It’s Smart to Buy Hybrid Cars Even When Gas Prices are Low
I’m sure you’ve all read or heard people on TV saying that hybrid and electric cars won’t really catch on because oil prices are so low right now. Most of the time the comment goes unchallenged — which is really irritating for a number of reasons.
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If you’re in a polite or reasonably polite conversation on the subject, and someone tries to get away with saying that, remember this little tidbit on OPECs dissatisfaction with current oil prices, brought to us by Bloomberg:
OPEC, supplier of more than 40 percent of the world’s oil, may cut production at a meeting next month if prices and markets are unstable, Iraqi Oil Minister Hussain al-Shahristani said.
“If demand is going to stay down as it has done, then obviously we will need to cut production,” he said at a conference in Doha, Qatar today.
Forbes (via the Associated press) has a little more of al-Shahrisani’s quote:
“At $40 per barrel, very few investors will be willing to invest in developing oil fields,” Hussain al-Shahristani told reporters on the sidelines of a conference Doha, Qatar. “And that’s going to create a big shortage in the world supply, which is not healthy.”
So when someone says something vapid, like “Oil prices are at record lows and there’s no way people will buy hybrid cars,” try not to hyperventilate. Be calm, remember the above and “gently” remind the person that in January, Arabian Business.com quoted OPEC’s target per barrel price at $70. That’s about $2.50-$2.80 for a gallon of regular gas, looking at GasBuddy.com’s historical price charts.
Find a way to work the following into the conversation. Demand and prices drop during a recession. OPEC and the rest of the oil producers are worried about it. They’re also worried about how industrialized countries are moving away from a dependence on foreign energy sources. They’re not panicking, because they’ve seen this before. The Oil Crisis of the 70’s hurt them politically, but they’ve done quite well financially ever since. They’ve seen and heard all the rigmarole about saving energy come and go.
Then say there’s something about this recession cycle that has to be unsettling to oil producers. They have little to guide them when the world economy starts to pick up again. The technology is already in place to cut demand permanently by a few percentage points. Low prices are putting pressure on Arabian governments that use oil money as transfer payments. They see an American President intent on creating jobs in alternative energy, and by extension reducing more demand. Global warming is not fiction (unless you write a conservative column for the Washington Post), and the rest of the world is worried and willing to do something about it. And if Iran’s Ahmadinejad isn’t a reason to go green, then nothing is.
And with that, you should be fully equipped to tangle with those who think cheap oil is an excuse to do nothing. Cheers!
Image Credit: Indigoprime’s Flickr Photostream under a Creative Commons License
Rich: Your claim of 80,000 miles for Prius batteries is plain wrong. Most are still going strong at well over 100,000 miles.
The riposte to that little parry and thrust is that cartels inevitably fail to achieve production cuts because members cheat. OPEC has proven no exception to this rule.
Certainly oil prices will rise again. However, the fundamental price driver in the US petrol market is not so much crude prices as the balkanization of gasoline production and the political climate that prevents refiners from expanding, let alone building new plants.
Gasoline prices will remain volatile and subject to price spikes as long as petrol produced in, e.g., L.A. isn’t salable in, say, Chicago. And so on. These supply barriers will have much more profound effects on gasoline prices than will crude prices.
One can argue persuasively that now is the worst time to buy a hybrid. The cars cost much more than comparable conventional models. And currently that extra money will help our economy much more by flowing to providers of other goods and services than it will be spent on a hybrid. Get more haircuts and tip taxi drivers generously. Create some buzz among those service providers who talk to a lot of businesspeople that the economy is improving so that it, in fact, will.
Save the hybrid evangelism for later. And if you get in my face about it, as the author’s article suggests, I’ll smack you down :>).
I agree with your sentiment, but TOTALLY disagree with your conclusion. It is unwise to buy a product that requires a price supports/subsidies to be competitive, and then wraps your family in a cocoon of high amperage DC current (more dangerous than AC), and gallons of sulphuric acid. All wrapped in a car that is not going to come out well in a head-on with a mid size SUV. Add to that much higher than average maintenance costs (How much do those replacement batteries cost once they’re out of warranty anyway? just a few bucks? I doubt it…).
The Germans haven’t fallen for this nonsense. Smart, clean diesel technology is bringing real-sized cars to this shore that have power, room, and hybrid-beating fuel efficiency at a competitive price without subsidies. And diesel engines tend last and last and last.
