Thursday, July 26, 2007

100 miles per gallon

The only short term fix available to us in the face of that $500 fill up is to convert to a automotive system that gets 100 miles to the gallon as a minimum. a huge effort is now underway to achieve just that. I am even getting feedback off the street that is even more optimistic.

A three to four times improvement in mileage in the face of a three to four times improvement in fuel prices is consumer neutral in terms of economic impact. And our current supplies are then easily extended for decades since we can then shift over to an ethanol blend over the next two decades. The ethanol can be produced as a derivative of algae production so that agriculture is not disrupted.

This is an apparently viable strategy and certainly the least disruptive. If however, we get a rapid shift to the high end in price, then I expect that we will see a forced conversion of the global automotive fleet over a very short time period. First downsizing to better mileage vehicles followed by a slow increase as general efficiency rises. Amazingly enough, that suggests that the automotive industry will enter boom times as everyone shortens their trade in cycle. I never though that I would be saying that about the most mature industry we have.

Buy Gm?





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