Chevy Volt 230 mpg claim is misleading

On August 11, 2009 GM made media headlines by claiming that using EPA methodology its Chevy Volt hybrid vehicle was capable of getting a city driving fuel economy rating of 230 miles to the gallon. That’s 98 km/l or 1.02 l/100 km to those of us on the rest of the planet who use the metric system. The next day the EPA poured cold water on GM’s claims: “The EPA has not tested a Chevy Volt and therefore can’t confirm the fuel economy values claimed by GM.” Relatively few articles took the trouble of dissecting GM’s claims for plausibility.

In reality any mpg figure for this type of vehicle is essentially meaningless because unlike mpg figures for other cars it is highly dependent on how far one drives the Volt between recharges. Volt uses a lithium ion battery with a theoretical capacity of 16 kWh that powers the car for about 40 miles (64 km), depending on driving conditions. Once the battery reaches its lower charge limit, a 4 cylinder gasoline engine kicks in to power a generator to provide electricity for driving. GM calls this internal combustion engine (ICE) the “range extender”.

Do less than 40 miles between charges and the Volt won’t burn any gasoline. Its mpg rating would be infinite, because its only fuel is measured in kWh and shows up on your electric utility bill. Once you exceed the 40 mile limit you will start burning gasoline at a yet unknown rate. The Wikipedia article on the Volt mentions a figure of 50 mpg, almost the same as the third generation Toyota Prius. I am a bit skeptical about that number, given the Prius uses an efficient mechanical transmission that connects the engine directly to the wheels via planetary gears, while the Volt first converts the mechanical power from the engine into electricity and then an electric motor converts the electric power back into mechanical power. Neither process is 100% efficient. Also, at 170 kg the Volt’s lithium ion battery weighs some 125 kg (280 lbs) more than the Prius’ much smaller 45 kg nickel metal hydride (NIMH) battery. This weight difference is not exactly going to help the Volt match the Prius’ fuel economy in city driving, where weight is a major determining factor.

For argument’s sake, let’s assume that the Volt does indeed get 50 mpg while running on the engine, after 40 miles on battery power. So what’s the total test distance in GM’s calculation that it used as the basis for its claim? The portion run on gasoline would be 50/230 of it and the 40 electric miles would be the remaining 180/230. From that we can calculate that the total distance is about 51 miles (40*230/180), of which 11 are on gasoline. You would get 230 mpg only if you happen to go 51 miles between recharges. On the other hand, it could be 83 mpg at 100 miles between charges or even 2550 mpg at 41 miles. Pick your number 😉 It really won’t tell you anything until you also factor in your driving patterns and the cost of domestic electricity for recharging where you live.

Americans basically like big numbers and a figure of 230 mpg sure is eye catching, but it doesn’t really tell you much until you study all the details. Here’s another big number: $40,000. That’s about how much GM is going to charge for the Volt from late 2010 or early 2011, when it’s supposed to go on sale. $15,000 more than a 51 mpg (EPA city rating) Prius III is tough to justify economically: Even at $5 per gallon it would buy 3000 gallons or probably around 120,000 miles at a conservative 40 mpg and no electric bill. It remains to be seen how the brand new lithium ion batteries in the Volt will hold up over time compared to the tried and tested NiMH batteries used in the Prius for the last 12 years. The Prius batteries are backed by an 8 year warranty and there are cars that have done 400,000 km (250,000 miles) on the first traction battery.

The 230 mpg claim is dishonest. They could simply say: “It doesn’t use any gasoline for about 40 miles and after that it gets 50 mpg (or whatever number).” That wouldn’t be too hard to understand for anyone and wouldn’t raise any unrealistic expectations. GM doesn’t even mention what fuel economy the car gets while running on the range extender.

I have to agree with those who charge that GM designed the Volt less as a viable competitor in the low-carbon automobile market than as a clever insurance policy to make a bailout at US tax payers’ expense more palatable to the public. Its technology sounds exciting, but it’s a farce. The main piece of new technology that goes into the car – its lithium ion batteries – will be made by LG in Korea. The rest of the car is basically the same platform as the Chevrolet Cruze and its European sibling, the Saab 9-3.

