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Imagine a vehicle that runs on hydrogen or biofuels and offers the same features, performance and price as today's gasoline vehicle. Will it capture half the market? Not likely, concludes a new MIT analysis. Not even if it's three times more fuel-efficient.
"Our model doesn't assume that everybody is a perfectly rational economic agent. Instead, we try to model how people actually make decisions such as which cars to buy and when and where to drive them. Emotion and social status matter, along with the economics."
-- John D. Sterman, Professor, Sloan School of Management
Among the barriers: Until many alternative fuel (AF) vehicles are on the road, people won't consider buying one—so there won't be many on the road. Catch-22.
The researchers' conclusions are not all gloomy, though. If policy incentives are kept in place long enough, adoption will reach a level at which the market will begin to grow on its own. But "long enough" may be a surprisingly long time.
Environmental pressures and energy security concerns are motivating a move away from fossil-fuel-powered vehicles and internal combustion engines (ICEs). But repeated attempts to introduce other technologies during the past century have nearly all failed. Displacing the gasoline-consuming ICE has proved difficult.
"The challenge is not just introducing an AF vehicle," said postdoctoral associate Jeroen Struben of the Sloan School of Management, who has been examining the mechanisms behind such market transitions. "Consumer acceptance, the fueling infrastructure and manufacturing capability all have to evolve at the same time."
Consumer exposure to AF vehicles is just one feedback loop that can slow adoption. Similarly, fuel suppliers won't build AF stations until they're certain of future demand; but until the fuel is widely available, consumers won't buy the vehicles. And manufacturers won't be able to make AF vehicles cheaper and better until their production volume is high; but high-volume production won't happen until such improvements are in place to attract buyers.
And then of course there's the status quo to be overcome—the well-established and highly attractive gasoline-ICE vehicle and the fueling infrastructure, energy supply chain and other industries that support it.
Understanding market behavior
To analyze the behavior of this system over time, Struben and Professor John D. Sterman of the Sloan School have developed a system dynamics model that simulates how markets for AF vehicles may (or may not) grow. The model can track the fate of various vehicle platforms, including conventional and advanced ICEs, hybrids and plug-in hybrids, hydrogen fuel cells and biofuels. Decisions made by consumers, fuel suppliers and auto manufacturers change the market, consumer opinion, vehicle attributes and other factors, which then feed back to alter the decisions people make tomorrow.
Finally, the model accounts for the peculiarities of human behavior. "Our model doesn't assume that everybody is a perfectly rational economic agent," said Sterman. "Instead, we try to model how people actually make decisions such as which cars to buy and when and where to drive them. Emotion and social status matter, along with the economics."
Thus, people's buying decisions may not reflect the actual features of an AF vehicle but rather what they have heard or read about it. And real drivers who are worried about locating fuel for their AF vehicles may fill their tanks early—a behavior that reduces the vehicles' effective range and may cause unanticipated side effects such as crowding at filling stations.
Analyses to date show that a key factor slowing AF-vehicle adoption is the long lifetime of today's vehicles. People buy cars infrequently, so it will be a long time before a given consumer is exposed to enough AF vehicles to feel comfortable buying one. Even an AF vehicle that's as attractive (objectively) as a gasoline-ICE vehicle won't catch on without strong and lasting promotion campaigns.
Concern about finding fuel also slows adoption. In a simulation representing California, entrepreneurs opened AF stations in urban areas but not in less-populated rural areas where demand is initially lower. Urban AF drivers must then avoid the rural areas, reducing the appeal of AF vehicles and slowing their sales everywhere.
Another counterintuitive result: Tripling the fuel efficiency of the AF vehicle should attract more buyers. But since drivers then need much less fuel, energy suppliers build fewer AF stations, lowering the appeal of these efficient cars. The net result? Sales may actually decline.
Self-sustaining markets
Despite such findings, Sterman sees reason for optimism: There are tipping points. With policy incentives that push the new technology forward and sufficient coordination across decision-makers, eventually enough AF vehicles will be on the road that all the decision-makers will buy in and the AF market can become self-sustaining.
