Bill Reinert knows cars. He helped design the Prius, perhaps the most iconic “green” vehicle on the road today. Over the past few years, Reinert, an affable, irreverent engineer not known for holding his tongue, has become one of America’s most-recognized experts on automotive and technology issues. For a few hard-core electric car advocates, Reinert is something of a villain.

(See this link: http://earth2tech.com/2008/06/15/who-killed-the-electric-car-debate-rage…) I met Reinert about three years ago at an energy conference and I consider him to be a friend. In the few hours that we have spent together (all of which have been highly entertaining and educational) I have found him to be the ultimate pragmatist. He looks at automotive technology and energy technology through the three essential lenses: energy density, cost, and scale. If the technology delivers on those three fronts, he’s willing to pursue it. If it doesn’t, forget it.

As the manager of Toyota’s advanced technology group, Reinert works out of Toyota’s Torrance, California office, where his team focuses on a variety of new technologies including hybrid-electric vehicles, hydrogen fuel cells, electric vehicles, and plug-in hybrids. He was a leader in the effort to get Toyota to consider how the company would deal with a hydrocarbon-constrained world. That push led the company to commission a multi-year study from Dubai-based geologist Peter Wells, who has used a meticulous field-by-field analysis to estimate the peak in global oil output. Wells has predicted that peak output will come in about 2017. (Energy Tribune covered this issue last year. Link is here: http://www.energytribune.com/live_images/Bryce_1208.pdf.) Before joining Toyota in 1990, he worked on energy issues at Hewlett Packard. Reinert has a bachelors degree in biopsychology from the University of Missouri at Kansas City and a masters degree in energy engineering from the University of Colorado. He lives in Rancho Santa Margarita, California.

RB: You are one of the designers of the Prius. But you have made it clear that oil is going to be a key transportation fuel for a long time to come. Why?

BR: Well, oil and petroleum products have a lot of inherent advantages. Two of these are of particular interest: First, there are relatively large resources available and they are pretty easily developed, and second, petroleum products have marvelous energy density, which means we can provide adequate performance and range at a price the customer can afford.

This isn’t to say there aren’t problems, because of course there are significant issues with climate forcing emissions and criteria pollutants. Beyond that of course, are geopolitics (commonly referred to as energy security) and the whole process of oil production, transportation, and refineries. However, looking into my fine-tuned crystal ball, I can see tremendous advances into high-efficiency spark ignited engines and breakthroughs in catalyst technologies. When combined with hybrid technology you get a powertrain that is low in carbon emissions, criteria pollutants are nearly absent, and the customer can afford and embrace the end product.

It’s important to keep in mind that petroleum is also useful in a wide variety of industries, and is a source for many of the products we use today. Of course, in the fullness of time society will find new and better replacements, it will just take awhile.

RB: During the Toyota meeting in Portland last September, I met Mary Nickerson, the national marketing manager for cross vehicle marketing. She told me that in Toyota’s most recent survey of potential car buyers, the prospective purchases said that their number one concern was oil availability. That’s a remarkable fact. Is that still the case? Does that help explain the popularity of the Prius?

BR: Unfortunately I’m not that close to our marketing groups so I’m not all that involved in their studies. Shooting from the hip, I’d say you’d need to consider the context at that time. Energy prices were skyrocketing and gasoline was $4 per gallon and rising. Well, times have changed now, and while I don’t have any direct evidence to prove it, I’d wager customer feelings have changed as well.

Today our news is dominated by loss of jobs and an economy in decline. At $2.00 per gallon, energy is, at best, a back-page story. Despite all of this I don’t think there’s any single explanation for why the Prius is so popular, why it’s become an icon. There are thousands of considerations that are made when you develop a new concept, fuel economy is just one of them. Nail each one and you have an icon, miss on a few and it’s just another car.

RB: What are the key concerns for car buyers in how they choose what they drive?

