social crisis that would far exceed current worries over sub-prime.

This morning, I published a follow-up report on the state of electric cars that looks at the cost benefits of electric cars vs. gasoline cars, the environmental benefits, and a soon-to-be-released ultracapacitor battery that promises to be the holy grail for electric transportation. From that report:

Let’s look at the best case scenario. We’ll choose 5 cents per KWH (the cheapest option), 200 miles driven per week, an SUV’s 13 miles per gallon, and again $3 gas prices to get:

> Cost per year to drive the gas vehicle: $2,400

> Cost per year to drive the electric vehicle: $93.60

> Annual savings: $2,306.40

That’s just the electricity vs. gasoline advantage. The maintenance on an electric car is also much cheaper than on a gas car because you never need to change the oil, replace the filter, get a new muffler, or have an emissions test.

As far as convenience, electric cars bypass gas stations entirely. Your fill-up happens at home via a standard electrical outlet. That sure beats getting your hands dirty at the pump once or twice a week.

Finally, the geopolitical benefit of electric cars is hard to overstate. Most of the international entanglements of U.S. foreign policy in the past 30 years have been about oil. We’re literally fighting for an energy source that’s proven to harm the planet. Currently, 95% of U.S transportation is fueled by oil, most of it imported, and a good percentage of it from hostile nations. Going electric would improve U.S. national security more than going to war does.

If you would like to read these two reports in their entirety and gain access to the complete Kelly Letter archive, please sign up for my one-cent, one-month trial.

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