Nick Yates on Travel

The rise in energy prices has added not only to families’ transportation costs but to those of businesses as well.  High energy prices have also diverted extra dollars away from non-energy consumer spending.

Happily for both businesses and consumers the recent energy price increases have, as might be expected in a free market economy, resulted in a rise in innovation which promises relief — perhaps soon.

The world car industry seems to have set aside, at least for now, its quest for a usable hydrogen fuel cell to powered its cars — in favor of more readily attainable battery power technology.  According to scientists, we’re close to producing practical and affordable batteries for use in electric cars, and within the next few years mass produced and affordable electric cars should actually start rolling off assembly lines in numbers.  Several leading car companies are now talking about a model year 2010 kickoff.

Initially, such cars will include small internal combustion engines which will be used primarily to provide charge for batteries rather than for propulsion.  What seems do-able now are cars that can travel forty or so miles on a single charge, but which are able to go beyond this by using small fuel engines to generate electricity and top-up batteries while on the road.

If battery charging can be reduced from six hours down to mere minutes — as might well become the case as battery technology evolves — shopping mall parking lots could feature free charging stations as a lure to shoppers.

Larger vehicles such as trucks may have to continue to rely on souped-up diesel engines for power.  But with passenger cars out of the mix, diesel fuel prices should fall accordingly.

If all this results in lower — or at least stabilized — transportation costs, businesses should benefit not only from lower overall production costs but also from the freeing up of consumer dollars for purchases of other goods and services.

Which would be good news indeed. Fuel costs in Australia are still very much an issue, and probably will be for the foreseeable future. This has been Nick Yates with your business installment for the week.