The Future of Transportation

A big problem

NOVA: Just how vast is our global transportation system?

David Greene: We're approaching a billion motor vehicles worldwide. In this country alone, we have more light-duty vehicles—cars and small trucks—than we have drivers. So it's an enormous transportation system. We produce about four trillion passenger miles of travel every year. It's enough to take each human being in the United States around the world once every 18 months. Just fantastic. And we consume more than 6,000 gallons of fuel every second.

In terms of the scale relative to our resources, a quarter of all the petroleum ever consumed in the history of the world was consumed in the last 10 years.

Why is it critical that we wean ourselves off oil?

Well, there are three main issues. First, in the United States we know we have a problem of oil dependence. Oil makes us dependent on foreign suppliers. It maybe gets us involved in military situations we'd rather not be involved in. It costs our economy hundreds of billions of dollars every year.

Second, we have a problem of greenhouse-gas emissions. Our transportation system alone produces more emissions than any country in the world except China. So it's a major source of climate-changing greenhouse gases.

And third, there's the problem of sustainable energy. We're now approaching a time when oil production outside of the OPEC countries is likely to reach a plateau or peak. And when that happens, we will have a growing gap between what the world can supply itself in oil and mobility demand, not just in the United States and in Europe and South America, but also in Asia, China, India. So we're going to have to find other sources of energy to power the transportation system, and we're going to have to make it more energy-efficient at the same time.

"Very few people will voluntarily pay extra money to solve society's problems."

What are the challenges to replacing petroleum? Why are we so stuck on it?

There are a lot of challenges. First of all, petroleum is an excellent fuel for motor vehicles because it's easy to store and has very high energy density, a lot of energy in a small amount of space. Petroleum is 100 times better than batteries, for example, and far better than hydrogen, or even alcohol fuels, or natural gas. And petroleum is relatively cheap. It's hard for alternative energy sources to compete with it.

So how do we begin to make the changes we need in our transportation system?

Most likely, we want to focus first on the fuel economy of the vehicle itself, as we have in the past. After the first oil crisis in 1973-74, we made enormous progress in improving the efficiency of vehicles, almost doubling the fuel economy of passenger cars.

Over the next 10 or 12 years, we can increase new vehicle efficiency by another 50 percent without having to make smaller vehicles, just by making more efficient engines, more efficient transmissions, slipperier shapes, reduced rolling resistance, and taking some weight out of cars with material substitution. [See Model of Efficiency for more details.]

Then we have to shoot for a goal of perhaps 100 percent improvement in efficiency by 2025 or 2030. We can't just make a certain improvement and rest on our laurels. We have to keep going.

Changing technologies

When do you see various new technologies coming into play? What's the time frame?

Well, in the near term, we can make changes to conventional gasoline internal combustion engines. There are lots of things that can be done to reduce the internal friction of the engines, for instance. Just tweaking existing engines, if you want to think of it that way, can help improve efficiency by 50 percent.

We also have diesel engines coming to the United States, and they're inherently about a third more efficient than gasoline engines. And we are beginning to see novel technologies, like hybrid vehicles, which I'm not even including in that 50 percent.

So you think it's possible to dramatically improve efficiency even without hybrids?

Yes. And hybrid vehicles will help. The costs will come down, the batteries will improve, and the numbers of makes and models will increase. Hybrid vehicles will make an increasing impact on the market. So they're both a near-term and mid-term technology.

Do you think the Prius is a breakthrough?

The Prius and the Honda Insight, those hybrids are a huge breakthrough in automotive technology. Even in 2002, when the National Academy looked at fuel economy, they said, "We don't think the hybrid vehicles can make it in the market. They're just going to be way too expensive and too complex, and they won't work that well." All of that was wrong.

Hybrids have introduced electricity into transportation. That's the real breakthrough. Battery-powered electric cars didn't make it. (Someday they might.) But now we have electricity in transportation, and we're finding the synergies of that. We're developing better batteries; we're developing cheaper and better motors and controllers. So we're developing the technology that I think we're going to need in the long run, whether we go to hydrogen or whether we go to plug-in hybrid vehicles or whether we get to battery electric vehicles. The hybrid is a key technology in that step forward into the future.

What about hydrogen?

Hydrogen is a very interesting long-term technology. But hydrogen vehicles are not anywhere near ready for the market yet. They're too expensive, the fuel cells are not durable enough, and of course we have the problems of storing hydrogen on board the vehicle. So in the next 10 or 15 years, I don't think we're going to see hydrogen have a significant impact on the transportation system.

