Bill Reinert is the green-car guru at Toyota Motor Corp. The automaker's national manager of advanced technology vehicles has been known to rattle cages with some of his statements.
These days he spends less time driving green-car prototypes than investigating the mysteries of electrical power storage or the holy grail of hydrogen fuel cells.
Reinert spoke with West Coast Editor Mark Rechtin about key environmental issues. Like algae.
Will the oil companies use the BP spill as an excuse to raise pump prices this summer?
They won't use it as an excuse to act irresponsibly. The Gulf spill is a big platform taken out of production, plus it's interfering with ship traffic. So you could see localized capacity constraints, and that could add to volatility. But that's a short-term availability issue.
Everyone in the energy business is tremendously concerned about the aftereffect of the spill. There's a concern in the energy industry that you will see regulatory or environmental push-back of one sort or another. We have a big transportation infrastructure based on fossil fuels, and the majority of oil available to the U.S. is coastal.
You could wish it were different, but it's not. There's going to be tension about wanting to shut down offshore energy production. But we are an energy-based economy, and we need to get it wherever we can. There's no happy ending.
What about longer-term price volatility?
In 2023, we start to see price volatility because of a lack of spare capacity, never to recover. It doesn't mean we run out of oil. It means the amount of oil we can produce won't match the demand spike.
What happens here is that governments will then engage in demand destruction through regulatory effects. Look at Italy, incentivizing natural gas through tax packages. And VW responded with a natural-gas Passat, which is a very nice car. We might see electrification or more plug-ins. People think EVs are going to be powered by wind and solar. They're not. It's going to be coal for the next two decades. There's no killer app.
We might have to look at alternatives -- biofuels, natural gas, oil shale. We have shale gas now in the U.S. We've learned how to fracture those shale formations and recover the natural gas. We're finding tons of natural gas. More recently, we have found oil we didn't know we could get at in shale. But it's too early to say how much.
Most of our energy security resources are either going to be in Canada in the tar sands or offshore. Unfortunately, that's the way things are.
Why hasn't Toyota brought a lithium ion battery pack to market yet?
The mass market will bear hybrids priced from $15,000 to $27,500, but they trail off in a typical bell-shaped curve. We have to be careful about that. We have to build cars not just for the first owner but for the second owner, so they have an equally trouble-free experience.
In doing this with EVs, we're going to have more battery capacity than we actually need because batteries deteriorate over time. In the hybrid context, the degradation of batteries is irrelevant, but it's different when you get more into electrification. So we need a bigger battery, which means they are too expensive.
So, no lithium ion from Toyota?
We're going to do it. We're going to do the lithium ion plug-in. Everyone wants to adjudicate the range, but it ought to be the value proposition of getting the mpg you want over your driving pattern and over the life of the car.
What is your opinion of the Chevrolet Volt? Can GM change the public's perception of the alternative-fuel industry the way Toyota did? Or is it a me-too product?
The direction they went is a little more risky. Customers are going to be more sensitive to battery cost. Toyota hybrids are 2 percent of the market. The hybrid has changed the talk and created the green-car industry. But there are still a lot of people who think a hybrid is not a car for them, which means a range-extended EV is really not for them. That's a niche of a niche.
Somehow people have equated greenness with battery size. I don't believe in that. You have to look at CO2 equivalents over life-cycle emissions. A small, 40-mile EV has by far the least energy use of a lifetime, but it has the second-highest CO2 usage because we use so much coal to create the electricity, plus the energy losses to transport the electricity all those miles. Once we're wind and solar power, that's a different discussion. But right now we're all about mountaintop removal and five-mile-long coal trains.
How important is plug-in technology for hybrids?
We understand the demand for plug-in vehicles. And there's a regulatory aspect as well. It's a technology you can't ignore.
What about engine technology?
The internal combustion engine is developing so rapidly, they're getting really green. When you are talking internal combustion engines in the mid-40 percent efficiency range, you're talking a package that's really efficient, on par with hybrids. With some reduced-carbon fuels or biofuels, it could be something we use with our existing cars. Mazda is making some efficiency gains. Same with Fiat's [reduced-emission] MultiAir engines; they are doing incredible things.
What about other efficiencies?
The next thing is light-weighting [the body and chassis], not with carbon composites but with advanced steels or new types of welding or hydroforming that will meet tomorrow's safety requirements.
Is Nissan's Carlos Ghosn overestimating the electric-vehicle market?
A lot of literature says the market is not that robust. But Ghosn is a brilliant man, and Nissan has resources. If you look at it through a certain lens, you can see how you could make it big. But it's going to be difficult to grow that business at the same pace that we've grown the hybrid business at Toyota.
Will Americans ever embrace diesel?
Diesels have a rich, long life. But you won't see them proliferate here in the U.S., especially in the smaller markets. I'm also seeing some talk about a move in Europe away from diesels because they have good tax incentives and good CO2, but there is a NOx problem.
Other than a technological "Eureka!" what do you see as the best cure for EV range anxiety?
It's telematics. There is no real cure. Your information will be in [your phone]. You will ask your phone where the nearest charge is within your car's range; it will smart-route you to one and maybe reserve a charging station for you. And, of course, more charging stations.
I don't see replaceable batteries. You could do it in Israel where you can dictate battery size. But companies in larger markets won't use a standard format. So if not a battery swap, there may be a few fast-charge stations, but 480-volt stations are expensive.
So you are bearish on EVs?
The EV won't be a replacement for your everyday driver. It could be a second or third car. Maybe it's not an owned car; it's a shared car or a Zipcar. It means working with a different type of customer, which automakers don't like. I challenge Toyota with the question: Who owns the EV customer? Is it Toyota? Is it Zipcar? Is it the utility company?
What is the worst-case scenario you see in regard to the future of the vehicle population?
Part of it is happening in the Gulf, that we demonstrate our inability to reduce the environmental impact of the automobile, and from a regulatory point of view, where people lose faith in us. Or we have a double-dip recession and we savage the auto industry even worse than we have been. Or we don't prepare for a smooth transition or have enough infrastructure to reduce demand for gasoline gradually.
Anything you have read lately that has changed your way of thinking about the world, the auto industry or the alternative-fuel movement?
I am skeptical of EVs, but once I start thinking of cars in a system like smart phones, I see a systematic approach to doing them. I was frankly surprised to see how far and quickly we could come in spark-ignited and compression-ignited engines. I am guardedly optimistic that we will have lower-carbon gasoline either from municipal solid waste or algae.
Gasoline from algae?
I am bullish on algae. At Sapphire Energy, they have created a genetically engineered species of algae that is modified to produce oil that you can put into the refinery system to make gasoline. Algae is a tiny footprint compared to corn or switch grass. It can be grown with gray water and doesn't require land because you grow it in a PVC tube. It doesn't meet the refining cost of $3 gasoline, but it might meet the $5 gas level.
What about hydrogen?
The guys at Sandia National Labs think we should be working with hydrogen combustion, not just fuel cells.
Between Hyundai, Honda, GM, Daimler and us, the industry has made remarkable progress on fuel cells. We all pretty much solved cold-start problems. We're getting there on durability. Honda has shown how to package it properly. We know how to do compressed-gas storage. We can bring a product to market well under $100,000 without huge volumes.
But it's the infrastructure, whether it's getting the hydrogen or the electricity to the car. We're working on cracking the infrastructure. We aren't a fuels company, but we have to go down these roads.