Let’s remember that Toyota launched the first generation Prius in Japan back in 1997. GM didn’t see the writing on the wall then: Even two years later it went out and bought the Hummer brand. Over the following decade it saw its own market capitalization drop from over $50 billion to essentially zero and would be dead by now but for the assistance of politicians too scared to see GM and its supply chain fail while the country was still heading into the worst recession in decades. Keeping the Volt alive all this time made political sense for GM, whatever the real merits of the project.

Top 10 employers list, made in Japan

A recent survey amongst Japanese third year university students indicates that relatively few aim to join the well known companies producing the export products “made in Japan” that, economically speaking, put the country on the world map during the 20th century.

According to the list published in Nihon Keizai Shimbun (2009-02-23), five of the top ten companies that students would like to work for were banks or insurances. There were also one airline (All Nippon Airways, #3), one travel agency (JTB, #5) and two railway companies.

Only one electronics company made it into the top ten (Panasonic at #4, unchanged from 2008) and no car manufacturer at all. The ranking clearly reflects the hit that Japan’s export industries have taken during the global economic downturn. Industrial icons such as Toyota (#46), Honda (#60), Sony (#22), Sharp (#37) dropped sharply from last year’s survey, when three of these were in the top 10 – Toyota (#3), Sony (#5) and Sharp (#6) while Honda at least made #22 then.

As an engineer I may be a bit biased, but I can’t help feeling sad when companies that make stuff for customers worldwide are seen as less interesting to work for than companies that domestically move money around.

Japan depends almost entirely on imports for primary energy resources and domestically produces little more than one third of the food that the Japanese eat. It will always have to depend on exports to pay for vital imports. The more bright minds that concentrate on competing globally, the better for the country.

Good bye Audi, welcome Prius!

Only about 6% of cars sold in Japan are foreign makes (mostly German), but Kanagawa prefecture and its capital Yokohama have one of the highest rates of import cars in Japan. Yokohama is one of the two major ports (the other is Kobe), it has a relatively long history of exposure to Western influences and on average is relatively wealthy. Even so, the street where I live in a middle class neighbourhood is unusual for actually having more foreign cars than Japanese ones.

Until very recently the count was as follows:

  • Mercedes Benz: 4
  • BMW: 3
  • Volvo: 2
  • Audi: 1
  • Porsche: 1
  • Toyota, Nissan and Honda: 4

Since then the numbers changed because I sold my Audi A4 and bought a Toyota Prius. Who knows what’s going to happen when the only German in a street in Japan where German cars outnumber Japanese cars trades in his German car for a Japanese one? 😉 It’s going to be interesting.

The first time my wife and I washed it in front of our garage, neighbours from two houses came over to take a look at it and to talk about it. One couple, who have a BMW X5 were very curious. They explained they only get about 6 km per litre (17 litres per 100 km) and were thinking about what to replace their car with. The other, who drives a Volvo came up as soon as she saw her neighbours across the street talk to us. Afterwards, the wife of the BMW driver said: “Minna eko ni shimashô!” (“Let’s all go green!”)

I expect we will see more hybrids in our street soon.

I’ve driven Audis (or Volkswagens based on Audi designs, such as the VW Passat) since I got my first car in 1982. Generally I have been very happy with them, especially an Audi coupe quattro 20V I had from 1989 to 1994. The latest Audi A4 2.4 however that I bought in 2000 was heavier and seemed not as well made as its predecessors.

The A4 was fun to drive when I bought it second hand with only 3000 km on the clock, but its V6 engine was never anywhere near as fuel efficient as my previous five cylinder engined Audis, nor was it quite as reliable.

After spending more than $2500 on repairs in the final year alone while consistently getting only about 320 km of range out of a 53 litre refill of premium unleaded (98 octane RON), I was starting to worry for the future of that car.

