Eyes Wide Shut

I read a report in the Wall Street Journal in April about a Tesla car crashing into a tree in Texas, killing the two occupants. Sadly, fatal car accidents are all too common. Striking however was the reported time of four hours that it took emergency crews to finally put out the fire that engulfed the car. Apparently, the batteries used in the car are hard to extinguish once ablaze; or at least they keep on reigniting after the job is seemingly done. The car was also equipped with so-called ‘Autopilot’ and, reportedly, neither of the occupants was behind the wheel at the time of the crash. Now, to be fair to Tesla, Autopilot does not quite mean autonomous; it is just a step on the way.

There is a lot of hype about autonomous vehicles. No doubt they will have their place in well-contained situations. Australian mining companies lead the way in using them on-site to shift material from one spot to another. There are trials afoot, including on dedicated lanes on public highways across North America and Europe. Imagine. Millions of cars and heavy trucks tearing down highways, through towns and suburban streets without drivers. What could possibly go wrong?

Call me a techno-skeptic. I can’t see anyone being clever enough to devise a system to safely control millions of speeding intersecting vehicles while orchestrating appropriate responses to untoward situations. To wit, avoiding or not avoiding, and how, that dog wandering into the road. And I’m still trying to figure out how motorcycles and push bikes fit in.

Fahrvergnügen?

Of course, there’s always artificial intelligence (AI) to come to the rescue. Nothing is beyond AI apparently. Elon Musk himself, along with other far-sighted people, including the late Stephen Hawking, is on record as believing that it might even subdue us and take over the world. Self-driving cars would be a doddle. However, I remain unconvinced.

In any case, it doesn’t matter because autonomous vehicles, so far as I can tell, will live or die in the marketplace. It a question of whether lots of people who like driving will take to them. Whether bolder trials will end in too many crashes for comfort. Whether algorithms can ever be devised to replace human judgement in handling the myriad of different, and subtly different, situations arising on the road. That story will eventually be told by technology and market forces acting together.

Electric cars belong to a different storyline altogether. Their development is inorganic. It’s artificial. It can’t be quelled by antibodies -- in this case by economic realities. Bad things can happen and will go unpunished.

Pound for pound, electric cars are more expensive to make than are petrol or diesel cars. They are heavier and impart more kinetic energy when they crash; they create a bigger fire hazard. They will require massive amounts of electricity overnight when the sun isn’t shining and the wind is often still. They depend on the extraction of rare earths which, by all accounts, is a dirty business for the environment and which increases dependency on communist China, the overwhelmingly dominant producer. They require massively expensive, power draining, ubiquitous roadside charging infrastructure. Then there’s the challenge of disposing, year after year, of millions upon millions of toxic defunct batteries.

And, pray tell, what to do during those extreme-weather events (threatened by John Kerry et al as the doleful wages of anthropogenic climate change) when a community’s electricity supply has been snuffed out by one of those weather events and families whose cars have flat batteries are advised to flee the area? Back to horses?

Make hay while the sun shines, comrade.

To reiterate, none of this would matter a jot, if governments were not forcing the issue and taxpayers were not picking up the tab and thus hiding the costs and damage that would ordinarily be revealed and quickly punished by the marketplace. At this stage only about 0.5 percent of vehicles on the road are electric and most of those are hybrids. That leaves just about ninety-ninety percent to go. There is no way of knowing how far-reaching and irreparably damaging making such a wholesale changeover will be. And, if that’s an unknown, put it together with growing dependency on electricity generated by wind and solar. Unknown unknowns.

No one has this secret knowledge of the future. Nor do markets. But markets, ever alert, tend to weed out bad ideas not too long after they germinate. In other words, we seldom find out how bad things could get. The marvel of markets is that we don’t have to think too hard about what to produce and how to produce it. That’s a good job, because we don’t have sufficient knowledge. It’s a pretence of knowledge, as Hayek put it, to think that we do.

Communism is built on a pretence of knowledge. The means and makeup of production are directed from above. That things turn out badly is no surprise.

Proud papa of the Trabant.

The response of western governments to ‘climate change’ is essentially taken from the communist playbook. Transport and energy are at the core of modern economies. Determining how they will evolve by government edict is not fiddling around the edges. It is bound to end in tears. And those tears will inevitably go beyond economics to every facet of life.

