Oil Doomsters Despair

Peak Oil porn and the William Kunstler school of suburban doom blowhards are in for a bit of a shock:

German Loremo AG will introduce their ultra Efficient Car at the Motor Show 2006 (site) in Geneva next week.

The car start-up developed a light-weight passenger car with outstanding aerodynamics. The Loremo LS is powered by a 2 cylinder Turbo Diesel engine with 20 hp and 160km/h top speed. The amazing thing is that the Loremo only needs 1.5l per 100km. This is approx. 157MPG!
14U news

What is intriguing about this car is that it really does only one thing to achieve the claimed gas milage: it weighs 450kg. Call it 1000 pounds. Combine that with good aerodynamics and an efficient deisel and you triple the fuel efficiency achieved by a hybrid Prius.

This is the leading edge of a revolution in car transportation. The SmartCar, and assorted hybrids, technological innovation is going to radically change the options available for personal transport.

This is a market in action. If the price of gasoline goes up there are going to be increasing incentives for cars which use that gasoline more efficiently. No magic or carbon tax needed. Just the right price signal.

Unfortunately, the world auto industry and its American end has been fairly slow in adapting to higher oil prices and what they imply. One of the happier consequences of Hurricane Katrina was a temporary bump in gas prices and, for a few months, an unwillingness on the part of consumers to buy SUVs. That, of course, is a signal even GM could have understood. But it did not last long enough.

During the seventies oil shock American car manufacturers lost huge market share to foreign competition. One would think they would have learned something. As more people begin to demand radically increased gas mileage the demand will be created for lightweight, high efficiency, cars. And, as consumers demonstrated in the 70’s oil shock, they will not much care if the car is built in North America or in India.

From a larger perspective, a gradual replacement of 30MPG cars with 150MPG cars will reduce demand for oil rather radically. Which, in turn, will ensure that price rises are gradual - over the long run. But for this demand to be created there have to be real products available. It will take a while. But the uptake of the Prius - which is not all that fuel efficient - suggest there is a huge potential market.

Written by jay on February 27th, 2006 with 14 comments.
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