Article

2010-01-30 Economy

Secretary Chu Announces Closing of $1.4 Billion Loan to Nissan

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Posted by ed 2010-01-30 10:47|| || Front Page|| [11132 views ] Top

#1 Only $1,076,923.08 per job created, I'll do it for half that. Who do I call for my loan?

Posted by AzCat 2010-01-30 10:58|| 2010-01-30 10:58|| Front Page Top

#2 You do realize that for every primary Auto company employee there are another 5 at supplier companies and another five in the general economy (stores, medical, schools, legal). But that is beside the point I wanted to make. The point is the Leaf uses no oil. Every gallon replaced does not have to be bought from the Middle East and less money to fund the jihad.

Posted by ed 2010-01-30 11:12|| 2010-01-30 11:12|| Front Page Top

#3 Nissan Recalls - So you think buying Japanese is a good deal?

Yeah right.

Posted by Uloluter Darling of the Munchkins5034 2010-01-30 11:15|| 2010-01-30 11:15|| Front Page Top

#4 Energy policy in this country is insane.

This car nor any other version of an electric vehicle will resolve or even dent our energy needs. In fact, it will likely make them much, much worse.

Electric cars are notoriously inefficient in cold weather. A lot of electrical cars on an electrical grid will draw down on power from everyone else without the US making a massive investment in additional power sources.

All of energy policy in place was originally premised on the cost and now on the social aspects of dealing with Arabs, Muslims and other mobocracies.

We don't want to deal with nations whose goal is to destroy the American way of life, but the underlying premise in that is that we must destroy the American way of life to save it.

Insane, and for all the solutions proposed, few have been advanced to take advantage of what we know will work: free markets.

Green technology relies heavily and always have on government subsidy, inasmuch as we know after nearly two generations, they aren't ready for free markets.

They never will be.

Instead we have billions and billions of dollars pissed away on technology we know hasn't worked, isn't working and will never work without massive investments in an industrial base our elites have little stomach for.

Disclosure: I work in an oil field related job and have, off and on, since the early 80s.

Posted by badanov 2010-01-30 11:19|| http://www.freefirezone.org 2010-01-30 11:19|| Front Page Top

#5 badanov, thanks for the activity in the OK. panhandle. They are discovering some nice deposits of oil and gas. Drill Here, drill now.

Posted by bman 2010-01-30 11:27|| 2010-01-30 11:27|| Front Page Top

#6 Chevrolet recalls What was your point?

My point is to move away from oil based transportation that is funding the jihad against us. The military cost of mideast oil dependency is now costing American taxpayers around $200 billion/year plus at least another $50 billion for internal security. Add anther $350-400 billion this year in imported oil costs. That's a huge proportion of wealth leaving the economy and is, frankly, sinking it.

The Nissan Leaf is the first semi-affordable battery electric car, will be made in the USA and will run on US produced energy.

Posted by ed 2010-01-30 11:31|| 2010-01-30 11:31|| Front Page Top

#7 Somehow I always knew badanov had a Halliburton connection.

Posted by Besoeker 2010-01-30 11:41|| 2010-01-30 11:41|| Front Page Top

#8 Electric cars are notoriously inefficient in cold weather.

That is true. Most batteries don't like it below 0 Celsius. There are lithium chemistries that work very well to -30 Celsius (e.g. lithium titanate) but the energy density is low and the cost high. Too high for individual transport at this time. That said, lithium chemistry is rapidly improving.

But, these cars shouldn't operate in Michigan winters. They should be sold in the South or CA. If the entire Smyrna production was devoted to the Leaf, it would take many years just to replace Alabama's cars.

Posted by ed 2010-01-30 11:44|| 2010-01-30 11:44|| Front Page Top

#9 If you think the batteries don't like it below 0 anything, wait till you see what the heater does when you turn it on.

Posted by Nimble Spemble 2010-01-30 12:09|| 2010-01-30 12:09|| Front Page Top

#10 What badnov said.

Ed - I presume that when the government says, "The two projects are expected to create up to 1,300 American jobs," they've included every multiplier you thought of, many you haven't, and all of the very temporary gigs that a retrofit will fund that will evaporate very quickly.

With the $1.4B we're pissing away on this I could drill & complete over 45,000 new (very shallow) oil wells in my region including the cost of leasing the relevant rights in the first place. That would create just a bit of economic activity, no?

