TIME Autos

General Motors Is Getting Ready to Make a Huge Change

A General Motors Co. 2014 Chevrolet Cruze vehicle sits on the lot at a dealership in Southfield, Michigan, March 28, 2014.
A General Motors Co. 2014 Chevrolet Cruze vehicle sits on the lot at a dealership in Southfield, Michigan, March 28, 2014. Jeff Kowalsky—Bloomberg via Getty Images

The favored fuel of Europeans could be in 10% of US cars by 2020

fortunelogo-blue
This post is in partnership with Fortune, which offers the latest business and finance news. Read the article below originally published at Fortune.com.

By Ben Geier

The word “diesel” probably elicits one of three reactions from most Americans: A disgusted comment about black smoke, a curious glance that says they don’t know what diesel is, or a story about the time they accidentally put diesel in their engine and worried they’d ruined their car.

All that could be changing, though. Steve Kiefer, the General Motors’ vice president who oversees engine production, said in a speech Tuesday that he thinks 10% of the U.S. market could be made up of diesel cars by 2020, echoing past statements from GM executives.

As of right now, only one GM car, the Chevrolet Cruze, is available in the U.S. with a diesel engine. Some heavy-duty pickups are also available with diesel as an option. Several more could be coming in 2016, according to a report onAutomotive News. The Chevrolet Colorado and the GMC Canyon will be available with diesel engines in 2016.

The Chevrolet Cruze diesel will be the first of many diesel-powered passenger cars General Motors will offer in the United States, Kiefer said in his speech.

Lauren Fix, an automotive columnist who goes by the title “The Car Coach,” said she agrees, and that diesel’s image is changing stateside.

“Diesel today is about performance,” she said. “Its a great alternative to a hybrid, because what you lose with a hybrid is towing capacity.”

For the rest of the story, please go to Fortune.com.

 

MONEY Gas

Gas Prices Dropped 30 Out of 31 Days in July

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UpperCut Images—Getty Images

The national average for gas prices experienced the largest drop in July in six years, according to AAA

The direction that gas prices have been heading in during peak vacation and road trip season should put smiles on the face of American motorists.

As of July 31, the AAA Fuel Gauge Report listed the national average for a gallon of regular at $3.517, roughly 3¢ less than a week ago, 16¢ less than one month ago, and 11¢ less than prices at the pump at this time last year. What’s more, AAA announced that gas prices fell in 30 out of 31 days in July, helping to bring about the biggest decline in prices at the pump in July in six years.

This is the first time ever recorded that gas prices have fallen so consistently in July, which is a month when gas prices are generally prone to soar. The highest national average ever posted remains July 2008, when prices spiked to a panic-inducing $4.11.

“Falling gas prices are nearly the opposite to what we usually see this time of year,” said AAA spokesman Avery Ash. So what explains the decline? “Refineries are running at full tilt and there is more than enough gasoline in the market, which has helped bring down prices despite multiple overseas conflicts.”

And what can we expect going forward? Well, gas prices have dropped in August in three of the last five years. But prior performance is no indication of what’ll happen in the future—just look at gas prices recently, which have fallen during a time period when they have skyrocketed in the past.

Even so, the experts at AAA anticipate that gas prices will continue on a downward path in the days and weeks ahead, provided there are no major hurricanes, refinery problems, or unforeseen international conflicts—any of which could send fuel costs up and up. For now at least, the idea that gas prices peaked for 2014 in early spring is still holding up.

MONEY Autos

7 Cars That Save on Gas in a Way You Won’t Believe

2013 Ford Fusion
Ford began offering auto stop-start technology as an option with the 2013 Fusion. Ford—Wieck

New research shows that funky, futuristic auto stop-start technology is a proven money saver on gas. It's available right now only in a tiny fraction of cars, but that's going to change soon.

Over the years, one urban fuel-efficiency myth has been pervasive—that you’ll save gas by letting your car idle rather than shutting the engine off when, say, waiting at the curb for someone running into a store. Popular Mechanics, AAA, and others have busted this myth, pointing out that a vehicle gets negative miles per gallon while idle. The consensus advice now is that if you car is stopped for more than a minute, the smart move is to turn the engine off.