It’s hard to imagine, if it were not happening. The ways of fuelling transport and generating electricity being foisted on us would never have powered the industrial revolutions which have led to today’s prosperity. And, to make matters worse, if that is at all possible, none of it will cool the planet.

Toyota Chief on Electric Cars: Slow Down!

The Observer reports on some very striking comments by Toyota Motor Corporation president Akio Toyoda, on the topic of Electric Vehicles. EVs are hot right now, with the automotive industry investing heavily in them, and governments throughout the world (prominently, as The Observer mentions, those of Great Britain and California) looking to aid their development by banning the sale of gasoline and diesel engines in the not-too-distant future.

But Mr. Toyoda is not convinced that they are the answer. At a recent press conference, he pointed out a few problems with the projected shift to EVs. First, he claimed that “the current business model of the car industry is going to collapse" if the industry shifts to EVs too quickly. No word on whether he thinks that the oft-discussed 10-15 year timeline put forward by activists in and out of government falls into that category, but it wouldn't be surprising if that is exactly what he had in mind.

Next, he pointed out that "Japan [for one] would run out of electricity in the summer if all cars were running on electric power." There just isn't enough electricity to go around, especially with battery technology being what it is. He estimated that "the infrastructure needed to support a 100 percent EV fleet would cost Japan between 14 trillion and 37 trillion yen ($135 billion to $358 billion)," a hefty percentage of GDP for a famously stagnant economy like Japan's.

Worth noting that it is a lot cheaper to generate the electricity a given vehicle needs on site -- that is, within the vehicle itself, as a gasoline powered combustion engine does -- than producing it elsewhere and transporting to the car.

And, following up on that point, he called attention to the fact that "most of the country’s electricity is generated by burning coal and natural gas, anyway," so the stated goal of leaving fossil fuels behind by shifting to EVs isn't going to happen. In his words:

The more EVs we build, the worse carbon dioxide gets… When politicians are out there saying, ‘Let’s get rid of all cars using gasoline,’ do they understand this?

Unfortunately the answer to that question is probably "No," both for the politicians and the propagandists in the media.

Is It Me That's Mad, or the World's Leaders?

Yes, I know that the headline should really read “Is it I who am mad—or the world’s leaders?” but the dubious grammatical form used above is better suited to the populist sentiments of this article. And though populism and populist are words routinely used to mean “insane,” “dangerous,” or worse “problematic,” some kinds of populism are in fact social truths that experience has shown to be accurate and valuable, i.e.,  commonsense.

That applies especially to truths about spending, saving, investment, and borrowing. Copybook maxims on that score go from Thomas Jefferson’s “Never spend your money before you have it,” to Shakespeare’s “Neither a borrower nor a lender be/For loan oft loses both itself and friend/And borrowing dulls the edge of husbandry.”

With that prudent advice ringing in our minds, let’s look at how prudently our political masters are handling our collective expenditures, revenues, borrowings, and investments. The first thing to notice (though few do) is just how massive the sums involved are.

Estimates differ but in the U.S., apparent president-elect Joe Biden is proposing a budget of $5.4 trillion equal to 24 percent of America’s GDP. He’s also proposing a smaller (but still massive) tax increase that would leave a gap of $2 trillion dollars for the U.S. Treasury to borrow. But cheer up—it’s bipartisan. President Trump’s budget estimates for 2021 weren’t much lower at 4.8 trillion equal to 21 percent of GDP and a deficit of $966 billion.

Now, expenditures to cope with the pandemic and lockdowns are emergency spending that almost everyone agrees is justified or, to be more precise, inevitable. That’s why the Trump budget rose to an annualized rate of 30 percent of GDP at the height of the pandemic this year. But a cool $700 billion is accounted for by Biden’s “Build Back Better” agenda that would increase spending on infrastructure, the environment, and the Green New Deal. That's equal to one-eighth of Biden's projected total spending for 2021 and one-third of the likely deficit.

The picture is the same in Britain where Boris Johnson’s government, as well as spending vast sums to ameliorate the pandemic and concomitant recession, is embarking on a green industrial revolution and unrelated (even contradictory) infrastructure spending. There too the Labour, Lib-Dem, and Green opposition parties attack these plans as too little, too late. In both countries the general attitude has been Spend! Spend! Spend!