The researchers are not ready to make policy recommendations, but their analyses provide initial insights. They clearly illustrate the effectiveness of carbon emission taxes, but they also produce some more unexpected findings. For example, given the importance of vehicle lifetime, providing incentives to scrap current vehicles may be more effective than direct efforts to get more AF vehicles on the road. Likewise, providing subsidies for building AF stations will help, but giving bonuses for building and especially keeping them in remote areas may be critical.
Most important, for markets to reach the tipping point, policy incentives may have to be kept in place for many decades, even through periods of declining fuel prices. Withdrawing the policies too soon will result in yet another failed attempt to shift the market away from gasoline-powered ICE vehicles.
This article reprinted with permission from Nancy Stauffer of the MIT Energy Initiative.
This research was supported by the Project on Innovation in Markets and Organizations at the MIT Sloan School of Management, the National Renewable Energy Laboratory and Shell Hydrogen.
I agree with Mr. Akau on this one.
Also, the cost of crude oil will continue to rise, and with it gasoline will rise with it. Campbell, Jean LaHerrere, and several other petroleum production forecasters all agree on one thing. Cheap oil ends at a much steeper rate than most people realize. We are at or near peak oil globally, according to EXXON representatives. Our global consumption rate is still increasing. Looking at the most recent predictions we are in for a wild ride in about 9-13 years. If you don't think the transition off of crude oil will happen in your lifetime. Think again. In 50 years, fossil fuel driven vehicles will be specialty items. Even the most optimistic forecasters don't see crude oil being a substantial part of our energy budget in 100 years. Campbell called oil, "The 200 year bubble."
We shouldn't kid ourselves about why people change. In time, we will have no choice.
I would hate to disagree with the results of such a respectable institute as MIT but, according to the law of diminishing returns, there will be a point at which the cost of fuel must be taken into consideration when purchasing a vehicle just as much as the cost of the vehicle itself. The education process is slow but, if hooked up to the pocket book, then people tend to learn much more rapidly.
It took decades for the automobile to be accepted as a replacement for the horse. In England, it was not until 1896 that the law requiring somone to walk in front of the horseless carriage was repelled. The job of the person was to warn all using horses that a vehicle was approaching so that the horses would not be spooked.
Even in the early 1900's, we find a recorded incident in 1906 of children and others throwing rocks and bottles at passing cars to dissuade the use of these vehicles in preference to the horse. It took the passage of another decade or two, the development of the battery starter, tires filled with air and building of new roads before the car was really accepted.
I do not think it will take so long for us to switch over to more fuel efficient vehicles or to EV's. Just put them on the market and we will see.
When the Prius first came out, US car companies presented a smear campaign on their image. However, you cannot keep good technology down. Good common sense ultimately prevails.
Sorry, MIT.
adrianakau2aol.com
Interesting. Although not specifically mentioned, this seems to present some good evidence for a wonderful short-term solution and infrastructure that is, and has been, "ready for prime-time". Plug-in hybrid technology - a beautiful "bridge solution" as hydrogen and other clean, alt-fuels are developed, perfected and accepted. My humbly submitted 2 cents.
The switch will not be to hydrogen...way to dangerous and volatile a fuel, despite the very convincing side-by-side demos of hydrogen vs. gasoline explosions I saw last night at the Hydrogen Center of Maine's monthly meeting.
There is a fueling problem as well; not sure many will want to also tend to an onboard hydrogen generator run by solar panels.
The switch will be to natural gas, either from the vast reserves of fossil sources or from bio-gassifiers.
The gas can be directly pumped into a hybrid's fuel cells or burned in a high torque engine like Direct Wave's prototype.
and life will go on for most of America.......there might be peak oil, but peak natural gas is a long, long way off.
Alternative energy vehicles are a must! By 2050, at the latest, there will be no more petroleum; and unless there is some radical technology breakthrough, we’re in big trouble. Natural gas reserves would disappear overnight if all vehicles used it for power. Hydrogen? And there’s not enough land in the country to provide ethanol from grain – not to mention the possible starving 1/3 of the world’s population. Cellulosic ethanol – maybe? Any alternate fuel will require massive infrastructure, no matter what it is, and that will take time to develop. The ideal energy source is there! The sun radiates about 20X the total energy needs of useable power daily. The energy just needs to be captured and stored. Advances in rechargeable zinc/oxygen battery technology is probably our best hope for land-mobile alternative energy. Times a wastin’ government!
