Ford Exec: Oil Production is Peaking
16 October 2005
In a keynote address to the Society of Automotive Engineers’ “Global Leadership Conference at The Greenbrier,” Mark Fields, Ford executive vice president and president of the Americas, noted that the auto industry faces seven specific and serious challenges, one of them being that oil production is peaking.
The SAE Greenbrier conference, first held in 1950, is an annual event attended by automakers, suppliers and business leaders.
The auto industry events of the past week [e.g., Delphi’s bankruptcy] prove that the roadmaps our companies followed for 100 years are no longer valid. Business models have changed. Consumers and markets have changed. We have to change, too. From now on, only those automakers and supplier companies that find new ways to work together—and strike down some new, uncharted paths—are going to survive.—Mark Fields
Fields said the auto industry faces seven specific and serious challenges:
Globalization is bringing more competition to the US.
The balance of power in the industry has shifted with China and India emerging as top markets.
Market dynamics are changing, causing intense competition in every part of the market.
Customers are becoming even more demanding.
Customers’ views of their automobiles are changing faster than ever, with cars increasingly becoming an expression of who people are rather than mere transportation
Legislative pressure is increasing
Oil production is peaking, and concern for the environment is growing.
We must grapple with all seven of these challenges. Guts, grit and new ideas will be the key to winning in the automotive game today.
In a separate speech at Greenbrier, Anne Stevens, Ford’s newly-appointed executive vice president and chief operating officer of the Americas, stressed the critical role of innovation in moving the auto industry forward.
Noting Ford’s development of the Escape and Mariner Hybrids, as well as the environmental manufacturing advances at the Rouge plant, she said that more needs to be done by all automakers in all areas such as alternative fuels, biodiesel, fuel cells and hydrogen powered vehicles.
She voiced concern to the audience, however, that with the declining number of students studying science and engineering, the future of the US auto industry runs the risk of being completely dependent on engineering knowledge residing abroad.
The building blocks of the auto industry are eroding at a time when such nations as China are gathering strength, she said, noting that:
Fewer students are studying science and engineering. Enrollment in first-year engineering programs is down more than 5 percent since 2002.
Electrical engineering is starting to decline, as well. Computer science is even more alarming—with enrollment for first-year students off 31 percent from 2001.
China is graduating five times the number of engineers this year as in the US—and graduating an equal number of PhDs.
In the US, foreign nationals earned more than 50% of master’s degrees in engineering and 63% of PhDs.
Less than 20% of graduate engineering students in the U.S. are women, and only 10% of the engineering workforce is female. This makes it the most segregated of all professions in the U.S. today.
This does not bode well for the manufacturing base in the United States—and that means us. If America is to maintain its manufacturing know-how, we must fill that engineering pipeline. We cannot afford to be slow to market because of an insufficient engineering base at home.—Anne Stevens
If there was any such thing as a smart CEO in the oil business they would be building infrastructure to make BioDiesel as we speak.
Looks like ADM and Cargil are going to become the oil barons of the future.
Posted by: Lucas | 16 October 2005 at 08:36 AM
"Electrical engineering is starting to decline, as well. Computer science is even more alarming—with enrollment for first-year students off 31 percent from 2001."
As a Computer Science student myself, wrapping up my final year of undergrad studies, I have witnessed this drop-off in CS enrollment first-hand. I enrolled in 2002 and by then already, the CS department had begun to shrink. By now, it's only about 1/3 of the size it used to be in 2000-2001 with certain courses which used to be offered at least once a term now being offered only once a year or less.
However, I wouldn't be too alarmed by this. Using 2001 as a base point skews the numbers since the turn of the millenium was a peak period for CS, driven by the .com boom of the late 90s. Every thought they could make tons of money doing CS jobs, which seemed never ending at that time. Well, the .com boom burst (sort-off, its not as bad as the hype) and more and more low-level programming jobs moved overseas (to India especially). Now the US demand for CS graduates has shrunk enormoulsy and enrollment in CS programs has fittingly dropped to match it. It's harder to get a CS job these days: there's less of them out there and you have to be better to get them. No wonder then that we're seeing less CS graduates.
I don't know about the other engineering programs mentioned, but the drop in enrollment in Computer Science programs is a simple case of supply and demand. I wouldnt lose sleep over it. If demand picks back up, it won't take too long (2-4 years) for more students to start enrolling and graduating from CS programs to meet the new demand. People will go where there are high-paying jobs...
Posted by: Jesse Jenkins | 16 October 2005 at 11:29 AM
Good thing Ford has been in the vanguard of producing fuel-efficient vehicles to prepare us for the peak of oil production. Not.
Sounds like Madam is just making excuses for Ford's lethargic, gas-guzzling product line. The whole bit about engineering graduates is a canard, probably to be used to outsource more American jobs in the future.