Disclosure: we've been in the oil business since before the Great Depression and still are. As an added bonus I'm an engineer and can smell greenie energy BS a mile away.

Posted by AzCat 2010-01-30 12:42|| 2010-01-30 12:42|| Front Page Top

#11 What was your point?

That's a huge proportion of wealth leaving the economy and is, frankly, sinking it.

Why is the yen subsidy a competitive challenge to U.S. automakers?
Between 2000 and 2004, the Japanese government spent more than $400 billion in direct interventions in global currency markets, buying dollars specifically to push down the value of the yen. This was the largest single currency intervention ever undertaken by a single country. Nevertheless, the U.S. administration tacitly approved Japan's aggressive moves to secure a weak yen, disregarding the impact on the U.S. economy and in particular the regions and industries most vulnerable to the resulting surge of Japanese exports.

Since 2004, the Japanese government has engaged in "jawboning" actively talking down the value of the yen through public statements that make it clear to currency traders that they're willing to intervene again if necessary.

In addition, low Japanese interest rates have fostered an enormous "carry trade" by which international investors borrow yen at cheap rates to invest in instruments denominated in higher yielding currencies. The carry trade estimated by some analysts to be worth up to a trillion dollars keeps the yen low while creating a source of great potential instability for the global financial system. A stronger yen would undermine the financial underpinnings of the "carry trade."

Why is the yen subsidy a competitive challenge to U.S. automakers?
U.S. auto companies are changing their business models and making the painful but necessary adjustments to compete successfully in today's global market. Ford, DaimlerChrysler and GM produce state-of-the-art autos using the most advanced technologies in the world. However, these companies alone cannot counter the effects of an artificially weak yen that gives their Japanese competitors an unfair and unearned competitive advantage worth thousands of dollars per car.

Aside from hurting U.S. automakers, how does the yen subsidy impact the American economy?
The artificially low yen has helped fuel our trade deficit with Japan. The U.S. trade deficit with Japan has been our largest or second largest bilateral trade deficit for over 25 years. In 2006, the U.S. trade deficit with Japan reached $88 billion, the second largest such deficit we maintain with any trading partner. A full two thirds of this deficit($54 billion) comes from autos and auto parts.

Thats the point ed. Why do you support putting the American economy further in the hole? And why is Zero's Government helping in the process ?

Posted by Hupasing Sinatra9419 2010-01-30 12:45|| 2010-01-30 12:45|| Front Page Top

#12 So it is fine for the government to be a bank for any ol green job needing big money? The government doesn't mind, cuz its not their money so if a loss so what...besides how much would it cost to refit this plant back into a normal production? It gets the factory dependent on go-green-go. There are ways in which Nissan could raise this money: real business banks and investors - neither of which would be on board if the risk is unacceptable. So Nissan gets their (bank/investor) money anyways via government because big banks and wall street are eeevillll and deserve a fine for being so. Anyone with any money in markets or banks, this is you.

Then there are the technical aspects. I am for anything which lets the USA determine its own fate; less ME oil for example. There are huge real world problems to figure out firsthand. I propose that if the electric car cannot make it in LA, that is use LA as the guinea pig if you will, then it will not make it anywhere: fairly consistant weather, combination stop go traffic and highway, and a local cadre of celebrities who just love the environment and stuff. Examin after 5 years and see if the concept can scale or work in other environments.

Good stuff on paper does not translate into real world results. Example, the new LED street lights which dim according to ambient light, sounds great right? Well, they don't put off enough heat and during ice/snow they obscure or are downright blocked. Not so great in fog either I hear. There are going to be these kinds of problems to fix and more, like what happens to these vehicles after being in swamp weather for x years. People are going to be real surprised, for example, when they find out their lighter for efficient cares are made with an alloy most firefighting equipment cannot cut through, and some of the cage designs potentially jam the doors shut with the crumpling effect.

Then there are people like me who will refuse to use unproven transportation to carry my family around.

Posted by swksvolFF 2010-01-30 13:19|| 2010-01-30 13:19|| Front Page Top

#13 Plus, an electric car should be a lot cheaper to maintain for it's owners---lots less moving parts, Ed.

Posted by g(r)omgoru 2010-01-30 17:36|| 2010-01-30 17:36|| Front Page Top

#14 What about the poisons in the battery? Don't these toxins offsett the reduced carbon footprint of electric vehicles?