Well, it is -- right?

After all, everyone knows that Tomorrow Is Another Day!

Scarlett O’Hara, Gone With The Wind’s heroine, may be out of fashion in racial politics, but financially she’s never been so enchanting to so many powerful people.

That may be because we simply can’t get our minds or even our imaginations around the figures when they rise from million to billions to trillions. To help us do that, here’s David Schwartz, the science writer and a brilliant popularizer, explaining them to NPR listeners:

The difference between a million, a billion and a trillion is like the difference between eleven and a half days, 32 years and 32,000 years.” Do the sums: a $2 trillion dollar deficit the equivalent of 64,000 years in time measurements.

And an $5.4 trillion dollar total annual budget... or a $23 trillion accumulated national debt... is equal to... but I see the audience’s eyes glazing over... No -- they’re crying.

Now, it’s certainly true that borrowing is economically justifiable and potentially profitable if it’s likely to produce a stream of income or equivalent benefit that over time more than equals the cost of the capital borrowed. A home mortgage is a humble example.

It’s also the case that government investment can be economically worthwhile if it creates an economic environment that hikes productivity, spurs general economic growth, and thereby increases tax revenue for the Treasury. Some state investment meets those criteria, but by no means all. So we should apply certain tests to proposals such as the green industrial revolution and the Green New Deal?

The test that governments seem to like most at the moment is the question:

Can we borrow at a low interest rate?

It’s a fair question but it should be a secondary one. A low interest rate means it’s cheaper to borrow, but that’s a modest benefit at the best of times and no benefit at all if the investment produces less wealth than the cost of borrowing. And if interest rates rise as they tend to in periods of inflation produced by government over-spending, then the modest benefit becomes a horrendous cost, especially when your accumulated borrowing has reached $23 trillion. So the next—or rather, prior—question becomes:

Can we make sure the investment pays off?

To which the honest answer is, No. As the distinguished political theorist, James Burnham, author of The Managerial Revolution, used to say in his rules on life: You can’t invest in retrospect. Some of the visionary Green schemes proposed by Joe and Boris, such as electric airplanes and cheap hydrogen cars, can’t be  invented simply because we establish a state fund to invent them, any more than the flying cars and personal jetpacks of Matt Ridley’s youthful imagination exist today because we wanted them, as he noted in a column on the ten big things wrong with the green industrial revolution.

I quoted the column last week, but it can’t be quoted too often because to judge from government policy no one in Whitehall or the Beltway has read it. It should be especially worrying that many of the schemes for transitioning from fossil fuels to “renewables” all cost more than the cheap fuels they are meant to replace and need state subsidies for longer than their advocates claim in advance. Demands for extended government subsidies should be a warning. Innovations will occur, of course, because a free economy is an innovation machine. We simply don’t know what they’ll be, and if we concentrate state funding on bright ideas too early, we risk being unable to fund the good ones that survive the sorting out process.

But they lift productivity and economic growth, surely?

Again, the proof of the pudding will be in the eating, but the signs don’t look that good. What economic benefit is likely to arise from the total electrification of Britain electric cars require that would match both its cost and the cost of forcing motorists to give up petrol-driven cars from 2030 onwards? If the answer is that we will benefit from the technological innovations that British and American auto manufacturers make in the course of developing cheaper and more efficient EV’S, we could have those benefits anyway by allowing them to make the cars that the motorists want at a price they can afford and at a pace that would allow government and industry to transition in line with market demand changes. Then we might get technical innovations in both EVs and petrol-driven cars.

But, Miss Scarlett, do you really need an electric car?

We don’t do that because the real aim of policy is not technical innovation—that’s a by-product at best—but a reduction in carbon emissions, or net-zero in short. That’s why everyone concedes that electricity prices will rise for industry as well as for consumers, putting the industries in countries with green hairshirt economic policies at a serious disadvantage with their foreign competitors. How will that kind of enforced economic primitivism help us either to raise productivity or to pay back the money we’re now borrowing? It won’t.

Since this is a global problem, though, surely, our competitors like China are making the same sacrifice?

Well, no they’re not, as a matter of fact, and when they say they will, they usually ask “the West” to give them subsidies to do so. In the meantime, the Chinese Communist Party—no idealistic Greens in that Politburo—is bringing new coal-fired power stations on line with emission levels greater than the U.K.’s entire carbon output.