BR: Despite the hard times our economy is in, I think buyers still want a car that meets their basic needs both actual and projected. And one they can afford. Beyond that, safety still drives the buying decision. Cost of operation including fuel economy and insurance is still a consideration and the environment is gaining as a buying aspiration; much like luxury and performance before.

RB: All of the carmakers have been hit hard by declining sales. But Honda and Toyota have done better than their American counterparts, GM, Ford, and Chrysler. Why?

BR: I certainly wouldn’t want your readers to think we’re not suffering because of the economic downturn, because we are: 2008 was the first year we lost money in the auto business.

I’m not in a position to speak about the other manufacturers, but Toyota has always run lean. We’re always looking a ways to reduce waste and energy use in all aspects of our business. We try very hard to provide the cars our customers’ want, when they want them. In that sense our goal to keep our inventories low has help us weather the storm, but the next year isn’t going to be easy for any of us.

RB: A decade ago, fuel cell-powered cars were two decades away. Today, they are still two decades away. Why?

BR: You need to consider fuel cells in the same cold light as with any new energy program. Whether it’s solar, or wind, or batteries, or ethanol or fuel cells, it’s been the same story. Every new market entrant has been marked by an initial period of over promising and under delivering.

It’s pretty understandable how this happens. We’re working in the labs and a certain technology looks promising. But once the technology goes public, a lot of folks see only the promise and not the limitations or challenges. New startups are generated and there’s a lot of buzz and a lot of hype. Money is funneled into the technology and it becomes the next killer app.

The trouble is the limitations that were there originally are still there and overcoming them is a long-term process. As I said in your first question, there are specific advantages in using petroleum products to power cars, overcoming these advantages, with any technology is not going to be easy. Having said all that, I’m still very bullish on the promise of fuel cells. There are several manufacturers that are turning out very promising cars, cars that couldn’t be realized without using fuel cells. Most of us have solved many of the initial problems including energy density and cold weather performance. We still have some cost problems, but at least we can see a clear pathway. Energy storage is still an issue, but we’re learning how to design around that.

I think the biggest issue facing the emergence of fuel cells has nothing to do with the products and everything to do with the infrastructure. Despite all the work the auto companies have done to develop the cars, there isn’t a corresponding effort on the infrastructure side. We can develop the best car in the world, but if the customer can’t find fuel for it, they’re unlike to adopt it.

RB: A while back we were talking about electric cars. You were skeptical that electric cars will ever be truly viable. Why?

I certainly hope I didn’t use the word “ever.” When we talk about the future I always try to cover myself with weasel words so I don’t look like such a fool. Using “ever” takes that cover away.

Considering the batteries we have today, and the trajectory of the technological development, I am pessimistic about the viability of a mass market for battery electric cars in the near to mid-term.

Our current battery technology simple does not provide the cost, durability and energy storage attributes that allow for the development of mass-market products. We can get around some of these issues with niche products or schemes like battery leasing, or subsidizing the products but none of these are solutions for the mass market.

Within Toyota, we’re working on a niche electric vehicle. At the North American International Auto Show in Detroit this year, we showed a concept of what our current thinking is. A small, city car with relatively limited range, that’s reasonably affordable, targeted at non-traditional markets. But it’s not intended to be a mass-market car. We’re looking at sales volumes of thousands not millions. To produce an electric vehicle that’s truly intended for a mass market, a replacement for your current gasoline car, we’re going to need a battery chemistry that isn’t currently available.

Not that we won’t get there, just that we’re not there yet. Not if we want 150,000-mile durability and the ability to go where we want, when we want. Subsidizing the industry can only take us so far; it’s difficult to see how that works into a mass market. Certainly, considering some past examples it hasn’t been effective.

RB: When we talked a few weeks ago, you said designing an electric car that’s viable would be expensive. As I recall, you said it costs about $500 per mile traveled. That is, if you want to travel 1 mile on electricity, the vehicle will cost the price of a Prius plus about $500. Is that true?

