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May 18, 2007
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Transcript - May 18, 2007

BRANCACCIO: Welcome to NOW. Gasoline prices have hit a record-high. Imagine what you're gonna pay when you go on your road trip this summer.

There's nothing like a swift kick in the wallet to focus your attention on things like the fact that many cars now on America's roads get no better gas mileage than the ones we were driving twenty years ago.

How did this happen, and what are the auto manufacturers doing about it?

We sent a former GM engineer turned filmmaker to find out. His name is Jonathan Silvers.

SILVERS: The town of East Haddam in southeastern Connecticut is a tranquil place, largely free of 21st Century goods and services. There are farms and general stores, church dinners instead of fast food, and not one big box retailer.

There are, however, cars. With the summer driving season approaching, the town is bracing for record fuel prices.

BUCK: East Haddam, I think, is pretty much a rural town. We like to think we're very rural. But it's also a working class town.

SILVERS: Marion Buck has lived in town for thirty years. She's a retired biochemist and raises black-faced sheep.

BUCK: In our town, you almost always have to drive quite far to go any place. If gas goes up to $4 a gallon by August, people will really cut down on driving. It means they'll have a lower standard of living, because they won't have enough discretionary income in order to buy things. Or buy services that they would otherwise have.

SILVERS: Like everyone else in this Connecticut River town (and across America), I'm bracing for the spike - but in the comfort of a late-model wagon. It's an import, the second car I've owned. The first was a 1984 Pontiac, bought at a discount when I worked at General Motors and which got 22 mpg without trying. Two decades later, my state-of-the-art Volvo is getting 23 mpg.

Average fuel economy has increased a fraction over the past twenty years. Factor in SUVs, and it's actually fallen. Backsliding at a time of fuel scarcity raises lots of questions. We put a man on the moon in ten years. Is it unreasonable to ask: where's the 100-mile a gallon car? How about something close to it?

And it's not just fuel economy that's stalled. Alternative fuels - like ethanol, biodiesel —are available only in limited quantities. Hydrogen fuel cells and plug-in electric are closer to science fiction than science fact.

All of which takes us where? For the foreseeable future, going down the same road we've been traveling. And unless there's innovation soon, we'll be riding on empty.

Innovation was in short supply at the New York Auto Show in April. I navigated this crossroads of culture and commerce in a hopeful mood —expecting bold ideas that would lead us to a fuel-efficient future.

Instead, I got taken for a joyride.

This Hummer, predictably enough, had enough horsepower to a shift a continent. The Saab sound system rivaled the Pentagon's shock and awe. Even the family sedan was sporting muscle- V8 engines and turbochargers. And the food and drink, well, it was free and plentiful for the press, whose hearts and minds the automakers were determined to capture.

Hidden in a corner was a hydrogen-powered Acid Trip —a Ford Airstream concept vehicle. But even this gets no more than the equivalent of 50 mpg. And don't rush to the dealer quite yet. It cost a few million to develop, and won't be ready for a decade at the earliest.

The message at the Autoshow was unmistakable: if you're not into performance, you're roadkill. If I wanted progress, I'd have to look elsewhere.
I found something close to it at the Homestead Miami Speedway, an arena better known for fast and furious fuel consumption. For the first time, cellulistic ethanol propelled every vehicle in this year's IndyCar Series, the only motorsport to use a renewable homegrown fuel.

RAHAL: Ethanol is never gonna replace gasoline, because it just—you can't produce enough of it. But you can—you can begin to dilute a gallon of gasoline with ethanol, and still have the same benefits of it.

SILVERS: Bobby Rahal is co-owner of Rahal Letterman Racing and a Motorsports Hall of Fame inductee. He's been experimenting with alternative fuels for decades.

All the teams here got an unlimited supply of fuel from the ethanol industry - free of charge. But ordinary drivers of so-called flex fuel vehicles have a harder time finding ethanol for purchase, let alone for free.

RAHAL: Here in this country, gasoline's been very, very cheap, comparative to the rest of the world. So the necessity has been perceived by the buying public and the manufacturers themselves is that they didn't have to develop systems that will give you ten miles per gallon more.

SILVERS: When he's not on the racetrack, Rahal can usually be found in a dealership. He's chairman of an automotive group that runs fourteen of them, all foreign. He thinks American automakers should be farther along than they are.

RAHAL: It's not that that technology wasn't known or wasn't available. It just—It was never considered a necessity here as it is in the rest of the world. I hope that philosophy changes. I think it has to change.

