March 28th, 2007
There have been many posts on the subject of disintermediation in this blog. For those new to evolution shift, please check out this post and this post. I firmly believe that we are living in one of those short periods of time when the world gets rearranged in large part due to historically powerful agents of disintermediation. Gutenbergâ€™s printing press in 1455 changed the world so much that fifty years later it had become a different place. The Internet is doing that right now. I believe that we are in an age of disintermediation. Every week there is a news story that brings this home.
It is well documented that the CD business has been in decline ever since Napster came on the scene in the late 1990s. The industry became alarmed that sales first stopped increasing on a unit basis. Then when they arrogantly increased prices without adding value to stem the decline, sales declined further. Then, having no historical awareness of the winds of disintermediation that were starting to blow through their industry they actually started to sue customers.[ It is clear that an industry has no clue about what is happening to it when it initiates legal action against its customer base]. All of this was done when sales were decreasing annually by single digits. The alarm of course was that sales had historically always gone up, so a drop of 5-10% a year was both unheard …
March 26th, 2007
In the prior post I gave a general definition and overview of peak oil for those that have yet to track this development. Until recently, the brightest minds unencumbered by vested oil interests have strongly suggested, and with good documentation, that the world could well run out of extractable petroleum sometime around the mid twenty-first century.
Up until a year ago, this was cause for great alarm. Most countries in the world, with the U.S. being at the top of the list, have, in the last 50 years, allowed economic development, urban planning, real estate development and transportation issues to be made within the context of always having cheap oil to allow us to construct a society around the internal combustion engine. If you were to look at a time lapse photographic history of the U.S .landscape from 1900 to 2000, taking one photograph a month for 100 years, the changes will be almost entirely based on an automotive culture. This culture, while transforming the countryside, has basically been using the same mechanical invention, the internal combustion engine the entire time. It has been as though once we fell in love with the car and the cheap gasoline that powered it we decided that we arrived at the highest point of civilization and our infatuation blinded us to any kind of consequence other than some nasty smog and ever lengthening drive times. These were judged to be small prices to pay for an American Dream that gave us 300 horsepower …
March 23rd, 2007
Peak oil is loosely defined at the point in time when half of all the oil reserves in the earth have been extracted and burned. This means that we are half way through the oil consumption cycle and move into extracting the remaining 50%. Some of the most respected experts and oil geologists have long suggested that peak oil would occur in the early part of this century, that in the decade 2000-2010 we would move through it. The expected symptoms would be a dramatic increase in price, followed by price volatility, with a long term ever upward pressure on pricing due to constantly increasing demand, combined with increasing cost of production, combined with a fully utilized production pipeline. This certainly sounds like 2006-2007, and is evidence the believers in peak oil use to support their theory.
One of the key dynamics of this theory is that a lot of the oil reserves that remain cost more to extract that in the past. In other words, much of the oil extraction of the past 100 years has been the â€˜low hanging fruitâ€™ like West Texas crude, which was near the surface and was therefore very cheap to extract. What remains in the ground is heavier crude oil, or oil embedded in shale. The long used technology of the past decades is not up to the task of this type of extraction, or if it was, the extraction is much more expensive, thereby closing the gap between cost of production and …
March 20th, 2007
In my last post I wrote about GM and the presentation it made to some of us in the media about the new battery technology they are developing along with several other companies. At the end of that post I highlighted the two distinct lines of challenging questions that have come up in response.
I will quickly restate these two before moving on to address them. The first challenge to GM about their commitment to creating a new battery technology for vehicles is to directly question how serious the GM commitment is. How can the people who were identified as launching and then â€˜killingâ€™ the electric EV-1 be taken seriously? The second challenge is to the commitment of GM to not come out with a true electric car until there is the â€˜perfectâ€™ battery technology to do so. In other words, since it will take several years to perfect the lithium ion battery to meet all the necessary criteria for use, why not just come out with vehicles that use the current nickel-metal hydride technology so that â€˜greenâ€™ cars can be put on the road much sooner.
To restate simply: Are you guys for real, and why wait for perfect when good is available?
Is GM for real? All evidence points to a truly serious, committed company that has set as one of its core missions to reinvent the actual DNA of the automobile. First, GM is being extremely open to the press, bloggers and the world at large about what they …
March 16th, 2007
One of the most important research and development efforts in the world today is the quest for the perfect battery to power electric cars. We all know that there is global warming, air pollution, and an increasing dependence on imported oil. We know that petroleum is a finite resource that will be depleted in this century. We live in a country whose culture and functionality is so dependent on the automobile that an alien might think the car is the dominant form of life. Therefore, the solution to all of these problems and situations is to reinvent how the 200+ million vehicles in this country are powered.
It has been 120 years since the internal combustion engine was invented and first utilized for a personal mode of transportation. In that time, the 20th century, practically every technological aspect of our lives has been consistently upgraded, changed or replaced by a new invention. Not so the power train of the automobile, which, at its essence, is still the mechanical, internal combustion engine we were using in 1900.
This then is the historical context for what the automotive industry and many of its suppliers are attempting to do regarding the invention of an electric power source for all the vehicles we drive. As readers of this blog know, I had been invited by General Motors to meet with some of their top management last month prior to the Chicago Auto Show. In follow-up to that, GM invited me …