THE CAR OF THE FUTURE - The Power Surge: Energy, Opportunity, and the Battle for America's Future - page 129

When it comes to protection from volatile oil prices, though, the situ-
ation gets more complicated. Even if people cut their oil consumption
by using liquid fuels that are produced using gas-to-liquids technol-
ogy, they, and thus the economy, remain exposed to volatile oil prices.
h at's because the prices of liquid fuels such as gasoline and diesel
that are almost entirely produced from oil swing up and down with
world oil prices; as a result, so do the prices of similar fuels produced
from natural gas. In contrast, when people cut their oil consumption
by switching to cars and trucks that use compressed or liquei ed natu-
ral gas directly, they shield themselves and thus the economy from
the pain of gyrating oil prices, just as those who buy more ei cient
vehicles do.

T he increased use of fuel-ei cient cars and trucks may also be upend-

ing another element of U.S. vulnerability to oil shocks: the automo-
bile industry itself. When I visited Youngstown, Ohio, I regularly heard
stories about what had happened a few years back in its sister town of
Warren. Warren is next door to the GM Lordstown Assembly Complex,
which opened at the heyday of the auto industry in 1966 and produces
hundreds of thousands of cars every year. In 2008, when oil prices spiked,
car companies laid people of by the thousands. But Lordstown wasn't
just spared, it l ourished, moving from one shit to three. h e secret? h e
plant manufactured the Chevrolet Cobalt, the second-most-fuel-ei cient
car in the GM line. 70 High oil prices crushed demand for most vehicles,
but appetite for the Cobalt soared.
Paul Edelstein and Lutz Killian, two economists then at the University
of Michigan, would probably not have found this a surprise. h eir study
of decades of data coni rmed that when oil prices rise, consumers shit
their purchases to more ei cient cars and trucks. 71 Historically, U.S.
automakers have biased their production toward gas guzzlers; this sug-
gests that oil-price spikes should hurt domestic auto sales much more
than they do foreign ones. When Edelstein and Killian did a careful
statistical analysis, they found “a strong and highly signii cant decline
in new domestic automobile consumption” following any jump in oil
prices. In contrast, they found that “consumption of new foreign auto-
mobiles initially increases,” though “at er four months, [it] slumps as