Posted by remoteman 2010-01-30 18:10|| 2010-01-30 18:10|| Front Page Top

#15 AZcat: The two projects are expected to create up to 1,300 American jobs," they've included every multiplier you thought of, many you haven't

The battery project can produce enough for 200,000 new cars annually. It requires a heck of a lot more than 1,300 people to produce that many $30K cars. That value of production translates into around 50,000 jobs if all the work is done in the USA. Some won't be. For instance the Lithium Carbonate production.

Wouldn't you agree this will new production of a new class of cars. A product that does not currently exist in the market. I don't see any commitment coming out of Detroit for mass produced electric cars. The Volt, while a fine car, is an 80% solution to our oil addiction and at $40K not quite affordable for Mr and Mrs Average.

I could drill & complete over 45,000 new (very shallow) oil wells in my region

That comes out to $31K/well. Oil companies or wildcatters can't come up with $31K? No the problem is socialist government's decision to ban domestic oil production and rely of foreign sources. Some of who want to kill and enslave us.

HS9419: Why is the yen subsidy a competitive challenge to U.S. automakers?

Japan gets the money to subsidize the Yen via the trade surplus w/ the US. That is a consequence of having a wide open import policy. That's US governmental policy. Our stupid policy, not Japanese. If the Japanese didn't have so many dollars, they couldn't sell Yen at depressed prices. Talk to your politicians, not Nissan.

Nissan is proposing to build 200K/year electric cars in Tennessee. That actually decreases the US trade deficit. Some of those cars may even be exported. Nissan could import those instead, probably with less headache. At $25K/car at the dock that alone is $5 billion/year. That's fully 12% of last year's total US-Japan trade deficit ($40 billion). Why would you want to add another $5B by having the cars produced in Japan?

While Japan has a trade surplus with the US, it has an overall trade deficit (think oil). They are not in as good a shape as one may imagine.

low Japanese interest rates have fostered an enormous "carry trade" by which international investors borrow yen at cheap rates

I suggest holding a gun to Mrs Japanese Houswife to quit saving for retirement and force her to buy ... What is it we make in the USA anymore? How about putting barriers to the bankers' carry trade instead? What is Goldman-Sachs bonus payout this year, $10 billion? How many politicians does that buy?

Posted by ed 2010-01-30 18:36|| 2010-01-30 18:36|| Front Page Top

#16 What is it we make in the USA anymore?

Female pop-singers?

Though those do seem prone to break-downs...

Posted by Pappy 2010-01-30 18:43|| 2010-01-30 18:43|| Front Page Top

#17 But not, alas, to mass recalls.

Posted by lotp 2010-01-30 18:46|| 2010-01-30 18:46|| Front Page Top

#18 lotp wins the thread. :-D

Posted by Barbara Skolaut 2010-01-30 19:09|| 2010-01-30 19:09|| Front Page Top

#19 That comes out to $31K/well. Oil companies or wildcatters can't come up with $31K

Sure, it's trivial to do so even in much larger amounts. I estimated conservatively, $31k to completion is actually on the high side though it depends on which part of the region one is in.

However you're ignoring the point: if you want to impact the domestic energy picture what is the better use of $1.4B in very limited government funds? Drilling tens of thousands of new domestic wells? Or subsidizing a Japanese company to create less than fifteen hundred domestic jobs? Seems like a pretty easy call to me but then our government has never really been serious about addressing our energy issue.

Posted by AzCat 2010-01-30 19:15|| 2010-01-30 19:15|| Front Page Top

#20 ...sorry , late to the party here.

to comment: electrical cars pollute just as much if not more oil you consider battery disposal. All an electrical car does is move the source of the energy it runs on from the gas station, to the oil and or coal run power plant which generates the 'refill' energy.
The electrical grid is strained and outdated already. Bad idea to strain the grid with millions of 'electrical cars'
Hybrid cars seem to be our best option at the present time. Or 'flex' cars that can run on LPG as well.
My brother's turbo VW Golf diesel Wagon gets around 50 mpg and moves around quite well even in the Minnesota winters.

It will be quite some time if at all before electric cars would be feasible for the general masses.

Posted by Mike Hunt 2010-01-30 19:18|| 2010-01-30 19:18|| Front Page Top

#21 Sure, it's trivial to do so even in much larger amounts.

Then do it. But it's not a money problem. It's a government that's captured by green-red and NIMBY alliance problem.

if you want to impact the domestic energy picture what is the better use of $1.4B in very limited government funds?
Again, what's stopping one from drilling a few wells and using the profit (410 barrels break even) to drill some more? At break even that's 16M barrels total production.

