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(LEE CELANO/REUTERS)
(LEE CELANO/REUTERS)

Economy Lab

Oil is important, for sure, but let's focus on alternatives Add to ...

Jeff Rubin is getting a lot of publicity for The End Of Growth, his recently published book – which I look forward to reading. It was featured in the Globe and Mail’s Report On Business on May 5, and he was interviewed at length on the CBC. Based on what I’ve read and heard so far, I have a small, a medium, and a big bone to pick with him.

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The small bone concerns his apparent treatment of Denmark in the book. In The Globe article and CBC interview, Mr. Rubin suggested that Denmark has no oil industry, which explains why it is relatively easy for Danish politicians to curb automobile ownership and use.

Denmark happens to be one of three oil-exporting high-GDP-per-capita countries, along with Canada and Norway. In 2010, according to the BP Statistical Review Of World Energy, Denmark’s oil reserves were almost three times higher per capita than those of Britain, a well-known as an oil producer. Denmark produced more than twice as much per capita as the UK and exported more than a quarter of what it produced (unlike the UK, which is now past its peak production and is a net oil importer).

The fact that Denmark does have oil makes its moves to curtail automobile use even more remarkable than Mr. Rubin suggests.

The medium bone is that Mr. Rubin does not seem to give credit to what may be the most remarkable accomplishment of the Obama administration: pushing through massive improvements in the required fuel economy of all kinds of new U.S. road vehicles. Essentially, no improvement has been required since the 1980s. Now, the fuel economy of personal automobiles will have to improve by 39 per cent by 2016 and, if current proposals are finalized, by a further 54 per cent by 2025 – a total improvement by 128 per cent. Fuel economy standards for heavy trucks and buses have been set for the first time.

The Government of Canada should get some credit too, because it is harmonizing fuel economy standards with those of the U.S.

If these improvements translate into corresponding reductions in overall fuel consumption – which seems likely – together with similar improvements being mandated in Europe and elsewhere, they could well be enough to offset a likely fall in world oil production by about 20 per cent by 2025. This would be in spite of continuing growth in oil consumption in developing countries.

The big bone concerns what I understand to be the thesis of his book: that economic growth is unalterably tied to the availability of inexpensive oil, and that because we’re no longer able to increase production of inexpensive oil we have reached the end of growth.

I believe there’s another view about oil. It is that its main use – inefficient combustion for transportation – has on balance been a blight on society from social, economic, and health perspectives. The huge benefits gained from the transportation services provided by oil have not have been sufficient compensation.

Electrification of transportation could be viewed as release from this blight, much as electric lighting provided release from the even more inefficient and unhealthful combustion of flammable substances for lighting. Electric lighting made possible huge increases in economic activity, and electric transportation could well do the same.

We’ve been pursuing what may be two dead ends concerning the electrification of transportation. We’ve almost stopped chasing one of them: providing power from on-board fuel cells. We’re still pursuing the other: wholesale reliance on batteries.

The sensible way to power electric transportation is to do it directly from the grid. This technology has been available for just about as long as the internal combustion engine. We see it today in our streetcars, subways and other electric rail systems.

The challenge is to marry the evident advantages of grid connection to the evident advantages of personal automobiles (and trucks). Until recently, available control technology could not cope well with grid connection of huge volumes of vehicles, but now it can. The other challenge, of course, is to develop the power for the electric traction, preferably from renewable sources. This, again, seems solvable.

Battery powering will always be necessary: for the first and last kilometres of many trips, for other places where the grid does not reach, and for interruptions in grid supply. For these reasons alone, battery research and development must continue. And it’s always possible – although unlikely in my view – that a battery breakthrough will provide the range and refuelling convenience of current vehicles.

I estimate we have about a decade before serious electrification of transportation will be essential. We have less than a decade to figure out how best to electrify the largest share of our everyday transportation. Will it be battery-powering or grid-connection?

Mr. Rubin’s book frames part of the challenge – but its apparently dismal prognosis does not seem to be useful in helping us find solutions. Perhaps I’ll think differently after I’ve read his book.

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