BR: Before I answer, let’s go back to my weasel words and allow me to slightly rephrase the question. Let’s take out the word “viable,” because that has lots of meanings. I’m pretty hard nosed about what viable means, but some of my friends out there in the industry have a different opinion. Also let’s substitute Prius with the general concept of a platform.

So what we’re left with is a rule of thumb, but one that works. With today’s technology and costs, it turns out that nearly every plug-in hybrid or battery electric vehicle does cost about $500 for each electric-design-mile plus the cost of the platform it’s derived from.

I’d like to take credit for the estimate, certainly it came out of the group I work in, but maybe Jaycie Chitwood, one of my partners, was first to discover the relation. Jaycie and I have been at this game for a long time now, longer than either of us care to remember. Our data goes back to the RAV4-EV days and, while we’re not in pricing discussions with our competitors, what we read in the blogs and on the Internet seems to support our estimate. The estimate may not be accurate in the future, but for now it’s useful to judge where we’re headed.

RB: Are the high costs of electric vehicles a reason why the Chevy Volt is going to be so expensive? Do you think the Volt will succeed?

BR: General Motors doesn’t share their cost accounting with me, but hey, if they read this and want to provide some data…So I have no idea what the market price for the Volt will actually be. Certainly batteries and power electronics are going to be a significant factor in any electric or partial electric design. As for will the Volt be successful; I guess that depends on what successful means. If you mean will they bring it to market I’d say yes. I have nothing but the highest admiration for the Volt design and development team.

If you mean will they hit their original sales forecasts, that’s going to depend on the market conditions when they launch. If the economy is still in deep trouble and energy prices remain low, then it will be a bit more difficult. If by success you mean will the Volt impact the market in the same manner as the Prius, I’ll take a pass on that one. History will be the judge.

RB: Everyone’s talking about lithium ion batteries. You think that technology is flawed. Why?

BR: I don’t know if “flawed” is the right word to use here. I believe there are limits to what this family of chemistries can provide in terms of energy density and cost.

It’s not just the automotive industry that’s running up against these limits, you see it in the personal electronic market as well. Battery life is a very real consideration in the new generations of personal communication devices and lap top computers. There are those who believe that lithium ion chemistry is a final solution. I don’t see it that way. I see lithium ion as being a stepping stone, a bridge technology. But to go forward I think we’re going to need a clean sheet of paper.

RB: In addition to the problems of energy storage on-board the car, aren’t there problems in getting the cars charged, specifically in managing the electric transmission grid?

BR: I think we’ve all seen our share of talking heads at one press conference or another waving around an extension cord and proclaiming that there are no infrastructure problems for electric cars; the issue is solved. I’d recommend that these folks get a copy of the recent Department of Energy report on the Electric Grid and sit down and have a good read.

Generally speaking, our electric grid is in dire need of update. A significant portion of our generation assets are at or beyond their intended design life and need to be replace; but with what kind of fuel, coal, natural gas, renewables or nuclear, or all of them. We have no national grid that would easily allow bi-directional energy transmission. There are plans to build one, but nothing exists yet.

More importantly, most of our distribution systems, the substations and transformers and the feeds to our houses were installed in the 1950s before all the houses had central air conditioning, before there were 56-inch plasma TVs and before there were 3 or 4 personal computers in each house.

If we can’t support the situation we have today, how do we justify a wholesale change to electric transportation with no infrastructure investments? This is no big deal if we’re talking tens of thousands of cars. But if we’re talking about millions of cars, then the discussion is much more interesting.

There’s a lot of talk about smart meters being a solution. With a smart meter the customer gets time of day pricing and off peak electric usage is incentivized. Seen from a cynical perspective, one might say the smart meter strategy disincentivizes customer choices, and is really just a band-aid for a bigger issue. It just postpones necessary upgrades for distribution systems.

If the electric utility industry is to play a meaningful role as a provider of transportation fuel, then they’ll need to provide a customer service equivalent to the competition. Schemes to make the car an extension of the grid, add cost and complexity to our products, reduce the usefulness of the product and ultimately may limit market share.

