The End of Petroleum for Personal Transportation

Every great company in the history of the [silicone] valley started in a technology down cycle. — Shai Agassi

Stories about electric cars usually don’t get me very excited.  They may not generate any emissions on the road, but their batteries must recharged from a national electric grid, which in America is 50% dependent on coal and 20% dependent on natural gas.  Essentially, electric cars always looked like a game of fossil fuel whack-a-mole – trading the limitations and pollution of oil for the limitations and pollution of coal and natural gas.  You could argue that we could power the grid with renewables, but the grid is a 7/24 dance of precisely matching up demand with supply and it can only tolerate a limited amount of intermittent power like wind and PV before the music stops.  Add to that the limited range of electric cars and the whole concept falls apart when you consider that potential buyers must be confined to a tight radius around the umbilical cord of their home’s electric meter.

All of that is about to change as our model of personal transportation built around cheap oil and the internal combustion engine goes the way of the buggy whip.  Imagine a future work day that looks like this:

  1. You enter your garage and pull out your electronic key. The logo on the key is blinking blue, indicating your car is fully charged.
  2. You unplug your car from the wall, open the garage door, and head for work. Your electric system software analyzes the first few minutes of driving and determines your likely destination based on past history: “Work?” it asks to confirm. You answer the question in the affirmative and the system determines how much energy is needed for the day.
  3. During your commute, the GPS enabled system finds and displays three open parking spaces near your office that are equipped with charging pods linked with your electric car’s subscription plan.
  4. You pull into one of spaces and an automatic arm extends to plug into the car. The charging pod then communicates with the control center, and based on the your driving history,  picks the lowest rate time slot to recharge your vehicle.
  5. Before your recharge is complete an unexpected cross town meeting comes up.  You climb into your car and enter the new destination, and the system software notifies you that there is insufficient charge to make the trip, return to the office, and commute back to your home.    To extend your range you order a battery swap.
  6. The system software finds the most convenient battery-exchange location and books a bay. The old battery gets lowered onto a hydraulic plate, and the car moves forward on a car-wash-style track. In no more time than it takes to fill up your old tank with gasoline, a fully charged battery pack is in place, and you are on your way with another 100 miles of driving range.

If all this sounds like an episode from the Jetsons, think again.  Within 15 years, automobile transportation in Israel and Denmark will be carbon neutral, with electric cars powered by wind and solar energy, and the rest of the world may not be that far behind.  This all starts with a business model for the automobile that takes its cues from the mobile phone.

The idea, according to Shai Agassi, the software entrepreneur responsible for this new vision, is to sell electric car transportation on the model of the cellphone. Purchasers get subsidized hardware — the car — and pay a monthly fee for expected mileage, like minutes on a cellphone plan, eliminating concerns about the fluctuating price of gasoline.
As with cellphones the car will become secondary in importance to the network, “You’ll be able to get a nice, high-end car at a price roughly half that of the gasoline model today,”

Agassi’s vision is well on its way to reality.  His company, Project Better Place, has already attracted $200-million in venture capital, a commitment from Renault-Nissan to develop and build the software enabled electric cars, and commitments from Israel and Denmark to be the “beta sites” to prove the concept.  If any of this required some new technical breakthrough, I would find it all interesting in a wait-and-see kind of way.  However, what makes this real is that it all rests on a proven foundation of off-the-shelf technology.  The breakthrough lies in the vision – in the paradigm shifting business model.  The initial selling is done, what comes next is flushing out the partnerships, building he supplier base, creating the system software, and engineering the infrastructure.

The collection of park and charge spots across a country or city, together with software that controls the timing for charging the cars, creates a smart grid—synchronized and extending the country’s existing electric grid, matching excess electricity on the grid with the need to charge batteries flattening the demand curve in the process. When we put together the charge points, the batteries, exchange stations, and the software that controls timing and routing we get a new class of infrastructure—the Electric Recharge Grid (ERG). A new category of companies will emerge in the next few years which will install, operate and service customers across this grid—called Electric Recharge Grid Operators (ERGOs).—Project Better Place white paper distributed at EVS-23


The ifs and the maybes are past tense.  Renault-Nissan has promised to have the cars ready by 2011 and prototype testing has already begun in Israel.  These cars will not be glorified golf carts, but snappy full size sedans and small SUV’s.

The consumer’s contract for the EV must be the same – or better – than the consumer’s current contract for gas-powered cars.  We need to change the way consumers buy an EV so that it fits the current social contract we have with our cars, providing a normal car ownership experience even if the car has an electric drive train. –  Shai Agassi

Israel and Denmark provide ideal consumer markets to test the business model.  Each country enjoys low average miles driven per day that fall within the proposed battery pack range and a high likelihood that the electricity used for transportation will be renewable.  Denmark already generates enough excess wind power to supply all of it’s personal transportation needs and Israel has an obvious strategic need to be independent of Middle East oil.