Even allowing for the fact that most of our trips are short runs to the station or to shops, usually less than 10 km total, with the engine starting from cold much of the time, that 16-17 l per 100 km (6 km/l) that I was getting was simply way too much. The best I’d seen was around 12 l per 100 km (8 km/l) on long highway runs on a ski trip.

Then one day last winter I took my daughter to an entrance exam at a junior high school. As I was waiting near the school, a Toyota Prius rode past me in “stealth mode”, running only on its batteries without any engine noise. It was almost as quiet as a bicycle. My curiosity about this car was awakened.

I had heard various rumours about the Prius, such as about limited battery life and started to check out the facts. I found the batteries did not need replacing every couple years and were expected to last as long as the rest of the car.

The more I read, the more I was fascinated how much thought the Toyota engineers had put into this car and how methodical they had been about making it work in real life. The Prius has been around in Japan since 1997, even though relatively few of that first generation were sold until 2000, when the second generation came out, which went into export markets too. Even before the Prius, Toyota had already been gathering experience with the RAV4 EV, a plug-in electric. The 1.5 litre engine in the Prius is a close cousin of the identical sized engine in the Yaris / Vitz / Platz ranges, but using the more efficient Atkinson cycle instead of the Otto cycle. Its peak efficiency is 34%, better than some diesels. By giving up on peak power and peak torque (which instead are provided via the battery and electric motors), the engine can be much more efficient.

Later in February my Audi needed more repairs and this time I had a Toyota Corolla as a loan car. It made me consider if maybe I would be better off in something lighter and more economical than the Audi and I was curious what a Prius would be like.

In March I went to California on a business trip. A friend there whose wife drives a Prius let me do a short test drive. Pulling away from a traffic light, where the engine had been automatically stopped, felt very unusual: The car starts up running only on its electric motors, without the noise of the engine, which comes alive only as you already start rolling.

Finally in late June my wife and I started shopping around for a buyer for the Audi and for a good deal on a Prius. The waiting list from custom order to delivery turned out to be about 5 weeks, far less than I had seen quoted by US-based posters on websites. I went for the “S Touring” model with a navigation system as an option, which my wife had been requesting for years. The touring comes with HID headlamps (I had never been happy with the conventional halogen lights on the A4) and a firmer suspension than the base model.

We also added a gadget called “etc” (electronic toll collection), which handles toll road charges for motorways here in Japan (most motorways here charge for usage). There are special lanes for etc-equipped cars at toll gates, which make it quicker to get through, as you just have to slow down to 20 km/h to pass through while your car contacts the wireless booth equipment. Before we always had to queue in a line to hand a prepaid card, cash or a credit card to a guy in a toll booth. There are discounts for paying by etc, I guess because the operating company can cut back on staff.

We returned the Audi on the day its bi-annual vehicle inspection became due. We then relied on bicycles and public transport for four days, until the Prius arrived on the last day of July.

Only after I placed the order did I google for crash test results, but the outcome was very comforting: Though the Prius was some 200 kg lighter than my 1999 model Audi, it did as well as the latest A4 model (2008) on crash test results. In fact it had the highest rating of any car tested for kids in child seats in the EuroNCAP tests. As far as interior space is concerned, I didn’t have to give up anything. If anything it’s more spacious than the Audi and it offers the practicality of a hatchback.

Last weekend we drove down to the coastal town of Enoshima on the Pacific, about 35 km from here, which on a Sunday takes 1 1/2 hours because of traffic jams. The Prius will simply shut down its engine whenever stopped, whether at a red light or in slow traffic. Even then the air conditioner (essential at 30+ centigrade in hot and humid Japanese summers) will keep you comfortable, as it’s electrical and draws current from the car’s powerful traction battery that also drives that car’s electric motors.

The NiMH battery will get recharged when the engine is running again or whenever you push the brake pedal to slow down the car, which switches one of the motors to work as a generator. This “regenerative braking” extends the life of the brake pads too.

Other auxiliary systems that on conventional cars are driven directly by the engine via a belt are electric on the Prius, such as the power steering and the brake servo. These always suck some power on conventional cars, whereas on a hybrid they only draw power when needed, making it more efficient.