SILVERS: It's an understatement to say the situation is dire. Sixteen million new vehicles crawl along America's roads every year. 97% of them are propelled by gasoline engines.

True, fuel efficiency for passenger cars has doubled since the first oil crisis in 1973. But the number of miles driven per vehicle has doubled as well. So has the number of cars on the road. What's the consequence of pushing twice the product twice as far? The US today uses 60% more gasoline than it did in 1975.

SMITH: You need to start to look at the whole process of—of why we drive, where we drive, how we get there.

SILVERS: Brett Smith is assistant director of the independent Center for Automotive Research.

SMITH: You need to make this more than just a fuel economy discussion. It's more than just what technologies can you slap on the car to make it go farther on a gallon of gas or a gallon of diesel or a gallon of ethanol.

SILVERS: I sense some frustration.

SMITH: I think it's a frustration with—with the fact that what—we've been discussing this for decades and we still don't have a resolution.

SILVERS: In search of an answer, I headed to the General Motors Proving Grounds outside Detroit. The country's largest automaker had struggled with fuel economy in the past, when I was an engineer at one of its divisions. I wanted to see if it was getting any closer to 100 miles per gallon.

Coincidentally, I arrived at GM on the day that Toyota moved past them to become the world's biggest seller of vehicles. There's no crying in auto making, and GM engineers are a stoic bunch. Except when they're hurtling around the test track.

SILVERS: I suppose this is the worst part of your job.

MAHER: Yeah. (LAUGHTER) Yeah, this is the worst part.

SILVERS: Mark Maher knows as much about engines as anyone at GM. For the 2007 model year, he directed the launch of 19 new or significantly revised engines and transmissions —the most fuel efficient the automaker has produced.

MAHER: The key thing is that we're working to try and provide the best fuel economy we can in each segment that we participate in. .

SILVERS: GM isn't the innovator it once was ... it hasn't been for a while. During the SUV frenzy of the past eight years, it shortchanged research and development concentrating on features that dazzled drivers and boosted company profits. When that bubble burst, the struggling automaker redoubled its effort to make its gasoline engines more efficient.

MAHER: In the short term, we're focusing on improving what would be viewed as traditional—propulsion technologies. In terms of total breakthroughs in environmental impact, we really need to change the fuel and the vehicle as a system together.

SILVERS: It's a well-known secret that GM could put out a 100 mile a gallon car today. But the sticker price would stun even the greenest driver. So the question becomes not who would buy it, but who could afford it? Automakers are in the business of selling cars, and engineers largely design what the marketing people think they can sell. So GM and its competitors compromise by making modest improvements in fuel economy, at prices that move lots of cars.

As GM's Director of Engineering for Hybrid Vehicles, Mickey Bly is familiar with tradeoffs. GM is a latecomer to passenger hybrids. Toyota pioneered the sector ten years ago with the Prius; the badge is now synonymous with green transportation.

With the Saturn Green Line, GM is trying to lure away Prius owners - and entice some of its own customers with a car that gets 35 mpg on the highway - some 8 mpg better than the base model. The Saturn Green is advertised as the most affordable hybrid out there. But there have been some compromises along the way. It's what the industry calls a "mild hybrid." It can't run on electric power only (except at dead stops) and its fuel economy rating is lower than the Prius.

BLY: The real challenge is making sure we have the most cost effective solution that the customers can afford, so they buy it. Because if you don't have volume of these technologies, it really doesn't do any good—doesn't do any good for sustainability of the oil supply.

SILVERS: Is there a breakthrough coming up?

BLY: There is no silver bullet out there we see coming on.

CSERE: Really, replacing the internal combustion engine with something else is not gonna happen for twenty, thirty, forty years, because there's nothing else on the horizon that's ready to go sooner than that.

SILVERS: Csaba Csere has driven thousands of cars in his 26 years as editor of Car and Driver Magazine.

CSERE: There is no short-term solution. When you look at things like fuel cells that run on hydrogen, boy, that's wonderful. The problem is the fuel cell today still costs about ten times as much as an internal combustion engine. So, it would mean a Ford Focus that's a fifty thousand dollar car, nobody's ready for that.

We don't have any filling stations that can dispense hydrogen. And by the way, we don't have any hydrogen.

SILVERS: Where are the fuel economy breakthroughs? Where is the 100-mile per gallon car?

