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Prius Follies, Take Two

Discussion in 'Environmental Discussion' started by Spunky, Dec 19, 2005.

  1. Spunky

    Spunky New Member

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    The Wall Street Journal
    December 14, 2005
    Business World
    Prius Follies, Take Two
    By HOLMAN W. JENKINS JR.

    Since we're still on the subject of fuel mileage -- or at least still responding to mail after column two weeks ago on the Toyota Prius -- let's spill a few more gallons of petroleum-based ink.

    The Prius is a nifty gadget and comes with lots of extras. But Toyota markets the vehicle on its fuel efficiency, and fans tout its fuel efficiency. And our point was to debunk the idea that saving gasoline is a virtue independent of economics, such that it makes sense, say, to spend a buck to reduce gas use by 50 cents. Edmunds.com, the auto shopper site, guided us to Honda's Civic and Toyota's Corolla as conventional alternatives to the hybrid Prius. This was the source of our claim that the Prius retails for $9,500 more than comparable vehicles. In its own
    research, Edmunds concluded a Prius owner would have to drive 66,500 miles per year or gasoline would have to jump to $10 for the purchase to pay off.

    But don't take our word for it. Kazuo Okamoto, Toyota's research chief, recently told the Financial Times that, in terms of fuel efficiency, "the purchase of a hybrid car is not justified."

    Now, as an economic matter, overpaying for the privilege of saving gasoline is simply a subsidy to other gasoline consumers. Also as a regulatory matter: Thanks to the special genius of our corporate fuel economy rules, Prius buyers directly underwrite Toyota's ability to sell more SUVs and pickups in the U.S. market without paying the fines that Mercedes, BMW and Volvo long ago accepted as a cost of doing business in the U.S.

    But doesn't saving oil have benefits beyond the dollars saved -- for instance, postponing the doom of civilization?
    No: If Prius owners consume less, there's less demand, prices will be lower and somebody else will step up to consume more than they would at the otherwise higher price. That's the price mechanism at work. Oil is a fantastically useful commodity. Humans can be relied upon to consume all the oil they'd be willing to consume at a given price.

    But wouldn't using less oil make us less dependent on Mideast imports? Just the opposite: In the nature of things, the cheapest oil is consumed first, and Mideast oil is the cheapest. Drive a Hummer if you want to reduce America's reliance on Arab oil. Indeed, if we could all just pull together and drive gasoline prices high enough, we'd be able to satisfy all our fuel needs next door from Canadian oil sands.

    Let it also be noted our primary political interest in the Middle East over the past 50 years has been Israel, which has no oil. Even Saddam would have been delighted to sell us all the oil we wanted if we had been prepared to acquiesce in his extracurricular depredations. Our attempt to reform Iraqi society is costing us many multiples of the real value of Iraqi oil exports to the world market.
    To wit, let's not underestimate the degree to which our overseas entanglements are despite our interest in oil, rather than because of it.

    Not that Toyota is to blame for the mystification of energy economics, which is a hardy perennial without which the nation's pundits could hardly make their gardens bloom on a semi-weekly schedule year after year. Take a bit of fluff from a group called 40mpg.org, a subsidiary of the Civil Society Institute. It recently put out a list of 89 vehicles made by major global auto makers that rate 40 miles per gallon or better. These cars include the Ford Fiesta, Volkswagen Lupo and Toyota Yaris, none of which is available in the U.S. Only two vehicles sold in the U.S. get 50 mpg or better, compared to 39 such cars overseas. The group underlined its polemical point with a poll purporting to show that 88% of Americans believe "U.S. consumers should be able to get the best of the more fuel-efficient vehicles that already are available in other countries."

    Try not to be bowled over by the paradox: In the hyper-competitive U.S. car market, manufacturers are withholding fuel-efficient cars that Americans would be eager to buy. All this really proves is the pollster's facility for getting large majorities to affirm views at odds with their own behavior. Such fuel scrimpers sell in Europe because gas retails $5 a gallon, thanks to petrol taxes that feed the welfare state and keep the autobahns clear of poor people.
    Americans make an equally sensible decision, in dollars and cents, when they skip over fuel efficiency in favor of features more important to them, such as size, comfort and horsepower.

