Tag Archives: transportation

Maglev Trains for Greener Transportation

How would you like to travel from Austin to Houston in 33 minutes? Would you believe that this is possible to do without leaving the ground, all while reducing your carbon footprint? All of this is possible with Magnetic Levitation Trains. Magnetic Levitation Trains, also known as Maglev Trains, are a rising technology showing much promise. The current Shanghai Transrapid train in China averages a travel speed of 267 mph [http://science.howstuffworks.com/transport/engines-equipment/maglev-train3.htm]. Even at that speed, cross continental trips can be convenient; a trip from Los Angeles to New York City would take just over 9 hours (compared to just under 5 and half hours for a flight) [http://www.distance-cities.com/search?from=New+York%2C+NY&to=Los+Angeles%2C+CA][ http://www.travelmath.com/flying-time/from/Los+Angeles,+CA/to/New+York,+NY]. I have spent more time traveling on a greyhound from Austin to Brownsville for crying out loud.

The benefits of Maglev technology should not be overlooked in this environmentally conscious society we live in today. Looking at the Figure below, it is easy to see the benefits that Maglev trains could have on the environment. It is clear to see that on a per-passenger basis, Maglev trains are the most “green” mode of transportation. A Transrapid train can seat between 321-449 passengers, while a bowing 747 can fit between 400-500 passengers. [http://www.newaustralia.net/MaglevAlternativeDIT.pdf] Based on the data above with maximum capacity, traveling from LA to NY would produce approximately 374,300 kg-CO2 and 58,379 kg-CO2 by 747-Short Haul flight and Transrapid Train, respectively. The Transrapid system would produce only ~16% of the emissions that the equivalent flight would produce.


Figure 1. Comparison of carbon emissions for conventional high-speed rail, Tranrapid, passenger cars, and short haul flights.


Another benefit is that the prices of tickets for Maglev trains would be more stable than for air travel since the fuel for Maglev trains is electricity; air plane tickets fluctuate with the price of oil. Also, as energy production in the US becomes greener, so would Maglev trains.

It would be great to see the United States government push the issue on Maglev trains as we push for greener technology.


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President Obama Announces Funding for Breakthroughs in Natural Gas and Biofuels as Alternative Fuels: $30 Million Will Fund Breakthrough Natural Gas Vehicles Technologies

On Thursday, February 23rd, President Obama spoke at the University of Miami about what he thought was big news for his energy agenda. Obama touted the $30 million of funding that the Department of Energy will make available for a “research competition… that will engage our country’s brightest scientists, engineers and entrepreneurs to find ways to harness our abundant supplies of domestic natural gas for vehicles.”(1)
Before I get into the relative insignificance of this $30 million announcement when compared to the money it made for other people, let’s begin with an interesting quote from the NGV funding press release:
“Today’s natural gas vehicle technologies require tanks that can withstand high pressures, are cumbersome and either too large or too expensive to be suitable for passenger vehicles.”(2)
The above statement is not entirely true. Check out the MV-1 compressed natural gas vehicle made by The Vehicle Production Group http://www.vpgautos.com/. Excluding potential tax credits for the buyer and ancillary fees charged for delivery, you can buy this car for about $50,000.(3) Yes, that is on the high end and resembles luxury car price points. But, it’s a suitable passenger vehicle.
The MV-1 has successfully accessed private sector and government funding resources. Private sector investors, including T. Boone Pickens and Clean Energy Fuels Corp., invested $160 million in VPG. VPG also qualifies for “Buy America Act” funding requirements and received an ~$50 million loan from the US DOE in March 2011. In September 2011, Marc Klein, a co-founder of the Vehicle Production Group, was honored at the White House as a “Champion of Change.”(4) When Mr. Klein accepted the award, he had changed jobs and was now a Vice President at Clean Energy Fuels Corp., a position he still holds. (5)
Here goes the next part of the story…
Let’s compare the significance of the $30 million US DOE funding announcement to some other recent facts. Before I go here, I want to be explicitly clear about the following:
• I am a proponent of natural gas
• I applaud the Vehicle Production Group’s delivery of “the first factory-direct wheelchair accessible vehicle that meets or exceeds the vehicle guidelines of the Americans with Disabilities Act (ADA) and that is available in a compressed natural gas model (CNG)”(6)
• I think Clean Energy Fuels Corporation (“CLNE”) is a fantastic company, and I believe in the economic and social value of the work they are doing
On Wednesday, February 22, the day before Obama made the NGV research funding announcement, Clean Energy Fuels stock price closed at $17.52. On Friday, February 24, the day after Obama’s announcement, CLNE stock closed at $18.74, a 48-hour gain of $1.22.
Here is the best part of this – IN LESS THAN 2 DAYS, CLEAN ENERGY FUELS’ SHAREHOLDERS MADE OVER $85 MILLION IN CAPITAL GAINS AFTER THE PRESIDENT ANNOUNCED $30 MILLION IN FUNDS WOULD BE GIVEN TO NATURAL GAS VEHICLE RESEARCH. Do you see how awesome that is? CLNE shareholders made ~2.9x more in stock price gains than the entire nominal value of the yet to be deployed US DOE funding for NGV research! *Shareholder value creation calculated by multiplying the CLNE shares outstanding from the most recent 10-Q filing (~70.4 million) by the $1.22 share price gain.
On January 24, 2012 the following headline came across marketwatch.com – “Notable Call Options Activity in Clean Energy Fuels.” Some excerpts from the text: “The strike seeing the heaviest volume is the February 2012 $16 call.”(7) In simplistic terms, on Jan. 24, it cost $0.25 cents to bet that CLNE would be trading above $16 by the call contract expiration date of Feb. 17, 2012 (the 3rd Friday preceding the 3rd Saturday of the contract month per options exchange rules).
So what happened to the people that bought that option in late January? CLNE closed at $16.70 on the contract expiration date (Feb. 17). That means you exercised your option for a $0.45 gain per share (gain calculated as follows: $16.70 value at exercise less $16.00 stock purchase cost less $0.25 option cost =$0.45).
Now what if you held on for one more week (until Feb. 24), which is the day after Obama made the $30 million NGV research funding announcement? Well, you made another $2.04 in CLNE share price gains.
Think about how smart and forward thinking these option buyers were in late January. Ignoring taxes and transaction costs, these people basically set aside $16 for a few weeks to earn more than a 16% return in less than a month. That’s an annualized return of 187%!!! How awesome are these investors?
They are so awesome that everyone is resting easy that Congress had yet to pass the Stop Trading on Congressional Knowledge Act. The Smart Money buying calls on January 24 knew it would be a couple weeks before they could get in trouble for that.
(1) http://arpa-e.energy.gov/media/news/tabid/83/vw/1/itemid/44/Default.aspx
(2) http://arpa-e.energy.gov/media/news/tabid/83/vw/1/itemid/44/Default.aspx
(3) http://www.vpgautos.com/
(4) http://www.whitehouse.gov/blog/2011/08/19/champions-change-going-green-and-increasing-accessibility
(5) Ibid.
(6) http://www.vpgautos.com/experience-MV-1/mobility-vehicle-featuresCached – Similar
(7) http://www.marketwatch.com/story/notable-call-options-activity-in-clean-energy-fuels-2012-01-24

