Imagine a graph with two curves: one showing the rising cost of fossil fuels, the other showing the cost of alternative energy solutions. The two curves are going to cross, and sooner rather than later. The question is, are we going to be ahead of the curve, or behind it.
Business Week describes how GM fell behind the curve in a strategy session three years ago:
That's when Vice-Chairman Robert A. Lutz spoke up. Lutz, whose gravelly pronouncements routinely enliven auto shows and generate headlines, has a certain genius for challenging conventional wisdom. Maybe, he told GM's brain trust, it was time to build another electric car-one that would use a giant version of the lithium ion batteries that power cell phones and laptops.
It was a provocative suggestion-and Lutz knew it. Two years earlier, General Motors had killed its experimental EV1 electric car and set off a public relations furor. The environmental lobby was deaf to GM's assertions that the EV1, leased to a limited number of people but not sold, would never have earned its maker any money. And the greens accused GM of pulling the plug to show policymakers that such techno wonders were bad business.
By the time Lutz revisited the issue in 2005, Toyota Motor's (TM) quirky Prius hybrid had turned the Japanese automaker into a poster boy for the environmental movement and cast a greenish halo over the entire company. By contrast, GM, at least in the popular imagination, had tunnel vision; it was still making gasoline hogs like the Hummer and fighting congressional efforts to boost fuel economy. GM executives were furious Toyota was winning green cred despite making its own fuel suckers. But no one at the meeting wanted to hear about electric cars. "We lost 1 billion on the last one. Do you want to lose 1 billion on the next one?'" Lutz recalls one executive saying. "It died right there." The problem for GM's managers is that the world changed more rapidly than they were able to imagine. Oil crossed the the 100 a barrel mark at the beginning of the year. Now it's trading at 127. Change in the energy markets doesn't come in smooth increments, but in discontinuous jolts. Decision makers can't predict just when those discontinuous shifts will come. Some still doubt they will ever come. Those who sit back and wait for the world to change will find themselves behind the curve. It takes years to develop and market alternative power systems for cars, which means GM will be playing catch up to Toyota for the foreseeable future.
Some time in the next few years, the cost of electricity from burning fossil fuels will climb higher than the cost of Bluewater Wind's offshore wind power project, which will take about four years to build. If we wait until electricity from fossil fuels becomes more expensive, we will find ourselves in the very painful position of importing expensive power from out of state while rushing to get wind power up and running here in Delaware.
Source: our-green-energy.blogspot.com
