We also had a serious recession in the early 80s, which would naturally result in less energy use. I didn't know it took fifteen years to recover, though. Interesting.

We see great potential for DME as a clean alternative fuel . The present diesel oil is a major source of air pollution from diesel engine of trucks and busses in large city like Tokyo. The potential market of diesel oil substitute is larger than LPG. DME is one of ideal fuel for diesel engine. DME vehicles were demonstratively manufactured in Japan, China and Korea and their driving test already started. Practical durability fleet test of a DME truck is under going in Japan.

We are pleased to organise a conference on China taking the lead in the DME market in production from coal and Japan and Korea activities.

If you would like to know more on COAL to Syngas to DME developments, join us at upcoming North Asia DME / Methanol conference in Beijing, 27-28 June 2007, St Regis Hotel. The conference covers key areas which include:

DME productivity can be much higher especially if
country energy policies makes an effort comparable to
that invested in increasing supply.
By:
National Development Reform Commission NDRC
Ministry of Energy for Mongolia

Production of DME/ Methanol through biomass
gasification could potentially be commercialized
By:
Shandong University completed Pilot plant in Jinan and
will be sharing their experience.

Advances in conversion technologies are readily
available and offer exciting potential of DME as a
chemical feedstock
By: Kogas, Lurgi and Haldor Topsoe

Available project finance supports the investments
that DME/ Methanol can play a large energy supply role
By: International Finance Corporation

For more information: www.iceorganiser.com

9,400 thousand barrels per day.

High quality, information dense reports like this is a compelling reason for staying tuned at CCG. Thank you for doing this website it is quite unique.

This report highlights at least two issues of importance:

1) Higher gasoline prices do not importantly affect consumption (at least since 1991). The explanation for this is that a large majority of American households earn so much that they don’t care about gas prices. A good article on this is made in USATODAY http://www.usatoday.com/money/economy/2007-05-22-gas-price-impact_N.htm?loc=interstitialskip.
2) The annualized average vehicle fuel bill of $1775 is still too low to economically justify the introduction of PHEV and EV that will sell for a $15000 premium. The first EVs and PHEVs should not be marketed as means to save money because they don’t if you drive less than 15000 miles per year. Instead, they should appeal to wealthy people that care about the environment and that what to make a difference. There are million of such people in the US and hundreds of thousands of them in Europe and their numbers are growing rapidly with the bad news about GW popping up almost weekly now.

The conclusion I make of these two observations is that it would be a blessing for the environment if gasoline would increase to $5 gallon in the coming 5 years. That would not affect economic growth and it would imply an annual gasoline bill of (11,856/21,5)*5 = $2757. If you buy a PHEV that do 100 MPG your new gasoline bill would drop to (11,856/100)*5 = $593. The total saving is now more than $2000 per year which is enough to economically justify a $15000 price premium for PHEVs or EVs. Ethanol production would also skyrocket if gasoline crept to $5 without any need for subsidies for farmers or ethanol producers.

Cervus it would be irresponsible not to foremost consider the well being of the majority and the greater picture rather than the minority and smaller issues. More specifically, consider the well being of the about 90% of US households who earn enough not to care about $5 dollars for gasoline. They will be better of in the long run because the combination of PHEVs, EV and ethanol would mean 100% energy independence for the US. They will also be better of because a complete elimination of fossil fuel use will prevent GW that are on track to eradicate 1/3 of all species on earth and displace 100 of millions of humans living at costal areas. It is getting that serious and I do not feel much pity for a small minority that will have to bike a little more or sell their car and buy a scooter instead and perhaps eat more grain and less meat (both of which is healthy by the way). If that is all the “suffering” it takes to save the planet from GW disaster then we should not complain at all.

Henrik, give us links, or the source of your quote about "90% of US households who earn enough not to care about $5 dollars of gasoline". I do not believe that number at all!! What ivory tower are you in that you can make such an absurd comment?

