|Written by Steve Frazer|
|Saturday, 30 April 2011 11:00|
There are a dozen transportation infrastructures with a poll position to "wean" U.S. drivers off of OPEC petroleum. Only one of them is economically attractive, has the potential to become a large scale solution and can achieve rapid success. It is a win, win, win, win solution in that it can (#1) eliminate 100% of all U.S. purchases of OPEC petroleum within 5 years. It is (#2) great for the environment in that it results in an immediate 30%-35% lower emissions and puts us on the path to 95% lower emissions. This migration (#3) results in an immediate 25% petroleum volume reduction over-all each year at the same number of miles traveled in comparable sized vehicles and establishes the infrastructure and industry capacities over the long-term to eliminate petroleum as a transportation fuel entirely. It is economically viable (#4) - while this Migration will save U.S. drivers a considerable amount of money individually, many economists are suggesting this immediate solution has the best potential to boost our economy of any option on the table today.
To paraphrase Clint, "Ya gotta ask yourself. Are you feeling lucky today at $4/gallon?"
You should because most every other industrialized nation in the world is paying $6-$10/gallon (USD equiv.) at their pumps today. You should also consider if you are willing to pay $5-$6/gallon ($100-$200 to fill up your tank) to drive a gasoline powered vehicle in the next few years? (Total cost of fuel at the pump in red with government taxes per gallon in blue):
Edmunds has published several articles over the past 3 years with the statistics for vehicle price recovery between diesel, hybrid and EV technologies over the traditional gasoline powered version of the same or similar vehicle. Typically, the purchase price of a diesel powered vehicle will be recouped in 2.5 years over a gasoline powered car, 7-9 years for a hybrid and literally never (far beyond the life-cycle of the car) for an EV (as the result of the higher purchase price and the $9K-$28K battery replacement cost). So while the diesel version is roughly $1,500-$2,500 more expensive to purchase, once you have owned the vehicle for 2.5 years and if your driving habits are in-line with national averages, the diesel model becomes less expensive to own and operate than the gasoline version. For those people who own and drive a vehicle for more than 5 years, a diesel powered vehicle is an incredible bargain - the lowest cost/mile in the market. Many diesel owners choose to drive their vehicles for more than 10 years as the typical diesel engine life-cycle is 200,000-500,000 miles. Longevity of a vehicle trumps virtually all other forms of "Green" and the combination of lower emissions than both a comparable gasoline and hybrid vehicle with this longer life cycle makes advanced diesel the environmentally friendly choice.
While it is easy to understand how buying a diesel powered vehicle saves the driver money, how does this Migration boost the U.S. economy? The U.S. is consuming over 20% of the total petroleum production of the world though the U.S. citizen count represents less than 5% of the world's population. So if we were to use 20% less petroleum to drive the same number of miles, this represents a 5% reduction of the world's current petroleum demand and will result in an economic game changer. Anyone who has managed a business understands the difference between "flailing and flourishing" is typically 3%-5%. This solution offers a 20% advantage for our petroleum addiction. If the next 100M U.S. light fleet vehicle (cars, SUV's and light trucks) purchases were all diesel powered, it would keep $300B per year, each year, going forward in the U.S. economy in reduced purchases of foreign petroleum and would measurably reduce petroleum demand to the degree that it would lower the market price of petroleum and extend the supply for many more years.
Most other industrialized nations have been migrating their light fleet to diesel engines for the past decade (see table below - "European Diesel Car Sales") and since diesel powered vehicles are generally 25%-30% more efficient than similar gasoline powered vehicles, U.S. citizens have wasted over $2T by purchasing hundreds of billions of lower energy density gallons of gasoline and burning that fuel in lower efficiency gasoline engines over the past 10 years.
The following chart shows U.S. vehicles are over-all 30% less efficient compared to European nations. This is primarily due to the gasoline vs. diesel engine differential. What is frustrating, is that even with the knowledge of the problem, this DoE projection does not suggest that U.S. drivers will correct this issue and migrate to the higher efficiency vehicles over the next 20 years.
One should note that "Resource Protectionism" is alive and well and becoming more common as demand for all the resources of our planet continue to grow in radically increased proportion to world population. We see it particularly from China regarding their precious metals, rare earth minerals, etc. Quality of life in our modern times is primarily measured in units of technology, transportation and communication and this higher quality of life requires higher volumes of minerals and greater energy resources - consumption per capita U.S. PDF. To a lessor degree, we are also already experiencing Petroleum Protectionism today and we should expect it will become more common in the coming years. The current reserve reports do not include these political concerns so people should expect the backside of Peak Petroleum will not be a gradual slope as it effects their lives, but rather almost a vertical drop-off in the coming decades.
The following 2 BMW videos share that most U.S. consumers are not aware of the advantages of modern, advanced diesel technologies. The 2nd video below highlights the 2013 BMW M550d sedan for performance, but this vehicle is rated at 37mpg (U.S. gallons) hwy and by burning B10 provides over 40mppg in a full-sized, high performance luxury sedan.
