how remote the destination is or how much of a hurry you’re in. In April of 2007, they said that going forward they were going to count the fully burdened cost of fuel delivered in-theater in wartime with force protection. That’s all written into the new defense authorization. And once the primes [prime contractors] start competing, we are on our way. They will come up with ways to have more efficient platforms, and that will pay back in civilian car and truck manufacturing, just as defense gave us microchips, the Internet, and GPS.
[Lovins holds up, and then dons, a black hemispherical object.] I brought an example. This is my carbon cap. It’s from a little startup that is one of five spinoffs from our non-profit. This is a test piece to show that you can make a hemispherical shell in less than a minute out of carbon-fiber composites. We’ve figured out how to do aerospace-grade composites for structures at automotive costs and speed. This material is tougher than titanium. You can bash it with a sledgehammer and it just bounces off. Imagine making cars out of this stuff. Half of the weight and fuel use go away. And also, the power train gets three times smaller. You have to think of this as if wildcatters had just found another Saudi Arabia under Detroit. We ought to drill that first.
PM: Maybe Exxon ought to bail out the car companies, not the U.S. government. Isn’t 70 percent of oil used in transportation?
AL: Yes. A standard car uses 100 times its weight in ancient plants—a big, steaming swamp. But where does that energy go? Seven-eighths of it never gets to the wheels. And of the one-eighth that does get to the wheels, most of it either heats the tire and the road, or pushes air aside. Only 6 percent accelerates the car—and then heats the brakes when you stop. Only 0.3 percent of they energy is for you—actually moving the driver. That’s not very gratifying, after 120 years of devoted engineering effort.
But happily, three quarters of the energy needed to move a car is caused by the weight. So every unit of weight saved saves 7 units of energy. Toyota showed a concept car last year that has the same interior volume as a Prius but one-third the weight. It’s a plug-in hybrid. Normally, concept cars can be dismissed as boasts, because they don’t get to market. However, the day previous to Toyota showing off this car, the world’s biggest maker of carbon fiber announced it was building a factory in Nagoya to build carbon fiber car parts. That’s another reason coming at us that we should modernize our car industry with wartime urgency.
PM: When you sit down with President Obama, what will you suggest that he do right away?
AL: He is already exerting energy and climate leadership. That is a very important step. But there’s a big difference between leadership and management. There are some managerial things to do. The Department of Energy will never work right until the bombs and the nuclear industry are out of the building. It needs very close coordination with, if not a merger with, climate and environmental issues. That is likely to happen.
The two most powerful policy levers are a little unfamiliar. In electricity and gas, it’s the decoupling and shared savings to reward utilities for cutting your bill. In cars, it’s the “feebate.” Buy a vehicle the size you want. On the less efficient ones, you pay a fee, and on the more efficient ones, you get a rebate paid for by the fees. This widens the price spread between the more and less efficient models by thousands of dollars, arbitraging the spread and the discount rate to get a societally effective private decision. Those are the two big things in policy. The utility one has to be done at a state level, but the feds can encourage it. The feebate should probably start experimentally at a state level and then go national.
There’s a whole slate of other things we need to do in fuel and electricity, but the most important policy thing you could do is to set up a sensible and conservative framework for energy. All ways to save energy should be allowed to compete fairly at honest prices, regardless of the type of technology, its size, location, or ownership. Let’s see how not-in-favor of that the free-marketeers are, after paying for the best government money can buy.
On carbon pricing, we should do it. However, it’s not essential. You can make lots of money off of efficiency with zero carbon pricing. We know how to save half the oil and gas and three-quarters of the electricity at an eighth of their price. But busting the 60 or 80 institutional obstacles to allowing people to respond to price is even more important than getting the price right.