Hydrogen has a lot of potential, but it also has very serious technological challenges, and it also has this problem that it's a completely novel energy system. We would have to replace essentially all of the infrastructure on the fuel supply side.

What about biofuels?

We already have the technology for using ethanol in vehicles, and we now consume about six billion gallons of ethanol every year. There's talk about increasing the amount of biofuel dramatically. But in my own view, there's no sense in doing that unless we get away from corn-based ethanol and we produce our ethanol from forest residues and crop residues and other cellulosic material. That should be cheaper and produce much less greenhouse gas than corn-based ethanol.

We'll need to find better ways of making fuel out of biomass than we have now. Then biomass can become a more significant source of energy. But it's impossible to fuel the transportation system entirely with biomass. There's simply not enough of it, and we need a lot of it for food. So that's not going to be the solution, but I think it's going to be part of the solution.

Changing our ways

How did the gains in fuel economy of the 1970s come about?

In 1975, Congress passed the Energy Policy and Conservation Act, which set the Corporate Average Fuel Economy standards, the so-called CAFE standards. They required passenger cars to increase their fuel economy from about 14 miles per gallon to 27.5 miles per gallon within 10 years, by 1985. So we got a significant increase in fuel economy.

But that was before the surge in SUVs, wasn't it?

Right. At the time the standards were passed, light trucks were less than 20 percent of sales. Now they're about 50 percent. We've had a tremendous shift from passenger cars to less efficient light trucks. Because of that, and because the light truck standards were not as stringent as the passenger car standards, the on-road fuel economy of vehicles increased by only about 50 percent.

There hasn't been a lot of progress in fuel economy since the mid-1980s, has there?

Yes, that's exactly correct. From 1985 until today, there's been no change in the passenger car fuel-economy requirements. There has been a lot of technological progress that could have been used to improve fuel economy, but instead it was used to increase horsepower by about 80 percent. So we have heavier, more powerful vehicles, but about the same fuel economy.

Does this trend mean consumers just don't care about fuel economy?

Actually, my view is that consumers do care about fuel economy, but it's not on their minds when they buy a new car. They're thinking about other things: Is this a good price for a car? Is this going to be a reliable car? Does it have all the features that they want? Does it convey, you know, who they are? These kinds of things are more important to them at the time they buy the car.

But when they own the car, and they use it day after day and they fill it up week after week, then they appreciate the value of fuel economy, I think. At that point, they may be dissatisfied with the fuel economy of their super-size SUV and say, "This is terrible. Why did I buy this?"

Can we rely on consumers alone to push fuel-economy standards?

No. The market for fuel economy has two problems. First of all, consumers are not paying close attention to fuel economy and what it's worth to them when they purchase a vehicle. The other thing is that the problems we're worried about—oil dependence, greenhouse-gas emissions, energy sustainability—are public problems. They are society's problems; they're not the individual's problems. And very few people will voluntarily pay extra money to solve society's problems. There're just a relatively small number of altruistic people out there who will do that.

So we have these two kinds of market failures, if you will, for fuel economy. We're not able to rely on individual decisions in the marketplace. That's why we have to have policies like fuel-economy standards.

"The argument that increasing fuel economy will decrease highway safety is simply not true."

Will skyrocketing gas prices change consumer behavior?

If the price of gasoline goes up, this will provoke changes but not big changes. The most recent estimates are that a doubling in the price of gasoline [to $4-$5, based on prices at the time of the interview] would cause American motorists to drive five to 10 percent fewer miles. That's not much.

Would taxing carbon emissions for vehicles help?

Well, the Energy Information Administration estimated that if a carbon tax of $25 per ton of carbon dioxide were levied, it would drive the carbon emissions of the utility sector down dramatically, maybe eliminating half by 2030 or 2035. But there would be only a one or two percent reduction in carbon emissions from transportation.

Why such a small amount?

If you had a tax equivalent to $25 per ton of carbon dioxide, that would increase the price of gasoline by about 25¢ a gallon. People would drive one percent less, maybe, and it would also have a small impact on the energy efficiency of vehicles.

Government action

So what are the policy solutions?

Well, we know fuel-economy standards can work. And we know that we have the technology to increase fuel economy by 50 percent over the next 10 or 12 years, and maybe with technological advances, 100 percent over a 20-year period. But the price of dealing with climate change, dealing with our oil security problem, may be giving up the horsepower race and the size race in vehicles.

Given recent trends in the auto industry, can that really happen?