So why are we doing this?

That’s a bigger question to which I’ll return next week. But it certainly requires explanation because unless the laws of economics have been repealed, the policy of spending and borrowing massively in order to make our economies less productive and efficient can only have one result. It was forecast most eloquently by Rudyard Kipling in his once-familiar poem "The Gods of the Copybook Headings":

In the Carboniferous Epoch we were promised abundance for all,
By robbing selected Peter to pay for collective Paul;
But, though we had plenty of money, there was nothing our money could buy,
And the Gods of the Copybook Headings said: "If you don't work you die."

Something to think about.

Driving Towards Utopia, Skidding on ICE

“Against stupidity the gods themselves struggle in vain, O’Sullivan,” my grammar school teacher, quoting Goethe, would say as he handed back my weekly essay with helpful comments. “So what chance do you have against it?”

They said things like that in those days. And I have often wished that Mr. Hughes were both around and in a position to “mark” the policy announcements of various governments painting the glorious future they were shaping. Her Majesty’s Government headed by Boris Johnson especially needs his dry and weary judgmentalism.

Last week I contrasted two things: first, HMG’s apparent decision that, having already announced a ban on the sale of petrol- and diesel-fueled vehicles by 2035, it would bring forward that timescale to 2030; second, the substantial reasons why electric cars might not be the inevitable future—consumer resistance, the vast expense of expanding the electricity network to cope with EVs, and the possibility that a new battery needed to make EVs cheaper and more efficient might not materialize for a future as near as 2030.

That’s a tough contradiction. But it was resolved on the day I wrote it by the adverse reactions of both specialist writers and the market to Elon Musk’s “Battery Day” announcement that Tesla hasn’t come up with that hyped-up battery yet but it will soon.

Here’s the summing up of Tesla’s stock gyrations over the next few days by Market Watch: “Shares fell 22%, as of Thursday’s closing price, as a widely anticipated update on the company’s battery technology failed to wow investors. The decline is worse than Tesla’s 21% drop in March, when the entire market was plummeting because of the coronavirus.”

Even Goethe had his critics.

Now, the market isn’t infallible. Some of the higher share price may have been in response to salesmanship by Musk that now looks over-optimistic.  It’s also likely that research and innovation will develop a lighter and more efficient battery and thus a cheaper EV in time, if not necessarily in line with a politically driven target like 2030.

That said, public policy should not be based on optimistic forecasting of specific innovations in technology. Which means that the U.K. government should not bring forward its ban on selling petrol-fueled cars—ICE cars in the jargon—to 2030 and should even push it forward to beyond 2035. That would give us the time needed to consider a better mix of public policies on carbon emissions and much else.

As it happens there are very solid reasons for doing so, as Professor Gautam Kalghatgi, a fellow of the Royal Academy of Engineering, the Institute of Mechanical Engineers and the Society of Automotive Engineers, who is currently a visiting professor at Oxford University, argues in his monograph, The Battery Car Delusion:

The first sentence of his summary introduction alone is a stark questioning of current orthodoxy in Whitehall: “Battery electric vehicles (BEVs) do not represent a significant improvement over internal combustion engine vehicles (ICEVs) in terms of their carbon dioxide footprint unless all the energy for their manufacture and use is CO2 -free.”

There’s a huge cost -- as in Pounds and Dollars -- in carbon emissions as well, from building a larger and more robust system of electrification to accommodate BEVs. It’s paid not only by government but also by EV owners who would have to install battery-charging pillars in their garages and driveways in order to avoid long lines and waiting times to refuel their vehicles.

And what are the benefits to set against these extraordinarily heavy costs? Still in his summary, Professor Kalghatgi points out that “Even with a 100-fold increase in the number of BEVs to 10 million, around 85% of transport energy will still be delivered by ICEs. And this large increase will at best save about 4% of the GHGs [Greenhouse Gas Emissions] associated with transport in the UK. ”

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In short the switch to electric vehicles, even if we could be confident that they will be cheaper and more efficient for EV drivers (which we can’t be) would offer an extraordinarily modest benefit to set against heavy costs. It’s a public policy that makes no sense.

