The Value of Optionality: There Can Be Many Paths to the Same Destination

Author’s Note:  This is meant to be a fun and somewhat lighthearted exploration of a logic trail and not meant to provoke an emotional or “tribal” response to what is becoming a polarizing issue.  Sometimes it’s enjoyable to look at an issue from multiple points of view.  Not trying to change anyone’s mind, just looking to allow mine to run through multiple options.

       The ability to maintain and develop several options running in parallel is, or should be, considered a good state of affairs for nations, communities, companies, and individuals.  The world is a complex place and constantly evolving.  Even when you think that you have a handle on the situation the wind will frequently change and force you to begin anew.  Establishing and maintaining several creditable paths forward regardless of circumstance fosters adaptability and, if done well, predictability.  So why then do we separate ourselves into rigid, distinct, and seemingly mutually hostile camps when it comes to what method we use to propel our automobiles?

       A few disclaimers are necessary here:

1. 1. How do I explain talking about the inherent and comparative strengths and weaknesses of internal combustion engines (“ICE”) versus electric vehicles (“EV’s”) in a blog nominally concerned with issues and topics pertaining to land acquisition? Simple, a tremendous amount of land acquisition work centers on developing projects serving the Oil & Gas or Renewable Energy sectors.  On the surface, it feels like one should take a side – you work in the Oil & Gas Sector and you favor ICE while your opposite number in the Renewable Sector only shops EV’s – but that is not in reality correct.
         Preconceived notions of preference aside, you would think that there must be wide gulf of knowledge and ability between those able to work in those competing industries, but that is not always the case either.  Many well qualified land acquisition professionals will find themselves on both sides of this debate depending on who their current client might be.  Many lease negotiators will be just as adept at negotiating the terms on an oil lease as they will be negotiating acreage intended to be included in a solar generation facility.   An expert title examiner can inform and assist developers in any sector or industry without any need for retraining.  The same logic applies to drone operators, surveyors, and GIS technicians.  Engineers, environmental permitting specialists, and project managers only need a little adaptability and some cross training to be able to work both sides of the equation. I hold this belief not out of some misguided notion of emotional exuberance but because I see it every day at Percheron and many of our larger, cross-sector clients.

1. 2. While I have a very, very healthy respect for the speed and performance capable from an EV (Tesla Model S Plaid and Lucid Air Sapphire, I’m looking at you), I am, for the moment, securely in the ICE camp. I believe in squeezing a naturally aspirated V8 into any car that can fit one.  Once, after purchasing a Ford Mustang, I had it sent to Ford Racing before taking delivery so that they could work their magic and turn it into a proper rocket sled.  Simply starting a large displacement engine will cause your inner 9-year-old to smile.  If you think you’ve outgrown that phase or never had an inner 9-year-old, then I challenge you to cold start a Corvette in a parking garage and see what you think then.  Put plainly, I am not the individual who wants to end the internal combustion engine.

So back to a discussion about why we should keep an open mind as to EV’s…

       The focus of this discussion will not be the eroding global market share of U.S. and European manufactured ICE vehicles or the slow but steadily rising dominance of Chinese EV’s – no one can say if these trends will perpetuate into the future.  Nor is this a discussion as to the environmental effects of either technology – looking at full cycle resource gathering, manufacture, and usage over a vehicle’s anticipated lifespan neither alternative should really be considered “green”. 

       This discussion is about accepting change… and optionality.  And remember, change and optionality do not necessarily mean that one of those options must be erased for the other to continue to thrive.  This is a large country with many different needs that must be constantly addressed.  There is no reason that change and its associated optionality cannot end in both ICE and EV’s being available to serve the markets and needs they are each best suited to.

    For me, the genesis of this topic and discussion comes from listening to EV naysayers make comments such as:

“Who needs a car that can only travel 250 miles?”

“Who has thirty or more minutes to wait for a battery to recharge?”

 “Good luck finding a charging station when you need one.”

And, my favorite usually voiced by fire marshals and landlords:

“Who in their right mind wants to drive a fire hazard/death trap?”

Hearing those questions ad nauseum got me thinking…

       The year is 1908 and you just took delivery of one of the very first Motel T’s sold by Ford Motor Company.  You tell everyone that your favorite color is blue because it’s what you think sounds right and best as a strapping young fellow, but it’s really red.  It doesn’t matter because Mr. Ford refuses to sell a car in any color other than gloss black.  But you deal with that because you not only have the newest hallmark of progress, but you also have faith that it will be the way of the future. 

       You decide to take your new car on a road trip to your father-in-law’s house so that maybe he will finally see you as something other than a stain on his family’s honor.  But the year is 1908.  There are in fact 2.36 million miles of public road in the United States, but only approximately 144 miles of those are actually paved with cement or concrete (we hadn’t figured out asphalt yet).  Most were “improved roads and trails” linking the nation’s towns and cities.  They were somewhat leveled and sometimes covered in gravel or stones.   But it’s alright, you’re a patient person and will wait for a dry spell to make sure the roads are not an impassable quagmire.  Of course, by waiting for the roads to dry out you guarantee yourself a bone jarring, teeth chipping ride, but you deal with that because you not only have the newest hallmark of progress, but you also have faith that it will be the way of the future. 

       Hopefully, you have a good internal sense of direction.  There had certainly been maps made of the United States for centuries and the first primitive “road atlas” was actually published by Christopher Colles in 1789, but it would be 1924 before Rand McNally published the first of their soon to be ubiquitous road atlases to help guide American motorists.  For your big journey in 1908 you’ll need to be possessed of a compass, a good sense of direction, and be willing to ask directions from strangers along your way.  But this is of no concern to you because you not only have the newest hallmark of progress, but you also have faith that it will be the way of the future.