RB: I’ve been talking to various people about battery technology. I understand there are two ways to measure energy density: watt-hours per kilogram, or watt-hours per liter. Which metric is more important to car makers? Or do you need both?

BR: Each is equally important for related reasons. Bigger batteries mean more mass, but not just the mass of the battery. You have to consider the impact to structural systems, to suspension components and to systems like the brakes. In some designs the mass-up of the vehicle may be 2 or 3 times that of the battery system alone.

Keep in mind this mass increase is always working against the customer, while providing no tangible benefit. It either reduces the electric range or, in the case of a plug-in hybrid if the battery is exhausted, decreases the MPG of the internal combustion part of the drivetrain. Carnegie Mellon University has been doing some serious work on the impacts of mass on fuel economy in plug in hybrid vehicles and is a good source of information.

Volumetric density is important from a packaging and thus a customer acceptance point of view. There’s only so much space available on a specific platform. It’s a zero-sum game. The more space we devote to the battery, the less we devote to the customer. With bigger batteries, we start trading off things like third-row seats, fold-down back seats, spare tires or luggage space. Each trade we make in this direction reduces customer acceptance and satisfaction.

RB: The last time we talked, you said something to the effect of “customers want car makers to design cars around a lot of things. The fuel tank is not one of them.” Can you explain what you mean?

BR: I kind of answered that in the last question, but allow me to provide more clarity. In the cars you see on the market today, the customer only considers the fuel tank from an abstract point of view concerning safety. Other than the specific range of each vehicle I don’t think the customer is thinking about the fuel tank at the time of purchase. Now when we start to consider new energy storage devices that, when compared to gasoline, have very poor energy density, the customer starts to become aware of the fuel tank. Once you start trading off interior room or luggage capacity or functionality for energy storage, the mainstream customer is going to become increasingly less enamored with the product.

RB: Boone Pickens talks a lot about compressed natural gas cars. The Iranians are starting to build them in huge quantities. What is your take on CNG vehicles? What will it take for them to catch on in the US?

BR: Boone’s a smart guy and of course, he’s been around for a while and so he knows how the cow ate the cabbage. I don’t think he’s so much supporting the notion of CNG light duty vehicles, as he is the idea of using our own natural gas resources to improve energy security.

We have tremendous reserves of natural gas throughout the United States in tight shale formations. The energy equivalent of these reserves is probably enough to offset our imported oil for around 30 years. But today’s economic conditions don’t justify drilling the wells and developing the collecting and gathering and transportation networks that will be necessary. And of course, there’s a great deal of resistance to more drilling activity.

The trouble is the time lag between when we set out to develop the resources and when they can come on line in any meaningful manner. If we wait until the last minute to develop these resources then we’ve waited too long.

There are a lot of useful ways to blend this gas into our energy picture. We can use it in high efficiency, combined-cycle power plants and offset the carbon emissions from aging coal fired plants; we can use it in the petrochemical industry; we can turn it into synthetic diesel or gasoline, or we can compress it and use it in both heavy- and light-duty transportation applications. So I don’t want to speak for Boone and I certainly don’t want to misquote him but I think he’s saying “we have these reserves, let’s sit down and decide how best to use them and get on with the program.” It would be an honor to sit in on that particular conversation.

RB: Of all of the alternative fuels, which ones do you believe offer the most promise for the automotive sector?

BR: Starting from near-term and moving out in time, I’d say it goes something like this:

1. Synthetic diesel and gasoline from natural gas
2. Synthetic diesel and gasoline from algae biomass using high temperature solar
3. Synthetic diesel and gasoline from municipal solid waste using high temperature solar processes
4. Ammonia (more on that later)
5. Hydrogen

RB: I notice that you didn’t include alcohol-based fuels in that list. Why not?

BR: When I was thinking about how to answer the question on promising alternative fuels I didn’t list ethanol due to its hygroscopic properties. Because it readily absorbs water, it can cause problems in older cars and cars that are driven infrequently, even at relatively modest blend ratios.