Posted by: Bib | 17 October 2005 at 04:23 AM
It sounds to me like Ford is getting ready for some large-scale job cuts in the near future
Posted by: Kerry | 17 October 2005 at 04:31 AM
Also, this point is relevant:
"In the US, foreign nationals earned more than 50% of master’s degrees in engineering and 63% of PhDs."
Since 9/11, increased security measures and other isolationist activities have made it more difficult and less desirable for foreign nationals to come here, for study or whatever else, and we're starting to see the impacts of those policies. The students graduating now are completing their educations but we're seeing a "student peak" similar to the oil peak where we're not replacing them as fast as they're leaving. It's no surprise that enrollment in engineering and computer science, where a large contingent of newly arriving foreign nationals have typically applied themselves, have dropped. I expect this trend will continue.
Posted by: Shirley E | 17 October 2005 at 06:24 AM
"Electrical engineering is starting to decline, as well. Computer science is even more alarming—with enrollment for first-year students off 31 percent from 2001."
Unemployed CS grads tops the unemployment list. Does this mean fresh CS grads do not have what it takes to be a IT worker? Or simply the employers are too choosy and refuse to take in any unexperienced people?
"China is graduating five times the number of engineers this year as in the US—and graduating an equal number of PhDs."
And how many % of them employed within one year they graduated?
Posted by: rexis | 17 October 2005 at 05:57 PM
A New Manhattan Project for Clean Energy
Over the past year many luminaries have made clarion calls for a concerted effort to solve the energy crisis. It is a crisis, with 300 million middle class Chinese determined to attain the unsustainable lifestyle we have sold them. Their thirst for oil is growing at 30% a year, and can do nothing but heat the earth and spark political conflict.
We have been heating the earth since the agricultural revolution with the positive result of providing 10,000 years of warm stability. But since the Industrial revolution we have been pushing the biosphere over the brink. Life forces have done this before -- during the snowball earth period ( Cryogenian Period ) in the Neoproterozoic toward the end of the Precambrian - but that life force was not sentient!
Thomas Freedman of the New York Times has called for a Manhattan Project for clean energy The New York Times> Search> Abstract. Richard Smalley, one of the fathers of nanotechnology, has made a similar plea http://news.uns.purdue.edu/html3month/2004/040902.Smalley.energy.html.
We are at the cusp in several technologies to fulfilling this clean energy dream. All that we need is the political leadership to shift our fiscal priorities.
I feel our resources should be focused in three promising technologies:
1. Nanotechnology: The exploitation of quantum effects is finally being seen in these new materials. Photovoltaics (PV) are at last going beyond silicon, with many companies promising near-term breakthroughs in efficiencies and lower cost. Even silicon is gaining new efficienies from nano-tech: Researchers develop technique to use dirty silicon, could pave way for cheaper solar energy http://www.physorg.com/news5831.html
New work on diodes also has great implications for PV, LEDs and micro-electronics Nanotubes make perfect diodes (August 2005) - News - PhysicsWeb http://physicsweb.org/articles/news/9/8/11
And direct solar to hydrogen, I was told they have hit 10% efficiency and solved mass production problems: Hydrogen Solar home http://www.hydrogensolar.com/index.html
And just coming out of the lab, this looks very strong, it brings full spectrum efficiencies to PVs: UB News Services-solar nano-dots
1a. Thermionics: The direct conversion of heat to electricity has been at best only 5% efficient. Now with quantum tunneling chips we are talking 80% of carnot efficiency. A good example is the proposed thermionic car design of Borealis. ( http://www.borealis.gi/press/NEW-GOLDEN-AGE-IBM.Speech.6=04.pdf ) . The estimated well-to-wheel efficiency is over 50%. This compares to 13% for internal combustion and 27% for hydrogen fuel cells. This means a car that has a range of 1500 miles on one fill up. Rodney T. Cox, president of Borealis, has told me that he plans to have this car developed within two years. Boeing has already used his Chorus motor drives http://www.chorusmotors.gi/.
on the nose gear of it's 767. (Boeing Demonstrates New Technology for Moving Airplanes on the Ground http://www.boeing.com/news/releases/2005/q3/nr_050801a.html )
The Borealis thermocouple power chips http://www.powerchips.gi/index.shtml (and cool chips) applied to all the waste heat in our economy would make our unsustainable lifestyle more than sustainable.
You may find an extensive discussion on thermo electric patents at: Nanalyze Forums - Direct conversion of heat to electricity http://www.nanalyze.com/forums/topic.asp?TOPIC_ID=1006
2. Biotechnology: Since his revolutionary work on the human genome project, Craig Venter has been finding thousands of previously unknown life forms in the sea and air. His goal is to use these creatures to develop the ultimate energy bug to produce hydrogen and or use of their photoreceptor genes for solar energy. http://www.venterscience.org/ Imagine a bioreactor in your home taking all your waste, adding some solar energy, and your electric and transportation needs are fulfilled.