CSERE: If we want high fuel efficiency vehicles, yes, we can apply some new technology—more efficient engines. We can downsize the engines. We can make vehicles lighter. But we've got to make vehicles smaller. We've got to change the type of vehicles that people want to drive. And nobody wants to actually ask the consumer to give up anything.

SILVERS: Certainly not the automakers, who survive by giving customers what they want - and then more of it. Remember the auto show? American consumers might talk fuel economy and low emissions, but when it comes to their ride, their priorities are power and comfort. In a recent survey, they ranked fuel economy 22nd behind sound systems and heated seats. They'll happily trade five miles a gallon for better cupholders. And they'll nearly always upgrade to stronger engines, given the option.

If this Lexus GS 450 is any indication, Toyota is determined to change the cars we drive -sacrifice-free. Unless you consider money a sacrifice. It starts at $55,000, but then it's a luxury performance hybrid sedan, the first of its kind. Crammed under the hood is every trick in the hybrid book - which Toyota largely wrote - and some new chapters as well.

YERACE: That's one of the reasons why you know this hybrid is very different than say a Prius. It's much more of a luxury car—so the emphasis is more on luxury than it is on—fuel economy.

SILVERS: The surprise is that $55,000 Lexus hybrid gets only 25 mile a gallon in the city. So why is Toyota doing this? Because power sells, and it plans on selling lots of hybrids in every segment of the market. Remember that Toyota raised the bar with the Prius. Now rather than use the technology to eke out fuel mileage in up-market vehicles, they're using it to boost performance.

YERACE: The internal combustion engine—as far as I can see into the future, will still be a viable method of propulsion for vehicles.

SILVERS: Daniel Yerace is Senior Principal Engineer for Toyota Technical Center. He says Toyota is investigating technologies it once considered unlikely. And by accelerating product development, it can put those technologies on the road twice as fast as its competitors.

YERACE: We're looking at the incremental things. What are—ya know, where are the weaknesses of the current internal combustion engine and how can we apply new technologies to those engines to make them more efficient? Because we're looking for that extra edge all the time.

SILVERS: The bottom line is this: at the moment there's no revolutionary technology that people are willing to buy. That doesn't mean the automakers aren't searching.

SMITH: The industry is absolutely confused. Everyone's betting on everything. You walk around the analysts talking about it. They're just as confused. You talk to the—the technology folks; they don't know. Everyone's got their belief of what's gonna happen. But, no one's certain.

SILVERS: The nearest thing to a visionary I met wasn't in an automaker's billion dollar research complex. He was in Boston, driving a battered GMC Yukon that gets 16 miles to the gallon.

COHN: I've had it since 1999. Gotten a lot of service on it. About 130,000 miles. Taken it through some pretty rough roads.

SILVERS: This dismal fuel economy led fusion physicist Dan Cohn, along with two of his colleagues at MIT, to devise a new engine - one that could get a midsized sedan 40 mpg. They did it in a garage lab on a budget that wouldn't pay for an SUV.

COHN: Our concept is, that by using a small amount of directly injected ethanol, in a gasoline engine ... that the engine could operate at a much higher level of torque without unwanted detonation of fuel. It's possible to achieve the same power that you would have in a large engine, in a much smaller engine.

SILVERS: When computer models predicted the system would improve fuel efficiency by roughly a third, the scientists formed a start-up company last year - and began testing with Ford Motor Company.

Implementing the system would add roughly a grand to the cost of a car. That's less than one third the cost of a hybrid system, with a bigger payoff. But a test vehicle won't hit the road for at least three years.

COHN: Well, I think the greatest satisfaction will come if it actually turned into a practical technology that has an impact.

SILVERS: Are there other garages out there, other tinkerers who may come up with a car that gets 100 miles a gallon? I can only hope so, because I didn't find it at the automakers.

Marion Buck, the retired biochemist, would have loved to get 100 miles a gallon. She recently settled on a Toyota Camry Hybrid, with a sticker rating of 43 mpg city.

BUCK: The price of fuel has to go quite a bit to really pay for the car, for the extra cost in buying it. But, then it's good for the environment. So you feel good about that.

SILVERS: It's a baby step. And by her own calculations it'll take five years at the gas pump to recoup the higher price of the hybrid. But it's a step forward on one of the few roads less traveled.

BRANCACCIO: Now from cars to bicycles - notice a subtle theme emerging here? So travel with us to Houston, where four kids fresh out of college opened up a community center in the poorest neighborhood.

