Comments And The Chinese Electric Car

No one, certainly not me, wants to be accused of racial prejudice. Make no mistake, it was disturbing just to be accused.

I wrote an entry on Gearlog last night about the new Chinese electric car from BYD. As with most of my posts for them (and here) there was plenty of me infused in the article and lots of my opinion. I am lucky that my editors give me latitude in that regard.

“From those fabulous folks who brought you the $40 Rolex watch and melamine laced baby formula (and pet food) it’s the electric car! Monday morning BYD unveiled the F3DM, China’s first mass produced electric sedan.”

Uh oh! I woke this morning and checked the comments.

“Why is racial prejudice so ingrained in the minds of the American culture? It is shameful that the author of this article thinks it is his duty to insult BYD and the Chinese people in general by opening this article with irrelevant and insulting references to Rolex knockoffs and tainted milk. Where does BYD fit into these imbecile ridicules?

Who knew? I told Helaine I was going to respond. She said don’t.

I checked back later today. I was being defended by strangers.

“The reference to a “knock off” is because the exterior is a knock off; just look at it! The technical advances are “inside” as rightly pointed out in the article. Get over it, I have (I’m Chinese). The author also took a good crack at GM too, saying its Volt is a “2010 dream”… why not have a go at him for saying that? I was in no way insulted or felt the article contained racial bias.

If you get ‘told off’ by someone, don’t first say its because you’re ethnically different, perhaps the person doing the ‘telling off’ does this to everyone, or perhaps you deserved it. If you still feel the article was refereeing to ‘stereo typing’ then we only have the Chinese government to blame for allowing knockoffs to occur so openly. “

Later another commenter came on.

“have you listened to any on the Chinese dialects such as Cantonese or even Mandarin recently? I’d say racial prejudice is pretty ingrained in us Chinese too. A lot of people I know still use “鬼佬” or something similar when referring to foreigners.”

Where do I start? Helaine was right. I would only have started a flame war. The other two comments have allowed me to rest easier. No one, certainly not me, wants to be accused of racial prejudice. Make no mistake, it was disturbing just to be accused.

On top of this what’s amazing is the reach of Gearlog. The site gets around 650,000 page views per month from every corner of the Earth. I suspect one or two of these commenters was from China. The world continues to get smaller.

Economics And Oil

As I write this, a little after 2:00 AM, I am concerned… no, I’m petrified the U.S. financial markets will follow the rest of the world and plummet at today’s opening.

The global economy is totally interconnected. International markets fell Monday, while our stock exchange was closed. They’re falling again right now. The Dow could be down multiple hundreds of points right at the opening.

A full fledged crash is certainly possible, though I’d rather not think about it.

That’s really not what I wanted to write about, but since this will be about the international economy and oil, I thought I should acknowledge what’s going on.

Yesterday, I saw a story (in many places) about Israel’s commitment to build an electric car. Here in the states a fully electric vehicle will be out from GM in just a few years. These are fully electric cars, not hybrids.

It makes a lot of sense, because at $100 a barrel, alternative fuels become competitive with oil. Except, $100 a barrel is a totally artificial price.

Yes, there’s some supply and demand at work, but oil’s price is steered by a cartel. They control the supply to control the demand to control the price.

OPEC is not a monolith. The oil producing nations aren’t exactly in lock step. They’re close enough.

That being said, the actual cost to produce a barrel of oil is a lot less than the selling price. What it costs differs by location, but here’s what the Energy Information Administration, a US government agency, says.

In 2006, average production costs (or “lifting” costs, the cost to bring a barrel of oil to the surface) ranged from about $4 per barrel (excluding taxes) in Africa to about $8.30 per barrel in Canada; the average for the U.S. was $6.83/barrel (an increase of 23% over the $5.56/barrel cost in 2005). Besides the direct costs associated with removing the oil from the ground, substantial costs are incurred to explore for and develop oil fields (called “finding” costs), and these also vary substantially by region. Averaged over 2004, 2005 and 2006, finding costs ranged from about $5.26/barrel in the Middle East1 to $63.71/barrel for U.S. offshore.

Forget the $63.71 figure, because it represents a small portion of what’s being produced. By and large, most of the world’s oil is found and removed at $10-$20 per barrel. Obviously, the oil exporting nations are getting rich and their selling price has little to do with their actual cost.

However, in the face of competition from alternative energy (think electric cars) they can and will reevaluate their price, settling for less in the short run to guarantee a continuing market for their products.

Oil exporters don’t want coal, solar, nuclear, or whatever else can be thought up, to kill their business. That leaves us with tough decisions.

Do we want energy independence and, if so, at what cost?

My feeling is, we need to be independent and must be willing to make short term economic sacrifices to establish an energy beachhead. In the long term, an economically weakened OPEC, which can no longer run roughshod over energy prices, is in our best interest.

It won’t be easy. At some point, whether through consumer persistence or governmental subsidy, we’re going to have to endure short term pain in order to free ourselves. OPEC will do their best to temp us by cutting their prices. And, as has always been the case, more oil will be found to quench the world’s growing thirst.

Will we continue to look to alternatives if oil returns to a ‘reasonable’ price? There’s certainly lots of fudge factor in what they’re getting now.

I hope we can resist their temptation.