I didn't say they had to make their vehicles smaller. They just have to not make them bigger and more powerful. Are our cars and trucks powerful enough now, or do we need to have more horsepower? I would say, "For what?"

Many people feel safe in SUVs. Are safety and size linked?

The safety argument has been used over the past 20 years to prevent Congress from raising fuel economy. But the argument that increasing fuel economy will decrease highway safety is simply not true. It hasn't been true in the past, and there's no reason for it to be true in the future.

What confuses people is that it's definitely true that if you run a huge vehicle into a small vehicle, the occupants of the smaller vehicle are at much greater risk. However, from a societal perspective, this is essentially a zero-sum game. If I get a heavier car, I'm safer in a collision with you. You're less safe. What we know from the history of traffic fatalities in the U.S. is that the increase in fuel economy we saw on the road has no correlation with traffic fatalities whatsoever. We now have data for this over the past 50 years.

But are large, heavy vehicles still safer for the individuals in them?

The consequences of a crash depend on the ability to slow down the rate of deceleration of the vehicle, and especially the rate of deceleration for the bodies inside. Having a little space, having some size to the vehicle, is helpful. Having extra mass is actually bad, because it's harder for the structure to absorb that energy in a crash.

So what we understand now is that we would like to keep the size of the vehicles but take some mass out. That's good for safety and for fuel economy.

"We are on an unsustainable path with our foot on the accelerator."

What are "feebates?" And what do you think of them?

Feebates are an alternative to fuel-economy standards that have some very positive attributes. Feebates get around this problem of the consumer not fully considering the value of fuel economy, because the feebate comes at the time of purchase. It essentially affects the price of the car, and we know that people focus on the price of cars, and we know that manufacturers focus on keeping those prices down.

If a manufacturer can add a fuel-economy technology and avoid a fee or gain a rebate, it's very likely that they will do that. So even though we have not tried feebates, there's every reason to think they would work well.

Do feebates have any advantages over fuel-economy standards?

An advantage of feebates over fuel economy is that when you set out a fuel-economy standard (as we set 27.5 miles per gallon by 1985), once the manufacturers meet that standard, they're done. There's no reason to keep going. If new fuel-economy technology comes along, they can use it to increase horsepower, they can not use it at all.

On the other hand, with a feebate system, there's always a dollar to be gained, or a dollar of cost to be avoided, if a new fuel-economy technology comes along. So there's a continuous incentive for the manufacturers to adopt fuel-economy technology.

The chief disadvantage of feebates is that they don't guarantee any level of fuel economy, and therefore they don't guarantee any reduction in fuel consumption or greenhouse-gas emissions.

What's kept feebates from being adopted?

They can be characterized as a tax. So opponents can say, "You're taxing cars," because, in fact, the fee part is a tax. If you are below the fuel-economy target, then you have to pay. But if you're above, then you get a rebate. And you can design the system so, on net, there's no gain or loss of revenue to the government. Still, the opponents can say, "These people are trying to tax your cars." And if there's enough confusion created in the public mind, then the public will say, "I don't want that. I don't want you taxing my car."

We do have half of a feebate system in place, but just on passenger cars. It's the gas-guzzler tax. There's still a gas-guzzler tax on inefficient passenger cars. And that tax has actually been very effective. There aren't any mass market cars that pay the gas-guzzler tax. They're all special high-performance cars (Lamborghinis, Ferraris, that sort of thing). Everybody else has found that it pays to get whatever technology they need to avoid the gas-guzzler tax.

But it's crazy to have a gas-guzzler tax on cars and no gas-guzzler tax on light trucks. That's ridiculous. But that's where we are. [laughs]

The road ahead

How hard will it be to really solve the big problems looming ahead with our current transportation system?

To really solve this problem of climate change, to solve the problem of sustainable energy for transportation, will require technology we don't have. So in a way, we are on an unsustainable path with our foot on the accelerator. And we're counting on technology to solve the problem. You know, this is not prudent behavior. [laughs]

While we do not yet have the technologies we need to solve those problems, it really only makes sense to use the technology we do have. What is most irresponsible is that we are not requiring fuel-economy improvements, that we are not making more use of renewable energy. We need to do what we can now, one, to reduce the size of the problem we're going to have to solve in the future, and also to help generate the technological change we're going to need.

But technology alone won't be the answer.

The problems we're trying to address are public problems. They're societal problems. And we will need societal action to address those. Just developing the technology alone won't be good enough. It takes collective action. It takes government action.