    Several Prius partisans emailed to say they purchased their cars not to save money but to save the earth, or at least make a statement about doing so. That's a perfectly good reason to buy a car (as is wanting to meet girls). However, we doubt their Hollywood coreligionists would be so keen on solidarity if it meant driving around town in a Ford Fiesta.

    In any case, fuel economy plays an ambiguous role in the fight against air pollution. Our considerable progress against the traditional pollutants has come by specifying allowable emissions per mile driven, not per gallon consumed. Meanwhile, CAFE rules raise the cost of a car while reducing the cost of operating it. Being rational even when they don't meant to be, consumers respond by getting more use of out their cars -- driving 15,000 miles per year, up from 10,000 since the rules were adopted. (And auto makers have met this demand by greatly improving vehicle reliability.)

    That leaves carbon dioxide, aka greenhouse gas, to support the increasingly rickety rationale for treating fuel efficiency as a socially desirable end in itself. Here, we can only suggest Prius fans might do the planet more good by convincing the American public of the merits of nuclear energy, the closest thing to a genuinely "green solution" to energy challenges in the real world.
     
  2. TonyPSchaefer

    TonyPSchaefer Your Friendly Moderator
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    This is the single most stupid, idiotic, narrow-minded arguement that people launch against the Prius that boils my blood more than anything else they can possibly say. The cost of my car is none of your business. The dependency upon foriegn oil is everyone's business. Only a third of the oil we consume comes from overseas; so let's work to reduce our consumption by a third.

    [editted]
    I read yesterday that a third of our oil comes from OPEC countries. So my original statement is misleading and probably wrong. Sorry for the confusion.
    Turns out boiling blood does not supply an adequate amount of oxygen to the brain.
     
  3. FBear

    FBear Senior Member

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    Since Mr. Jenkins has had his cranial rectal inversion surgery, I feel responding to this article is feeding the trolls!!!
     
  4. Spunky

    Spunky New Member

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    Since the article was printed in the Journal, please send thoughtful responses to their editors. Misinformation printed in somthing as big as the Journal needs to be corrected.
     
  5. TonyPSchaefer

    TonyPSchaefer Your Friendly Moderator
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    Yeah, you're both right.
    It just really ticks me off when I read about that line of "reasoning" and I couldn't help myself.
     
  6. Salsawonder

    Salsawonder New Member

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    The consistent publishing of poorly informed, misleading and biased articles written in WSJ signifies that this is no longer part of the Free Press but a mouth piece for big oil and "American" car companies. How can the recent swing of gas prices be justified? They suddenly realized that their gluttonous profits that were reported during the aftermath of hurricanes would have to be accounted for.

    The Prius is a statement to these oil companies in that we will not be held hostage. The Prius is a statement to our government who still refuses to see the need to control emissions and support recycling and renewal of natural resources. The Prius is a statement to American car companies that we want quality and dependability in our vehicles.

    When has an SUV driver ever been called to justify their purchase the way that Prius owners are being questioned over their personal choice of a vehicle.
     
  7. Jaguar88

    Jaguar88 Member

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    I thought this article had very good analysis and I don't see it as bashing the Prius.

    We can argue about whether if should be compared to the Corolla, how many miles you need to drive it to break even or what gas would have to cost. I think overall the economic analysis is pretty straight forward and hard to argue with.

    I biggest concerns when I bought my my car were not to save gas or money and I don't want to drive a corolla. The Prius is what it is, if you don't like it don't buy it. The article doesn't say its not a good car, just not a good car if saving gas or money is your primary concern.
     
  8. TonyPSchaefer

    TonyPSchaefer Your Friendly Moderator
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    Well, that's where I want to split hairs.

    Saving Gas:
    Edmunds lists the 2006 Corolla with MPG of 30/38. I have a 16-month average of 49. I am saving gas versus driving a Corolla.

