Institute of Transportation Studies
University of California, Davis
Energy 2050
Future of
Transportation Fuels
Daniel Sperling
Professor and Director
Sponsored by the Senate Hydrogen and
Fuel Cell Caucus and RFF
July 20, 2005
dsperling@ucdavis.edu
www.ucdavis.edu
“The era of easy oil is over.” David O’Reilly, Chevron CEO
Yet Oil Consumption is Rising Rapidly Everywhere …
Mostly due to increasing number of vehicles
125
million barrels per day
100
75
Other
China
U.S.
FSU
50
W.Europe
Japan
25
0
1960
1970
1980
1990
2000
2010
2020
2025
Oil Imports are Rising Rapidly in US
2/3 of oil is used for transportation
Source: EIA (DOE)
Good news: World fossil fuel supply is huge.
Bad news: Unconventional oil and other fossil sources have large
environmental and/or economic costs, and higher GHGs --and 2/3
of remaining conventional oil is in Middle East and cheap.
But most conventional
oil is in Middle East
Source: H. H. Rogner, “An Assessment of World Hydrocarbon Resources,”
Annual Review of Energy and Environment, 1997.
Oil is being re-carbonized … heavy oil, tar
sands, coal-to-liquids are carbon intensive
Photo of Alberta Tar Sands
Tar Sands
Solving oil problem, but exacerbating GHG problem
Production (mostly Alberta) (million b/d):
1990: 0.4
2003: 1.1
2012: 2.0
2030: 5.0
GHG emissions (tar sands vs petroleum):
+37% (surface mining)
+50% (in situ)
Point #1: Trends Not “Sustainable”
• More vehicles using more oil
¾
Transit share dropping (<2% in US)
¾
Vehicle ownership and use increasing (1.1 vehicles/driver)
¾
Vehicles getting larger and heavier
• Oil imports increasing
• Oil getting “re-carbonized”
• GHG emissions increasing (+2%/yr in US)
What Can Be Done to Reduce
GHG Emissions and Energy Use?
ƒ Reduce vehicle travel
¾
But highly unpopular (with voters and politicians)
ƒ Improve conventional technology
¾
Many possibilities, including hybrids promising, but limited
impact due to resistance to pricing/regulatory policy
ƒ Introduce advanced vehicles and low-carbon
fuels
¾
Interest in biofuels, H2, and fuel cells
We need green technology!
Vehicle Fuel Economy Dropping Past 18 Years
Fuel Economy by Model Year
30
Average MPG
Cars
25
Both
Trucks
20
15
10
1970
1975
1980
1985
1990
1995
2000
Model Year
Source: Heavenrich, R.M., and K.H. Hellman. 2000
But not for lack of innovation. Fuel economy ≠ fuel efficiency
Efficiency innovations offset by increased weight, size, power
Source: Hellman and Heavenrich, EPA 2003
If trends continue, this will be the SUV of the
future … hybridized or with fuel cell!
4.5´ longer, 2´ higher than Hummer. For sale Sept 2004!
Navistar ad says: “POSSIBLY TOO MUCH TRUCK . LIKE THAT’S A PROBLEM.”
The Failure of Alternative Fuels
„
„
„
Synfuels: $88 billion program in 1980 (partnership with oil
companies)
¾
Today = ~$20 billion dollars wasted (1 plant still
operating)
Energy Policy Act of 1992: 10% alt fuels by 2000; 30% by
2010
¾
Today = 3% (mostly etoh)
Methanol (supported by George Bush Sr)
¾
„
„
Today = 0.0%
Battery EVs: 10% ZEV req’t for 2003 in CA, NY, MA;
¾
Today = 0.01%
NGVs in NZ: 10% of cars in 1985;
¾
Today = <1%
Partial Successes
Because of large subsidies
„
Ethanol in Brazil: 95% of new cars dedicated to etoh in 1988
¾
Today <5% dedicated etoh vehicles, but 3 billion gallons/yr
in 20/80 blends
¾
Cost competitive but 30 years of subsidies
„
Corn ethanol in US
¾
3 billion gallons annually, but large subsidies for 25
years
ƒ Natural gas vehicles in some countries (esp Argentina)
¾
1.4 million vehicles because subsidized natural gas prices
Because cost competitive and no change required in fuel
supply system
„
Tar sands in Canada (profitable at ~$20/bbl)
Why Alternative Fuels Failed in US
Public support dissipated when studies showed public benefits
were small (benefits were over-sold)
Methanol – small AQ benefits (compared to reformulated gasoline)
NGVs – AQ benefits small, limited domestic supply of NG
Synfuels – large environmental costs
Market interest evaporated
Battery EVs – too expensive (for automakers and customers), require
behavioral change (refueling)
NGVs – requires new fuel supply system (Honda exception)
Synfuels – too expensive (except for tar sands)
Is hydrogen different?