On the way back we also drove at 80-90 km/h on multi lane highways, with the multi function display (MFD) showing better than 20 km per litre (better than 5 l per 100 km). We never had any trouble keeping up with traffic.

UPDATE (2008-08-10):
With about 250 km on the odometer, the displayed fuel consumption average is now around 16 km per litre (6.25 km per 100 km or 38 mpg US). Other than the weekend trip, it was mostly short trips to a shop or to drop off or pickup a family member at one of the train stations, which are about 3 km away. At our average of about 900 km per month this means the Prius is burning some 90 to 100 litres of fuel less per month than the Audi A4 it replaced, as well as running on a cheaper grade of fuel (regular instead of premium unleaded).

According to the website of the UK Department for Transport the Prius is not the car with the lowest CO2 output per km in Europe: It is undercut by two other cars. The Polo 1.4 TDI Bluemotion and the SEAT Ibiza 1.4 TDI Economotion both use the same 80 PS VW/Audi turbodiesel engine. At 99 g/km they output about 5g less CO2 than the Prius. However, these cars are classed as “superminis”, which offer considerably less space to passengers. Most people fail to realize how spacious the Prius really is compared to its competitors. Based on interior space the EPA in the US actually puts it into the “mid-size” category, along with the BMW 5-series and the Audi A6. Below the 5-series and A6 in size are the 3-series and A4 (rated as “compact” cars by the EPA). Below that is the A3 / Golf / New Beetle (“minicompact”). And one more size below that are the Polo and Ibiza.

UPDATE 2 (2008-10-16):

In two and a half months of ownership, our Prius has clocked up over 2500 km (1530 miles). My daughter accidentally reset the average fuel consumption display after 100 km, but in the 2400 km since then the car has averaged 18.9 km/l or 5.3 litres per 100 km or 44 miles per US gallon.

Keep in mind that most of our trips are to pick up or drop off a a family member at a station 3 km away, so most of our trips are no more than 6-7 km on a cold engine. Also, almost all our driving is urban, with plenty of traffic lights / stop and go traffic. If your average trip is longer or you drive more across country or if you live in an area that’s flatter than hilly Yokohama then you’d probably see even better fuel economy from this car.

The “run your car on water” scam

Every crisis can also be viewed an opportunity, or so it seems. As many motorists are having trouble making ends meet with rising fuel (and food) prices, various websites are popping up (usually with affiliate schemes) that make tempting promises such as:

  • “…use water as fuel and laugh at rising gas costs…”
  • “double your mileage”
  • “…cooler running engine…”
  • “no knocking”
  • “one quart of water provides over 1800 gallons of HHO gas which can literally last for months”

You will find numerous websites if you google for “water fuel car” or similar terms. Mostly the websites that make these claims sell e-books and other kits with instructions on building your own hydrogen generator from glass jars, electrodes and tubes to hook up to your existing engine.

Such kits draw power from your car’s electrical system (the battery and the generator charging it) to split water into hydrogen and oxygen gas, which is then fed into the air intake of the engine, so the hydrogen-oxygen mixture will be burnt along the air/gasoline mixture in the car’s combustion chambers. How well can such a system really work?

If a a “water-engine” as described above were to produce extra power beyond the power obtained from burning gasoline it would violate fundamental laws of physics. The First Law of Thermodynamics states that no energy is ever lost or gained, it just changes form, such as chemical energy to heat when you burn wood or heat to mechanical energy in a steam engine. An engine that uses only liquid water to produce water vapour (i.e. water plus heat) in its exhaust while providing mechanical energy violates this law of energy balance. It outputs energy with no energy going it. It would be a perpetual motion engine, which is physically impossible.

The sad fact is, people who buy these systems usually have a very rudimentary understanding of science. They take these unverified claims at face value, or are at least prepared to give them the benefit of doubt and spend money on testing unverified claims.

