Saturday, May 14, 2011
The Geo Metro, MPG's and why car and gas companies think we're idiots.
Another question, what happened to the EPA MPG ratings? In 2007, the EPA "revised" it's MPG ratings, such that the average MPG's of all production cars were lowered by anywhere from 10-20%. This meant that, when discussing cars like the Metro, you could no longer rave about it's 55 MPG average, because now it was rated at 42 MPG, or roughly equal to the Prius. The obvious question is, how does "miles per gallon" suddenly change when neither the measuring unit of a mile nor that of a gallon has changed in any way? Well, the answer is that the EPA began to factor in variables, such as acceleration speeds, air conditioner usage and other factors which are frankly impossible to quantify in a standardized manner. Everyone accelerates differently, everyone runs their AC's differently, and so on, so to now use these extra factors, which vary wildly from one driver to the next, as a part of the average MPG equation is at best puzzling and at worst extremely dubious. However, the EPA standards were changed and all production cars saw a significant reduction in their MPG ratings as a result.
Now, in the wake of the new 2007 EPA fuel economy ratings, a car that got 25 MPG was considered average in terms of fuel economy. At the same time, gas companies began experimenting with chemicals, such as MTBE, added to their fuel that supposedly reduced emissions, but were ultimately proven to have no discernible affect on emissions at all, and really only served to do 3 things - lower the MPG's of all cars that used MTBE gasoline, raise the price of gas by about $0.25-$0.40 a gallon and introduce a new contaminant into our environment that was so powerful and detrimental that a single cap full could ruin the entire water supply for a large city. Within just a few years, MTBE was ordered to be taken back out of gasoline, but the desired impact was already achieved - cars now continued to see lower MPG's per tank, even without MTBE being present in the gas anymore, and gas prices never lowered from the point they were raised to when the MTBE was added. Why does gas continue to be less efficient per gallon than it used to be? Why does the price of gas only raise to match the oil market and never lower in relation to it? When the price of oil goes up by $0.50 a barrel, you immediately see a price increase at the pump, but when gas drops $10 a barrel, you're lucky to see a $0.2-$0.3 drop after a month. Why is that?
When all the chaos was going on in Egypt, Syria and Lybia, gas prices spiked, raising by nearly a dollar a gallon within 4 months. However, when the recent death of Osama Bin Laden caused global oil prices to tumble considerably, gas prices at first only stabilized and simply stayed at about the same price for the first few days and after that only lowered by less than $0.5 a gallon on average and have already started going back up in anticipation of summer travel demand. A mouse farts on an oil tanker and gas prices raise by a quarter, but you take out the people and organizations most responsible for instability in the global petroleum market and you can't even get a 5 cent drop in price to stick for more than a week? Why?
In a previous blog post, I talked about how energy speculation investing is the single biggest contributing factor to high gas prices, and it continues to be the case. However, more than just the high price of gas, there also needs to be questions raised about why a tank of gas gets you less mileage now than it ever has before? My first new car, bought off the lot, was a 1996 Saturn SC2. It was a 5-speed manual and I averaged between 40-45 MPG's in it. When I filled up my tank, I always calculated how many miles I traveled divided by the gallons I had used and I was consistently in the 40-45 MPG range. My second car was a 1998 Dodge Stratus. It was an automatic, and I averaged about 35 MPG's per tank in it. Today, in order to get an average of 35 MPG from a car, you have to buy something like a Honda Civic or a Toyota Corolla, and it pretty much needs to be a manual transmission. How is it that, 13 years later, fuel economy has declined in production cars across the board? Are car manufacturers intentionally making cars with less and less efficient engines? Or are gas companies intentionally making shittier and shittier gas? Today, in order to get the gas mileage that my 5-speed, 1.9 liter 4-cylinder Saturn SC2 with a sticker price of $10,500 used to get, I have to buy a 1.8 liter gas/electric hybrid Prius with a sticker price almost 3 times higher.
It's either the cars or the gas that's getting shittier and shittier each year...
Car companies insist that they're continuing to push the technological envelope with things like "Electronically Controlled continuously Variable Transmission (ECVT)" in the new Prius, that supposedly optimizes fuel efficiency by automatically shifting gears at the best possible points. They tout their superior fuel-delivery systems, their more efficient independently computer-controlled valves and a slew of other features designed to make the cars today achieve an optimal combination of maximum performance and maximum fuel efficiency. The cars of today supposedly deliver more HP at a better MPG than ever before. Yet, the pinnacle of automotive fuel economy - the Toyota Prius - is just barely achieving the MPG benchmark set by the 1995 Geo Metro, a car that is over 16 years old, and they had to make the engine a gas/electric hybrid in order to do it.
