The Only Winning Move

I’m not usually one for paparazzi reports, but this is some very encouraging news. It seems Matt Damon was spotted at a coffee shop test-driving a Tesla Roadster, which I have blogged about before. It’s to be the first “cool” green car - a $90k sportscar (actually, a variant of the Lotus Elise) that runs entirely on battery power. At the equivalent of about 135mpg, it’s certainly efficient. The only thing keeping the rest of us from buying one is the price.

The report is that Damon is impressed and will probably buy one. I hope so. The more celebs seen in these things, the “cooler” they become, and Tesla is actually banking on the cool factor for reinvestment capital in a more affordable line.

The market will provide. The link goes to an article in the International Herald Tribune about the rising crime of stealing used cooking oil from fast food joints.

Yes, cooking oil.

Outside Seattle, cooking oil rustling has become such a problem that the owners of the Olympia Pizza and Pasta Restaurant in Arlington, Washington, are considering using a surveillance camera to keep watch on its 50-gallon grease barrel. Nick Damianidis, an owner, said the barrel had been hit seven or eight times since last summer by siphoners who strike in the night.

“Fryer grease has become gold,” Damianidis said. “And just over a year ago, I had to pay someone to take it away.”

Why? Well, it seems that fryer grease is actually a commodity - as in traded on the market - and that its value has increased from 7.6 cents a pound in 2000 to 33 cents today - which is to say it’s up over 400%. Who would’ve thought that buying fryer oil futures was even an option, let alone a good idea? But there you have it. An ambitious fryer oil thief - one who hits several restaurants in a night - can rake in $6000 on a typical haul on the black market.

Why the sharp increase in value? That’s the interesting part. It turns out the fryer oil is a legitimate biofuel. You mix it with alcohol in a process that any old boob can duplicate in his home, and cars will run on it. So what we have here is yet another example of the efficiency of markets. Gas prices rise sharply, and suddenly there’s a market in alternative fuels, even in the most unlikely of places. It’s like that old story about the wind and the sun. Government bureaucrats can spin as many schemes as they want to try to get people to go green - but what actually works is incentive, not coercion. If gas prices rise, people will go green on their own - no socialism required. Oh, and this is probably good news on the obesity front as well - since the added security measures to protect waste frying oil is bound to drive up the price of fried chicken bits.

Well, well. You know all those arguments that legalizing prostitution would lead to some kind of explosion in the rates? Not true in New Zealand, where “a comparison between the number of sex workers in Christchurch in 1999, before decriminalisation, and 2006 - after the act was passed - showed the total had stayed about the same.”

More goodies:

Before the act, the illicit status of the industry meant workers were open to coercion and exploitation by managers, pimps and clients. Research indicated there had been “some improvement” in employment conditions “but this is by no means universal”.

In other words, laws banning prostitution actually work against prostitutes by making them complicit in the “crime.” They are reluctant to go to the police with abuses for fear of arrest. Who knew?

Not to mention - sex work isn’t all (or even mostly, or even at all in many cases) about exploitation.

Around 93 per cent of sex workers cited money as the reason for getting into and staying in the sex industry.

“The most significant barriers to exiting are loss of income, reluctance to lose the flexible working hours available in the sex industry and the camaraderie and sense of belonging that some sex workers describe.”

So sex work is a good part-time job, actually. That’s backed up by this UChicago working paper, which reports that prostitutes in Chicago work an average of 13 hours a week for $26-31/hour. Better money than most of these women can earn anywhere, with flexible hours. One of the women in the study, in fact (the one with a pimp) was earning more like $50/hour for about 12 hours a week.

Is there any reason at all why this should be illegal? Oh, right, the danger of violence. Certainly that comes with the territory, but making anything against the law guarantees it will be more dangerous. Again from the New Zealand article:

More than 60 per cent felt they were more able to refuse to provide commercial sexual services to a particular client since the enactment of the law.

Other findings included that the majority of sex workers felt the act could do little about violence that occurred, although a significant majority felt there had been an improvement since the passing of the act.

So violence remains a problem, but sex workers now feel more in control of the situation. A step in the right direction rather than a panacea, in other words - exactly what one might expect.

I realize that New Zealand is a demographic outlier in the world and that its experiences with policy implementation can’t be taken as definitive for that reason. But these results are just intuitive; there is no reason to believe the situation after decriminalization or (better still) legalization in the US would be any different. Let’s legalize it already.

If This is to be believed, the Tesla Motor Company will be introducing a $98,000 all-electric sportscar soon - possibly next year. Some circles claim that it will run at an average cost of $0.01/mile, do 0-60 in 4 seconds, and require only 3.5 hours to charge (though not from a standard wall socket - it will need special “fueling stations” of its own).

It’s the 1cent/mile fuel cost that strikes me, of course. That’s really spiffy!

So where’s the catch?

