Posted on 06/15/2005 2:04:24 PM PDT by xp38
Hybrid owners may be spending less for gas, two recent studies show, but they're almost certainly also paying thousands more to the car companies for the privilege.
Studies by the British Columbia Automobile Association (BCAA) and Edmunds.com in the U.S. make it clear that it's very hard for hybrid owners to recover the premiums car companies charge for their vehicles under the present economic conditions.
Essentially, hybrids don't save enough fuel at current gas prices to recover their extra cost, unless they're driven two-to-three times farther every year than the current average, but then that would increase the likelihood of service or maintenance work which would add more costs.
Of course, Hybrids would also make more financial sense at traditional annual driving distances if fuel prices went up to about $3 a liter.
It's impossible to state specific terms, however, since every hybrid carries a different premium and delivers different fuel economy levels, and sometimes there isn't a precise non-hybrid model to compare it with. Ford sells an Escape SUV with a traditional powertrain and one with a hybrid, for example, but there is no non-hybrid version of the Prius.
But on a case-by-case basis, both studies show over and over that there is no strong economic case for all hybrids in either Canada or the U.S.
The BCAA study did come up with a comparison that showed the Honda Accord Hybrid would be a lot less expensive ($3,305) over five years, but only if the hybrid delivered the promised fuel economy levels (which experience increasingly shows they do not), if they get reduced rate financing (available only in BC from VanCity), if they get a government grant, and if they don't cost any more to service. Big ifs, to put it mildly.
Edmunds.com did a similar review of the cost differences between hybrid and vehicles with traditional powerplants in the U. S. and reported that, "during the first five years of ownership, a hybrid can cost as much as US$5,283 more than its non-hybrid counterpart."
For its part, the Santa Monica-based organization could only come up with one example of a hybrid costing less over five years - a Toyota Camry LE would cost US$81 less than a Toyota Prius.
Phil Reed, a co-author of Edmunds.com's "Strategies for Smart Car Buyers," says possible hybrid buyers need to review the situation carefully. "While some people buy hybrid cars because they appreciate the environmental benefits and enjoy using advanced technology," Reed says, "consumers looking at hybrids solely to save money at the gas pump need to carefully research the cost of actually owning and operating a hybrid."
According to Reed, "most hybrids' high sales prices, insurance costs and related expenses will offset the savings" associated with lower fuel and maintenance costs, though that last item is pure conjecture.
Reed says Edmunds.com analysts do "predict this cost differential is likely to decrease as the technology matures and hybrids become more mainstream."
Currently, hybrids make up less than one percent of market share, so "the manufacturers have not yet been able to achieve economies of scale and are passing the higher costs along to their buyers."
Since current customer demand greatly exceeds supply, Reed says, "the vehicles are easily able to carry the premium transaction price. At some point in the near future, these dynamics are expected to change."
In reviewing both studies, it's easy to see that both agencies support the wholly estimable desire to find ways to reduce airborne pollution, as they give hybrids every break possible and soft-pedal the results. Notwithstanding that, it's also hard for anyone -- even the most vehement environmentalist -- to miss the reality that hybrids cost more to operate.
Of the two studies, the Edmunds.com effort probably carries more weight because the Santa Monica-based firm uses its highly-evolved and well-proven methodology of estimating real world costs.
Common Freakin' Sense Bump!
Mine did its most recent 52 mpg down the Atlantic shore (NY, Jersey, OBX, from the Five Boros Ride) to Charleston with our tandem bicycle in the wind. Three days of just touring- very nice.
I agree. I think they buy it to support the technology that they believe in and to make a statement.
???
a lot of cities have dual systems in their buses, Vnacouver BC has quite a few buses that run on propane/electric, diesel/electric, and a few have ballard fuel cells...
sure not everyone uses them but they exist...
also a lot of the cabs back home in BC run on propane.
I don't mock the concept, I choose to silently mock the libs... My attitude is the same as the poster of #15:
http://www.freerepublic.com/focus/f-news/1423565/posts?page=15#15
Building a distribution system for hydrogen is not even close to trivial. The engineering and materials problems are going to be very expensive to overcome. I would even predict that the first companies on board will quickly become bankrupt.
Yup, and that beautiful piece of mahogony furniture didn't get there on a bicycle either.