I agree with Cervus. A extra 10K premium for a PHEV buys alot of $5 gasoline. Many small towns here in the US do not have public transportation. Also biking or scootering is out, as many do not have a simple office job. Thats making things way too simple. Many have to carry the tools of their trade with them in their commute from their home. Perhaps a large toolbox filled with carpenters tools, or plumbing tools, with perhaps an 8 foot ladder. Or in many small communities, the harvest of their property. Whether is is eggs, cucumbers, tomatoes or such. Or even flowers. Ever try toting a bushel of tomatoes on a bicycle, along with an 8 foot ladder, say in a mid January snowstorm in Minnesota?? The point I am making is that the US is so interconnected with the small communities connecting with the large cities, all relying on cheap, easy transportation where public transit is not available. The service community is large.

I do feel confident in the upcoming EV's and PHEV's, if they are able to bring the prices inline with a standard model. But until the offerings are equal in cost, the premium to get a PHEV, or whatever the offering is, will make no sense to the 90% of us here in the US who must pinch and scrape and conserve to get by (and who do care about $5 gasoline!!!).

We keep reading this comparison, but what we dont factor is
in 1981 - there were not SUV's, Minivans, Pickups (were not used by households) and also the cars had a very high mileage.

But now most of the households have these and also the regular cars have become gas-guzzlers though not as bad as in 1950's and 1960's.

Definitely the $ 3 / gallon will impact the household more than what it did in 1981. Apr-2007 vehicles sales were down 7 % compared to Apr-2006 even though the gas prices were < $ 3 / gallon.

But the hatchbacks and wagons can give both the decent mileage and also ample space. They can also used to hold more cargo when seats are folded.

Hybrids make lot more sense now.

Yes, we need to take into account those with lower incomes who do not have transportation alternatives. But when did they buy their last vehicle and what did they buy? Could they have bought, say, a used Honda Civic or Corolla for equal to or less than what they paid for their SUV or truck. And I am not talking about, say, a carpenter, who probably needs a truck to haul his tools around. I am talking about people who insist on driving big SUVs or trucks to work or shopping with one or two passengers in them. These are the people who I see crowding the freeways.

Clearly, people do not get the fact that we are in for high gas prices from here out and they need to get the fact that they either need to move closer to work or buy a more economical vehicle. And that doesn't mean they need to buy a Prius or PHEV.

In any event, there are millions of people who can afford a hybrid and are choosing to continue to buy giant SUVs and trucks without regard to what or whom they need to haul.

As was said above, people will not get it until a floor is put under the price of gasoline. In addition, we should increase the price each year by $5.00 until it gets to at least $10.00. Those who respond appropriately to said plan will not suffer undue hardship. Those who ignore such a plan will suffer accordingly and pay the consequences.

To the extent that some people are simply too poor to make the necessary arrangements, then we can use part of those increased taxes to help them out, even if it means subsidizing housing closer to their work.

Katrina should have been a wakeup call. Obviously, it wasn't. In the mean time, there are a lot of us out here without upper class incomes who will do quite well even with $10 per gallon gasoline because we decided years ago to "make other arrangements" like buyihng the most economical vehicle we could find and doing everything we can to minimize driving.

Yes, we need to take into account those with lower incomes who do not have transportation alternatives. But when did they buy their last vehicle and what did they buy? Could they have bought, say, a used Honda Civic or Corolla for equal to or less than what they paid for their SUV or truck. And I am not talking about, say, a carpenter, who probably needs a truck to haul his tools around. I am talking about people who insist on driving big SUVs or trucks to work or shopping with one or two passengers in them. These are the people who I see crowding the freeways.

Clearly, people do not get the fact that we are in for high gas prices from here out and they need to get the fact that they either need to move closer to work or buy a more economical vehicle. And that doesn't mean they need to buy a Prius or PHEV.

In any event, there are millions of people who can afford a hybrid and are choosing to continue to buy giant SUVs and trucks without regard to what or whom they need to haul.

