Friday, January 05, 2007

Was being green just a fad?

It seems that hybrid sales are seriously falling off. I figure that the reasons are two fold. First, the most obvious, now that gas prices have dropped back down to a more reasonable price range, people aren't as paranoid about owning a car simply for it's gas mileage. Instead, they are going to buy a car they want. Secondly, like everything new, there is a "gotta have it" phase in which the masses that have demanded a product for years rush out to buy it. After that initial wave, things resort back to a more realistic demand level.

This past September-October, SUV sales grew 12.4%, whilte hybrid sales dropped off 16.2%. People are resorting back to what they really want. I think the horizon will be even less promising for current hybrid owners when it comes time to trade-in or sell their car. You see, batteries have life expectancies, buyers will take this into account, and dealerships accepting trade-ins will surely take this into account. Honestly, even if the current battery prices which range in the $3,000-$5,000 range get down to an anticipated $1,500 or so in the next 7 years, who wants to buy a car that needs $1,500 worth of work as soon as you buy it? Who wants to put $1,500 into a car in order to sell it? Ok, let's say that you simply want to get rid of the car and take it to a junk yard. The junk yard will have to pay to dispose of these very large batteries, that cost will be passed along to the owner junking the car. That $75 tow to the junk yard likely just went up exponentially when you add in "cost to dispose of batteries."

I still view hybrids as a temporary fix, a stepping stone to the next big technology. Perhaps it will be hydrogen fuel cell technology. Though in all honesty, I think the "next big thing" won't be that big in all actuality. I think we will keep on keepin' on with fossil fuels and growth within the E85 sector created from corn. Especially when you consider that the United States is ramping up to tap into an estimated 2 tillion barrels of oil under Colorado, Utah, and Wyoming. According to the energy department, this is enough oil to meet our demands by up to 500 years.

World's largest oil reserve

Offshore drilling in the Gulf of Mexico also had a 25 year ban recently lifted, to allow drilling. This area is estimated to hold 1.26 billion barrels of oil and 5.8 trillion cubic feet of natural gas.

Congress approves offshore drilling

The fact is, I've been hearing about how we are going to run out of oil for the better part of my 30 year life. I've seen the gas prices climb to insane levels, heard reports that it'll never drop below $3 a gallon, only to see it closer to $2, even dropping below $2 a gallon on occasion. It's a chess match in which we have played for many years with the middle east. As other options open up, whether it be in the form of oil, or perhaps with E85, as our dependeny upon importing oil drops, so should the price fluctuation. Perhaps I'm being too optimistic, but I just don't buy into the doomsday talk in regards to oil.

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