Jim Press - On Energy Bill

[Rambit]

Turbochargers, direct fuel injection, smaller engines along with the two mode hybrid SUV's. That's the future according to Jim Press. Camry mileage eh!
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December 19 2007 - 8:36AM
By Mike Ellis


Jim Press, Chrysler Vice Chairman and President, speaks to reporters about the Energy Bill


The U.S. Congress on Tuesday passed the Energy Bill, which includes a 40 percent hike in fuel economy standards.

We caught Jim Press, Chrysler Vice Chairman and President, and got his thoughts on the new standards calling for cars and trucks to average 35 miles per gallon by 2020.

Press congratulated Congress and the Bush administration for supporting the new standards.

“We’re very pleased,” Press said. “We commend Congress and we support the Administration signing the bill. We’re committing to meeting fuel economy standards, improving the energy efficiency of our products. We’re very proud to do our part to satisfy customers’ desires and the nation’s need to reduce greenhouse gas and reduce the country’s reliance on foreign oil.”

“The thing that I like about this is that we now know what the rules are of the game,” he said. “Each manufacturer will be able to play its hand in its unique way. From our perspective, it’s a great opportunity because we’re in the best position to marry technology and not make people make sacrifices or compromises on the product they want. You want a full-size SUV, then here, you got a two-mode hybrid with cylinder activation. Full-size SUV gets gas mileage about like a Camry. So you can get a large vehicle and it still has the footprint of a smaller product. You start thinking that way, you can provide performance, you can provide style and design, utilization.”

Press said a single federal regulation on fuel economy is important to keep vehicles affordable.

“It’s really important to try and drive towards a single federal regulation,” he said. “If you have to build a separate car for every state, the engineering and development and certification and the different specs really becomes onerous. We all share the same air. The cars drive from state to state. It’s so much better to have one federal standard that is utilized, that meets the needs of everyone.”


Q - Do you think that reducing the size of some vehicles, as you look at the total fleet, does that mean more vehicles with smaller engines, or can you get there with just technological improvements?

“We’re going to have to use smaller powerplants, but that doesn’t mean they have to be less powerful. They can be more efficient using turbochargers and direct injection and other advanced technology, multi valve. We have as you know in our vehicles, we have cylinder deactivation which is a very positive impact. And so, I think that the key will be the company that can innovate and produce the kinds of vehicles customers want, that also give them the responsible energy footprint. Anybody can make a small car, and they can make a small appliance. But we have design expertise and engineering. Our full-size SUVs will have a two-mode hybrid system with cylinder deactivation. So they’ll have great mileage. They’ll have mileage kind of like a Camry in a full-size SUV, so you don’t have to sacrifice to get a smaller vehicle. Our technology and our innovation can give you both.”
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Bernie

[Tinstar]

They can make cars get better mileage. But the oil industry will just continue to raise the price for gas. The oil ceo's will maintain their profits.

[kevenj]

Originally Posted by Tinstar

They can make cars get better mileage. But the oil industry will just continue to raise the price for gas. The oil ceo's will maintain their profits.

"They" can't raise the price if the demand isn't there. The price of gasoline is a function of (a) crude oil price, (b) demand and (c) refinery capacity (or lack of).

The simple fact is that as much as I don't like paying $3 a gallon for gas, the "good ol' days" of the late 1990's, with $1 a gallon gas and $10 a barrel oil, are actually part of the problem we face now, because at those price levels there was NO incentive for oil companies to explore for new sources of oil or to build new refineries. That is a big reason we are feeling the pinch now. And nobody cried 7 years ago when the oil companies were losing money either.

If we want the stuff we have to be willing to pay a price that makes it possible to get it out of the ground and then refine it into a useful product.

[IESRT8]

Originally Posted by kevenj

"They" can't raise the price if the demand isn't there. The price of gasoline is a function of (a) crude oil price, (b) demand and (c) refinery capacity (or lack of).

The simple fact is that as much as I don't like paying $3 a gallon for gas, the "good ol' days" of the late 1990's, with $1 a gallon gas and $10 a barrel oil, are actually part of the problem we face now, because at those price levels there was NO incentive for oil companies to explore for new sources of oil or to build new refineries. That is a big reason we are feeling the pinch now. And nobody cried 7 years ago when the oil companies were losing money either.

If we want the stuff we have to be willing to pay a price that makes it possible to get it out of the ground and then refine it into a useful product.

One minor detail.... The supply of crude is controlable. They will just slow/reduce production to create the shortage to raise prices.....

[mouserider]

The price at the pump has many factors above the usual supply and demand equations.

The supply of crude is indeed controlled by the cartel but that's just one variable in the equation that determines the price.

Much of the price is determined in the commodity markets of the world and often they are based on both actual and perceived factors, much like stocks in the stock market.

In a way, sometimes the gasoline companies are just beneficiaries of the commodity markets.

[CJ7VFR]

"They" can't raise the price if the demand isn't there. The price of gasoline is a function of (a) crude oil price, (b) demand and (c) refinery capacity (or lack of).

I would tend to believe that, but, what about the 10 cent hikes we see
when there is a large storm predicted, like a hurricane? With no other
reason for a raise in the price, we see hikes for just about any reason what
so ever. And then, after the storm disipates, or, never even hits the coast,
the prices of gas don't fall as fast as they went up? Why is that, when the
supply has not been shut down, the demand is still the same, and the
refineries have not slowed down their production?

Also, what about the fact that oil is now in the $90 to $100 a barrel, which
is alot higher then it was last year at this time, but the price of a gallon of
gas was still almost $3.00 a gallon then? If "They" can't raise the price, and the
factors you mentioned are the ones that actually raise the price, then why
was gas the same price last year when the actual price of a barrel of oil was
less than it is today?

I believe what you are saying about what affects the actual price of a
gallon of gas, but is sure seems like there are times when the price rises for
no apparent reason other than greed.

Jim

[Mr. Redbird]

Commodity markets (as well as the stock market) are ruled by 2 factors:

Greed and Fear

With the current credit based problems right now it appears Greed is in charge for the moment.

[mouserider]

Redbird is totally right about greed and fear, but to a degree, the market does correct itself if it is wrong, either gently or with a huge crash.

Individual gas station owners, if they are owned/operated, do have the ability to move their prices up or down to a degree. Even in my neighborhood, there is one crazy station that is always 20-40 cents more than any other station around, probably because they are right off the highway at an intersection and they're looking to land the "sucker" and from the looks of it, the honey trap works.

Depending on what state you or city you are in an there may be restrictions on how much flexibility an individual station gets. For example, in NJ, if you have a station on the Turnpike or Parkway, contractually, they are only allowed to change prices once a week so there's always a lag.

As for correlation between crude prices and pump prices, there is always a lag because refineries have stock holdings and refineries buys crude futures rather than spot prices.

Refineries and gasoline companies also have the ability to "subsidize" the consumer by absorbing some of the costs, why? It can be good for business in times when crude prices are just spiking.

[CJ7VFR]

Even in my neighborhood, there is one crazy station that is always 20-40 cents more than any other station around, probably because they are right off the highway at an intersection and they're looking to land the "sucker" and from the looks of it, the honey trap works.

This station wouldn't be at the corner of RT 206 and Pennington Lawrenceville road would it?

I live in NJ, and this station is EXACLTY as you described it, right down to
the suckers that come in off of RT 95 to get their gas. This station is also
right near a rehab place, one of Rider University's campus' and the Lawrenceville prep school.

Cha-ching!!

Jim

[Tinstar]

Well You can bet if the cars are using less gas. The price per gallon is going to go up.