    Saving Money:
    Never before in my 19 years of driving and 25 years of knowing about vehicles have I ever heard the argument that a car is no good because it doesn't pay for itself. Please, someone show me historic arguments and I'll shut up. Unless someone shows me proof, I am bound to believe that this argument was made up specifically to create a line of doubt about hybrid and alternative fuel cars. For that reason alone, I consider it BOGUS!

    Additionally, Priapus is a 2004 package 9. In 2004, it was the highest package available and I paid $26,000 for him. In 2004, there were other cars available with NAV, cars with side curtain airbags, cars with RFID, cars with voice-activation, cars with 6-CDs and 9 speakers, cars with BlueTooth, and even cars with hybrid technology. But you will not find a car for sale with all those features - hybrid or not - for less than $26,000. DO NOT compare my Priapus to a Corolla!

    BTW, I'm not lashing at anyone. Just lashing.
     
  9. Jaguar88

    Jaguar88 Member

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    Saving gas:
    I agree that you are saving gas locally, at Tony P Schaefer's house, and I am saving gas locally at my house too. If enough of us use the prius and reduce consumption by enough, the price of gas goes down and other people will use more because gas is less expensive. I used to drive a tercel and I only got about 18-23 mpg.

    Saving money:
    I totally agree. A ten year old corolla would save even more money and still be reliable.
    But alternative fuels and other technologies will never become mainstream without the early adopters, when they are new and relatively expensive. The price will come down on hybrids and eventually they will make a plug in that doesn't need the gas engine. I see the prius more as an investment in the future.
     
  10. IsrAmeriPrius

    IsrAmeriPrius Progressive Member

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    Comparing the Prius to a Corolla is akin to comparing the Wall Street Journal to the business section of the Peoria Journal Star (no offense intended).
     
  11. Tideland Prius

    Tideland Prius Moderator of the North
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    I like how they wrote the article in a way that "we're not saying this and that, this source said $9,000 more and don't take our word for it cause this guy at Toyota said this too" blah blah blah
     
  12. TonyPSchaefer

    TonyPSchaefer Your Friendly Moderator
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    Yeah, I'm familiar with this argument to the point that a guy here at work congratulated me when I got the Prius and thanked me for reducing demand and therefore the price. More for him was his response. And that's valid economics 101. No argument here.

    I stopped quite some time ago attempting to change the habits of other people. Never worked for me and I'm guessing that it never will. I have decided that it's easier and quicker to change the practices of one person than to change the attitudes of many.

    So now I do what I feel is right whether others want to condem or condone it. I sort my recyclables, I work on improving my mileage, and I try to be nice to people. I can sleep at night knowing that I have done my ever-so-minor part to even begin to attempt to make a difference. In the end, when I'm standing before God, I hope he buys me a drink and thanks me for helping take care of his big blue-green gift and the people he created to inhabit it.
     
  13. tripp

    tripp Which it's a 'ybrid, ain't it?

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    I guess the whole Energy Security argument is completely meaningless to Jenkins. His purely economic argument doesn't really work because he doesn't acknowlege the geopolitical/natural disaster related constraints on oil supply. He makes a totally lame argument that the middle east oil supply is not a strategic interest of the US. That's utter crap. It's not only a US strategic interest but a global one. They have 65% of the proven oil reserves in the solar system.
     
  14. caliprius83

    caliprius83 New Member

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    first off, good article for a bigited right wing oil monger, ok now that thats out of my system
    the economics side: yes you do have to drive like a hundred thousand or so miles before the car becomes economicaly feesable, but its a fricken toyota, i meen our cars are relyable. also look at the big american car companies at the moment both of wich are taking huge losses where as toyota has poasted huge gains, and here in california priuses are selling verry fast even still. now what isnt good economic sence about being able to drive 400+ or - miles on about $23.00( i think is what i payed last fill up ) and who among us also is not going to keep the prius around till we atleast pass that 100k mile mark, me personaly i am well on my way at about 32k miles in alil over a year and a half.

    well that is it
    Chris
    2004 Silver Prius Woodside CA and proud Green party member B)
     
  15. darelldd

    darelldd Prius is our Gas Guzzler

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    And this is EXACTLY why when I *do* buy gas, I find the most expensive place to buy it, and I gladly hand over my $20 per month.