With any infrastructure project of this magnitude, there will be unforeseen problems.  However, none are likely to be more than temporary engineering challenges.  The end result will be a new electric personal transportation paradigm that is equal to or better than the freedom and convenience provided by the internal combustion engine.  It is a business model that has the potential to greatly mitigate the impact of peak oil, positively impact climate change, and by providing a large storage sink in the form of batteries enable much greater use of  solar and wind power on utility grids.

It also extends the age of the automobile, along with the legacy of traffic jambs, suburban sprawl, and mind numbing commutes.  Better Place estimates the the cost to develop the necessary infrastructure in the U.S. is about $500 per car or about a year’s worth of oil imports.  Over $400 of that number is for investments in renewable energy to avoid the shell game of trading oil off against coal and natural gas, so the actual cost for the charging and battery swap infrastructure is only about $85 per car.  Since the U.S. electrical grid suffers from 30 years of under-investment and is a balkanized maze of 500 owners, the implementation of the Better Place model will mimic the cellphone industry and role out by metro region based on local politics and beliefs that favor an early adopter mindset.  It’s no surprise that the California cities of San Francisco, Oakland, and San Jose will combine to be the first U.S. adopters of the model.

A Utopian Future?

Once you have a system of electric cars – a system that knows where every car is and where they are going – it is not much of leap to imagine the end of traffic jams or even the end of actually having to operate the vehicle.  Phase II?

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14 responses to “The End of Petroleum for Personal Transportation

  1. “…trading the limitations and pollution of oil for the limitations and pollution of coal and natural gas.”

    I find it a bit sad to read such a line written on a website with the name “The Sustainable Home Blog”. It is like saying ‘trading a million dollars of debt for a half a million of debt” like it makes no difference.

    Of course it is better to be debt free, but halving it is a HUGE step forward and should be taken.
    The rest can then follow.

    • Thanks David,

      It would be sad, except that after using spare capacity, Better Place is committed to only using renewable energy. Over time, as that “spare capacity” is absorbed by growth in demand, all cars on the system will be powered by renewable sources. This is truly a game changing, petroleum ending business model for personal transportation.

  2. John,

    Maybe I misunderstood you, but how can you accept a statement such as “Better Place is committed to only using renewable energy”, when, according to the Israel Ministry of Infrastructure’s communication a 20% portion of the total electrical energy supply will be achieved only in a matter of decades.
    By the way, in a speech at the Technion Last year, Shay Agassi promised 1000 charging points and 50 EV’s on the road by the end of 2008 (Two thousands eight). I believe we are now in 2009…

    • Thanks Reuven,

      I appreciate hearing first hand from sources living in BP’s premiere “beta country”. My understanding is that, as a general rule, BP only requires 7% renewables (not 20%) convert an entire country to EV’s. As a side note, in the U.S. 20% is a number I hear as an upper limit for interruptible power sources like wind and PV solar for the grid. The storage capacity added by the BP system will increase that limit, however I have not found any data as to how much. Regarding delays, I would have been very surprised if there were no delays. I spent 25 years in manufacturing and there are too many players and too many things and software being built and coded for the first time to expect perfect execution in the initial roll out. I’m curious, will you be an early adopter, or will you wait until BP has worked out all the bugs?

  3. John,
    First, regarding the issue of upper limit for renewables: you can go above the limits mentioned above as long as in parallel with developing renewables you keep installing conventional backup thermal capacity. I am all for the nuclear option.
    Also, the assumption that 7% of the total energy consumption comes from renewables and is equal to the energy required by PBP’s cars, does
    not justify at all PBP’s claims that these cars run on renewables. The PBP charging infrastructure is using electricity from the existing grid irrespectively of its source.
    A major point that many fail to understand is that there is absolutely no affinity between PBP and the quest for renewable energy sources. Mentioning the issue of renewables in every reference to its project is simply a PBP marketing ruse people should see through. If from any reason it is desirable to develop renewable energy sources, this should be done full blast independently of PBP that should not be considered as an incentive for this activity.
    By the way, since the oil import goes mostly for transportation, PBP will reduce it, at the expense of more coal!

