Talk about money: Electricity viable on the streets

As I filled my gas tank and watched the meter on the pump roll past $50, then $60, then $70, I couldn’t help but think of Jay Friedland, who drives an electric vehicle and says the only time he pulls into a gas station is to fill his tires with air.
Friedland is vice president of strategy and sustainability at Zero Motorcycles in Scotts Valley. He says sales of electric vehicles are brisk, with waiting lists of six months for buyers of the Nissan Leaf and three months for the Chevy Volt. He thinks this is just the beginning.
“When we hit $5 a gallon for gas, we’ll see a rush toward electric vehicles,” he said.
For me, his enthusiasm brings back memories of 1982. Oil prices had surged to $35 a barrel from $14 just three years earlier. Pump prices and electric bills were soaring. Brokerage firms touted clean energy investments with glossy brochures and visions of an America dotted with windmills and solar panels.
Then, over the next four years, crude oil fell back to $14, and those wind and solar investments went sour. In the 30 years since those predictions of a clean-energy future, wind and solar power haven’t made a dent in our nation’s dependence on fossil fuels.
My skepticism was further fueled by a recent segment on PBS’s “Nightly Business Report” about Austin, Texas, where the Chevy Volt is becoming popular. Because most Volt buyers are affluent and live in the same parts of the city, and because most of them charge their Volts between 6 and 11 p.m., they are starting to strain the electrical grid. That could force utilities to build more power plants, sending energy costs higher.
Friedland dismissed those concerns, saying electric vehicle owners will learn to charge up at times of the day when electricity is cheaper.
“I pay a nickel a kilowatt-hour if I charge after midnight,” he said. “If I charge between 6 p.m. and 11, it’s 10 cents. Late at night, there’s low utilization on the grid.
“It costs about a penny a mile to drive an electric vehicle,” he added. “It’s incredibly inexpensive. Gasoline would have to be 75 cents a gallon for the cost of driving to be that low.”
The cost of buying an electric vehicle can be reasonable, too, Friedland said. His company’s 2011 model Zero S motorcycle has a retail price of $9,995, but with a federal tax credit of 10 percent and a California rebate of $1,500, the price falls to $7,495, he said.
Friedland and world events are beginning to convince me that maybe this time we won’t see a repeat of the clean-energy boom and bust of the 1980s.
Today, crude oil is about $112 a barrel as oil-producing nations of the Mideast cope with social upheaval. The world burns more oil every year than is being discovered in new supplies.
And consumers in the emerging economies, where 80 percent of the world’s population resides, are joining the middle class and already buy more cars than we do in the developed world. That growing demand will keep gasoline prices high.
Mark Rosenberg is an investment consultant for Financial West Group in Scotts Valley, a member of FINRA and SIPC. He can be reached at 439-9910 or mr********@fw*.com.