This is just to continue my thesis that the natural gas to oil ratio can not last forever. Entrepreneurs will find a way to arbitrage the difference. This is one potential way but it will probably take years to get a full scale facility here.

The natural gas price we see quoted on Bloomberg is the US domestic price which is cheaper than international prices which vary from location to location. Plans are afoot to export liquified NG from N America to Asia, so that should eventually take care of the price differential (not to mention your home heating bill).

I think the future of vehicles will actually be a mix between carbon and electiric but it will take a while.

The problem with the current electric vehicles is they are too inconvienent. They need electric vehicles with quick charge batteries (10 minutes or less), a range of a few hundred miles and competitively priced per mile with the carbon vehicles.

The question with electric vehicles that never seems to be adequately addressed is where does the electricity come from to charge them? True, there's less demand at night, which is when most charging would be done, but heavy industry uses that electricity in some areas - steel mills and chemical plants for example, which do production runs at night to get the cheaper rates as well as not overloading the grid. Ultimately you'd have to build new capacity, which presents you with a stark choice: nuclear, or coal.

Until then the only buyers will be the curious and environmental types.

There's a general rule with technology - it first appears as a novelty, then establishes itself as a convenience after which it becomes a necessity and finally an obstacle. We're at the obstacle stage where the automobile is concerned. Electric vehicles may extend their life for a few more decades, but the writing is on the wall for the technology as a whole. When you consider the entire cost equation - the amount of metal and plastic (oil) used to build them, the energy required to build and maintain roads plus the amount of land devoured by roads (Los Angeles, for example) then extrapolate that onto an emerging China and India, both of which are on a path to the same build-out, it just doesn't work. Then there's the environmental costs - the tons of toxic dust being generated by tire wear for one example - the tires themselves, batteries, waste oil, air polution and so on.

Compare that to a conventional electric train. The cars can be designed to carry 100 passengers each and can last 50 to 100 years. The steel used for rails and wheels becomes iron oxide - relatively benign compared to tires. The rights of way take up less room, and can run underground where practical. Much higher speeds can be achieved with much greater safety. The benefits to public health would be profound - no more horrific auto accidents and attendant insurance, hospital and emergency costs, a huge drop in respiratory ailments due to improvement in air quality, plus the beneficial effect of people getting off their sorry asses and actually walking or riding a bike every day to a nearby train station.

The majority of people will always buy what is best for them and their pocket book.

The market will be the final arbiter. People will be priced out of owning a car and will have no choice but to move closer to rail service, or to higher density areas closer to work. The market will respond to that demand and build along existing rail lines and extend the lines as part of an overall urban development plan. It's already happening where I live - downtown Vancouver is now a forest of high rise condos where office workers walk, bike or take transit to work. Everything you need is within walking distance and many people don't even own a car. If you need one for a long trip, you just rent it.

Even if you do own a car, the effect of the automobile on limiting your choices is profound. I recently changed jobs, and out of the five local companies that can use my skills, only two are within reach, so I was fortunate to be hired by one of them. The others aren't that far away, but traffic congestion makes them impossible to reach on a practical level. I'd have to move, which raises a whole bunch of other issues, especially if you have school age kids, a spouse who works, or other commitments in your local area.

ebear