The “water-fuelled car” in detail

To split water (H2O) into its constituent elements hydrogen and oxygen takes electric energy. While the engine is running that energy will come from a generator driven by the engine via a belt. Just like running with your headlights on or your radio blaring will cause your engine to work a bit harder and burn more fuel, so will an electrolytic “hydrogen generator” take its toll on your gas tank.

Assuming an efficient setup, about 50-70% of the electrical energy provided will end up as chemical energy in the explosive hydrogen-oxygen mixture fed back into the engine, the rest will just warm up the water. A gasoline engine manages to convert up to 20% of the chemical energy contained in its fuel into mechanical energy, which is then available for driving the wheels or a generator. That generator converts maybe 90% of its mechanical input into electrical power. Altogether this means that burning the hydrogen returns only around 1/10 of the power originally invested into generating the hydrogen from water. It’s like you just burnt 10 litres (or gallons) of fuel in order to avoid burning one litre (or gallon).

What this of course means is that a “water-powered car” actually burns more gasoline and gets worse mileage than an unmodified car. However, the output of the “hydrogen generator” is so small and its practical negative effect on fuel mileage is so minor, you are unlikely to actually notice that, even if you accurately measure fuel economy. For example, a setup that draws 3 amperes of current from your generator (as claimed in one of the websites we’ve studied) will only use 1/20 of one horsepower (3 A x 12 V = 36 W = 0.036 kW = 0.050 hp). The difference in fuel usage is smaller than the difference between say driving with a full or a half empty fuel tank, which also changes fuel economy as a heavier car takes more power to accelerate.

The advertised fact that the “water-powered car” uses so little water (“one quart lasts for months”) is actually a give-away that the system is a hoax. If you produced hydrogen at home from tap water and a solar panel on your roof and stored it in a pressurized tank in your car to run it on only hydrogen, you would find that the amount of water used to make the hydrogen is still in the same order of magnitude as the amount of gasoline used, maybe something like a third by volume (I’d have to look up the exact numbers on relative energy content of hydrogen and hydrocarbons). In a water car that uses virtually no water (no matter where the electricty to make the hydrogen came from) the hydrogen can not be making any significant contribution to running it because there’s too little of it!

Less pinking / knocking?

I don’t know how many of the people who sell these useless plans are simply ignorant about science and how many are fully aware they’re scamming people. In any case, their other claims are equally baseless as their claims about improved fuel economy. Hydrogen has a higher energy content but also much lower octane rating than gasoline because it burns faster, more violently. This means your engine is more likely to start knocking or “pinking” than when run on gasoline (or gasoline / ethanol mixtures), not less. This is a problem that BMW had a hard time dealing with when they converted the engine of a 7-series saloon car to run on hydrogen. In practice this problem doesn’t matter in a “water car” because those “hydrogen generators” output so little hydrogen that it makes almost no difference to the engine, unlike real hydrogen cars with hydride or high pressure hydrogen tanks.

Cooler running engine?

Also, a hydrogen / oxygen mixture does not burn “cooler” than a gasoline / air mixture. Ask the space shuttle designers: The only reason the space shuttle’s hydrogen-oxygen engine doesn’t melt itself is because it’s cooled with liquid hydrogen (at -253 C / -423 F). Hydrogen / oxygen flames burn so hot they can be used for cutting steel like butter. First, hydrogen release more energy per unit of weight than does gasoline. Secondly, while the oxygen used for burning gasoline in a car engine is diluted with nitrogen (which makes up 80% of the air we breathe), the ogygen / hydrogen mix from the generator has not been diluted with anything inert, which is another reason why it burns so hot.

The vater vapour in the “water car” exhaust has no cooling effect whatsoever, because it’s not derived from liquid water, hence there’s no cooling effect from evaporation heat. Again, in the “water car” setup it makes no difference because there’s too little hydrogen involved.

Summary

In reality a “water as fuel” car is a placebo. Technically it doesn’t make any noticable difference to the amount of gasoline you use per kilometre or mile, but it may change the way you think about driving. If you do see any drop in fuel usage, it may be simply that you’re thinking more about fuel usage because of the investment you’ve just made and now drive less aggressively than before and that can indeed result in a modest reduction. Beyond that, any claimed changes are either due to wishful thinking, a vivid imagination or a cruel hoax to deceive unsuspecting customers.