Other fuel systems exist that "Blend In"
A few links for Thought are here -
http://world.altavista.com/babelfish/trurl_pagecontent?lp=fr_en&trurl=http%3a%2f%2fperso.orange.fr%2fquanthommesuite%2fhistpmcfrance.htm
http://world.altavista.com/babelfish/trurl_pagecontent?lp=fr_en&trurl=http%3a%2f%2fperso.orange.fr%2fquanthommesuite%2fsystemGreflexionJS.htm
and http://panacea-bocaf.org/PaulPantone.htm
for a easy to use THIS YEAR system
and here
http://waterfuel.t35.com/index.html
for Hydrogen using water as a carrier
rcb
My impression is that adoption rates for new technology have accellerated a lot over the past 50 years and if fuel costs spike and a desirable (popular) new vehicle hits the market, penetration could be fairly rapid, especially in urban areas, where infrastructure is easier to justify. Adoption for people living in remote areas could take longer, but worrying about "fuel stations" for urban people who visit remote areas infrequently may be a bit of a red herring, since most families have multiple vehicles and / or auto sharing groups can make it realistic to rent for infrequent trips to remote areas (flex fuel options eliminate even that concern). The bigger issue may be what happens to the old vehicles, if their resale values plummet, since a lot of people will sacrifice fuel economy for low vehicle acquisition cost. Therefore, if reducing CO2 emissions is the critical goal, finding ways of taking old vehicles off the road is a more important concern than getting new ones on the road.
It is not entirely equivalent (since a car sitting in the driving uses no energy); but it is important to remember that buying an energy efficient refrigerator actually increases energy consumption, if it doesn't lead to the scrapping of an old one.
In Oregon, the State Department of Transportation is investigating the feasibility of the government partnering with a private partner to provide the fueling infrastructure needed for an alternative fuels backbone. California and Washington are also involved (using potentially different mechanisms - I don't want to appear to speak for them), to develop a "Baja to BC" corridor along the west coast. Until such a time that the chicken-and-egg dilemma is overcome, this is a perfect role for government -- and there's alot of venture capital out there. The fueling stations would be on state-owned right of way and the private partner would lease the space. The contract could be written to require the facility to be sustainably built, operated and maintained, and perhaps even incent showcasing and retailing locally produced goods, and provide information on local tourism opportunities, thereby assisting local economies. There would have to be an "other goods/services" retail element to make the economics pencil out; the fuel sales won't carry the load -- at least, not at present.
This is all conceptual at this point, but investigations are underway.
Another factor to consider is the impact on the price of food products if corn continues to be used for ethanol production. Corn is fed to cattle--beef prices have already started to increase. So have other items that are corn based.
the way i see it,the only way to go is massive government expenditure on bio fuel conversion kits for existing vehicles along with a fast tracked phasing out of the manufacture of petrol driven vehicles.At the same time there needs to be a massive increase in the production of bio fuel crops.and the refinerys to convert these fuels.Any new cars built would be hydrogen or electric powered and once again big spending on infrastructure to make them a viable option.There is a lot of talk about how to encourage people to buy this new technology and how do you make it economically viable. We simply dont have time to let market forces change consumer practices,the environment doesnt care about market forces economies or ,unemployment levels,countrys go to war if they feel threatened ,this looming 'war' needs a similar prompt and dramatic response ,and every country on the planet needs to mobilise WITH each other rather than AGAINST each other.
Change happens gradually. Before we'll ever see widespread adoption of alternative fuel vehicles, it will be necessary for a few "early adopters" to show the masses that the new technologies not only work, but also carry a high "cool factor." After all, consumer buying decisions - especially for cars - are more emotional than pragmatic.
This "cool factor" is exactly the reason why Tesla Motors sold out its initial production of expensive, impractical electric vehicles - long before anyone could drive one. It's the reason I rushed out and bought a CD player in the early 80s, and why iPhones are selling like crazy today. Long before mainstream consumers are even aware of new technology, early adopters are establishing buying trends.
The problem is there is precious little to buy today. Having just been through the new car buying experience, I was disappointed that I couldn't buy a highway-worthy electric vehicle at any price, and the current crop of flex fuel and hybrid autos didn't meet my needs. I'd love to be that early adopter, but I bought a conventional gasoline car.
