Alice in EVland Part II; The Hall Of Mirrors

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Mark Twain reportedly said that "Figures don't lie, but liars figure." Truer words were never spoken.

On November 22nd the EPA issued an official fuel economy sticker for Nissan's (NSANY.PK) Leaf that shows an impressive electric drive equivalence of 99 MPG. Two days later it issued an official fuel economy sticker for General Motor's (GM) Volt that shows a comparable electric drive equivalence of 93 MPG, a gasoline drive fuel economy of 37 MPG and a combined equivalence of 60 MPG. Both stickers were heralded as the dawn of a new age in transportation. Unfortunately, they were outrageous lies that account for the distance a car can travel on a kilowatt-hour of electricity but ignore the energy needed to make that kilowatt-hour of electricity in the first place.

To arrive at their magical fuel economy numbers, the EPA started with the scientific fact that 1 kWh of electricity contains 3,412 BTUs of energy and 1 gallon of gasoline contains 124,238 BTUs. After calculating a base energy equivalence of 36.41 kWh per gallon, they adjusted that value to show a 7.5% energy loss in the battery and arrive at a final value of 33.7 kWh per gallon. In the words of autobloggreen "Since the Leaf has a 24 kWh battery pack and can go, officially, 73 miles, then, the EPA says, it could theoretically go 99 miles if it had a 33.7 kWh pack."

Now let's talk about what really happens.

To get a gallon of gasoline we have to drill a well, produce the oil, refine it and transport it to a gas pump near you. Overall, the production, transportation and refining consumes about 20% of the raw energy the crude oil contained at the wellhead. So if we back the entire process up to mother earth, each gallon of gasoline had an initial energy value 155,300 BTUs.

To get a kWh of electricity from sources other than water, wind and solar, we have to consume fuel to create heat in a generating plant and then turn that heat into electricity. The conversion process is very inefficient. According to the Energy Information Administration, it takes 10,378 BTUs of coal energy, 11,015 BTUs of petroleum energy, 8,305 BTUs of natural gas energy or 10,453 BTUs of nuclear energy to make 1 kWh of electricity. In other words, about 2/3 of the raw energy extracted from mother earth is wasted. If we include electricity from water, wind, solar and all other sources, the US consumed an average of 8,775 BTUs of raw energy last year for every kilowatt-hour of electricity it produced. By the time we account for transmission and distribution losses on the electric grid, the energy inputs for each kilowatt-hour of electricity delivered to a wall socket near you is about 9,375 BTUs.

When we track all the numbers back to mother earth, the energy equivalency ratio between gasoline in a car's tank and electricity in an EVs battery is 16.6 kWh per gallon – not 33.7 kWh per gallon.

The EPA's official sticker for Toyota's (TM) venerable Prius shows a respectable combined fuel economy rating of 50 MPG. Since the Prius only burns gasoline but does so very efficiently, we have to extract 3,106 BTUs of energy from mother earth to move the Prius a mile. In comparison, we have to extract 3,388 BTUs of energy from mother earth to move the Leaf a mile and we have to extract a whopping 3,873 BTUs of energy to move the Volt a mile.

The bottom line is all the efficiency talk for plug-in vehicles is based on a fundamental deception that ignores the energy required to produce electricity in the first place, the same way it ignores the emissions impact of producing electricity. As a result, all of the arguments in favor of vehicle electrification have the intellectual integrity of a no peeing zone in a public swimming pool.

William Martin wrote that "In America we get up in the morning, we go to work and we solve our problems." We don't delude ourselves by creating a hall of mirrors where unconscionable waste can masquerade as conservation. We can do better, but not until we take our heads out of the sand and recognize the problems.

Disclosure: None.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks , Technology

Referenced Stocks: GM , TM

John Petersen

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