Unfortunately, if you want to get a policy changed, it’s not enough to persuade governments that it will have a net negative impact on the country. You also have to convince that them there is a policy that will also meet their aims—here it’s reducing carbon emissions—to compensate them for having to abandon their destructive approach.

In this case there is an alternative policy. It  is to improve the efficiency of the internal combustion engine so that it releases fewer carbon emissions into the atmosphere. It’s a very simple and practical approach to solving a difficult problem. It does not require the building of any infrastructure, let alone a massive one, in order to work effectively. For that and other reasons, it doesn’t constitute a heavy increase in expenditures by governments and consumers.  It’s already being accomplished by the research departments of automobile companies which have transformed conventional cars to an astounding extent since the 1960s.

How effective might this approach be in reducing carbon emissions? Professor Kalghatgi estimates that a 5 percent reduction in fuel consumption by ICE vehicles would obtain a larger reduction in carbon emissions than the massive switch to electric cars with all its attendant infrastructure costs. That alone would be a massive prize. But he also believes that a reduction much larger than 5 percent in fuel consumption by ICEVs could be obtained through such methods as “better combustion, control and after-treatment systems along with partial electrification and reductions in weight.”

The snag is that though these innovations are being pursued now, how long is that likely to continue if the U.K. government instructs car manufacturers that they must stop selling their product in ten years? What incentive is there for companies to maintain large R&D expenditures when they are officially told that these innovations, even if successful, will reduce  carbon emissions and make other improvements in their automobiles for only a short period before production is halted altogether?

Let's relax and think this through.

Indeed, how long will automobile companies continue to invest at all in products other than those which, unless Musk gets that elusive breakthrough, will be too expensive for most consumers to buy unless the government steps in with subsidies to help them?

It’s policy fueled by the moral vanity that Britain should lead to the world in combatting climate change by destroying a major industry, making a huge dent in the Exchequer, and contributing a reduction in world carbon emission so small that it would not register on any meter.

Against stupidity the Gods themselves struggle in vain.

The Automobile of Tomorrow -- and Always Will Be?

Yesterday was “Battery Day,” the long-awaited moment when Elon Musk was to reveal Tesla’s breakthrough in battery technology that would make the electric car a real economic rival to the internal combustion engine. It was therefore a significant moment not only in the evolution of electric cars but also in the development of policy by governments and international agencies towards a switch from fossil fuels to cleaner and renewable sources of energy.

There’s an obvious link between these two trends. Petrol is the fossil fuel that provides the energy for the internal combustion engine that still powers the overwhelming majority of automobiles on the world’s roads. If it’s gradually replaced by electricity as the fuel powering cars, then one major source of demand for the world’s oil companies will shrink very substantially. And where automobiles go, other forms of energy consumption are likely to follow, notably home heating.

That at least is the intention of most Western governments. Britain’s Tory government, for instance, has decreed that the sale of petrol-driven automobiles will be prohibited by 2035. Ministers are considering bringing forward the date to 2030. There are pressures to speed up the transition from MPs in all parties—notably from a 100-strong group of moderate “One Nation” Tories. And this policy has received support from some unexpected backers, notably the company formerly known as British Petroleum, which, under its new CEO, Bernard Looney, has adopted an almost missionary stance in promoting an ambitious Green agenda.

Quick off the mark, but what about the long haul?

As Ambrose Evans-Pritchard also pointed out in a fascinating analysis of the future trends in the energy market, Looney intends to free his company “from the fossilised grip of his predecessors. Not content to declare a rhetorical Net-Zero target by 2050 -- who doesn’t these days? -- he has called for the U.K. to pull forward its ban on the sale of diesel and petrol cars to as early as 2030. “We’re up for it,” he says.

Mr. Looney is not quite the revolutionary he seems, of course. As Evans-Pritchard points out in the same article, BP is also “doubling down on liquefied natural gas” which is another fossil fuel.  And placing a large bet on the proposition that “natural gas with carbon capture” will become a far larger part of the energy market once the technology for carbon capture and storage has broken out of the laboratory. And having his research department look closely at the coming prospects for hydrogen as a fuel for everything from aircraft to home heating (at least as I read between Evans-Pritchard’s eloquent lines on that last point.)

Even with these qualifications,  the push for electric cars and the switch from oil go hand in powerful hand. Are there any reasons for caution on the side of the skeptical investor? Though most investors have not been very skeptical until now, I think there are.