We went to take a look at a program they call "Earn-a-Bike." It's partly about kids getting wheels ... but the special focus is empowering inner-city young people.

Chris Thompson produced our report, part of the series we call "Ideas that Work."

BRANCACCIO: America's fourth largest city is Houston, Texas. One of its toughest neighborhoods is in the center. It's called the Third Ward.

MCREYNOLDS: Third Ward, Texas is an area predominantly black, now moving Hispanic most of the people in the area now probably poverty level individuals.

BRANCACCIO: Community activist - and bicyclist - Veon McReynolds.

MCREYNOLDS: The people in Third Ward, you know, unfortunately they don't have a lot of resources.

BRANCACCIO: One of the resources the neighborhood does have got started four years ago by four friends who had just graduated from Oberlin College. It's called the 3rd Ward Bike Shop.

Nothing to do after school? Come down to the shop and work on a bike. Still, even with the best of intentions, they had to prove themselves to their new neighbors.

MCREYNOLDS: What people, I think, originally thought about 3rd Ward Bikes was, "Here are some more white people coming in the neighborhood to extract resources or somehow get some gain—personal gain for themselves."

But, you know—with the type of work that they were doing and the resource that they actually brought to the community, it was—you know, resentment at first.

And then the next thing: it's love, you know.

BRANCACCIO: Residents were won over when they saw that this bike shop was, by design, becoming a little community center ... a kind of "hub" as it were.

MCREYNOLDS: They're open when kids have no place to go. They can come by Third Ward Bikes on Saturday when there's nothing to do. And so you could go in there and see the life—you know, and them helping kids and teaching them.

Capron: So let's just go through and fix all this stuff. What's the first problem we have?

BRANCACCIO: Seth Capron is one of the friends who founded this. They've already got offshoots going nearby, through a non-profit called "Workshop Houston."

CAPRON: We offer activities that kids are excited about doing. We offer resources that kids are excited about using. Such as, in the Beat Shop, we do music production. In the Style Shop we do silkscreen and fashion design. In the Chopper Shop we do custom welding and metal fabrication to make custom bikes.

BRANCACCIO: Give kids a hands-on task that captures their imagination. Let them build, fix, and create their own reward ... like a bicycle they've fixed up themselves.

CAPRON: It's just how to have an idea, to formulate a plan, and to follow through and do everything you need to finish that. And in that, they learn a lot of lessons

BRANCACCIO: Lessons that go beyond nuts and bolts.

MCREYNOLDS: You know, when you work on a bike, it's more than just turning the wrench. It's—you know, some discipline. I have to work with others. I have to put my tools away.

CAPRON: That's how life works, and that's a skill that kids are not necessarily learning in school.

BRANCACCIO: The opportunity to earn your own bike is aimed at the kids but the shop itself is open to all.

WOMAN AT SHOP: I just brought my wheel down and I'm fixing it myself.

BRANCACCIO: In a community which is underserved by public transportation and where many people don't have a car a bike can be more than just a hobby.

WOMAN AT SHOP: I use my bike for everything. When I don't a car or when I am not driving my car, then comes the bike.

BRANCACCIO: The shop is staffed by volunteers, some of whom are young people that have already gone through the bike shop program, like Delroy Criswell who's been coming for the last two years.

CAPRON: You're fixing it for charity. What have you done so far?

BRANCACCIO: We also met 11-year-old Ronald Coleman who was hard at work trying to earn his bike.

COLEMAN: I fixed the wheels and the chain. I gotta fix the back brakes.

BRANCACCIO: Ronald was learning how to build one of these things using salvaged parts that are donated to the shop - that's Delroy lending a hand - The resulting bike will be presented to a local charity. Ronald then will have the chance to put the wrenches and grease to work cobbling together another bike which will be his to keep.

Workshop Houston is funded mainly through grants and charitable foundations. Their vision is to reach as many kids in the Third Ward as possible.

They're on the right track. In the four years since they began they have had over 3,600 people come through their doors, 600 kids have participated in the Earn-A-Bike program and 225 bikes have been donated to charity.

MCREYNOLDS: I think the kids—you know, from interacting in Third Ward Bikes, you know, just like working on the bike in order to stop my chain from slipping off. Maybe I'm gonna have to adjust my—sprocket. So, I may have to make the same sort of adjustment in my life to get to other places.

It's more than just the bike.

BRANCACCIO: And that's it for NOW. From New York, I'm David Brancaccio. See you next week.



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