An electric car will likely last at least 10 years. Mechanically a lot longer. One year's (full) production of 200K cars that will eliminate the need for 15M barrels oil over 10 years. Over 10 years that 150M barrels. And that $1.4B seed money will jump start 2 magnitudes more economic activity than drilling.

electrical cars pollute just as much if not more oil you consider battery disposal.

Lithium batteries do not use heavy metals anymore. Cobalt is gone due to the fire hazard. Other components are iron, manganese, phosphorus, titanium.

All an electrical car does is move the source of the energy it runs on from the gas station, to the oil and or coal run power plant which generates the 'refill' energy.

Yes, from $75/barrel oil to $5/barrel equivalent coal. Even less uranium. One ton of lignite (the crappiest coal) is equivalent to 2.5 barrels oil. Powder River basic coal (40% of US production, 1 ton = 3 barrels oil) sells for $10/ton.

Posted by ed 2010-01-30 20:53|| 2010-01-30 20:53|| Front Page Top

#22 List of the highest fuel efficiency European cars

24 of the 25 are diesel.

Plus diesel vehicles last much longer and are much cheaper to maintain.

Dubai is building a natural gas to diesel conversion plant, which will produce millions of gallons of diesel fuel a year.

And here in Perth, most cars that do more than 15,000 miles a year are converted to natural gas.

Electric cars are a boondogle, that don't reduce energy consumption, don't reduce carbon dioxide emissions, and bar major breakthroughs in battery technology will never be more than a niche product.

Posted by phil_b 2010-01-30 21:06|| 2010-01-30 21:06|| Front Page Top

#23 The electrical grid is strained and outdated already.

There is plenty of excess capacity at night when you want to charge batteries. According to a recent U.S. Department of Energy study, there is so much excess capacity that if every light-duty car and truck in America today used plug-in hybrid technology, 73 percent of them could be plugged in and "fueled" without constructing a single new power plant. That's almost 200 million cars and trucks. Of course to approach that efficiency level will require a smart electric grid. But the energy capacity is already available.

Hybrid cars seem to be our best option at the present time.

That depends on battery price, but mostly accurate.

Posted by ed 2010-01-30 21:13|| 2010-01-30 21:13|| Front Page Top

#24 24 of the 25 are diesel.

And almost all would be illegal on US roads. Blame the government if you want, but US cities don't smell of diesel fumes. Last I was at a European rail station, I ended up puking.

Electric cars are a boondogle, that don't reduce energy consumption, don't reduce carbon dioxide emissions,
Gas and electric cars have similar end use energy efficiency. So total energy consumption and CO2 is equivalent with coal. However, that coal BTU is 1/20th the price of oil's BTU. Coal (nuke energy) is produced domestically, using US labor with the money circulating in the US economy. In addition, electricity production is fuel neutral. Any energy source will do.

and bar major breakthroughs in battery technology will never be more than a niche product.
Lithium-silicon batteries promise 4 times the energy density of today's lithium batteries. Funny enough, Nissan is planning to use them in the Leaf. After that, silicon nanowire hold the promise of 10X energy density. Battery tech is advancing far faster then internal combustion tech. The same for the cost curve. Think 10-20 years down the road.

Posted by ed 2010-01-30 21:37|| 2010-01-30 21:37|| Front Page Top

#25 And here in Perth, most cars that do more than 15,000 miles a year are converted to natural gas.

It would be very helpful if Americans could buy factory Nat Gas cars. Would be great for the urban/suburban commuter if the refill infrastructure is built along with it (chicken and egg problem). But home refill is impractical. The compressors are $2-3K and don't last very long.

Posted by ed 2010-01-30 21:46|| 2010-01-30 21:46|| Front Page Top

#26 US cities don't smell of diesel fumes.

I've owned diesel vehicles and they don't smell nor do they create fumes.

I suspect the problem is that diesel engines last a very long time. So there are far more old diesels on the roads than old petrol cars. And old vehicles are the primary cause of urban air pollution.

I knew a taxi driver in the UK whose diesel London Cab had done over one million miles with the original engine.

Electric cars are a boondogle primarily because of the range issue. The market for a vehicle that will never go more than 50 miles from home is very small. And you better hope you don't get stuck in traffic on a hot or cold day because the heater or aircon will run down that battery pretty fast.