The only way you’ll really see a 50% drop in your monthly fuel bill is if you basically cut your driving in half or if you change to a significantly different kind of car, such as from a bulky V6 to an economical Toyota Prius.

The number one factor that affects fuel economy around town is weight: A lighter car uses less fuel. Don’t get a more powerful engine than you really need. A more efficient setup, such as a hybrid or a new clean diesel can make a big difference too. Use public transport, ride a bicycle or walk wherever you can. It’s good for your health too 🙂

UPDATE: Here is a good page that explains in more detail why the claims for “HHO” don’t add up (use Ctrl+A to mark the text as it’s difficult to read as dark text on dark background).

Media fall for “car that runs on water”

Nikkei and Reuters report about an announcement by Japanese company Genepax of a car that supposedly runs on only water. One litre will keep the car running at 80 km/h for about an hour, reports Reuters.

Genepax CEO Kiyoshi Hirasawa is quoted by Reuters as stating that the car requires no external inputs but water. As long as water is available, it will keep running.

Reuters states things a bit differently:

Though the company did not reveal the details, it “succeeded in adopting a well-known process to produce hydrogen from water to the MEA,” said Hirasawa Kiyoshi, the company’s president. This process is allegedly similar to the mechanism that produces hydrogen by a reaction of metal hydride and water.

The uncritical reports by these two sources barely scratch the surface of this story. Hydrogen is not an energy source, it’s an energy carrier as there are no natural sources of it on earth. It always has to be produced through physical or chemical processes that require external energy input of some source, either fossil natural gas or coal or biomass or electricity generated from some source.

The Genepax website does not shed much light on how the hydrogen is produced for their fuel cell. The description of their technology on the company website consists of all of two sentences and one diagram of a fuel cell.

If you produce hydrogen in a chemical reaction of metal hydride and water, you use up not only water, but also metal hydride. Typically, metal hydrides take a lot of energy to produce. Substances such as alkali metal hydrids or aluminium that easily release hydrogen when reacting with water consume huge amounts of electricity in their manufacture — hardly a case of “no external input”.

The car uses a 300W fuel cell, presumably only to supplement a conventional battery, as 0.3 kw is far too little drive a car. That fuel cell sells for about 2 million yen ($19,000), almost enough to buy a Toyota Prius (the base model of which costs 2.3 million yen here in Japan).

Even if the “hydrogen generator” could produce hydrogen indefinitely with no external input (otherwise known as a perpetuum mobile), 300W is not enough power to keep even a small car running at 80 kp/h. It would take at least tens of kW, or the output of maybe 50 of these fuell cells. The concludion is that the demo car ran on a set of batteries previously charged from the mains grid, with no assistance from the Genepax fuel cell that was either significant or sustainable.

While we are not sure about all he facts behind the announcement by Genepax (such as whether they happen to be selling stocks to science-challenged would-be investors right now), we’d suggest taking any of their announcements with considerably more than a pinch of salt.

The domain genepax.co.jp was registered only on May 8, 2008, a mere five weeks ago. That seems awfully recent for a company that claims to have spent years developing this technology.

Whichever way you look at it, the story quickly falls apart, but the journalists hardly seem to notice. With rising fuel prices people will be interested in such “news” and that seems to be all that matters.

Toyota Prius hybrid versus BMW diesel

The Sunday Times did a road test, driving a BMW 520d SE and a Toyota Prius from London to Geneva. The BMW used 49.3 litres of diesel, versus 51.6 litres of petrol (gasoline) used by the Prius.

While the BMW’s results are clearly respectable, the figures quoted in the Sunday Times article do not tell the whole story.