3. Fusion: Here I am not talking about the big science ITER project taking thirty years, but the several small alternative plasma fusion efforts and maybe bubble fusion - Is bubble fusion back? (July 2005) - News - PhysicsWeb
On the big science side I do have hopes for the LDX : http://psfcwww2.psfc.mit.edu/ldx/.
There are three companies pursuing hydrogen-boron plasma toroid fusion, Paul Koloc, Prometheus II, Eric Lerner, Focus Fusion and Clint Seward of Electron Power Systems http://www.electronpowersystems.com/ . A resent DOD review of EPS technology reads as follows:
"MIT considers these plasmas a revolutionary breakthrough, with Delphi's
chief scientist and senior manager for advanced technology both agreeing
that EST/SPT physics are repeatable and theoretically explainable. MIT and
EPS have jointly authored numerous professional papers describing their
work. (Delphi is a $33B company, the spun off Delco Division of General
"Cost: no cost data available. The complexity of reliable mini-toroid
formation and acceleration with compact, relatively low-cost equipment
remains to be determined. Yet the fact that the EPS/MIT STTR work this
technology has attracted interest from Delphi is very significant, as the
automotive electronics industry is considered to be extremely demanding of
functionality per dollar and pound (e.g., mil-spec performance at
Wal-Mart-class 'commodity' prices)."
EPS, Electron Power Systems seems the strongest and most advanced, and I love the scalability, They propose applications as varied as home power [email protected] .ooo5 cents/KWhr, cars, distributed power, airplanes, space propulsion , power storage and kinetic weapons.
It also provides a theoretic base for ball lighting : Ball Lightning Explained as a Stable Plasma Toroid http://www.electronpowersystems.com/Images/Ball%20Lightning%20Explained.pdf
The theoretics are all there in peer reviewed papers. It does sound to good to be true however with names like MIT, Delphi, STTR grants, NIST grants , etc., popping up all over, I have to keep investigating.
Recent support has also come from one of the top lightning researcher in the world, Joe Dwyer at FIT, when he got his Y-ray and X-ray research published in the May issue of Scientific American,
and according to Clint Seward it supports his lightning models and fusion work at Electron Power Systems
Clint sent Joe and I his new paper on a lightning charge transport model of cloud to ground lightning (he did not want me to post it to the web yet). Joe was supportive and suggested some other papers to consider and Clint is now in re-write.
It may also explain Elves, blue jets, sprites and red sprites, plasmas that appear above thunder storms. After a little searching, this seemed to have the best hard numbers on the observations of sprites.
Dr. Mark A. Stanley's Dissertation
And may also explain the spiral twist of some fulgurites, hollow fused sand tubes found in sandy ground at lightning strikes.
lightning produces thermonuclear reaction
This new work By Dr.Kuzhevsky on neutrons in lightning: Russian Science News http://www.informnauka.ru/eng/2005/2005-09-13-5_65_e.htm is also supportive of Electron Power Systems fusion efforts http://www.electronpowersystems.com/
Vincent Page a technology officer at GE made a presentation at the 05 6th symposium on current trends in international fusion research , which high lights the need to fully fund three different approaches to P-B11 fusion . 1.) Prometheus II , 2.) Field Revered Configuration, and 3.) Focus Fusion http://www.focusfusion.org/about.html
He quotes costs and time to development as tens of million, and years verses the decades and tens of billions projected for ITER and other Big science efforts.
Posted by: Erich J. Knight | 17 October 2005 at 09:02 PM
Erich - Excellent recap for long range development possibilities. Would you risk a guess on what will happen in the next ten to fifteen years. It seems that:
Fusion - is out for one + life time.
Biotechnology - is on-goin and well financially supported.
Nanotechnology - seems to offer very good short and mid-term possibilities to improve clean power production and storage leading to clean, mainly electric, vehicles and other clean energy uses. I would put an important portion of the special project development resources in that domain and associated field to speed up the processus.
Posted by: Harvey D | 18 October 2005 at 04:48 PM
I have done a lot of looking into about "peak oil" and I have one thing to say about it: not tomorrow. Some analysts and now the ford guy are saying pretty much that demand will permanently outpace supply, etc. Consider the following: World demand has been fluctuating between 1.5-2.0% a year on increase for oil. This year (using a revised demand by OPEC) oil demand will increase 1.4%. Oil is obviously not going to peak this year because OPEC still has 2mb/d laying there, and wont peak anytime soon or before 2010 because over 5.5 mb/d will be added to capacity by decade's end.
So people like this and others are just trying to profit off and already shook up energy market.
Posted by: thatgreasemonkey | 19 October 2005 at 05:28 PM
"Customers’ views of their automobiles are changing faster than ever, with cars increasingly becoming an expression of who people are rather than mere transportation" - No, this is what used to be the case. For most people these days, cars are increasingly more and more like refrigerators, washing machines and other household appliances. I think Ford would like it to be like the "old days", but the world is changing...
Posted by: Kevin Bennewith | 21 October 2005 at 09:23 PM