As usual I both agree and disagree with Tom Friedman’s column this morning. I agree when he says this:
We not only need to bail out industries of the past but to build up industries of the future — to offer the kind of big thinking and risk-taking that transforms enormous challenges into world-changing opportunities. That is what made the Greatest Generation great. This money can’t just go to patch up our jalopies.
“Remember, this money will not be neutral,†said Andy Karsner, a former U.S. assistant secretary of energy. “We are talking about directing an unprecedented volume of cash at our housing, energy, transportation and infrastructure industries. This cash will either fortify the incumbent players and calcify the energy status quo, or it will facilitate the economic transformation we seek. The stimulus will either be white blood cells that will heal us or malignant cells that will continue to sap our strength.â€
I don’t think that Mr. Friedman appreciates what Mr. Karsner is saying. Bailing out dinosaur industries, the industries that are already dead but whose brains are too small to know it yet, necessarily saps new and successful ones.
And this is so stupid as to beggar comprehension:
A major electrification of drive trains in U.S.-made vehicles “would induce explosive growth and investment in a domestic battery business,†said Karsner. Europe, Japan and China are already dominating this industry. It’s the key to clean-tech — and ultimately our national competitiveness. We can’t allow ourselves to be battery importers in the 21st century the way we were oil importers in the 20th.
I recognize that Mr. Friedman is quoting Mr. Karner here but, presumably, he approves of the sentiment expressed. Unless Mr. Friedman opposes importing oil (or batteries) at all, this statement is wrong on the facts. In 1960 we produced the overwhelming preponderance of what we consumed and didn’t even import half of what we consumed until 1993. Twentieth century indeed! The last seven years of the twentieth century. I don’t believe that xenophobia and protectionism will serve the United States well. Perhaps Mr. Friedman does.
The barriers to battery production in the United States will be the same as the barriers to oil production in the United States: federal restrictions, state restrictions, and NIMBY considerations.
But there’s a more important thing to wonder about. Is battery production really the industry of the future? Who should make the call? If we subsidize it heavily enough, it will be the industry of the future whether that’s economically justified on its real merits or not and that investment will squeeze out the real industries of the future.
I wonder if you or one of your commenters can explain to me why we don’t push harder for diesel engines in the medium term, before we reach the battery-powered nirvanna. The majority of cars in many European countries are diesel. They get amazing mileage. And this is technology available right now that doesn’t require any research expenditure.
My understanding is that diesel-powered passenger cars have been a hard sell in the U. S. because of their poor image. I also suspect that up until the advent of “clean diesel” technology there have been CAFE issues with diesel here. Basically, they don’t fit into the mix the auto makers are required to have.
I’m skeptical that batteries are the long-term solution for reasons I’ve mentioned here before: it looks to me as though the production isn’t scaleable. Everybody’s having problems with them. Note that despite the fact that Toyota sells every hybrid they can make they aren’t ramping up their production of them particularly quickly.
For that matter, why aren’t all the resource nationalists pushing for greater use of Natural Gas in cars? We’ve got quite a bit of that here and in Canada, it’s difficult and expensive to ship, and there are already models existing (plus models of Natural Gas pumping stations).
I catch your point, though, about the “Industries of the Future.”
Brett’s right: natural gas is another example of available technology.
If we moved to diesel and natural gas over the next 20 years we’d drastically cut our use of oil. Diesels get 50% better mileage compared to their otherwise identical gasoline-powered model. 23/32 for the new Benz e-class diesel, as compared with 16/22 for the gas version. Where else can we get that kind of improvement?
As for natural gas, it burns clean, we know how to do it right now, it’s largely a question of building distribution — something we also know how to do.
Diesel exhaust creates more air pollution problems than regular gasoline. I think that’s one of the reasons that busses have been converted to natural gas. Personaly, I’m concerned about what natural gas as the fuel of choice would do to my heating bills. T. Boone Pickens doesn’t seem to mind though.
When and if a decent battery gets perfected, it will become a commodity and eventually be outsourced.
Yep, Andy, that’s exactly right.