       You had better get those directions correct, because that massive 20 horsepower 2.9 Liter engine in your pride and joy burns fuel at a rate of about 1.5 to 3.5 gallons per hour depending on your speed and the terrain.  You have a 10-gallon fuel tank and so depending on how hard you’re pushing the T you’ve only got between 2.5 and 6.5 hours of power available.  But how many miles are you covering during those hours?  That would seem to be a far more important consideration.  If you can find one of those very few paved roads the Model T’s top speed of 45 miles an hour will burn through that fuel supply quickly.  Given the relatively primitive state of the roads, you will actually need to constantly apply throttle at low speed and will burn through that fuel in exchange for far fewer miles as reward.  Don’t expect to pull into a gas station when you inevitably run low on fuel.  In 1908 there was exactly one (1) dedicated gas station in the United States, so if you weren’t road tripping through St. Louis you were out of luck.  Instead, prior planning and some intestinal fortitude would be required for any but the shortest of journeys.  In 1908 most fuel was sold in bulk through pharmacies or hardware stores.  In addition to a picnic basket filled to the brim with “I told you so” for your father-in-law you will also be strapping several cans of highly flammable gasoline onto your running boards. May God help you if you pass a town’s fire marshal.  He’ll rightly question your sanity.  But you’re not scared of a fiery end, because you not only have the newest hallmark of progress, but you also have faith that it will be the way of the future. 

       I know that you have been raised in world of horses and not horsepower, but you better have some fairly serious mechanical inclinations if you’re going to set out on this journey.  They didn’t hang those multiple spare tires on cars of old simply for the aesthetics of it.  Those roads were going to puncture and flatten your tires – repeatedly.  And only first and maybe second spare will already be mounted on a spare wheel ready to go. After that you will be dealing with inner tubes and soaking wooden spokes in water to ensure a tight seal.  Better learn how to properly use the external crank start on your engine.  There is no internal, electric start and this crank is directly connected to your engine’s crankshaft.  Fail to get your hand off of it quickly enough and you’ll learn why doctors will make a killing over the next few decades on the resulting broken and torn shoulders.  Your transmission isn’t made up of metal gears housed in a sealed, metal gearbox but rather rubberized bands of different lengths.  The dust, dirt, sharp gravel, and limited lifespan of early rubber compounds will make adjustment of the bands a constant necessity and frequent replacement likely.  And remember, take along one bottle of water for yourself and one to make sure your leak-prone cooling system can last the journey or else everyone passing you on horseback will snicker and laugh at your predicament.  After only a relatively few miles you will start to hear sputtering and coughing noises from your engine.  The fuel, a product of a questionable refining process, will be dirty and filled with suspended contaminants.  This will afford you the frequent opportunity to stop and smell the roses as you disassemble and clean sludge from the fuel line and ignition components of your car’s engine.  By the time you reach your father-in-law’s house you will reek of fuel and oil, have probably skinned your knuckles and bruised your shoulder, taught all those in earshot new curse words, and have covered your Sunday finest in dirt and grime.  But this is a burden you are more than willing to bear because you not only have the newest hallmark of progress, but you also have faith that it will be the way of the future. 

       And the likely reward for all this intrepidity and exertion?  Your father-in-law will likely lambast you for wasting your time on such a hopeless contrivance and will try and goad you into returning to the tried-and-true horse and buggy.  After all, why fight against a system that has served countless generations well back to the pharaohs of old?  What type of special arrogance must you exhibit to think you have found a better way?

       I think I have sufficiently beaten this horse to death (pun intended).  What is the essential difference between that individual willing to take a risk and purchase one of the first Model T’s and today’s anxious purchaser of a Tesla sedan or Rivian SUV?  In many ways, there is no essential difference.  Conformity with the current and established option is always the easy choice and indeed the safe one.  An unproven technology and associated support system is just that – unproven.  Unproven is inherently risky.  Would I throw my family into a relatively limited range EV and embark on a summer road trip across miles of open highway with no understanding as to battery longevity or charger availability – likely not.

       But I do foresee a time on the not-to-distant horizon where such a journey would not raise any such concerns.  Battery technology gets better and cheaper every year.  Chargers are becoming faster and multiple companies are working to make them as ubiquitous as gas stations.  As more EV’s take to the roads, spare parts will become more readily available and therefore cheaper.  Car manufacturers, for their part, will eventually figure out how to manufacture EV’s to be reliable, cost efficient, and serviceable.  Indeed, many of the issues inherent in that latter critique have more to do with the legacy costs and entrenched manufacturing protocols of century-old companies and less to do with the vehicles themselves.  Fire departments and roadside emergency crews across the nation will adapt and learn to quickly and safely secure damaged EV’s just as their predecessors did when the first horseless carriages came tearing through town carrying buckets of highly flammable gasoline.

       So, when we in the land acquisition sector venture out and face these sorts of debates maybe we can quietly take a lesson from history and reserve judgement.  Almost 120 years ago, and against thousands of years of established precedent, this nation threw itself wholeheartedly into the promise offered by automobiles powered by internal combustion engines and took it on faith that we would build out the necessary roads, fueling stations, and highway information and safety systems needed to make them practical and a necessary part of everyday life.  None of us truly know what tomorrow holds, let alone what will be considered normal and routine a generation from now.  For the time being, we should take heart that whether we are working on a project that extracts fossil fuels from the ground or adds electrons to the grid, there is a pressing need for acreage on which to site those projects.

       I do not, sadly, know that fathers-in-law will ever judge sons-in-law kindly… Maybe when we finally get those flying cars they have been promising us since the 1950’s.