We have two that were just recently purchased. Neither has more than 5K mi. My wife gets 50 - 51 mpg driving on country two lane roads at ~60 mph and in and out of town. I get ~47 mpg driving on the freeway to work at 75-80 mph and back home at 70-75. The mileage is improving as the engines become broken in. From what I've read, the mileage improves for the first 20k miles. The PDs don't seem to get as good a FE as the earlier engines, but it still seems like an improvement over other US available vehicles. I looked at (and drove) the Escape and Prius, but found the TDIs more fun to drive.
If you had first read the article. "Since current customer demand greatly exceeds supply, Reed says, "the vehicles are easily able to carry the premium transaction price."
Do you remember all the pictures they used to show on TV of thousands of Chinese riding their bicycles in the streets? I hope we studied the technique.
This is called the "Apple effect."
After several million pretentious liberals spent thousands of extra dollars buying iMacs and iPods, the economies of scale have allowed conservatives to start scooping them up at a bargain. Now we have extra money to contribute to the Republican Party AND Free Republic!
I'd be interested in seeing where you got that number from. And what "BioFuel" it's for.
North of Portland, Oregon, you can buy straight BioDiesel at the pump for $3.10 a gallon. And that includes the full state and federal gas taxes. Granted, that's expensive for diesel, but it is definitely NOT subsidized.
Commerical Hemp which is not addictive or used for drugs would produce the most efficient biofuel. It has a higher oil content, does not destroy the soil, will thrive on marginal soil and does not require a lot of fertilizer.
As to using hemp for an oil source, I'd really like to know where you're getting your information.
Industrial Hemp (Cannabis sativa) only produces about 300 kg of oil per hectare per year. Common Rapeseed (Brassica napus - a.k.a. Canola) produces about 1000 kg of oil per hectare per year. Avacadoes (Persea americana) produce about 2200 kg per hectare per year (Guacamoleum anyone?), and Oil Palms (Elaeis guineensis) produce 5000 kg of oil per hectare per year.
The Oil Palm output is pretty impressive, but it pales in comparison to the potential of algae. Some strains of oil producing algae produce 500 kg of oil per hectare per day. And they don't need good soil, or clean water, or any fertilizer to do it. A pond of brackish wastewater in the middle of the desert wasteland is ideal for oil producing algae.
Biofuels average $4.85 per gal cost but are heavily subsidized by the government.
I'd be interested in seeing where you got that number from. And what "BioFuel" it's for.
North of Portland, Oregon, you can buy straight BioDiesel at the pump for $3.10 a gallon. And that includes the full state and federal gas taxes. Granted, that's expensive for diesel, but it is definitely NOT subsidized.
The reason that you can by it for $3.10 a gal is that there is 75% capital cost tax break. That means if you invest $100 dollars in the production of biodiesel you get $75.00 in tax subsidy profit or no profit. You only risk $25.00. Under the present bill we taxpayers are spending $72,000,000 so you can buy it at $3.10. The real cost is about $4.85 gal. or $2.75 subsidized. $2.75 is the about the amount you would be paying if they weren't hitting you again withstate and federal taxes. It will be a long time before biodiesel is profitable and it will have to sell with taxes at about $6.50 gal. This year the congress would like to cut the subsity in half and if they do you're in for a shock! When I get time I will try to reply to some of your other questions pertaning to cost analysis.
The subsidy bill is below but there are many othe sources including the congessional record.
D tax breaks, biodiesel subsidy, alt-fuels breaks in U.S. House, senate energy bills
Diesel Fuel News, April 14, 2003 by Jack Peckham
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The full U.S. House and the U.S. Senate Finance Committee just approved bills granting tax breaks to a wide variety of energy producers, including "small" refiner deductions for producing ultra-low sulfur diesel (ULSD) and separate breaks for ethanol, biodiesel and other "alternative fuels."
Following earlier action by House Ways & Means Committee, the full U.S. House late last week passed an omnibus energy bill (H.R. 6) including the various tax breaks. The Senate is expected to take up similar legislation soon, but faces a major battle over a House-passed provision to allow oil drilling in Arctic National Wildlife Refuge (ANWR).