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Oil Prices and the Texas Economy: a crude measure of success?

On Thursday March 25th, Texas House Representative Mark Strama addressed Professor Webber’s ETP class. In discussing the role that Texas plays in the United States’ energy policy, he stated that there was a strong positive correlation between the price of oil and the strength of the Texas economy.  In the spirit of the Austin-American Statesman’s recent column ‘Politifact Texas’, which measures politicians’ statements using a “Truth-O-Meter”, I decided to research Representative Strama’s claim about the Texas economy and oil prices.

The chart attached to this post compares the fluctuations in price of a barrel of West Texas Intermediate crude with the unemployment percentage rate in Texas since January of 1976. West Texas Intermediate is the light sweet crude barrel benchmark that is used in the NYMEX pricing of oil futures contracts. Although there are many measures of Texas’s economic performance, the unemployment rate seems the most relevant to Representative Strama’s discussion as an egalitarian measure of the strength of the economy. An unemployed person cannot contribute income tax and is a consumer of welfare dollars. I gathered data from reputable sources and plotted the two variables on a month-by-month basis.

WTI and Texas Unemployment correlation 

Before I compiled the chart comparing the two variables over time I expected that they would be roughly mirror images of each other (a high oil price gives rise to a low unemployment rate) in the context of Representative Strama’s comments. However, the chart did not stack up with this expectation. The main features of the chart are the volatility in oil prices, with a low of near $12 a barrel in the late 1990’s followed by a general rise in oil prices, culminating in the $147 peak of summer 2008. There are also several ‘spikes’ in Texas unemployment rate in 1982, 1986, 2001 and 2008. There are many periods in which a declining oil price coincides with a declining trend in unemployment, and in the early 1980’s the high oil price ran alongside periods of increasing job losses for Texas.

To enrich the chart, I added markers showing the U.S. recessions (source: FRED, the St. Louis Fed database) . When these were added, the timing of Texas’s unemployment periods became clearer. In all instances where there was a general U.S. recession, Texas unemployment rose, in some cases dramatically e.g. in 2001 and 2008-9. Although this is an unremarkable finding, it indicates that the Texas economy is not as ‘decoupled’ from the Union as supporters of Texas secession might have you believe.