As was said above, people will not get it until a floor is put under the price of gasoline. In addition, we should increase the price each year by $5.00 until it gets to at least $10.00. Those who respond appropriately to said plan will not suffer undue hardship. Those who ignore such a plan will suffer accordingly and pay the consequences.

To the extent that some people are simply too poor to make the necessary arrangements, then we can use part of those increased taxes to help them out, even if it means subsidizing housing closer to their work.

Katrina should have been a wakeup call. Obviously, it wasn't. In the mean time, there are a lot of us out here without upper class incomes who will do quite well even with $10 per gallon gasoline because we decided years ago to "make other arrangements" like buyihng the most economical vehicle we could find and doing everything we can to minimize driving.

I would make a couple of observations that many of you overlooked.

Mileage of the fleet in use in the USA went from 15 to 21 mpg IN SPITE OF the presence of SUV trucks et cetera. No one seems to comment on that fact.

The long term trend reported on this blog last month revealed that the auto manufacturers are increasing mileage by 5.1 % per year over the past few decades.

Certainly, most of the mileage increases went to increase performance and size and safety. Crush zones, airbags, ABS, and stability systems, torsional rigidty (aids handling), all aid safety, all add weight, but they have been incorporated, and need not be added again.

There is little incentive to grow size any longer, and auto performance has about topped out too. As a reference, most first class civilized sedans have acceleration figures approaching the lower rated "performance cars" of the pre-oil embargo era.

So there is little need to grow the size of autos or increase performance much more. In short, the civilized sedAN "horsepower race" is about over. Its easy to predict that FURTHER mileage improvements will be invested MAINLY in mileage increases.

The 1982 reductions in consumption were a combination of two things; a recession and vastly underpowered and downsized vehicle fleet, that came into existence and was not well received by the consumers. Do you remember trying to merge and accelerate a full size sedan on a freeway ramp with a 120HP V8? Interminable, and Unsafe for sure.

Schlomo:

Two years ago I was in the new car market. At the time I owned a 1997 RAV4 and was getting about 22-23mpg on average. I traded it for a new Corolla and paid about $17k for it. I had looked at the Prius, but at the time I didn't know what the long term costs of ownership were and I could not afford a payment of $400 per month for six years. Two years later the car is paid down over $5k.

The new EPA figures for the Prius put the combined mileage at 46mpg. Given that I would have to go into debt by at least $10k and at interest rates much higher than two years ago, it's simply does not make financial sense for me to get a hybrid. Besides, I'm already getting 50% better efficiency by getting rid of my RAV4.

Those who respond appropriately to said plan will not suffer undue hardship. Those who ignore such a plan will suffer accordingly and pay the consequences.

And those who cannot afford to purchase a new vehicle off-the-cuff, which is most people by far, will suffer at the hands of their government. I'm sure you realize, tom, that this will never happen. Even Democrats aren't willing to artificially raise the price of gasoline so high. To do so is a rather authoritarian tactic, don't you think?

In any event, there are millions of people who can afford a hybrid and are choosing to continue to buy giant SUVs and trucks without regard to what or whom they need to haul.

And that is their choice, not yours. Sorry. That's just the facts. Even if they're making the wrong choices, it's their mistake to make.

Max:

Perhaps a more apt comparison in that class is the Civic Hybrid, which has about the same price as the Prius but gets slightly worse mileage. I exepct my next car will be either a hybrid or a (bio)diesel, but in the meantime I also have a Honda Reflex scooter that gets 65-70mpg.

Did I mention all cars in this comparison offer more performance (are peppier) than the Prius? (Yes, even the Yaris: 0-60mph 8.6 sec vs. 10.5 sec for Prius)

We owned a Focus wagon that averaged 30mpg. My friend was amazed that we could fit as much in our wagon as he could in his Toyota 4Runner SUV (while delivering ~50% better fuel economy). He sold his SUV (kicked the habit) and is now a recovering "gasoholic."

Folks driving mega-SUVs, "gasoholics," please repeat after me: "smaller is better."