LToro1, read the book “Energy Victory” by former NASA nuclear engineer and rocket scientist Robert Zubrin or visit his website at EnergyVictory.net.

You’re right that ethanol can’t by itself replace petroleum, but together with methanol it can.

Methanol can be made from natural gas, coal, or any biomass without exception, including crop residues such as stems leaves, and cobs (multiplying the per-acre alcohol fuel yield of corn ethanol farms); fast growing weed plants such as kudzu and water hyacinths; even trash and sewage.

I like learning new things. There’s no value in ignorance.

Well, nobody is going to make the pitch that electric cars will be the vehicle of choice in Wyoming, or Montana, or Nebraska, or Idaho, or Alaska.

I’d imagine we’re more likely to see this development not across the nation, but in the more high density states, as well as high density metro areas in states with uneven population distribution.

The population density of Denmark is 128 persons/km2. The combined population density of New Jersey, Rhode Island, Connecticut, Massachusetts, Maryland, Delaware, New York, Pennsylvania, Ohio, Florida, Illinois, California, Indiana, Virginia plus DC is pretty comparable – at 101 persons/km2 – and represents a market of 144 million people, as opposed to 5.5 million Danes.

Not to mention the fact that America is so bankrupt on a national scale, with debts in the trillions of dollars, that we can’t afford to remake our society from top to bottom, as the Danes are planning to do.

Well, that was kind of the Chicago School plan, wasn’t it?

Denmark: 43,100 square kilometers
United States: 9,827,000 square kilometers (228 times the area of Denmark)

Denmark: 2.3 million cars
United States: 254.4 million cars (110 times the number of cars in Denmark)

I was an engineer long enough to know that what works on a small scale doesn’t work on a big scale. Every order of magnitude increase involves qualitatively new considerations.

Building ONE highway was easy. But building the Interstate Highway System took 25 years.

In this case, you would have to standardize and freeze the design of batteries (especially form factor and power output) quite early, or else they won’t be interchangeable among all models of cars and trucks from now on into the future. (The nice thing about today’s gasoline is that just three grades of gasoline handle all makes and models of cars.)

If you standardize too early, you may bet on the wrong horse, like direct current, the Space Shuttle, BetaMax, DVD-HD, etc.

We are nowhere near being able to devise a standardized and ubiquitous infrastructure for electric cars. Not to mention the fact that America is so bankrupt on a national scale, with debts in the trillions of dollars, that we can’t afford to remake our society from top to bottom, as the Danes are planning to do.

For the next 20 years at least, the vast bulk of America’s cars and trucks will still be powered by fossil fuels. We ought to do research & development on electric cars. But no one should commit to that yet because the technology to do it for a nation as vast and transportation-intensive as America does not yet exist cheaply.

Thanks for the excellent presentation. I actually wasn’t aware that you have a taxable gain if the asset is sold for more than original cost less accumulated depreciation.

Buildings are one of the very few depreciable assets that actually increase in value. Land, while it may go up in value, is not depreciable for either financial statement purposes or tax purposes. In most cases the value of an asset goes down as it is used. It would not be inaccurate to say that it is being consumed. It’s just consumed over a period of time that is longer than one year or one accounting cycle. For example, a truck purchased by UPS to make deliveries is capitalized at cost and is depreciated over its useful life for both for both financial statement purposes or tax purposes. Note that useful life and/or the amount depreciated per year may be different for financial statement purposes or tax purposes. Generally, we would expect the value of this truck to be less at the end of its useful life than it was on the day it was acquired. In the event the asset is disposed of at a price greater than its carrying value or basis (original cost less accumulated depreciation) you would have a taxable gain. For a C corporation the gain would be taxed at their corporate tax rate, for sole proprietors or pass-through entities (S-Corps, LLCs, LLPs, partnerships) the gain would flow through to the individual owners. Ironically, if you were not allowed to depreciate an asset for tax purposes your basis in the asset would be higher resulting in a lower capital gain (possibly even a capital loss), resulting in a smaller tax liability.

It really does not matter that the same asset can be depreciated by more than one entity at different times. Each entity can only depreciate an asset based on the cost they incurred to acquire it. In the example of the UPS truck, if it were acquired by UPS at $40 depreciated over its life to $15K and sold a different delivery company for $15K, the second company could only depreciate up to $15K.

Also, buildings which may increase in value over time, (current real estate bubble burst notwithstanding) will have wear and tear that needs to be accounted for over time. I would wager that a 40 year old building would require significant renovations. If these renovations either increased the value of the buildings and/or its useful life, they would also have to be capitalized and depreciate over time rather than expensed immediately.