Under the House energy bill and the Senate Finance Committee bill, a relative handful of "small refiners" would be able to expense the first 75% of capital costs for producing U.S. EPA's highway ULSD (up to 15-ppm sulfur) and up to 5 cents/gallon for the other 25% of capital costs.
Both bills define "small" refiners as those with up to 1,500 employees "engaged in the refinery operations of the business" and average (annualized) daily runs of up to 205,000 barrels. This is broader than the standard U.S. government definition of "small" which normally includes all employees, not just refinery employees. Farm co-op refiners also qualify.
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The 75% expensing and 5 cents/gallon credit provisions max-out for refiners producing up to 155,000 b/d, then decline proportionally for the next 50,000 barrels (up to 205,000 b/d) qualifying for partial credit.
The tax breaks cover costs of "new process operation units or the dismantling and reconstruction of existing process units to be used in the production of low-sulfur diesel fuel, associated adjacent or offsite equipment (including tankage, catalyst and power supply), engineering, construction period interest and sitework."
The estimated cost to the U.S. Treasury between 2003-2013 would be about $72 million, with the greatest costs expected in 2008-2009.
Other key energy tax bill provisions:
The House bill (but not the Senate bill) would exempt the water portion of diesel-water emulsions from the 24.3 cents/gallon federal diesel fuel excise tax, effectively imposing a 19.7 c/gal. rate on EPA-registered emulsions of "at least 14%" water content.
Railroads and inland barges would (starting next year) be exempted from a 4.3 c/gal. diesel tax that went to the highway trust fund, for which these industries receive no benefit.
Buyers of "advanced lean-burn technology" light vehicles that meet EPA Tier 2/Bin-5 before 2007 could get fuel-efficiency tax credits. Since ULSD won't be widely available before mid-2006, this seems to block clean-diesel credits, with perhaps the possibility of some fleet applications using "early" ULSD.
Senate Finance (but not the House) approved a $1/gallon "agri-biodiesel" subsidy for oilseed/animal fat-based biodiesel (1 cent/gallon for each percent up to 20% biodiesel blend) and half that rate for recycled waste fats/oils-based biodiesel. The credit can be taken either as an income tax or excise tax credit if "agri-based" but only as an income credit for "recycled" biodiesel.
* 'Renewable' = Perpetual Breaks
The biodiesel credit provision supposedly would expire Jan. 1, 2006. But given the track record of the ag lobby getting repeated extensions for ethanol-gasoline tax subsidies and blending mandates, perpetuity seems more likely.
* Sellers of "alt-fuels" including compressed natural gas (CNG), LP-Gas, hydrogen and 85% ethanol/methanol could claim a tax credit of 20 cents/gallon of gasoline equivalent next year, 30 cents/gallon equivalent in 2005 and 40 c/gal. in 2006, under the Senate bill.
* House energy bill would allow refiners to earn renewable fuel credits for selling biodiesel fuel, as offsets to any shortfalls in the "renewable fuels standard" that forces refiners to sell 5 billion gallons of ethanol-in-gasoline blend in coming years.
* Fuel-cell cars and hydrogen infrastructure would get $1.5 billion in subsidies under this House Energy bill, as requested by President George Bush.
* Up to 25% of $210 million authorized for "clean school bus" acquisitions could go for buses equipped with diesel particulate filters (DPFs) running on ULSD. Alt-fuels would get the other 75%.
* In House energy bill, U.S. EPA must establish a grants program for clean-diesel school bus retrofits (1991 or later model year) running on ULSD. It authorizes (but doesn't appropriate) $90 million in 2004, $100 million in 2005 and $110 million in 2006 for retrofits.
* Up to 25% of another $200 million authorized for "advanced vehicle" grants in the "Clean Cities" program (including public transport, delivery vehicles, light vehicles) could include DPF/ULSD-equipped vehicles.
* Railroads could get up to $25 million next year, $30 million in 2005 and $35 million in 2006 for advanced technology research on low emissions/high efficiency locomotives. The same provision is included in both House and Senate Finance energy bills.
* Fleets that cut mobile-source emissions might be able to expand emissions credit trading with stationary sources. The House energy bill will require EPA to evaluate recent emissions-trading programs and figure out ways to make these work best.