The arrival of auto stop-start, a technology most often seen in hybrids, does this work for you, and not only if you’re idle for minute or more. As the name suggests, the tech shuts off the vehicle’s engine automatically when the car comes to a stop—at a red light, say—and then starts it again in the jiffy when the driver takes a foot off the brake pedal.

The technology has slowly been spreading beyond hybrids to a few vehicles powered by traditional internal combustion engines, and new research from AAA indicates that this is a good thing. After testing several cars with the feature, researchers concluded that the tech is a no-brainer that saves drivers 5% to 7% on gas costs annually. A blurb from the press release explains a little more about what this means to us all:

“Up to seven percent improved fuel economy can mean a $215 annual fuel savings for Southern California consumers,” says Steve Mazor, the chief automotive engineer of the Auto Club’s Automotive Research Center. “It also reduces the main greenhouse gas emitted from cars (CO2) by 5 to 7 percent in city driving.”

Navigant Research predicts that by 2022, 55 million cars sold annually will have stop-start technology, up from 8.8 million last year. Adoption is ahead of the curve in Europe, where gas prices are astronomical compared to much of the world: Roughly 45% of cars built in Europe already come with start-stop systems.

In the U.S., meanwhile, the stop-start feature remains an anomaly; only about 500,000 new cars sold in the U.S. in 2013 had the technology. Estimates call for that figure to shoot up to 7 million by 2022. But there’s no need to wait. The vehicles below already offer stop-start as an option or a standard feature in the U.S.:

BMW: Several BMWs have auto start-stop technology, but not all drivers are fans. “The stop-start system is just awful,” one Automotive News columnist wrote of his 2012 328i, describing the herky-jerky feeling of stepping off the brake and automatically restarting the engine as “balky” and “uncomfortable.” Drivers do have the option to turn the start-stop feature off if it’s proving to be too annoying.

Chevrolet Impala: The automaker has made stop-start technology standard on the 2015 Impala.

Chevrolet Malibu: Starting with the 2014 model year, Chevy made stop-start standard on the Malibu, which the automaker says has helped it boost fuel efficiency by 14% with city driving.

Ford Fusion: A couple of years ago, Ford introduced a stop-start system as a $295 option for the first time in the U.S. on a non-hybrid model. At the time, the automaker estimated that drivers would save $1,100 in gasoline costs over five years of driving by upgrading to stop-start. The 2015 Fusion is estimated to get an extra 3 mpg over the base model.

Ford F-150: Buyers who go for the 2.7-liter EcoBoost engine on the 2015 version of Ford’s best-selling pickup get a special auto stop-start feature that’s a little different than others out there. Like other systems, this one automatically shuts off the engine as a fuel saver when the vehicle is stopped, but not when the vehicle is towing something or when it’s in four-wheel drive. Without that feature, the tech could prove frustrating for pickup drivers who are hauling something in the rear or are inching along stop-and-go on bumpy or muddy terrain. During all other driving situations, “The engine restarts in milliseconds when the brake is released,” Ford promises.

Porsche: Among the Porsche models that come with auto start-stop, the new Panamera’s system is special in that the engine not only shuts off when the vehicle is at a full stop—but it also shuts off when the car is slowing down approaching a traffic light. While the engine goes quiet, climate control, audio systems, and other interior features remain powered by the battery. And if the battery doesn’t have enough juice for all the auxiliary equipment, the engine will simply turn back on.

Ram 1500: The 2013 model year Ram truck offered start-stop technology as an option, the first in the pickup category to do so. “This new system is just one of the advances that allow the 2013 RAM 1500 to offer up to 20 percent greater fuel efficiency than previous models,” the automaker stated.

