Could plug-in cars end the age of oil?

Ostensibly, the gathering this past Monday at the Microsoft Conference Center was about a cute little niche of the automobile market, dual-mode cars you plug in for electrical recharge of their batteries. A colorful bunch of them were lined up outside on the sunny day, looking like a futuristic auto lot. Inside were about 350 utility folks, government types, and businesspersons smelling a lucrative new market. Sounds harmless. In fact, the TransTechEnergy conference, sponsored by Microsoft and Cascadia Center of Discovery Institute, was a fascinating glimpse into what one key leader of the session, a former utilities lawyer named Steve Marshall, calls "the premier bipartisan issue of our time." Those funny little cars are symbols and possible cures for something as big as the industrial revolution – the replacement of an oil-based economy with electrons. The stakes are huge, and the thinking was there to match. Marshall could be a key actor in this story, and he looks like a mild-mannered attorney who somehow stumbled into a high-stakes poker game. The son of a former city manager of Olympia, Marshall grew up with a commitment to public service, went off to Harvard Law School, and spent 30 years at the Seattle law firm of Perkins Coie, working on the Boeing and Puget Power accounts. Later came a stint with Snohomish Public Utility District, recovering from its Enron scare, where he started looking at ways that electrical utilities could solve their power needs without doing bad things like building coal plants. About two years ago, Marshall went to a conference in Los Angeles and began hearing about an unusual silver bullet, those funny little electric cars. The wonky term for them is Plug-in Hybrid Electric Vehicles, or PHEV, which sounds like somebody spitting out the idea in disgust. They are hybrids, able to burn gasoline or biofuels; they have batteries that recharge while coasting downhill and power the cars until their charge runs down (about 20 miles or so); and they can be plugged into normal electrical outlets for recharging overnight or while parked during the day. (Two-way PHEVs, which can send unneeded battery power back into the grid, are the holy grail.) All this does wonders for gas mileage, producing cars that might go 500 to 1,000 miles on a gallon of gasoline. And that in turn does a lot to control carbon emissions and global warming. Ideas like this have been kicking around for decades, since the technology is of the sort that college engineering students can readily produce. (Some were in the Microsoft parking lot.) The usual story is that we have an oil crisis that drives the price of gas up so high that the automakers and others turn to these hybrids, make a few, and then OPEC drives the price of oil back down and bankrupts these little experiments by destroying the markets for them. This has happened twice since the 1970s, and the automakers are naturally gunshy about going through this again. But Marshall found that three new factors are in play, and taken together they might produce a mighty change in the oil-based economy. The first is the Iraq War, and the realization by such people as James Woolsey, former head of the CIA under Bill Clinton, that America's dependency on oil means we are financing our enemies, notably the Saudis who spread jihad philosophy all over the Muslim world and who have made us economically dependent on them. This is no way to win the war on terror. The second new factor is the general understanding, finally, that we do indeed face a crisis in global climate change and that cars, 97 percent fueled by gasoline, are a huge contributor to the problem. The third factor is where Marshall came in – electrical utilities. Assuming that you are not going to solve the global warming issues with biofuels (which take a lot of carbon to produce, denude rain forests, soak up precious water), you are going to need electrons. How to produce more electricity without spewing coal into the air? The answer suddenly appeared to Marshall and others. It's millions of little batteries in millions of little cars. The key is two-way electricity. These cars recharge their batteries at times when our power plants are off-peak, especially at night, or when clean but intermittent sources of new power (solar, wind, tidal) are making electricity and need some place to store it for peak demands. Car owners may pay more for these new vehicles, but they actually make some money by selling some power back to the utilities during their times of high demand. That's a pretty fine trifecta. You win the war on terror, avoid catastrophic climate change, and reward a nation addicted to autos with rebates that never stop giving. Inspired by some early signs of a grand coalition of interests, Marshall put on a conference on the subject last year when he was head of the Municipal League and then repeated and greatly enlarged the scope at the Cascadia/Microsoft conference last week. The advocates, helped by Discovery's connections with the Bush administration, got an executive order from the President that puts the federal fleet on the road to mass conversion to flexible fuel vehicles. Bipartisan coalitions started forming in the Senate and the House to push for PHEVs and more non-oil fuel choices. The group pushing for PHEVs consists of Senators Maria Cantwell of Washington, Barack Obama (who gave a tough speech this week in Detroit, criticising the automakers for getting nowhere in fuel efficiency), and Orrin Hatch of Utah. The conference speakers demonstrated the zany eclecticism of the coalition. There were angry green voices furious at the timidity of Congress and Bush. Automakers eyed each other nervously, saying they were doing lots of great research but hoping they didn't actually have to produce these new vehicles. (Once someone breaks from the pack, likely Toyota, and introduces the new cars, Marshall predicts, all the automakers will be slapped with mandates, and fleet-average fuel standards will shoot upward.) Microsoft was there, though pretty quiet, since the company has an active division working on software for advanced products in cars, such as how to maximize the timing for plugging in. (Bill Gates and Bill Ford have a friendship that has led to a business deal.) Electrical utilities were there, glimpsing a sunny uplands of revived electrical power, perhaps including nuclear. Hovering around all this were some venture capitalists, sensing that if there is going to be a huge shift, by which the electrical utility becomes the new "gas station" of America, there are going to be huge opportunities for those who get in early. John Doerr, the king of Silicon Valley venture capitalists, was quoted as saying that sustainable technologies will be "the mother of all markets." Once these new technologies develop strong enough American markets to induce new companies to form, the winners will be able to export to a global market, so the payoff in climate issues as well as greenbacks will be amazing. California leads the charge in most of these issues, but the Northwest is trying to leapfrog into the lead. Cascadia is hoping to have a big auto rally of the new cars next year, with celebrities driving the hybrids to add to the general coolness factor and cars winning not on speed (though they are fast) but on mpg. Marshall is pushing for a Northwest pilot project to study and demonstrate how PHEVs can work. The relevant federal agencies are talking to each other, for once, about these issues. And the Northwest advantage in hydropower, hence clean electricity, helps make the case for plugging in; elsewhere, many environmentalists fear the rise of electric cars will unleash a rash of coal-powered power stations and nukes. The coalition is seeking federal funding for a pilot project, as well as help in assembling an early, large market of federal and governmental fleets, so that automakers will sense a secure enough market to take the plunge. Gates Foundation and Microsoft might also join the funding. Seattle as a leader in a worldwide transportation revolution? The city that remains vexed by all kinds of transportation issues? Leading a bipartisan coalition when all Republicans have been driven out of town? Well, maybe. Marshall is a key person, and he's got both religion and the trust of the utilities as well as considerable political skills that go back to his early admiration for the Dan Evans gang. And there were numerous other self-starters on the panels, such as a Texas utility executive who wondered how to harness all that nighttime wind around Austin and so started putting together Plug-in Partners of governments all over the country making the pledge to buy PHEVS (Ron Sims is, naturally, an early adopter), or Felix Kramer of CalCars, pushing to get automakers to go ahead right now with "good-enough" technology and finding ways to convert existing cars. Marshall has gotten to know them all in the past two years, and they all seemed excited about each other's pet ideas. Most of all, I sensed at this remarkable burst of brainpower and political optimism about solving big problems something of that good old Boeing spirit in the region. Engineers with sliderules in their pockets, tackling great big integrated problems. If there were ghosts of WPPSS's amateur nuke-builders walking around the halls, so too there were ex-Microsoft entrepreneurs with a dauntingly brilliant grasp of the whole network of interconnected forces, virtually vibrating with a desire to "deploy." So maybe we can't build a monorail. That doesn't mean we can't end the age of oil.