If someone builds it, they will come. Go Tesla!
Interesting,
Personally, I don't know how this survey was conducted, but it has to be skewed beyond a simple question presented. I cannot imagine the average vehicle owner not choosing an alternative fuel vehicle if the question was asked properly.
Given the fact that most people do not understand the choces and the pros and cons of each, I suspect most could not make a decision, not that the wouldn't make a green decision if given the choice at same price. We see more and more people going green, and with events like Live Earth and Hollywood getting behind green fuels, this survey had to be slanted, and given where it came from, I would bet BIG OIL is a major donator to MIT.
If people were asked question like this, then I wonder what results would have been. Would you purchase a zero emissions vehicle with higher performance then gas or diesel powered vehicles and would last a million miles simply by changing synthetic oil every 15,000 miles, would you buy it?
Hydrogen is the only answer, but not the better known chemical hydrogen conversion, but hydrogen fusion, a more reasonable alternative given no tanks filling up your trunk or the pressurizes gas systems which present the safety issues never mind having to build a new infrastructure for delivery of traditional hydrogen.
Hydrogen fusion has seen several breakthroughs utilizing low cost radio wave frequency modulation. Have you seen the recent news video on salt water being ignited to 1500 degrees with a flick of a switch. Imagine filling up at the seashore someday soon? Better yet, wait until you see same radio wave frequency modulation create conversion of hydrogen at nano atom level splitting atoms one by one in your engines cylinder, now this will revolutionize the alternative fuel industry, and sooner than you think. Watch video clip to see the future of foreign oil independence.
So according to MIT model how long would it take for a country , say the US , to move from lead based gas, to lead free gas. Does the model produce the right ( short ) answer . If not dump it.
Alternative fuels with low infrastructure costs ( biodiesel, E85) involve minimal infrastructure changes and should happen fast.
Agreed Hydrogen will take forever, but that presumably is why the auto companies are supporting it.
Here in Canada,the price of gasoline can raise 12 to15 cents a liter over night,
depending on what world crisis is in vogue. We lag behind in the developement of
alternate sourses of energy. I fore-see the day when,in the morning, you open a hatch on your transportation,throw in a couple of briquets(fire logs) and away you go. This will be called BIO/STM/ELEC. P.M. PMA INT.
The argument is valid for Hydrogen but NOT for biofuels.
One of the biggest advantages of biofuels is its ability to blend in with the existing infrastructure. BioDiesel can be blended with diesel in any quantity (5% called B5, 20% called B20, or even 100% displacement called B100). The same gas station that provides diesel can also provide 100% biodiesel or even a blend of biodiesel and petro-diesel in any ratio. It has already happened in many gas stations in Germany and even in many states in US.
Similarly, another BioFuel, ethanol can be mixed with petrol upto 85% (called E85). Of course, Brazil also introduced Flex Vehicles to allow end-users to switch from Petrol to Alcohol and vice-versa using a twin tank system. However, the existing gas stations/petrol pumps are used to also dispense ethanol.
So the whole argument that a new distribution infrastructure needs to be erected is totally false for BioFuels. For Hydrogen and other technologies, yes, a new infrastructure needs to be built.
Shashank Verma
President, CleanStar Energy, India
The model seems to not reflect customer behavior in markets where alternative fuel and engine modifications have been introduced. In Poland, a country with about 20% of US per capita income, customers have moved in significant numbers to LPG fuel tanks, which require additional tanks be installed on their cars. This was done simply because of the economics. The distribution suystem is also completely different than conventional gasoline and diesel, but has grown with the market as well. This is in a poor country., but more than 70% of the taxis run with LPG and Poland is one of the top LPG automotive users in the world.
This is entirely predicated on price. The LPG conversion pays for itself in about 18-24 months and thereafter saves the owner a significant percent of his monthly fuel costs.
Rather than attempt a theoretical model, the best estimates would seem to be based upon actual experience in AF, such as LPG and bioethanol. IMO the economics will continue to explain about 90% of the customer behavior. If the government policies make AFs attractive economically, they will be used.
Randy Mott
Environmental Solutions
Warsaw
I thank my Dad for sending this article to me. Very interesting. I would only add to the discussion the caveat that the disappearance of oil is not in the near future as many people would have you believe. What IS in the near future is the disappearance of CHEAP oil.