For a start, about 40% of the trip were on motorways, another 40% on B-roads and the rest in urban areas. A driving mix that includes only a token 20% of urban driving is hardly typical for usage patterns of most motorists in our largely urban / suburban societies (for example, 79% of the US population lives in urban areas, with most European countries having similar rates). This unusual mix seems almost purposely designed to ensure that the advantage of the hybrid drive train of the Prius would lie mostly idle: Driving at constant speed on a flat road, you are not going to see any real benefits from a hybrid system, which really thrives in stop-and-go rush hour traffic with lots of traffic lights, as most of us experience on the way to work or home.

Secondly, even with these skewed parameters, the BMW lost out on greenhouse gas emissions. It burnt 10.84 Imperial gallons (13 US gallons) of diesel, while the Prius used 11.34 Imperial gallons (13.6 US gallons) of gasoline. Because of diesel fuel’s 15% higher carbon content by volume, the BMW added 131 kg of CO2 to the atmosphere versus 120 kg by the Prius.

Personally, I see no reason why in the long-term efficient diesel engines can not be mated to a hybrid system and have the best of both worlds. Sure, it may not yet be cost-effective at current fuel prices, but things may look very different 10, 20 or 30 years down the road.

Japanese petrol (gasoline) prices to fall 25c per litre

Following political gridlock in the Japanese parliament, a “temporary” tax on petrol (gasoline) that has been in force for three decades after being renewed every couple of years is set to expire on 01 April 2008 (to readers outside of Japan: No, this is not an April Fool’s joke). As a result prices of petrol are set to fall by 25 yen per litre (about US$0.95 per gallon, EUR 0.16 per litre).

I’m utterly unimpressed by how both major Japanese parties have handled this conflict.

Fuel taxes in Japan consist of the basic fuel tax and a “temporary” but de-facto permanent surcharge. The ruling conservative Liberal Democratic Party (LDP) wanted to hold on to the surcharge, as well as to a peculiar rule that fuel taxes must only be used for road construction and repair. This road-use-only restriction was defended by the so-called “road tribe”, an informal group of politicians with cozy ties to construction companies which in turn support their election campaigns.

The opposition Democratic Party, which controls the less powerful Upper House of parliament, called for dissolving the fuel – road construction link, as well as abolishing the surcharge altogether and only keeping the basic fuel tax, as it was until the 1970s.

The two did not compromise in time before the set expiration date and so prices will fall from tomorrow. Most likely the Lower House, which is controlled by the LDP-led coalition, will override the Upper House about one month later and reimpose the higher tax rate. Meanwhile Prime Minister Fukuda offered to remove the road construction link from April 2009 in order to get the opposition to agree to an extension of the surcharge.

While motorists will welcome cheaper fuel, petrol stations are likely to collectively lose about US$200 million over night, as they hold stocks of some 800 million litres of petrol in their underground tanks on which the tax has already been paid and which will not be refunded to them. Motorists are likely to give their business to whatever petrol station that starts selling at the new low prices first, making it near impossible for other stations to pass on to the consumer the taxes these stations have already paid on stocks delivered before April.

To me it makes no sense to maintain the outdated restriction on how fuel taxes can be used, which serves primarily the interests of construction companies, not the general public. Japan as an aging society with a declining population will need more and more cash for supporting elderly people and their health care, not more and more roads. Why can’t taxes be used where they are needed the most? This pork barrel restriction should have been abandoned a long time ago!

On the other hand it would be irresponsible to cut fuel taxes while the government is running a huge budget deficit. It would just mean more red ink, piling up higher debts to be repaid by our children and grandchildren. Also, cheaper fuel today will do little to encourage consumers to switch to more economical cars or public transport and to cut their output of greenhouse gases. Japan is already way behind on its efforts to meet its obligations under the Kyoto climate treaty.

It would make more sense to maintain and even raise fuel taxes and use the revenue to subsidise CO2 conservation measures, from better home insulation to solar collectors for warm water and subsidies for hybrid cars. Thirty years from now the world will live on maybe half the crude oil output per year as today, shared amongst more consumers. Whatever country comes up with intelligent solutions for living with scarce and expensive oil will do best in the 21st century. Trying to sneak back into a “golden age” of cheap fuel is not the way to succeed.