Ultimately, I believe that Representative Strama over-simplifies the relationship between oil prices and the Texas economy. Texas has come a long way since the Spindletop gusher of 1900, and it has a diversified economy with strong technology, retail, aerospace and healthcare sectors. Many of these sectors are adversely affected by high oil prices due to the increased transportation costs it brings or the increased manufacturing costs associated with petroleum-based raw materials. The factors behind the latest economic recession that has affected millions of Texans are less to do with a collapse in oil prices as they are general economic instability caused by the implosion of the banking sector which caused trillions of dollars of paper losses and a corresponding loss in investor and consumer confidence. On the basis of my research, I rate Representative Strama’s comments as “Barely True”, although I would be interested to see if any readers can support his viewpoint through their own research.


West Texas Intermediate spot price from Wall Street Journal, Dow Jones and Company.

Texas unemployment data from Texas Labor Market Information, Texas Workforce Commission.

U.S. recession data from FRED, St. Louis Federal Reserve Database.


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Is Ammonia the transportation fuel of the future?

Over the last 100 years, petroleum fuels have dominated due to their high energy content, relative ease of storage, and their abundance.  The age of abundant oil is ending, however, and while the new finds seem to be fewer and farther between, the demand for petroleum fuels has only increased.  The coming scarcity is obvious to many, and while some debate how much oil still exists, nearly everyone agrees that we will reach a point when petroleum will no longer be a viable source of fuel.  While there is agreement on the eventual end of petroleum fuels, there has not been any real consensus on what will be the new power source of all transportation.   Many potential alternatives have been proposed, from corn-derived ethanol to hydrogen, but there are prohibitive problems with nearly all of these methods.  One interesting alternative that has not received much attention, is the use of ammonia as a liquid fuel.

Ammonia, which has the chemical composition of NH3, can be combusted with oxygen to produce nitrogen gas and water.  The reaction is exothermic, and while ammonia’s energy content is about half that of gasoline, the fact that its combustion produces only nitrogen gas and water makes it’s use as a fuel increasingly attractive as CO2 regulation becomes more likely.

I attended a symposium on offshore wind in Houston recently, put on by the Ocean Energy Institute, and one of the speakers spoke of the potential to use ammonia as a transportation fuel, and ammonia production as a means of energy storage.   His proposal centers on using off-peak power from massive offshore wind turbines to run water desalinization plants, and then strip the hydrogen from the purified water to combine with nitrogen to create ammonia.  The draw of this proposal is that it will make use of the typically unwanted off-peak power to produce pure water and ammonia, both of which are already in high demand today.

Is this too good to be true?  Well, no, not really, but there are several hurdles that must be overcome before we are driving around in ammonia powered vehicles.  First,  while ammonia production is already over 150 million tones per year, most of that is produced through either natural gas, and it is mostly used for fertilizers.   Since current ammonia production utilizes fossil fuels, using what we have now as a fuel would not really be any ‘greener’, so the first step is developing commercial-scale ammonia plants that require only electricity, water, and N2 (from air) as inputs.  By using only these three inputs, all of which can be theoretically produced by renewable power, then the cycle becomes carbon-free.  I believe this is not nearly as simple as it sounds, but I do think it is well within our capabilities as a society. While the production of ammonia would have to be scaled up by about a factor of 10, the up-side is that we already know and understand how to store and transport ammonia safely and economically.  Ammonia is a gas at room temperature, but it does compress into a liquid at around 125psia, which makes it much more user-friendly than hydrogen gas.  Ammonia can also be combusted in traditional internal combustion engines with only minor modifications required, which is a huge benefit considering there are over 250 million cars in the US alone.

Overall, I believe that without breakthroughs in electrical storage technologies, liquid fuels will remain the best choice for powering transportation vehicles.  The portability, power density, ease of refueling, and ease of storage is what makes gasoline and diesel and other liquid fuels so popular, and why finding a sustainable fuel replacement is so vital.  Is ammonia the fuel of the future?  It is very possible, but only time will tell.


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Apparently cold weather and electric cars don’t mix (yet)

As the weather is hovering back around 60 and 70 degrees here in Austin, it’s easy to forget that cars usually take a beating in the winter months. Older cars might take a little encouragement to get going, and engines end up running a little richer in order to get up to operating temperature.

Electric cars are no exception. The record cold streaks in the Northeast this winter put some of the electric Mini-Es to the test. As some of the testers found out, efficiency and battery capacity take a major hit as the temperature drops. This behavior is typical for the most part of electric devices, so it will be interesting to see how vehicle manufacturers handle these issues.

Normally these might be minor issues, but with reduced battery capacity comes limited range, which is not something you want (especially if the weather is nasty outside). Perhaps electric cars will need to do a better job of insulating the battery in colder weather, or some sort of heater can be used when plugged in. Either way, limited range is one of the biggest fears of using an electric cars, and an area where there is a lot of room for improvement.

It would be nice if we could get a few Mini-Es to test here in Austin. We don’t have biting cold, but our summers sure could put the batteries to the test.

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