Oil locked in the sandstone and shale of Canada, Venezuela, and yes, the good ole U.S. of A could one day make Saudia Arabia look like an amateur. Estimates of oil reserves just in Canada and Venezuela are at 3.6 trillion gallons. Saudi Arabia and the Middle East contain current estimates of conventional crude oil reserves of 1.75 trillion. The problem right now is cost. Extracting that oil is expensive, but not that expensive that oil around current levels ($70+ a barrel) doesn't warrant setting up infrastructure to do just that.
Does that mean we shouldn't explore alternatives? Absolutely not. I think extracting oil from sands is in the long run way too energy intensive and its carbon footprint off the charts. It's just important to keep in mind that oil is not going to be going anywhere fast. What we need is to keep working toward severe carbon emitting taxes and/or emboldenments of carbon credit trading.
I read every comment....I was actually amazed at the WILLINGNESS TO GIVE M.I.T. a bust-on-the-nose ! This was not the STROBE-LIGHT GENISUS...we all remember....nor the Brilliant Gentleman teaching in Jerusalem....THE HIDDEN FACE OF GOD ! He only had three degrees and an MIT Professorship ! I will be very brief :
Two German Physics Professors-Married by the name of Laing.....www.pyronsolar.com
WHO KILLED THE ELECTRIC CAR......updated to July 14, YOOL 2.0.0.7. !!!!!
I love quotes.....ONE GENTLEMAN OR LADY USED THE WORD....three letter word beginning with "A" and ending in "S".....somebody may just recall it was the American Mark Twain...WHO'S HE ? !!! who said the same thing about LAW !
I could not be prouder.....of the level of debate, concern, tech., and American Brilliance.....plus many other countries WE A.L.L. H.A.V.E. A. D.O.G....I.N..THIS F..I..G..H..T.. mather_2001jr@yahoo.com
Speculation that we are running out of fuel is nonsense but the green house effect and smog pollution may require action against fossil fuel used for cars.
The speculation that US do not have enough land to switch to biofuel is also complete nonsense. Only a minor part of US soil has to be used to grow hemp enough to match US energy demand and the oil can substitute diesel directly - Within very few years all diesel cars could run on hemp oil and petrol cars could be outfaced.
http://www.globalhemp.com/Archives/Essays/Biofuel/energy_farming_in_america.shtml according to this article 6% of the land is enough to substitute petrol and diesel all together. http://www.ratical.org/renewables/greenEcon.html
Further hemp should be completely neutral to food prices because in many cases can be grown to revitalise farmland with boosted humus levels.
The recent report about burning salt water using radio waves is interesting
I wonder how much energy the radio wave generator use and how much energy the saltwater contains in hydrogen and oxygen not bonded in water as I expect it is only free hydrogen and free oxygen in the water that can react? Does anybody know.
I tend to belive the MIT researchers are right and I do believe that hydrogen in cars is a flawed concept.
Congress found a way to convince the oil companies to replace the MTBE in gasoline with ethanol. MTBE is made from natural gas so why didn’t the price of natural gas go down? The EIA website indicated that the oil companies immediately began exporting the MTBE to Europe. Now the Independence Hub platform has began natural gas production and several LNG import terminals are planned or under construction and domestic natural gas prices are going down.
So a compromise between Congress and Detroit could be fuel economy standards to match those in the Senate bill and a statutory requirement that natural gas is reformed at enough urban service stations by a date GM agrees to start selling hydrogen fuel cell cars and the hydrogen economy is initiated.
DOE could fund a Manhattan project to develop economical means of commercial production of hydrogen maybe by re-engineering one cell organisms and then beyond that fusion power should provide more than enough hydrogen for our needs.
The President and GM continue to say hydrogen fuel cell cars are the future of America so Congress should call their bluff so hydrogen need not take forever.
short answer - if its cheaper, they will LOVE it.
why don't the AF pundits get this simple fact?
Interesting,
No doubt about it, cheaper will always win out with consumers, but there are those who would pay more, just look at the current hybrid industry, a 100% increase in sales, and that is with the inconvenience of long waiting lists. As I see it, the green movement is picking up momentum from consumer demand, not gov. inaction. lol
NanoDetonator.com
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