    • Thanks Reuven,
      By backup thermal capacity, I assume you mean the baseload power currently supplied by coal and nuclear power plants. I would not put too put reliance on the future of nuclear power. According to the Energy Watch Group [EWG] the world currently gets about 40% of its uranium feedstock from decommissioned Russia warheads. This program will end in 2013 at which time there may be a temporary shortage while mining industry attempts to fill the gap in supply. Based on known and assumed reserves, the EWG predicts that uranium production will peak sometime around 2025, so we will not likely see much growth in the use of nuclear power. I don’t know if geothermal is an option for Israel, but concentrated solar power [CSP] is definitely an option. Combined with a phase change material for storage, CSP can provide a quai-baseload function and even produce power up to about 8 hours after the sunset.

      I won’t speak to the intent of PBP’s claims regarding renewables except to say that until proven otherwise I will take them at their word. That said, I think there is a real possibility that at least initially we will trade the problems of petroleum for the problems of coal. Since most of the charging will take place at night, this will be especially true in the U.S. because utilities will want to take advantage of the massive excess capacity in their existing coal and natural gas fired power plants. The “cure” for this will likely be a combination of carbon taxes and/or carbon cap & trade policies that level the playing field for renewables. At the minimum, PBP at least makes renewables a viable option for personal transportation.

  4. John,
    Unfortunately, during my navigating the various discussions concerning PBP, I found it somewhat difficult to to get people to understand that contrary to PBP’s publications, there is absolutely no affinity between PBP and renewable energy sources. If it is desirable to develop such sources, this should be pursued as energetically as possible, whether PBP existed or not. PBP is just another electrical energy consumer, from the existing grid, whichever its sources. Agassi certainly is not going to invest in green generation, on the contrary, he, like all of us , is going to enjoy the subsidies involved.

    Nuclear Energy: I read various EWG reports. To a considerable degree they seem to be politically slanted in line with the general antinuclear sentiment in Germany (that does not shy away from buying nuclearly generated energy from France). In the meanwhile, Germany keeps postponing the date for final decommissioning of its nuclear power plants. It is interesting to note that Italy has lifted the ban on nuclear power plants construction and the public opinion in Sweden has shifted dramatically in favour of nuclear.
    EWG is not the only voice in the choir: I suggest looking up on the Internet the sites of the World Nuclear Association (WNA) and of the Nuclear Energy Association (NEI) which present a completely different picture. If fuel for nuclear power plants would be constrained after 2025, France better adopt a new paradigm for their electricity generation.

  5. According to the Rocky Mountain Institute, “every dollar invested in new US nuclear electricity will save approximately 2-11 times less carbon, and will do so roughly 20-40 times slower, than investing in the same dollar in energy efficiency and “micropower” (cogeneration plus renewables minus big hydro dams). Buying new nuclear capacity instead of efficiency causes more carbon to be released than spending the same money on new coal plants!

    These conclusions and the empirical evidence supporting them are summarized in “Forget Nuclear,”

    and fully documented in “The Nuclear Illusion,” , which is to be published in early 2009 by the Royal Swedish Academy of Sciences’ journal Ambio.”

  6. John,
    I see we shall never agree on the desirability of NP – there are too much politics, fanaticism and vested interests involved.

    May be then that you are willing to see my point when I claim that PBP, if successful, will (at least in Israel) during at least a decade or two, bring about a decrease in oil imports at the cost of additional coal based electricity generation.

    • Thanks Reuven,

      Yes, I agree that in some countries the roll out of PBP will initially increase the use of coal. However, the battery storage added to the grid by the PBP business model will also enable the use of more wind and solar power to any grid’s energy mix. Bottom line, PBP gets us off of petroleum and is an enabling technology for the use renewables.


  7. Can you explain?

    • Wind and solar power are uncertain and interruptible. To avoid outages and power fluctuations, our national electric grid must manage and balance demand and supply on moment to moment basis. As a result, they can only accommodate a total of about 20% interruptible power in their supply mix. Because the PBP business model adds massive amounts of storage to the grid, more interruptible power can be added.

  8. John,
    Sorry, but could you elaborate? The sun shines and the wind blows (in Israel) during peak hours; the batteries are supposed to be charged during the night. As far as I know PBP does not allow feeding stored electricity in its batteries back to the grid. So, how will the grid benefit from the added storage capacity of PBP’s batteries?

    • Thanks Reuven,

      Pardon the delayed response, but I’ve been dealing with a shoulder injury.

      Assuming that with the PBP system we now have a smart grid or at least a portion of a smart grid, the utility can now manage that storage capacity in a way that optimizes its use interruptable power. I’d love to see the detailed numbers on this,but I’m afraid we would need to get into what PBP might consider confidential information.

      However, the larger point is that the conversion from internal combustion to electric drive trains makes wind and solar viable for personal transportation. The actual mix [coal, NG, solar, etc.] of energy sources for any national grid will be more about government policies that will vary from country to country. My guess is that many countries will choose to meet this new electrical demand with renewable energy.

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