There is a infamous quote that has been inaccurately attributed to everyone from Bill Gates to Steve Jobs that went something along the lines of "If the auto industry kept up with technology the way the computer industry has, we would all be driving $50 cars that got 1000 miles to the gallon." Neither of these gentlemen actually made this statement, but the fact remains that the automotive industry is one of the few industries in the world that, in spite of billions of dollars in R&D and exponential progress in computers and other ancillary industries related to their manufacture, produce a product that has only significantly progressed at the cosmetic level in over 20 years. Cars today aren't 20 years more fuel-efficient, but their interiors are 20 years more fancy and full of gadgets. A Prius gets the same MPG as a 16 year old Geo, but the Prius has a built in MP3 player, navigational system and tons of other "Oooh! Aaaah!" gadgets that are on the cutting edge of technology. The 2011 Ford Focus gets the same mileage as my 1998 Dodge Stratus did, but the Focus has a voice-activated SYNC system that controls a hands-free phone, a built-in MP3 hard drive and a navigational system and can even "read" your facebook statuses to you while you drive... "Oooh! Aaaah!" The electronics are 2011, but the hardware is 1995...
You can update your facebook, download and listen to MP3's, get turn by turn navigation and parallel park automatically in your brand new Ford Focus, but you're still filling up just as much as the 1997 Chevy Monte Carlo I currently own. You're paying $500+ a month for your car and I'm paying jack shit for mine, who's the dummy? All I have to do is hook an iPhone up to my stereo and we're even, oh and I have to park it myself, but for $500 a month, I'll take it.
So, are car companies intentionally neglecting to evolve the engine technology in their cars, in terms of fuel-efficiency, on purpose? Are they using fancy gadgets and gimmicks to distract you from the fact that you're driving dinosaur tech with a star wars shell as part of some grand scam? Do they think we're all a bunch of idiots?
Gas prices are on track to set a new all-time record by the summer. This is in spite of the fact that oil prices are significantly lower than they were in 2008, the last time gas prices were anywhere near this high. I've already explained before how speculation investing is the primary culprit in this. The fact that people who have no other interest in fuel markets except to gamble on them can buy and hold oil contracts, effectively keeping that oil out of the market and not allowing it to be refined into fuel, without ever having to even provide space to store it. A guy in his living room with an e-trade account can single-handedly hold tankers full of crude oil in limbo and manipulate the price as he sees fit and there's nothing we can do about it except pay the resulting higher gas prices and make him rich, as long as he's got the money to buy that oil in the first place. Our government has started to put policy in place to regulate this kind of speculatory investment, and get us back to where we were before Clinton repealed Glass-Steagall, which opened the floodgates for this kind of rigged market gambling in the first place. However, Big Oil is spending millions of dollars to lobby congress to overturn and block this legislation. It makes sense, of course, oil companies are making nearly $5 billion in profits per week right now, why would they want to do anything to change that?
The Obama administration is trying to put an end to the $4 billion per year in subsidies that they currently give oil companies, funded by our tax dollars. Put into perspective, Obama wants to stop giving oil companies one extra week worth of profits per year at your expense. The CEO's of the major oil companies have all said that doing this will "force" them to pass on higher prices to the consumer. Think about that, in all likelihood, ending tax payer subsidies for oil companies will mean an increase in the price of gas that will easily be at least 10-25 cents per gallon, and all it would actually cost these oil companies is one week worth of extra profits. Essentially, the gas companies are saying, if we stop giving them an extra week worth of profits at tax payer expense, they will fuck us for months worth of profits as punishment. Do you think that's fair? Do you think that's just "Free Market Capitalism" at work? Do you think being extorted into giving free money to the most profitable industries in America is ethical? Are you happy paying $60-100 a tank to fill your car or truck? Are you looking forward to paying $80-120 per tank? Would you rather see $4 billion a year of your tax dollars go into the pockets of these guys, or to people who want to develop solar and electric car technology that would cost you a fraction of what gas costs per month to fuel your cars? Are you happy subsidizing an industry that hasn't made a significant technological advancement since the 1970's? The only thing about the oil industry that has evolved in any real way since 1970 is the cost per gallon of gas, and that they can now drill even deeper and more dangerously than before to get oil. The methods for containing spills hasn't changed, the methods for refining hasn't significantly changed, the efficiency of a gallon of gas has actually gone down, most of the refineries and transportation lines have been around since the 70's. All that money that oil companies have taken from the government to supposedly help them with the "ever-increasing" cost of developing new fuel production technology, all the tens of billions of dollars they make per year in pure profits and the industry hasn't really changed all that much since Carter was in office.
Even sodas have evolved more in the last 30 years than gasoline has. They have "Throwback" soda now, sodas that pay tribute to a time, way back, when real sugar was used instead of corn-based sweeteners. Meanwhile, we're still filling our tanks up with "Throwback" gas, but they slap some fancy new name on it and make you think it's a revolution in fuel technology and we pay $4 a gallon for it and get worse mileage than we got 15 years ago. Do you think these guys need $4 billion of your tax dollars more than, say... old people who depend on social security to survive?
Today we have cellphones with faster and better processors in them than desktop computers had just 10 years ago, but we're driving cars that get worse gas mileage than they did in 1995. Are you ok with this? Why do we demand a higher standard of performance from our phones than we do from our cars? Why do we demand better technological advancement from our Taco Bell burrito than we do from our gas? If they don't find a new and exciting way to wrap meat with a tortilla every other month, people are ready to riot in the streets, but we're perfectly ok with paying $4 a gallon for essentially the exact same liquid that cost $1 a gallon 20 years ago and is actually a shittier product today than it was back then. Why?
Do gas and car companies think we're idiots? Obviously, because they clearly treat us like we are, and I guess since we keep letting them do it, maybe they're right...