Several pieces of this strategy were unveiled in San Francisco last Thursday, at an event entitled Inside Ford’s Electrification Strategy. Ford’s newly-titled Director of Global Electrification, Nancy Gioia, explained how the company is not only planning to build battery-electric (BEV) and plug-in hybrid electric (PHEV) vehicles, but is also working on strategies to build the infrastructure that will support those vehicles. Attendees at the event were also invited to test-drive two news Ford vehicles, the Escape PHEV and the Focus BEV. While my fellow 3P contributor will be posting an in-depth look at Ford’s electrification strategy itself, I would like to discuss some of the other things that make up the company’s overall strategy.

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How well Ford Motors’ actions measure up to the statements that the company has made is something that remains to be seen. Some commitments made by the company were only made after pressure was applied by shareholders. As it has been said, the proof of the pudding is in the tasting. However, the company has made some notable past efforts in greening its operations, led by current Chairman of the Board, and former CEO, Bill Ford.

Mr. Ford, Great-Grandson of founder Henry Ford is known to be an environmentalist, and has made several attempts in the past to move the company in a more sustainable direction, some very successful, and some dismal failures. His major success was the transformation of the River Rouge plant from a polluted industrial brownfield site into a model of green design, complete with green roof. Failures include canceling the company’s electric vehicle program, and the inability of the company to keep to its 2000 commitment to increase fleet gas mileage by 25% by 2010.

What is interesting about these failures is that the company cited market conditions as the main cause. As long as the consumers were demanding larger vehicles, the company needed to provide them, in order to remain in business. Ironically, it was rapidly changing consumer demand that almost put the company out of business, as the economy, rising gas prices and concern about climate change caused buyers to flee SUVs in favor of smaller cars and hybrids.

Huge corporations are not known for their ability to turn on a dime, they are more like Titanics on a competitive ocean, their rudder (leadership) too ineffective to avoid the oncoming iceberg. Perhaps this kind of disaster is the only thing that would allow such an entrenched company to make the necessary changes.

So what, exactly, is the company’s strategy? According to Ford’s Director of Sustainability John J. Viera, the company is not banking on any one technology to solve the various challenges of emissions and oil dependency. Instead, it plans to introduce vehicles which run on a number of different fuels, and employ different technologies in different situations, appropriate to the situation. In addition, the company will become more involved in the fuel delivery process, as in the case of electricity and biofuels.

This was very evident while I was riding in the new Ford Focus BEV, accompanied by a Ford engineer and several of my media colleagues. The vehicle, a prototype of one scheduled to be released in the US in 2011, has a current range of approximately 80 miles, with the production model slated to have about a 100 mile range. During our ride, the engineer explained that Ford did not intend for the BEV Focus to be a car that would be driven by everyone, but would mostly be marketed as a second car or commuter car for those with commutes in the appropriate range. For longer trips, a PHEV is more appropriate.

Ford is also putting it’s money on vehicles that can run on several different types of fuels, also known as “Flex-Fuel” vehicles. These cars and trucks can use Ethanol as well as gasoline. (There are even rumors of a flex-fuel hybrid.) Another type of multiple-fuel vehicle being planned is one that has multiple fuel tanks, such as a propane and gasoline combination. In addition, the company is moving into biodiesel, and will be offering a B20 biodiesel-capable engine for its 2011 F-series trucks.

Although Clean Diesel vehicles are already being produced in Europe, the cost to bring this technology to the U.S. is currently prohibitive, but, according to Motor Trend, the company is planning on being able to offer a clean diesel engine for larger vehicles, such as the F-150 and Expedition, by 2020. This could potentially result in clean diesel technology ending up on other Ford vehicles.

By introducing an assortment of vehicles, with different types of engine running on a number of fuels, the company hopes to diversify the current U.S. portfolio of vehicles away from gasoline. By having a large number of technologies at it’s disposal and readying its worldwide operations to switch technologies quickly, “Ford anticipates it will be ready to leverage the right vehicle fuel and energy sources when and where they are needed in the future (EcoTuesday.com)“. Like diversifying a stock portfolio, this strategy would reduce the risks of dependency on oil, in addition to reducing overall greenhouse emissions.