Hybrid Electric Vehicle Story
Available Now
2005 – 2006
2007 - Beyond
Source: J.D. Power
HEV Market Penetration Forecasts: 2005-2015
Percent Market Share
25
20
15
10
5
0
2002
2004
2006
2008
2010
2012
2014
2016
Model Year
Market forecasts vary considerably
y
y
y
High uncertainty in consumer acceptance/valuation
High estimates put market share over 20% for 2015
Low estimates at 6-7% market share for 2015
Are Hybrids an Important Breakthrough?
In market sense, yes. It is first time that car buyers can exercise environmental
preferences. Hybrid vehicles are expression of general “environmental”
value (not fuel economy). But how many people will pay how much for
this “superior” technology?
In energy/GHG sense, less so. Hybrids are not a savior. Hybrids run on
gasoline. They provide 10-50% better fuel economy … but it will be at
least 2 decades before much of this improvement is fully realized. By then
vehicle travel will have doubled, offsetting the fuel economy and CO2
gains.
More dramatic changes will likely be needed soon – in fuels and
technology.
Most Promising Alt Fuel Options
… each with major limitations
1. Cellulosic ethanol (trees, switch grass, etc)
‹ Different from corn ethanol, but similar costs?
‹ Retains liquid fuel energy system
‹ Less attractive in other countries, such as EU, Japan,
China, with less arable land
2. Battery electric vehicles (and plug-in hybrids) with
low-carbon grid electricity
‹ BEVs suited to niche applications
‹ Plug-in hybrids may prove attractive eventually
‹ Batteries expensive
The BEV experiment failed…but led to improved batteries
and electric drivetrains for hybrids and fuel cell vehicles.
BEVs and plug-in HEVs will be back?
DCX GEMs in
Factory, 2002
Early version of Ford//Pivco BEV
Most Promising Alt Fuel Options
… each with major limitations
1. Cellulosic ethanol (trees, switch grass, etc)
‹
Different from corn ethanol, but similar costs?
‹
Retains liquid fuel energy system
‹
Less attractive in other countries, such as EU, Japan, China, with
less arable land
2. Battery electric vehicles (and plug-in hybrids) with low-carbon
grid electricity
‹
BEVs suited to niche applications
‹
Plug-in hybrids may prove attractive eventually
‹
Batteries expensive
3. Hydrogen from renewables, or coal with carbon sequestration
‹
Greatest potential for reducing oil use and GHGs
‹
Need new fuel system
How is Hydrogen Different?
• H2 and fuel cells could virtually eliminate
greenhouse gases, air pollutants and oil use from
transport sector and possibly other sectors
• H2 can be made from virtually any material,
including water, biomass, and coal (like electricity)
• Fuel Cells provide value to customers (and
automakers)
• Automotive industry believes fuel cells are the
“Holy Grail” – unlike their attitude toward all
previous fuels
Renewable
Hydrogen can be made from many
sources, and used in many ways
Biomass
Transportation
Hydro
Wind
Solar
HIGH EFFICIENCY
& RELIABILITY
H2
Oil
Coal
Natural
Gas
Sequestration
Non-Renewable
Nuclear
Distributed
Generation
ZERO/NEAR ZERO
EMISSIONS
H2 Costs Could be Competitive (NAS 2004)
12
ur
re
C
10
nt
ur
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nt
C
C
C
Production costs
ur
re
8
ur
re
nt
Delivery and dispensing costs
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e
Fu
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Fu
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Fu ren
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Fu ren
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C
ur
Fu ren
tu t
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6
C
Hydrogen cost ($/kg)
nt
Carbon Cost
2
0
(GEA)
Natural gas
Coal
Coal with
sequestration
CENTRAL STATION
Nuclear
Biomass
Natural gas Electrolysis
(grid based)
MIDSIZE
Wind
PV with grid
backup
DISTRIBUTED
Technology
• GEA = Gasoline Efficiency Adjusted – scaled to hybrid vehicle efficiency
Gasoline
FCVs must be perceived as “better” than ICEVs,
and thus marketable at higher prices. Many car
companies believe they are.