TIME energy

U.S. Oil Could Rescue Iraq

A satellite image shows smoke rising from the Baiji refinery near Tikrit, Iraq, June 18.
A satellite image shows smoke rising from the Baiji refinery near Tikrit, Iraq, June 18. U.S. Geological Survey/Reuters

If civil war engulfs all of Iraq, oil prices are likely to skyrocket. But U.S. exports could change the game

Even though the conflict in Iraq still rages, with forces from the Islamic State of Iraq and Greater Syria (ISIS) just an hour outside of Baghdad while the Syrian military is reportedly bombing the insurgents, global oil markets have mostly calmed. Prices for Brent crude on June 26 had fallen below $114 a barrel, and have dropped more than 1% since hitting a nine-month high on June 19. The violence in Iraq’s north and west—including fighting around the country’s largest refinery in Baiji—hasn’t yet seriously affected oil production in the Shiite dominated south. Iraq’s Oil Minister Abdul Kareem al-Luaibi even promised in an interview with Bloomberg that the nation’s oil exports—which have averaged more than 2.5 million barrels a day—will actually accelerate next month. “Oil exports will witness a big increase, as recent events didn’t reflect negatively on Iraq’s crude output and exports,” al-Luaibi said. “International oil companies are working normally in Iraq.”

That doesn’t seem to be quite true, though—international oil majors like BP and ExxonMobil have already evacuated some of their foreign workers from Iraq. And if things do get worse, oil markets might not react so calmly. A recent report from the nonprofit Securing America’s Future Energy found that the loss of just a third of Iraq’s oil output could be enough to push global oil prices up as much as $40 per barrel. Even if production from Iraq stays steady, political turmoil in countries like Libya and Nigeria have helped remove some 3.5 million barrels a day of oil production capacity. That doesn’t leave much room for more trouble in Iraq, the world’s third-largest exporter of crude oil. And with Iraq projected to be the biggest single contributor to new oil production over the coming decades—at least before the ISIS insurgency revved up—what happens in the country will matter at the pumps for a very long time.

But it’s not so easy to predict the future of energy and oil. Case in point: the fracking revolution in the U.S., which has unlocked vast amounts of previously inaccessible crude, and which few experts saw coming. Between 2008 and 2013, U.S. oil production increased by 2.4 million barrels a day, to more than 7.4 million. And the growth hasn’t stopped—production hit 8.3 million barrels a day in April. Most of the new global oil production brought online over the past few years has come from the U.S. While the U.S. doesn’t export raw crude—aside from a few small exceptions, U.S. oil exports have been banned since 1975—more oil at home means fewer imports, which in turns leaves more oil on the global market for everyone else. Take away the fracking revolution, and global oil markets wouldn’t have been able to so easily shrug off the violence in Iraq.

In the years to come, the U.S. could play an even bigger role. As the Wall Street Journal and Reuters reported earlier this week, the Obama Administration has begun taking steps towards allowing U.S. crude exports. If that wording sounds confusing, well, it is. What seems to be happening is that the U.S. Commerce Department will allow a pair of oil companies to begin exporting what is known as ultra-light condensate to international markets, with only minimal refining. (The U.S. has long allowed exports of refined oil products.) That doesn’t mean U.S. oil companies can begin exporting all the crude they want; in fact, both Commerce and the White House, reflecting the political sensitivities around allowing domestic exports at a time when gasoline costs an average of $3.68 a gallon, have insisted that there has been “no change in policy on crude oil exports.”

But with domestic oil production approaching the capacity of U.S. refineries—and the oil industry putting all its considerable pressure on the government—it seems likely that U.S. oil will eventually be sold abroad. What effect that will have domestically is uncertain. A recent report by Goldman Sachs found that the ban on exports was a net economic positive for the U.S., at least until domestic refineries could no longer handle growing production of oil. But it seems clear that lifting or at least modifying the ban would likely lead to more production, as oil companies wouldn’t have to worry about their product being landlocked in the U.S. A report by the research firm IHS found that lifting the ban would lead to more than $700 billion in additional investment in oil extraction between 2016 and 2030, and would increase oil production by an average of 1.2 million barrels a day. And given that global crude demand is expected to rise by about that much over the next several years, that oil could be very useful indeed—especially if today’s fighting in Iraq is only the beginning.