Speaking to the various Ford representatives, and listening to their presentations, you do get the sense that at least some of Ford’s management are very well-versed in the language of sustainability, and the strategies that they are outlining appear to be sound and well thought out. If these could be implemented in toto, it seems likely that they would work.

However, it does appear that a healthy dose of skepticism is still in order. Ford’s short-term strategy for boosting fuel efficiency is something called “EcoBoost”, which essentially uses smaller, turbo-boosted engines to replace larger engines, something that SAAB has been doing for years. I have to admit, when I first heard about this, I had that same icky feeling that I had when SAAB attempted to pass off turbo-boosting their engines as “recycling”. The catchy, too-green, name, and too-good-to-be-true claims have a faint smell of greenwashing about them; this Wall Street Journal article clearly shows that Ford is likely overstating the fuel economy benefits of turbos.

Perhaps the EcoBoost thing is simply a misstep by a company trying to do anything it can to survive. I really do hope that Ford ends up proving me wrong, for everyone’s sake. A company of this size and influence is in a position to make a huge difference in the multiple fights against climate change and oil dependency. All that is needed is for the company to take its sustainability strategy seriously and to empower good people like the ones I met on Thursday.

What do you think, is Ford going to come through on its sustainability promises?

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This article originally appeared on TriplePundit and is reprinted here thanks to 3P’s Creative Commons Attribution 3.0 license. Find out more about Creative Commons licensing.

This graph shows exactly what 3.6 million jobs lost in 6 months looks like. It really is something, isn’t it? [via The Gavel]

The following video describes how an electronic “run on banks” almost collapsed the ENTIRE WORLD ECONOMY in just under 5 hours, if it wasn’t for fast action by the Fed. If this isn’t a prime example of a “Black Swan” or unintended consequence of complexity, I don’t know what is. [via BoingBoing]

Earth2Tech is reporting that a proposal to give drivers up to $10,000 in incentives in return for trading in their old car for an energy-efficient one has been withdrawn from the stimulus package. Unfortunately, this item fell victim to efforts to reduce the size of the stimulus package.

When it comes to government intervention, I am very much in favor of this kind of incentive, which gives people an economic reason to do something that is good for both them and for the country. I generally prefer this kind of incentive, because it is direct, measurable, fast, and represents a positive incentive instead of a punishment. It would both stimulate the economy, by getting people to buy new cars, while speeding up the process of taking old junkers off of the road.

I hope that this item is reconsidered in the future, especially if it is tied to very strict mileage requirements on the new vehicles that can be purchased with the rebate.

The author of this article points out that Steven Levitt, author of Freakonomics, pointed out a major flaw in the proposal:

Leavitt brings up an interesting point, although I can see two sides to this argument. On the one hand, you can simply change the cutoff to be based on the gas mileage of the car being traded in, not its age. The goal is to reduce the overall emissions of the U.S. fleet, so who cares if it is a 2-year old Hummer or a 10-year old Ford?

Now, on the other hand, you might want to consider the total energy (and, thus, emissions) embodied in the production AND usage of the vehicle over its lifetime. In this case, I don’t have a problem with a 10 or 15 year cutoff. If you accept this model, it’s probably not a bad thing to encourage people to keep their cars for their useful lifetimes, and thus minimizing the overall impact of the car.

Personally, I would choose the MPG option over the life cycle option, since reducing future emissions is probably more critical to solving our current dilemma.

Tags: sustainability, business, green, renewable energy, cars, auto stimulus black swan

Tomorrow, I leave Clayton for good. I have to say…I’m quite nervous. I’m joining up with a group of people that I don’t really know all that well, to go on a journey which may show me things that I’m not sure I want to see. But what choice do I have? Staying here really isn’t an option anymore…not since last year’s earthquake destroyed the last bits of infrastructure that we had out here.

Our community was an unusual collection of wealthy suburbanites and down-to-earth horse ranchers. The last few years saw the wealthy people, one by one, move to the city or back east, as gas prices rose and suburban real estate collapsed. In many cases, it made no sense to try and sell their houses, there was no one to buy them, so they simply left the houses to squatters and others. The horse ranchers didn’t really fare too much better, there being very few patrons to support the buying and selling of prize horseflesh. Some of them consolidated and stayed, while others left.