Moreover, the absorption of water also increases the difficulty in the supply and delivery logistics chain. Synthetic fuels don’t have these problems and beyond their superior energy density are much easier to incorporate into existing infrastructure systems. The issues involved with the selection and processing of biomass are complex and still evolving, none of this is easy. If you had ask, “what’s the most likely alternative fuel” I would have answered corn-based ethanol.

RB: Toyota has been late to the game in terms of making flex-fuel vehicles. Why hasn’t Toyota embraced ethanol in the way that GM, Ford, and Chrysler have?

BR: I’m not sure I characterize a cautious approach as “late to the game.” We’ve announced a flex-fuel Tundra and have a couple of other products in the pipeline and of course, provide flex-fuel cars in other markets. On the roads throughout the US, there are literally millions of flex-fuel vehicles but only a relative handful of E-85 pumps. It seems to me we have a lot of chickens, but they’re not laying many eggs. Other than a “me-too” value, there’s not much societal benefit for even more flex-fuel products until there’s a meaningful push for infrastructure.

And this begs the question of the environmental tradeoffs and benefits of our current ethanol program. There are various opinions on these complex issues. You’ve previously written extensively in this area, and without appearing as too much of a sycophant, can highly recommend your work as at least one point of view.

RB: What about using ammonia as a motor fuel? Given the huge quantities of natural gas that have been found in the US, would it make sense to convert some of that methane into anhydrous ammonia?

BR: Well I see that someone’s been doing their homework. Anhydrous ammonia is an interesting concept as an energy carrier, lots of hydrogen and no carbon. And there are robust logistics systems already in place.

Years ago, the army took a look at anhydrous ammonia as a battlefield fuel. It had interesting properties, but at that time the relatively low flame speed meant poor partial load performance. Of course things have changed since then and there’s a small group of folks who are taking a second look. Of course, as with any new fuel, there’s always going to be high hurdles and we will have carbon dioxide emissions to deal with, but I think it’s damn interesting.

RB: What do you mean by low flame speed?

BR: Low flame speed means the fuel doesn’t burn as readily so the cylinder pressure derived from it’s combustion is relatively low. To get over this issue the engine needs special combustion design and high compression ratios.

RB: Lots of people are talking about algae as a source of motor fuel. Is that viable?

BR: Of all the sources of biomass that I’m aware of, I’m the most optimistic about algae. It can be tailored to provide relatively large amounts of fuel for the amount of biomass involved and neatly answers the questions of land and water use that plague other approaches. I’m very interested in the work ongoing at the University of Colorado using high temperature solar to convert algae biomass into synthetic fuels.

RB: A few months ago, I wrote about Toyota’s work with Peter Wells regarding peak oil for Energy Tribune. Given the global recession, has Wells changed his mind with regard to when the peak will occur?

BR: I just talked with Peter in Dubai yesterday. He hasn’t had enough time to rerun his very complex modeling yet, but for now he thinks scenario is pretty much unchanged with respect to timing, but he added this warning, “the crossover may be more difficult.”

Editor’s note: When asked to clarify his comments regarding the “crossover” Wells, via email from Dubai, responded thusly:

PW: The slowdown in upstream investment, the collapse of high cost supplies (tar sands, some deep water, biofuels undless subsidised, CTL, GTL) and yet another round of staff “downsizing” in the industry will make the “climb out” (sorry about the mixed metaphors) on the supply side slower than the demand build up.

On the one hand the reduction in demand growth for 2 years (it may be negative this year), and new capacity already committed to, will build up a good cushion of spare capacity from 2009 to 2013-2014. The price will be under pressure on the downside with OPEC behavior crucial to maintaining price levels. If OPEC cannot hold the price up around $50-60 per barrel then the situation on the supply side gets worse, faster after 2013-14. After 2015, the supply side shortcomings will hit much harder, i.e., the cross over when demand and supply just balance will happen faster and at a steeper angle. In other words, we will see it as it hits us, rather than having 3 to 5 years to adjust.