Well, the price tag, obviously. By comparison, I drive a 1999 Maxima that I bought used for around $15k. Taking the current mileage and comparing it to what it was when I bought it and dividing by the number of years, it seems I drive about 6,000 miles a year. OK - ‘99 Maximas get about 21mpg (that feels about right to me). So that implies I use 286 gallons of gas a year. Since I have to fill up with premium, I’m currently paying $4.20/gallon. All other things being equal, I would drop that to an even $4 to factor in this year’s cheaper months - but since I expect gas prices to continue rising a bit, let’s just do the math at $4.20. Assuming a solid rate of $4.20/gallon, I could expect to pay just over $1200 in gas a year. Since my total expenditures on gas for the Tesla Roadster would be only $60, I would save $1040 or so a year in gas by buying one.

Yeah, but it costs so much more than my current auto. Even if we buy these numbers (and let’s face it, we don’t: I find it hugely implausible that there are cars in existence that run on $0.01/mile, not to mention that new technology like this that expects to sell only 10,000 units or so exclusively in California in its initial offering is bound to require frequent and expensive repairs), it would take me over 80 years of driving to break even (a $15k car vs. a $98k car).

The irony of all this, of course, is that people who are in a position to shell out $90+k for a car probably aren’t sweatin’ the $1000/yr gas bill much. So I don’t really see the point in talking about fuel efficiency for an electric-powered luxury car.

Fortunately, Tesla gets this. From a post by the CEO on the company’s blog:

Almost any new technology initially has high unit cost before it can be optimized and this is no less true for electric cars. The strategy of Tesla is to enter at the high end of the market, where customers are prepared to pay a premium, and then drive down market as fast as possible to higher unit volume and lower prices with each successive model.

Without giving away too much, I can say that the second model will be a sporty four door family car at roughly half the $89k price point of the Tesla Roadster and the third model will be even more affordable. In keeping with a fast growing technology company, all free cash flow is plowed back into R&D to drive down the costs and bring the follow on products to market as fast as possible. When someone buys the Tesla Roadster sports car, they are actually helping pay for development of the low cost family car.

Needless to say, this is encouraging, a really smart strategy.

Ah, but do the cars work? Popular Mechanics seems satisfied!

I will be needing a new car in exactly two years. If they have family cars on the market by then in the $50k range, I’m in.

More inspiring green technology news from Scandinavia. Apparently there is a Swedish company that makes gas from human waste. Yup - what you flush down the toilet every morning. Here comes the science:

Chemically, biogas is the same as natural gas from fossil fuels, but its manufacture relies on a process where bacteria feed on fecal waste for about three weeks in an oxygen-free chamber. The result is two-thirds methane and one-third carbon dioxide, as well as a nutrient-rich residue that can be used as soil or construction material.

Once the methane is purified, it is pumped through Goteborg’s network of gas pipelines to specialized filling stations, where it is pressurized for delivery. Any car with an engine and tank configured for compressed natural gas can use biogas.

Apparently, it’s cheaper than gasoline and diesel, and though slightly more expensive than ethanol per unit, it’s more efficient, compensating for the price gap.

So what’re the downsides? Plenty, actually. First, the fuel isn’t all that efficient. Car fuel tanks are huge (crowding out trunk space), but only hold enough for about 2-3 hours of driving. Some owners have apparently also complained that the cars don’t do well on steep climbs and can be sluggish in certain kinds of weather. Perhaps as a result, Volvo stopped making biofuel cars in 2006, dealing a blow to the prospects for market expansion. Also, from an American perspective, part of the supposed “low cost” of biofuels is almost certainly artificial - fueled by high Swedish taxes on gas, government subsidies for biofuel station construction, and tax breaks for people who buy biofuel cars. Furthermore, it doesn’t seem to be that great of a supply:

Ola Fredriksson, an engineer at Gryaab, the sewage facility in Goteborg, said that what an average person flushed down the toilet each year created enough biogas to drive 120 kilometers, or 75 miles.

The average American (as well as the average Swede, for that matter) travels quite a bit further than that in a year. Even with the recent drop in highway miles travelled, Americans still clocked 688.7billion highway miles in March alone. If every American gets 75 highway miles a year, that comes to a total of 22.5billion miles - or just over 3% of what we actually travelled in just one month. Which is like saying that people would have to poop at least 396 times more than they do to cover yearly highway travel in the US.

No one has that kind of time or dedication.

Still, the idea of dumping human waste into the city’s natural gas grid (which is how it actually works in some places in Sweden: the drivers put natural gas in their car, and in return the city natural gas grid accepts an offset amount of biofuel) is appealing. It doesn’t solve any large-scale energy problems, but it does at least find something useful to do with the sewer system.

The prospects? This 2007 Swedish government report claims that there are 11,000 biofuel cars in Sweden being served by at least 71 fueling stations. That’s a start.