I stayed longer than most, because of a unique situation. The owner of the townhouse I rented had vanished in 2017. He was a Korean dentist, and had been living abroad for many years. He rented the house to me because he was unable to sell it after the real estate collapse of 2010. There was some rumors that he had died from an early form of ReDS, but there was no way to know for sure. When no relatives contacted me to claim ownership, I simply stayed on, rent-free.

Even with the declining situation all around me, and $10 gasoline, I was able to hang on due to the fact that I could work remotely. As long as I had the Internet, I was OK. For the time being, the utilities stayed on, and there was enough food to be had at local farmer’s markets to keep things tenable, although I had to deal with more and more frequent power outages.

The earthquake was the final straw. It just so happens that Clayton lies on top of both an earthquake fault and an (until recently) active oil pipeline. The quake, while not very big, was centered directly under Clayton, which resulted in the rupture of the oil pipeline. Most of the area surrounding my development has been contaminated, and I was only allowed back into the community briefly to evacuate what belongings I could. Given the current state of government in California, I think that it is very unlikely that anyone will be cleaning up the area any time soon. It will simply be cheaper to cordon it off and let it sit for a few hundred thousand years.

So…it was with much coincidence and serendipity…as usually happens in situations like these, that I met Mike. Mike is the leader of a nomadic group of techno-savvy people, who banded together for mutual support. They roam from place to place, attempting to patch together the computing and communications infrastructure where they can. They buy and sell computer and electronic hardware, and hack together solutions, for a fee. The rest of his group consisted of mechanics, cooks and the like. He was willing to bring someone on as long as they could contribute a skill that could either make them money or keep the group moving.

Mike’s group was in the area, had heard about the earthquake, and thought there might be some opportunities around. We met while browsing the bulletin board at a local emergency shelter.

It turns out that Mike was looking to bring aboard someone who had experience repairing 4-wheel-drive vehicles. It was just my luck that I had belonged to a Land Cruiser Club for many years, and I was able to perform some advanced maintenance procedures. Luckily, those vehicles were designed to be repaired in the field, so basic mechanical knowledge and a good manual go a long way. Mike thought that my computer skills and my mechanical aptitude would make a good fit for the group. I agreed to take on trial membership in the group while we make our way to the East Coast, where I will decide whether or not to become a permanent member.

So, I’m gathering up my things and saying goodbye to friends. I will be meeting up with Mike and the rest of the group tomorrow, and we will be heading to Sacramento as we make our way to Reno. I’m very apprehensive, but I am also very eager to meet the rest of my new traveling companions.

More to come soon…

{This post is part of SuperStruct: The Game!}

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Whale oil production and prices (adjusted for inflation)

Ugo Bardi presents a nice example of Hubbert’s Curve in action, showing pricing and depletion for a resource different from crude oil: whale oil and bone in the 19th century.

Although whale is technically a “renewable” resource, Bardi explains that it behaved like a non-renewable resource because it was hunted at a much higher rate than it could be renewed. Even though whale oil and bone was nowhere near as crucial to 19th century life as crude oil is to 21st century life, there is a clear parallel between the pricing behavior of the two.

The conclusions that Bardi reaches is that prices will continue to rise, and along with this general rise we will see high volatility and fluctuations. These fluctuations are due to feedback loops and the slow response of the market. The market is no longer able to adjust quickly to fluctuations in supply and demand.

This James Kingsdalec article suggests several interesting factors that seem to support the fluctuation assumption: Global oil production is currently declining, meaning that there is noone to act as a swing producer, but in a few years we may see a surge of new oil from “megaprojects“. One interesting thing to note here is the lack of certainty of future oil production capacity, the implied use of heavier grade oil, and the delay measured in years. These things all add up to a very uncertain future.

One of the things we really need to be aware of, with this kind of volatility, are the inevitable periodic price declines. These declines may cause policy makers to herald the end of the oil crisis, when the reality is very different.