    Just doing my part. No need for thanks.
     
  16. Three60guy

    Three60guy -->All around guy<-- (360 = round) get it?

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    Please note:

    The more successful the Prius is and will continue to be the more misinformation you will hear from the traditional media. If any of you have been following my comments about the traditional media you will recall that the media has the agenda to put out any side of the truth no matter if it makes sense or not. Hence, the more successful hybrids become the more traditional media attention it will get both good and bad. It does nothing but cause confusion in the marketplace except one place......the media's bottom line.

    If you look at these traditional media comments as gospel you will go nuts. The article above goes to prove that in wonderfully convincing way. We need to deal with the media. How? WE ARE THE NEW MEDIA HERE. Please stop "REACTING" and place undeniable facts which dispute trash such as above. The world is looking in on us. Don't let the traditional media get the best of us.

    Now.....

    Aren't you glad you own a Prius? I sure am.
     
  17. burritos

    burritos Senior Member

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    Interesting article. I guess by living in america, we all participate in the machinery that drives the earth into an environmental oblivion. Some of us are small miniscule cogs and some of us are huge-nice person hummer cogs. Nonetheless, we're all cogs. In this line of thinking, one could say that all German citizens were complicit in the Holocaust. Some germans were pulling the lever in the gas chambers and some were just doing what they could to better germany. Nonetheless, they were all (except maybe that schindler dude) guilty to some degree by being part of germany, as we all are(despite our intentions) to this sub-acute holocaust we are perpetrating on the environment. Driving a hybrid doesn't absolve us of our environmental insults no matter how small they may be.
     
  18. tripp

    tripp Which it's a 'ybrid, ain't it?

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    So, with that line of thinking the supreme act of the environmentalist is suicide? Then you won't be consuming anything. Not really my cup of tea. I just keep driving my Prius, recycling as much as I can, and buying as much wind power from Xcel as they'll sell to me.
     
  19. DaveinOlyWA

    DaveinOlyWA 3rd Time was Solariffic!!

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    NPR does a show called Science Friday. on Jan 13 they had a segment called "China's Future" (for podcasters the number of the segment is 2006011312) it details how China, not the US has become the #1 consumer of most resources and commodities in the world.

    now lets forget about peak oil, whether we have a 5 year supply or a 105 year supply. it simply does not matter. in 20 years, China's demand for oil will exceed current world production. (that btw, leaves everyone else out in the cold)

    china has started a very ambitious wind power program that hopes to alleviate the need, but without PHEV's, it wont be enough. Europe already has a huge wind power system going. the US with much much more land available has done relatively little. and it will continue to be that way until oil becomes prohibitively expensive.

    so whether we have the supply or not, it does not matter. world demand will exceed production capability in the next few years.
     
  20. donee

    donee New Member

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    Scanning through that WSJ article, it seems to me to be the best written justification for an increase in the US transportation fuels taxes I have seen. If (as is implied in the article) the free market will not correct the situation that leads to comunity suffering (overseas wars, polution and green house effects), then its up to the comunity to implement a correction. Specifically the federal government increasing the gas tax.

    This is what the depression and the recovery in the 1930's was all about. Free markets driving the system into a singularity. And the government putting into effect rules and taxes to add a little negative feedback for stability.

    But on the other hand - what about the capatailistic economic principles that the individual acting in his own self-interest results in the best for all? So, why not buy a Prius, if it saves weekly moneys, has a transmission technology that is the most reliable demonstrated, is very confortable to drive day in and day out and gives the best defence against future comodity fluctuations ? And why should Toyota not charge more for these advantages? Hell, there are 2004 Prii on Ebay right now for more than I paid for my 2006!

    From either point of view, I cannot see the Prius as being bad. What seems to be wrong to me is the WSJ trying to talk us out of the capatalistic ideal. And the government not taking the strategic actions to keep the US safe. Adam Smith and George Washington are probably rolling in their graves!