TIME

This Is Where America Loves to Get Gas

Sharp Uptick In Gas Prices Forcing Some Gas Stations To Temporarily Close
Customers gas up their car at Costco Wholesale Corp. on October 5, 2012 in Burbank, California. Kevork Djansezian—Getty Images

Drivers are turning to grocery stores and retailers to fill their gas tanks

Your favorite gas station is also likely your grocery store, according to a new study.

Consumers prefer filling their gas tanks at grocery stores and wholesale clubs, not traditional gas stations, Market Force Information found in a study. Grocery and wholesale retailers have figured out that competitive pricing can lure customers away from traditional gas pumps.

“The rise of grocery and wholesale clubs is formidable in the petro-convenience sector, with the ability to use loyalty cards and point systems driving consumers to fuel where they perceive they get better value,” said Market Force CMO Janet Eden-Harris in a statement.

Researchers asked consumers how likely they were to return to the gas station they most recently used, and found that Kroger ranked first in satisfaction with a score of 79%. Costco and QuikTrip tied for second with 78% and Sam’s Club ranked third with 76%.

While location is the biggest factor in attracting customers to the pump, over a third of drivers (37%) said they were willing to drive past a gas station to go to their favorite brand. That said, Shell is the most frequented gas station in the country, likely because the company’s gas stations are so ubiquitous.

Market Force surveyed over 5,300 respondents across the United States and Canada for the study.

MONEY Gas

Gas Prices Hit a High for 2014—but the News Isn’t All Bad

Steven Puetzer—Getty Images

Right now, prices at the pump are as expensive as they've been all year. With any luck, though, it'll be all downhill from here.

According to the federal Energy Information Administration, as of Monday, the national average for a gallon of regular gasoline reached $3.70. That’s 13¢ higher than a year ago at this time, and it matches the previous high thus far in 2014, set in late April.

The bad news, beyond the obvious—you know, having to pay more to fill up and all—is that prices have been creeping upward just at a time the opposite was supposed to happen. The expectation was that gas prices would actually decrease in June, as they have in each of the past three years. The summer forecast from AAA called for a 10¢ to 15¢ per-gallon drop in prices at the pump this month, and predicted that the national average would remain in the vicinity of $3.55 to $3.70 through the summer. We’ve already hit the high end of the predicted price range long before anticipated—and gas prices have tended to rise toward summer’s end in recent years.

That said, prices at the pump aren’t exactly spiking. Nationally, the per-gallon price is only up a few pennies compared to a week ago, or even a month ago for that matter. Still, because everybody was expecting a significant decline this month, drivers are justified in feeling like they’re paying a lot more than they should to gas up right now. Turmoil in Iraq is being blamed for the persistently high gas prices.

So what’s the good news here? While drivers in 41 states and Washington, D.C., are currently paying more for gas than they did at this time last year, a handful of states are starting to see price breaks. According to the gas-pricing monitoring site GasBuddy, Indiana, Ohio, and Michigan drivers have all seen a per-gallon price decrease of 9¢ to 12¢ over the past week. And areas that have experienced a gas price hike lately can expect prices to flatten out going forward. “Many areas that saw gains over a nickel should see a calmer, cooler week at the pump,” a GasBuddy post on Monday explained. “So far this morning, oil prices are down 55 cents a barrel while gasoline spot prices are generally negative, a good sign for motorists.”

What’s more, the analysts generally say that it’s extremely unlikely the national average will reach $4 per gallon, or even close to $3.90 as happened in September 2012.

Then again, the analysts have been wrong before. Like when they were making predictions just a few weeks ago, for instance.

MONEY Gas

WATCH: Iraq Conflict Could Lead to Higher Gas Prices

The latest conflict in Iraq — the world's second-largest oil producer — could result in your paying more at the pump for gas.

TIME Autos

The Incredibly Simple Way to Get Drivers to Buy Fuel Efficient Cars

Japan Nissan
Itsuo Inouye—AP

The secret lies in making it crystal clear how much they’ll save in gas costs over the long haul.