* Heavy-duty trucks installing auxiliary power units (APU) or similar idle-reduction devices would get a 400-pounds break on maximum vehicle weight to offset the weight penalty of APUs. EPA must evaluate how to calculate possible emissions credits from idling reduction and how an idling-reduction credits trading program could work.
* The House energy bill tells U.S. Department of Energy (DOE) to "accelerate efforts to improve diesel combustion and aftertreatment technologies" that aim to meet EPA Tier-2 light vehicle emissions limits by 2010, but doesn't explain how. President Bush's proposed 2004 DOE budget deeply slashes such clean-diesel research programs (see Diesel Fuel News 2/17/03, p3)
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COPYRIGHT 2003 Gale Group
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I'll ignore the lubricity of hemp oil, as well as the legal issues, for now because they aren't really relevant to the subject of BioDiesel fuels. After transesterification, one source oil is pretty much as good as another.
Just because hemp has a history as an oil seed crop does not mean it's an ideal source of oil for fuel. Hemp simply does not have the oil output per hectare of other, better oil crops.
Of course, neither does soybeans. With an oil crop output of only 375 kg of oil per hectare per year, soybeans are only marginally more productive than hemp. But that doesn't stop the United Soybean Board from pushing soybeans as an "ideal BioDiesel oil source" either.
To be an acceptable source of oil for fuel, an oil crop needs to produce a minimum of 1000 kg of oil per hectare per year. Rapeseed (canola) barely qualifies. And opium poppies just barely miss the mark, producing about 980 kg of oil per hectare per year (and I don't even want to get into the whole drug prohibition issue there). With the massively greater production capacity of algae, though, the future of BioDiesel oil is in ponds, though, and not fields.
Now some of us would say that taxes are simply 75% (or more) too high.
The real cost is about $4.85 gal.
Of which the major portion is the cost of the source oil. Once you have the source oil, it costs only about 50¢ to 75¢ per gallon to convert it into BioDiesel (depending on the transesterification method used). But that oil is bought at a price inflated by millions (and probably billions) of taxpayer dollars in price supports every year. So what we have here is one tax credit offsetting the inflated costs imposed by a taxpayer funded subsidy.
Or you can look at it this way: In 1900, at the Paris Exhibition, Dr. Rudolf Diesel's engine ran on peanut oil (Arachis hypogaea - 890 kg of oil per hectare per year). In 2002, the U.S. federal government spent $1,094,742,381.00 taxpayer dollars in peanut subsidies to reduce peanut production and artificially inflate peanut prices. In 2002, U.S. farmers produced about 3.3 billion pounds of peanuts. Also in 2002, the U.S. produced almost 34 million gallons of peanut oil from approximately 520 million pounds of peanuts. That means the taxpayers got to spend just over $5 in subsidies to peanut growers for every gallon of peanut oil produced. Had Dr. Rudolf Diesel exhibited his engine in the U.S. in 2002, I don't think he would have run it on peanut oil.
While the price inflation and subsidies for other oil crops might not be as extreme as for peanuts (I only have the numbers for peanuts), they're still pretty high. Think about it the next time you spend more than $10 for a gallon of vegetable oil at the supermarket. We may be able to fry our food at these subsidy inflated oil prices, but what about fueling our cars? And is the farm subsidy worth continuing to bow and scrape before the middle east petroleum producers?
So how about this for a solution? Stop spending taxpayer dollars keeping oil crop prices for fuel producers artificially high. At the same time eliminate the tax break for the fuel producers. Then see if the price of BioDiesel goes up or down. I think it will go down (a lot). Either way, the taxpayer wins.
Oh, and while we're improving the world, how about we make sure the dollars collected from the gas taxes are actually spent on the roads, instead of being diverted (read: squandered) into the general vote buying fund.
Right, and lets get even more practical:
Bought a 1987 Ford Tbird, with a gas guzzling V8 302 that gets 20mpg on a good day.
Let's see, paid $5500 in 1995, and I've owned it outright ever since. I've got another $2500 in maintenance in it over the last 10 years, including a totally new tranny. So, $8000 for 10 years of driving. I can buy a LOT of gas for the $20k difference in price to a new hybrid, and I get a heavy, smooth, quiet, safe car. And it didn't even depreciate much.
And if it blew up and died tomorrow, I'd dispose of it and get another used car, while smiling all the way to the bank.
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