Sebastian, oil is cheap. Even at $140 per barrel, oil is cheap. How cheap? Well, we still bought it, didn’t we? Yes, we bought less (there were also external economic forces in play), but we still bought it. If you drove less because you thought gas was too expensive, you were driving too much or too inefficiently to begin with.
$140/bbl wasn’t high enough to persuade the so called ‘greenies’ to plant some windmills off Nantucket (where the wind is constant). Nantucket, mind you (and Mass., Conn., & RI), where there are still oil-fired electric plants. Heck, in Litchfield County, CT, they’re having trouble getting a wind turbine approved at a sewer plant because the neighbors (who live next to a sewer plant!) are concerned about property values.
$140/bbl. wasn’t high enough to get any new nuke plants approved.
Is anyone else tired of hearing how great alternative energy sources are, as long as the proponents (especially the wealthy ones) don’t have to look at it or live near it?
And, Nick, it’s not just for every gallon of gas you buy that some money goes to people who really don’t like us. It’s every time you buy something made from petroleum derivatives (petrochemicals), like plastic. Got a lot of plastic inside that hybrid? That oil comes from somewhere. Or polyester - got any of that in your closet? That oil came from somewhere. A lot of carpeting is made from petrochemicals, too. There’s a lot of carpeting in this country. That oil comes from somewhere. Heck, anytime you buy anything, it was most likely delivered by truck and/or rail, which use oil.
It’s hard to imagine the radical change necessary to reduce dramatically or eliminate altogether our dependence on oil, regardless of its source. Hybid cars are a band-aid approach to a much larger issue.
Well, let’s see. A Prius is about twice the price of the non-hybrid equivalent, Yaris, Fit or Corolla. If we go back to $4 gallon gas you’ll break even between the two in about six years, if the Prius does not need the battery replacement that Toyota says it will by that point (if it does, you’ll never break even. You’ll also never break even if you weigh insurance into it).
The emissions from the two vehicles are about a wash.
If you want to save money, get the Fit or Yaris. If you really want to save money, wring more years out of the car you have now as long as it’s something that gets 20 mpg and can be kept in emissions tune.
If you want to stroke your ego, get the Prius (that should be obvious from any interactions you’ve had with Prius owners; it’s all about the pose).
Don’t you naysayers get … ITS ABOUT DOING THE RIGHT THING …
This guys is soooooo smart he just KNOWS its the right thing to by an overly expensive car in the middle of a recession when gas is less than $2 a gallons. He JUST KNOWS IT so why can’t you become part of the solution instead of being part of the problem.
Apparently being a “green blogger” requires disconnecting the factual parts of your brain in order to just write about how you “feel” about things. No reasons or apparently reason needed.
What kind of maintenence does a Prius need? When do the batteries (heavy metal, correct) need changing? I’ve seen Prius’s on sale for $20,000 instead of the old $30- but I need to know I won’t get hit with a $2000 maintenence bill every year.
What we HAVE to do is get the 8 MPG monsters off the road and get the minimum at least up to 20- that will affect the overall gas consumption much more than people moving from 30 to 60 MPG cars.
At this moment there’s zero reason to buy a hybrid. If there’s some major breakthrough, like EESTOR is everything it’s hyped to be, maybe my next car will be a full EV.
I’m starting to think the present day radical greening agenda is going to turn out as well as Stalin’s collectivization and Mao’s Great Leap Forward. Maybe kindler and gentler, instead of a body count it’ll only have an unemployment count. But it’s the same kind of mentality - what’s a few broken eggs when the omelet will be glorious?
In the long run everything is a limited resource. I’m all for developing alternative energy, but I think it’s silly to expect that we can switch over in a short time. America has enough oil that we could be selling it, but we’re really addicted to environmentalists dogmas more than to oil.
I hate to break it to the hybrid haters, but their owners love them and don’t care if they cost a bit more up front. Besides that, most of you naysayers probably haven’t driven one or actually compared a Prius to something like the Fit by doing an actual test drive. They are not in the same class with respect to interior room and features. And, when they are comparably equipped, assessment of the five-years costs associated with these vehicles don’t show that much of a cost difference. Right now, the maintenance costs are a bit higher, but the gap is rapidly narrowing as more of them hit the road. In addition, the NiMH batteries have proven to be a non-problem. Testing has shown that most Prius batteries are likely to last the life of the vehicle. You don’t have to buy one, but you shouldn’t belittle their purchase by others by spewing unsubstantiated and opinion-based data.