In every car dealership, a new vehicle for sale is required to have an EPA car label slapped on the window. The labels are loaded with numbers and ratings and have a dozen different features, including the estimated fuel economy (with city and highway breakdowns), the estimated annual fuel cost for operating the car, a fuel economy and greenhouse gas rating, a smog rating, and a smartphone QR code that can be scanned for additional information.

But a new study by Duke University researchers makes the case that one critical bit of information is missing from the labels. The labels today show how many gallons of gasoline a vehicle uses over the course of 100 miles of driving, and they also provide an estimate for annual fuel costs, based on a rate of $3.70 per gallon and 15,000 miles of driving per year. Researchers say it would be helpful—for consumers and the environment alike—to do some more math for potential buyers and show how much owners can expect to spend on gas for the long haul. Like, say, 100,000 miles.

In the study, participants were presented with a variety of different scenarios and asked to pick the vehicle they preferred. For instance, one group was asked to choose either: Car A, which costs $18,000 and $20 in gas over 100 miles of driving; or Car B, which costs $21,000 and $16 in gas over 100 miles of driving.

Another group was asked to choose either: Car A, which costs $18,000 and $20,000 in gas over 100,000 miles of driving; or Car B, which costs $21,000 and $16,000 in gas over miles of driving.

Both scenarios are essentially the same: The upfront costs and fuel economy in Car A and Car B are the same in both scenarios. But guess which scenario resulted in way more consumers choosing Car B, the more fuel-efficient and cost-effective option? Yep, the second hypothetical, which did the long-term math for consumers and demonstrated that an owner would save $1,000 over the course of 100,000 miles by choosing Car B over Car A.

In fact, in the many scenarios presented—including several instances when the vehicle with better mileage didn’t pay for itself in gas savings—would-be buyers were most likely to select the more fuel-efficient vehicle when the costs were shown over the course of 100,000 miles. That doesn’t mean that the average consumer would actually buy a fuel-efficient vehicle if it didn’t make financial sense.

“People are very sensitive if the vehicle paid for itself or not,” Adrian Camilleri, one of the study’s authors, said in a phone interview. “People don’t like cars that don’t pay for themselves. But they show the greatest interest in more fuel-efficient cars when they’re shown the gas costs over 100,000 miles.”

Overall, in the sum total of all scenarios—including, again, some in which the more fuel-efficient car didn’t pay off—among the participants who selected the more fuel-efficient car, 61.6% did so when shown the gas costs over 100,000 miles, versus 46.6% when gas costs were simply shown over 15,000 miles, like they are currently on new-car EPA stickers. Specifically, when given costs over 100,000 miles, participants chose the more fuel-efficient model 87% of the time when it paid for itself, versus 36% when the gas costs savings didn’t pay off. But when shown costs over 15,000 miles, participants chose the more fuel-efficient model 73% of the time when it paid for itself, versus only 20% when the fuel-efficient car didn’t pay off.

What may come as somewhat of a surprise is that showing consumers gas costs over 100,000 miles significantly increased the odds of someone choosing the car with better mileage even when the choice didn’t result in an overall cost savings. “What we found is that many people want to buy more fuel-efficient cars when they’re close to paying for themselves,” said Rick Larrick, a Duke management professor and one of the authors of the study, published in the spring issue of the Journal of Public Policy & Marketing. “That’s when their sense of environmentalism kicks in. They might not be willing to pay a large premium, but they realize how close the difference gets when they see gas costs over 100,000 miles.”

Larrick said that consumers may also do a little more math for themselves and see that if they drive the car well over that marker—the life of many cars nowadays extends well over 200,000 miles nowadays, after all—that the vehicle with better mileage will, in fact, make more sense financially.

As for the EPA stickers, Larrick thinks that instead of adding the estimated gas costs over 100,000 miles to the already clogged label, it would be best to substitute it in there for one or more of the other fuel cost data points. “They already have the annual fuel costs and the amount drivers would save over five years compared to the average vehicle, which is pretty redundant,” said Larrick. “There’s a way to simplify this. The cost over 100,000 miles is just a more important metric.”