And while battery technology may be improving it doesn't solve the range problem. You will never be able to recharge a cars battery in the same time you can refuel a petrol/diesel/NG car.

Posted by phil_b 2010-01-30 22:22|| 2010-01-30 22:22|| Front Page Top

#27 "There is plenty of excess capacity at night when you want to charge batteries."

Ed, I read someplace recently (maybe here?) that electric plants need the nighttime to cool down. So maybe that "excess capacity" isn't.

Posted by Barbara Skolaut 2010-01-30 22:26|| 2010-01-30 22:26|| Front Page Top

#28 that electric plants need the nighttime to cool down.

There are some transformer designs that need to cool down during summer nights. Essential they were designed too small to operate continuously at rated power during hot periods.

Electric cars are a boondogle primarily because of the range issue. The market for a vehicle that will never go more than 50 miles from home

I disagree. Most US families have 2, 3 or 4 cars (260 million cars, 308 million people). The car that gets used most is the commute car(s). That's where the EV shines. The few times a year required for long trips/vacation, the second gasoline or rental car becomes attractive.

Even at 12 cents/kWh, it costs less than a dollar for the electricity to drive a gasoline gallon equivalent ($2.50 where I live). As the electric grid is used more at night, the cost of electricity will drop. That will occur because most of the electricity cost is for fixed infrastructure. For instance in my are, wholesale electricity cost is 3 cents/kWh at the plant gate. Transmission, regulation, backup, maintenance, debt service and billing eat up the other 9 cents. Increase usage by 50% and not only is generation equipment used more efficiently, the fixed costs stays the nearly the same. So you get a cost of (3+1.5+9)/1.5 = 9 cents/kWh vs 12cents/kWh. A good deal all around.

Posted by ed 2010-01-30 23:01|| 2010-01-30 23:01|| Front Page Top

#29 I suspect the problem is that diesel engines last a very long time.

No. Diesels pollute more. It's immediately noticeable in diesel heavy countries. Even the Latest Tir2 Bin 6 diesels that are expected to arrive on US shores still pollute more than any gasoline engine. An that's after very expensive particulate filters and urea reduction solutions that have to be refilled (about 1 gallon per tank of diesel, I seem to remember at $60 a pop).

Posted by ed 2010-01-30 23:12|| 2010-01-30 23:12|| Front Page Top

#30 Ed works for Nissan and the US Secretary of Engery's K Street gang.

Posted by Grens McCoy3284 2010-01-30 23:25|| 2010-01-30 23:25|| Front Page Top

#31 You found me out Grens, or should I say Sheik Abdalluh?

Posted by ed 2010-01-30 23:44|| 2010-01-30 23:44|| Front Page Top

#32 Then do it. But it's not a money problem. It's a government that's captured by green-red and NIMBY alliance problem.

Already doing it ed (albeit on a much smaller scale than I could if the gummit handed me a 10-figure payout) but, again, you're ignoring the point: you claimed this was a jobs thing but it's outrageously expensive as such.

And ... you think we should subsidize electric cars so we can move from oil to coal as a primary fuel source for transportation? Really? What planet is it that you live on because in the one I live on the same enviro-nazis that want to prohibit as much oil & gas production as possible hate coal even more. Ditto nuclear which you also mentioned.

Better the government keep its checkbook in its pocket and we wait for the adults to retake control. Given Bambi's flailing and the lemming-like march of Demonrats right off the proverbial cliff it won't be that much longer. Lefties lose if the recession continues as they own it now and they lose if it doesn't because at the first signs of life in the world economy (or if the lefties keep running up trillion+ annual deficits) oil prices will spike. Either way, after an election cycle or two the adults will be back in charge and subsidies for electric vehicles will go the way of Carter's synfuels program.

Posted by AzCat 2010-01-30 23:47|| 2010-01-30 23:47|| Front Page Top

23:47 AzCat
23:44 ed
23:25 Grens McCoy3284
23:12 ed
23:06 USN, Ret.
23:01 ed
22:36 Barbara Skolaut
22:34 Barbara Skolaut
22:30 Barbara Skolaut
22:26 Barbara Skolaut
22:22 phil_b
22:14 49 Pan
21:57 ed
21:56 Procopius2k
21:46 ed
21:41 Herman Slusoter6686
21:37 ed
21:34 Frank G
21:30 James Carville
21:30 tu3031
21:26 tu3031
21:23 tu3031
21:21 tu3031
21:13 ed