To begin with, there is likely to be some consumer resistance to electric cars for the reasons that were first outlined by Thomas Edison to Henry Ford in 1894 when evaluating the latter’s petrol-fueled Quadricycle:

"Electric cars must be kept near to power stations. The storage battery is too heavy. Steam cars won't do, either, for they have to have a boiler and a fire. Your car is self-contained—carries its own power plant—no fire, no boiler, no smoke, and no steam. You have the thing. Keep at it."

Both men changed their minds about electric cars subsequently, and Ford embarked on developing one, but in the end abandoned the attempt. That said, some of Edison’s complaints about electric cars are echoed by drivers today. There’s still debate over whether they’re too slow—with admirers saying they’re actually quicker off the mark than conventional autos and detractors responding that quicker is not faster once they’re actually off the mark.

Genius at work, 1899.

Some of these deficiencies will doubtless be remedied by what is a self-consciously innovative industry, but whatever the reasons, polls suggest that consumers are for the moment nervous. A nationwide survey by the U.K.'s automotive trade body (admittedly an interested source), quoted by the Telegraph, found that 44 percent of motorists don't think they'll be ready to run a battery vehicle in 2035. Many say they can't see themselves ever owning one. So it’s not surprising that according to the same report, industry insiders now want, as so often, better government incentives for consumers to purchase electric cars. And when the politicians are talking of bringing the ban on selling petrol- and diesel-based vehicles from 2035 to 2030, the producers are talking of pushing it forward to later than 2035.

The second basis for caution is that as another Telegraph report points out, the minerals needed for the production of car batteries--nickel, cobalt, and lithium—face a number of market obstacles. They’re scarce, difficult to mine or refine, located in countries with bad environmental records, dangerously volatile (lithium), and all in all their supply looks to be falling behind demand.

“Their growing scarcity is a problem that is weighing heavy on not just Musk, but the entire electric car industry,” writes the Telegraph. “Demand for nickel is expected to increase six-fold by 2030, and supply isn't keeping up.” When that happens, prices rise. And the price of electric cars, though becoming more competitive, is higher than other cars and so already a negative market factor.

The third consideration is that electricity doesn’t grow on trees—that is, not until they’re cut down, transported, and fed into power stations. Or as the intellectually lively former Tory MEP, Daniel Hannan, tweeted earlier this week: “I am often struck, in discussions about energy, by how many people talk of electricity as if it were a source of power rather than a medium. Your phone is probably coal-powered.”

So in order to replace disgraceful gas-guzzling, carbon-emitting conventional automobiles with vehicles powered by “clean” electricity, we have to generate much more electricity and make it available to drivers across the country via EV (or electric vehicle) charging points. That means more coal, gas, oil, or timber being fed into the power stations.

What also flows from this reality is that electric cars, however expensive in themselves, will be the cause of much larger costs in the form of a nationwide network of EV (for electric vehicle) charging points, not only as now in public places but in future in people’s homes as well.

In The Hidden Costs of Net Zero, Mike Travers, a distinguished engineer, estimates that the cost of installing EV charging points alone will be a considerable one—something on the order of £31 billion. (At present the U.K. has just five percent of the target number of public devices promised for the end of the decade.)

He goes on to estimate the impact not only of switching to electric cars but also of wider policies of decarbonizing, for instance, home heating, and concludes that the extra demand for electricity would overwhelm the existing system of electricity distribution and require massive infrastructure repair and development at a total bill of £410 billion, an average of £15,000 per household.

Even if we assume, as we must, that the second-order costs of electric vehicles alone would be much lower, these are such staggering figures that we look naturally look for alternatives to current policies, and that takes us down the route of innovation.

As Evans-Pritchard noted above, the titans are doing so. BP’s policies include both banking that carbon capture will give natural gas a longer life expectancy as a respectable energy source and, in the longer term, developing the potential of hydrogen as a versatile fuel, presumably by overcoming its dangerous volatility as tragically seen in the destruction of the Hindenberg.

The problem with innovation is that while it can be depended upon in general, it’s not a reliable solution in particular. Carbon capture is far from a sure thing. If it does ever emerge from the laboratory, however, its benefits need not be confined to natural gas. In principle at least it might make all fossil fuels clean or cleaner—gas, oil, and even coal. Given that these fuels have far lower prices than the accumulated costs of the electricity that powers the Tesla, that would revive their market appeal. The same would be even truer for a new clean fuel emerging from a safe hydrogen.