TIME Autos

One of Life’s Annoying Regular Expenses Is Getting Cheaper

Prices are on the rise for everything from meat to limes, from rent to Netflix. But one of life’s commonplace expenses is surprisingly on the decline.

According to AAA, the average cost of owning and operating a sedan in the U.S. is now $8,876 per year, which is lower than it was in 2013 ($9,122) and 2012 ($8,946). The figures are all based on an owner driving 15,000 miles per year in an average sedan. Naturally, annual costs are much higher if you’re the owner of an SUV (average of $11,039 this year, versus $11,599 a year ago) or a minivan ($9,753 vs. $9,795).

Costs aren’t coming down because of decreases in purchase prices. The average price of a new car last summer hit a record high of $31,252, a figure that’s been topped lately with average prices over $32,000 in recent months.

(MORE: Could It Be? Gas Prices Have Probably Already Peaked for 2014)

Even so, the overall cost of ownership is down, and the largest factor bringing on the decrease is the fall in the price of fueling one’s vehicle. AAA estimates that the average price of regular gasoline is down nearly 6% this year compared to 2013. (In past years, it’s been fairly standard for gas prices to shift in only one direction: up.) Combine that with the fact that the average fuel economy for vehicles has been climbing (over 25 mpg lately), and the costs of gassing up one’s car are down over 10% this year. (In a somewhat ironic twist, the widespread improvement in fuel economy in today’s traditional internal combustion-run cars is one reason that consumers aren’t turning to even more efficient (but expensive) electric vehicles and plug-in hybrids in larger numbers.)

Costs related to tires, insurance, and depreciation are all also down slightly this year, though in most cases the effect on one’s overall costs is marginal: The average insurance premium, for instance, fell from $1,029 last year to $1,023 now. So a savings of a whopping $6.

TIME energy

Could It Be? Gas Prices May Have Already Peaked for 2014

We’re still weeks away from Memorial Day and the peak travel days of summer. But it looks like gas prices mercifully won’t go much higher in 2014.

The commonly held theory is that gas prices rise hand in hand with both temperatures and consumer demand. In other words, gas prices tend to inch up in spring and peak in the height of summer. Many years, this theory holds true. For instance, the priciest day ever for gas in the U.S. was in July 2008, when the national average spiked over the course of a few short weeks, eventually hitting $4.11.

In more recent years, however, the summer spike hasn’t been quite as reliable. In 2012, the national average for a gallon of regular reached a summertime low of around $3.35 in early July, before shooting to over $3.80 in mid-September, after the peak summer travel period had passed. And the peak time for gas prices in 2012 was actually reached in early April, when the average topped $3.90.

Last year, the trajectory was a little different. Gas prices rose in early winter, then took the nearly unprecedented step of retreating in March, remaining in the vicinity of 3.50 through mid-summer. In any event, prices at the pump didn’t inch up slowly and steadily as the days grew warmer and longer, like the theory holds.

Analysts say that 2014 is shaping up as yet another year that blows a hole in the theory. As a recent NPR story noted, warmer days are here, the nation’s peak road trip period is approaching, and “predictably, the price of gasoline is rising.” The national average for a gallon of regular shot from $3.53 in late March to around $3.70 a month later.

But drivers will be relieved to hear that gas prices have already plateaued. As of Friday, the AAA Fuel Gauge Report indicated that the national average was $3.683, which is 12¢ more than a month earlier, but also 1¢ less than a week ago.

Most importantly, the experts have reason to believe that, based on crude production and demand domestically and around the world, prices at the pump are only going to go down from here. The Energy Information Administration forecast calls for a national average of $3.57 through September, and an overall average for 2014 of $3.45, which would be lower than the last two years.

“Prices could inch higher another week, but we’re definitely near the top for the year,” Brian Milne, energy editor of industry tracker Schneider Electric, told USA Today.

Likewise, the experts at GasBuddy wrote this week that their best guess is that “we’re starting to see clearer signs that we’re closer to top,” and that “the rally that started in February is nearing its peak.”

For the sake of the family vacation budget this summer, let’s hope we already got there.

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