On board electricity
and new lifestyle uses
Emergency
electricity
Mobile electronics,
tools & appliances
Low emissions,
energy use
Vehicle to grid
power
New vehicle
designs
Electric-drive feel
New vehicle opportunities and advantages
ƒ
ƒ
ƒ
ƒ
ƒ
ƒ
ƒ
ƒ
ƒ
ƒ
ƒ
ƒ
On-board fridge for champagne – 500 W
Power tools – 2kW
Power an RV – 5 kW
Beach barbecue for daughter’s wedding – roast ox, disco, light, heaters
– 15kW
Power the electrical demand of 5 houses (during blackouts?)
Receive payments from grid for electricity
Remote cool-down and heating before entering vehicle
Power an outdoor play/pop concert
Melt snow around your car to get out of driveway
Power outdoor hot tub for 12 on skiing holiday
Downtown access on ‘bad pollution days’ (Europe, Mexico, etc)
“Guilt-free” motoring
Adapted from Shell Hydrogen, April 2000
But H2 will be a long time coming …
% of Fuel for Light Duty Vehicles
The “Rapid H2 Penetration Scenario” in NAS H2 Report (2004) results
in 10% displacement in 2027
100
80
60
40
20
0
2000
2010
2020
2030
Year
2040
2050
2 Most Compelling Long Term Scenarios
„
„
Fuel cells powered by hydrogen made from
renewables plus coal with sequestration of
carbon
“Prius” hybrids
plug-in hybrids + biofuel
with battery EVs playing niche role in both scenarios
Counterfactual Case:
Imagine gasoline being considered as an
alternative fuel today
„
Unacceptable to NHTSA and DOT
¾
„
Unacceptable to EPA
¾
„
high air pollutant emissions, high CO2 emissions,
inefficient combustion
High distribution costs
¾
„
highly flammable, unsafe
small, diffuse markets
High production costs
¾
gasoline small part of output and no developed
markets for “co-products”
Clean Energy Research Needs to be
Dramatically Expanded
0%
Energy
Primary Metals
Stone, Clay and
Glass Products
Industrial
Chemicals**
Transporation
Equipment
Services (Bus,
Health, Eng, etc)
Communications
Equipment*
Prof & Sci
Instruments
12%
Drugs and
Medicine
Energy Sector Invests Relatively Little in R&D
R&D as % of Net Sales, Selected
Sectors, US, 1995
10%
8%
6%
4%
2%
Source: Margolis & Kammen, 1999/2001
Downward Trend in U.S. Energy Patents
and Total U.S. Energy R&D
Patents
Granted
Funds for
Energy R&D
200
14
12
10
150
8
100
6
4
50
2
0
1975
0
1980
1985
1990
1995
Energy R&D (Billions
1996$)
Patents Granted
250
2000
Source: Margolis & Kammen, 1999/2001
DOE RD&D Funding Much Lower Than 25 Years Ago
Private Desire
(larger vehicles, more mobility)
versus
Public Good
(AQ, GHGs, peace)
Every society finds acceptable balance along spectrum based
on their values and circumstances
‹
‹
‹
Asia has collective values and more concentrated population
Europe has history of limited land and natural resources, and
vulnerability to foreign conflicts
US values individualism & consumer sovereignty; has history
of open space, abundant resources, large frontier, and
remoteness from foreign conflict
… thus, US tends to defer to market forces, favor less govt
intervention, and be less concerned about global conflicts
and concerns.
To be seen how US deals with increasing pressure to
reduce oil imports and GHG emissions. Policy matters!
dsperling@ucdavis.edu
www.ucdavis.edu