These rivals to the electric car would have looked smaller yesterday if Elon Musk had unveiled a battery that enables EVs to travel further, faster, and with shorter refueling times at a price that competes with conventional autos and perhaps with other innovation-based cars and that can plausibly claim to leap over the obstacles listed above.

Did he do so?

He said he did. He promised a new battery that would enable Tesla to market EVs at $25,000, a fifty per cent cut from the present $50,000. That would be a game-changer. But industrial history is littered with the bones of true innovators who were over-taken in the final stretch.

We’ll see.

The Hidden Upside to Cheap Oil

Normal people react happily when they see the prices of gasoline and home heating oil dropping. Driving becomes cheaper (a plus in a country as expansive as the U.S.) and the heating-oil premium homeowners and landlords in the colder climes of New England and the upper Midwest must pay just to stay alive and keep their buildings operational decreases dramatically. The flip side is that domestic energy producers, who have essentially destroyed the Arab oil cartel and severely hampered Russia's attempt to get its balance sheet in order, need to make a profit in order to invest in current wells and in developing new means of production, such as fracking.

On the punitive, Calvinist Left, however, cheap oil is their worst nightmare, combining the freedom of the open road with the ability to withstand the harshest weather Mother Nature can throw at us in toasty comfort. It's clearly the work of Satan. But there's something else at work as well...

Rejoice, climate change activists. Around the world, greenhouse gas emissions are dropping. The demand for energy, until recently the cornerstone of globalisation and economic growth, has plummeted as countries implement sharp restrictions on movement and social activity in an effort to beat back Covid-19.

Oil has crashed in value, approaching levels not seen in decades, as lockdowns put economies on hold the world over. Even before oil was engulfed in its latest crisis, it was already facing an existential threat from new forms of renewable energy. Fossil fuel use hit a record low in the UK last year, as the country increasingly opts for cleaner energy in a bid to rid itself of a reliance on oil, gas and coal by 2050...  So you might be forgiven for thinking that this most recent crash represents the final nail in the coffin for oil. But not so soon, say experts.

Why not? Simple. Expensive and inadequate "green" technologies such as scenery-scarring, bird-killing windmills (invented centuries ago, and replaced during the Industrial Revolution) and solar power (good luck with that in New England, Canada, and northern Europe) are not economically feasible without heavy governmental subsidies and thus far have not proven competitive with fossil fuels.

"Low oil and gas prices will place pressure on the economics of renewable energy sources and, without policy support, some renewables that have seen rapid deployment will have to wait for credit markets to recover, ceding ground to cheap hydrocarbons and fossil fuels," says Reed Blakemore, deputy director of the Global Energy Center at the Atlantic Council.

The double whammy of Covid-19 smashing world economies and public budgets is also likely to harm the prospects of renewable energy.

The economic downturn is dampening the demand for power as millions of people stay at home and heavy industry operates at minimum capacity. Supply chains have been stretched to breaking point, and financing has been frozen, choking off lifelines to renewable energy companies that desperately need it.

Additionally, both governments and consumers have more important things to worry about these days than climate crankism. '"The combination of coronavirus and volatile market conditions will distract the attention of policymakers, business leaders and investors away from clean energy transitions," says Fatih Birol, executive-director of the International Energy Agency.'

This won't stop the Greens from trying to insert their crackpot nostrums into every post-coronavirus recovery bill they can get their mitts on. But continued low energy prices from fossil fuels also mean that consumers, when they start driving again, are hardly going to wish to pay a green premium on things like electric cars when they're trying to restore the green dollar bills to their pockets.

UPDATE: Sales of electric cars crater.

Global sales of electric vehicles are projected to drop by 43% this year as the technology faces a series of overlapping problems, the consultancy Wood Mackenzie finds in an analysis.

Driving the news: "The coronavirus outbreak, potential delays to fleet purchasing due to lower oil price and a wait-and-see approach to buying new models have all contributed to this decrease in projected sales," they write. They see worldwide sales of battery electric and plug-in hybrids at 1.3 million vehicles this year, compared to 2.2 million last year.