Montreal, October 15, 2004  /  No 147  
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Harry Valentine is a free-marketeer living in Eastern Ontario.
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by Harry Valentine
          World oil prices recently crossed over the US$50 per barrel mark and auto maker Daimler-Chrysler unveiled its sub-compact, 2-seat "smart car" that will soon be available on the North American market. This microcar is powered by a diesel micro-engine and promises to set new standards in automotive fuel economy. Time will tell as to whether the market is ready for such super-economy vehicles.  
          In the early 1990's, the Honda Motor Company unveiled its super economical gasoline powered Civic VX model. This car not only promised to deliver the equivalent of over 70 miles per gallon, it also promised to have one of the cleanest exhaust emission system in the automobile industry. Within less than 2 years, Honda discontinued marketing the Civic VX in the North American market due to poor sales.
          Recent increases in the world price of oil have renewed interest in more fuel-efficient vehicles. The economic growth that began in China and India during the mid-1990's has not only increased demand for oil in both those countries, that rising demand has steadily pushed up the price for a barrel of crude. Over the next decade, world oil prices may indeed remain in the US$40 to US$50 per barrel range. Increased oil prices impact on several sectors of the economy, especially the commercial transportation sector. Transport companies recently added fuel surcharge to passenger ticket prices as well as to freight rates. In order to provide customers with more competitive commercial transportation rates while remaining competitive and viable in the future, commercial transportation companies will need to reduce their overall operating costs, either by raising fleet fuel efficiency or by switching to a less costly type of fuel. Doing business in a competitive market place may demand nothing less. 
Developing alternative fuels 
          A variety of government-sponsored programs aimed at developing alternative fuels for private automobiles have been initiated in the USA and Canada. Governments in both countries have favoured the development of the hydrogen fuel cell to power buses and automobiles. In order to refuel, the fuel cell powered car (or bus) has to be supplied with cooled hydrogen gas, which is initially obtained by splitting hydrogen from oxygen atoms in water. From an electric power plug to the drive wheel, a hydrogen fuel cell vehicle is estimated to operate an overall engine energy efficiency level of 30% in urban traffic. 
          In 2003, a Japanese company revealed the test results of a full-sized, prototype electrically-powered car that used (full-sized) lithium based rechargeable batteries. In terms of energy efficiency from power plug to drive-wheel, a battery-powered vehicle could be expected to return some 50% of the recharge power to the road. After a 25-minute recharge, the car was able to cover 300 Kms (200 miles) at highway driving speeds. The Moteur Développement International Group (MDI) of Belgium recently unveiled a compressed air powered car that could travel for 80 Km (50 miles) at 113 km/hr after a 4-hour recharge from a home electrical plug. Other alternative-fueled test automobiles that can be recharged from a home electrical plug have included a flywheel-powered car that could travel for over 200 miles between recharges, as well as a short distance car that stored energy in a series of giant-size wind-up clockwork type springs. 
          Over the past several years in the USA, electrically-powered personal vehicles (golf carts) have appeared on private roads in retirement villages and in gated communities for local transportation purposes. A variety of higher capacity electrically-powered vehicles have also appeared on such roads as well as on private roads in holiday resort areas. Up to now, the performance limitations imposed by traditional lead-acid storage batteries made such vehicles generally unsuitable for widespread use for personal or commercial transportation on public roads. Recent advances in energy storage technology as well as new developments in electrical technology offer the potential to greatly improve the performance capabilities of such vehicles.  
     “If future oil prices remain high, competitively priced electrically rechargeable vehicles could become attractive to customers if a reliable supply of easily available, competitively priced alternate energy can be assured. Such assurance will depend on government behaviour, with its addictive propensity to interfere in the marketplace whenever the opportunity arises. This could make or break the future for renewable energy vehicles in Canada.”
          Performance improvements to electrically rechargeable vehicles include faster acceleration, higher speeds, greater traveling distances, shorter energy recharge durations and greatly improved cold weather performance. Related technological advances may also reduce future purchase costs of several types of electrically-recharged vehicles. If future oil prices remain high, competitively priced electrically rechargeable vehicles could become attractive to customers if a reliable supply of easily available, competitively priced alternate energy can be assured. Such assurance will depend on government behaviour, with its addictive propensity to interfere in the marketplace whenever the opportunity arises. This could make or break the future for renewable energy vehicles in Canada. 
State control of electric power production 
          Electrical energy production across Canada is either owned, controlled or heavily regulated by some level of government. Canada's most populous province, Ontario, is projected as having to retire over 50% of its electrical generating capacity over the next 20 years. For the past several years, Quebec has experienced an annual mid-winter shortage of electricity. Alberta's electric power debacle has resulted from decades of electric power regulation. High-priced electric power in Canada's Maritime Provinces has been generated by high-priced oil. Nowhere across Canada will any provincial government allow for unregulated electricity to be generated and sold to consumers. 
          As a result, electrically rechargeable vehicles could have a bleak future in Canada's most populous provinces. State ownership and state regulation of electric power production has the potential to cause future electric power shortages, as well as power brown-outs and black-outs. Both Ontario and Quebec remain firmly committed to the economic ideology of Karl Marx as far as the regime of state control of electric power production is concerned. This unwavering commitment would likely prevent the emergence of a regulation free, privately-owned electric power production regime intended for transportation use. The question begs to be asked as to which public officials in Canada may have taken an oath of allegiance to Karl Marx! 
          In such a free regime, anyone could produce electric power and sell to anyone willing to purchase electric power at an agreed-upon price. Unregulated free-market competition in an electric power production market would eventually lead to competitive prices (vs. oil prices) for transportation customers. During overnight hours (power station off-peak hours), owners of electrically rechargeable cars could use preset timers to recharge their vehicles between midnight and 6:00AM. It may be possible to purchase power during off-peak hours at reduced prices. For people who commute to work, commercial parking lots could provide customers with parking as well as access to commercial electrical power plugs for vehicle recharging. Companies that provide employee parking could allow for commercial electrical power plugs to be installed on their premises, for the benefit of employees who own and commute to work in electrically rechargeable vehicles. 
          In a free electricity marketplace, citizens would be able to make an easy transition from oil-powered vehicles to alternate-energy vehicles. The cost and availability of a reliable energy supply as well as competitive vehicle costs would be among the factors that could help develop market acceptance of alternate-energy vehicles. Except that Canada's provincial government officials, whose loyalty to the ideology of Karl Marx in electric power production is beyond question, would sabotage any possibility of large amounts of low-cost electrical energy becoming available to any sector of the power market. Like the government of Malawi that regulates food production in a subtropical nation where 30% of the area is a deep freshwater lake, officials in Canada's provincial governments have convinced themselves of the benefits of state ownership and state market control over commercial electric power production. 
          Malawi has experienced famine despite an abundance of fresh water, fertile land and favourable growing conditions. Despite an overwhelming potential to generate an abundance of new electric power, Quebec regularly undergoes a mid-winter power shortage while Ontario faces potential electric power shortages. Even Alberta with an abundance of low-grade geothermal energy capable of generating large amounts of electricity, has seen power prices rise due to a power shortage caused by a history of previous government economic regulation. Given the present (and future) regime of electric power regulation and control across the country, the future of all kinds of electrically rechargeable vehicles will remain bleak in Canada. This will include the hydrogen fuel cell cars, which will be the most expensive of all electrically rechargeable vehicles. All the money that Canada's federal government has allocated to hydrogen fuel cell powered automobiles may end up being just another episode of squandered public funding.