If you have not test driven an advanced diesel vehicle in the past 2-3 years - you will be surprised. Most cannot distinguish between a gasoline powered car - other than the higher torque and the lower fuel consumption. As Johan de Nysschen, the President of Audi USA, points out in the following video, the typical American consumer is simply not aware of the opportunity they have today. This video also includes a diesel engine blessing from the Green Car Group - a well respected organization whose mission is to promote more environmentally friendly vehicles.
The following VW 2012 Passat TDI review echos the same message - diesel is the superior solution in economy, power, environment and it is built in the Great State of Tennessee.
Three of the four largest companies in the world today are oil companies -- Royal Dutch Shell, Exxon Mobil, and BP. Underneath these giant energy companies are five hundred global companies representing every sector and industry with a combined revenue of $22.5 trillion (one-third of the world's $62 trillion GDP), inseparably connected to and dependent on fossil fuels for their very survival. The U.S. holds only 2% of the world's known petroleum reserves so we cannot simply "drill, baby, drill" our way out of this challenge.
Over the past few years, several dozen U.S. petroleum firms have secured permits and are now drilling thousands of new petroleum wells on U.S. lands. This represents the largest wave of new drilling in the U.S. since the 1970's then motivated by the OPEC Oil Embargo. Several of the CEO's and Operations V.P.'s of these firms have shared basically the same message - the petroleum they are extracting has an incredibly wide range of costs: $10/barrel - $110/barrel based on the well depth, specific location and characteristics of the petroleum. By the time they ship the petroleum to a refinery, contribute to their respective and required multi-$B environmental reclamation funds and pay a viable return on investment to the people and organizations who provided the capital to execute on the business plans to explore, drill, extract and refine the petroleum, the cost at the pumps will continue to be in $3.50-$4.50 gallon range. As history has shown, these waves of domestic petroleum extraction rapidly diminish in volume so while these efforts have helped to lower and stabilize the cost of petroleum for a few years, this is not sustainable.
It is not that the world will run out of petroleum over the next 10 years, rather, the higher priced petroleum sourced products will be replaced by lower priced bio-oil sourced products. The future for a net petroleum exporting nation vs. the future for a net petroleum importing nation is very different. U.S. petroleum production has been in decline since the 1970's and the U.S. is the largest net importer of petroleum in the world. As the supply declines, a growing percentage of the total volume of petroleum extracted will be used for applications other than transportation.
100% Biodiesel (B100) fuel sourced from 2nd generation feedstock running in an advanced diesel engine is life-cycle carbon neutral and reduces emissions to the point where in most U.S. cities, these vehicles with consideration of the fuel's life-cycle off-sets, will literally clean the air while running. So the advanced diesel vehicles running 2nd generation feedstock sourced biodiesel are far Greener based on lower emissions than gasoline vehicles, hybrids and EV's. However, getting to B100 for the almost 300 million vehicles in the U.S. today is not possible for many years - we simply lack the production volume capacity today though a 15-20 year migration window is plausible.
Please consider that virtually every industrialized nation in the world already has biodiesel mandates in place and are well into the Migration and while the U.S. Federal government has been slow to move, there are 7 U.S. states that have biodiesel blend mandates from B2 to B7 in place today. The Great State of Minnesota has already passed a B20 mandate by 2015. Petroleum diesel and biodiesel can be blended at any % level.
So how do we get from where we are today to where we need to be over the next 10 years? We need to get off of gasoline vehicles and migrate to diesel/biodiesel blends with a target of B100. Our own experience with this migration has been amazingly positive and painless - ETC Green's AWD, full-sized SUV, Jeep Grand Cherokees achieve 52mppg, provide lower emissions than a Toyota Prius and we never have to plug them in. Finally, GM has decided it is time to get into the winning game with their announcement of the release of the diesel powered Cruze in the U.S. market for 2013. If you are concerned about cold weather starting of diesel engines - put your mind at ease - that was an issue with old diesel technology.
In the past 4 years, over 75% of vehicles sold in some European nations are powered with diesel engines. These numbers are fluctuating based on tax structures and local EPA peer agency regulatory changes. However, as the price of petroleum continues to climb, ultimately, diesel engines will dominate both the heavy truck and the light fleets (cars, light trucks and SUV's) worldwide for a list of practical, undeniable reasons - basically they are more efficient than gasoline engines and they provide an immediate migration to biodiesel - a fuel that is already less expensive than petrodiesel today if sourced from preferred 2nd generation feedstock.
Most of these vehicles are powered by the new Common Rail Diesel (CRD) engine and include a Turbo Direct Injection (TDI) fuel system. TDI specifications include fuel injection pressures around 30,000 PSI. This extreme pressure virtually atomizes the fuel so combustion is far more complete. This more complete burn results in higher engine efficiency, better mileage and lower emissions. Ponder the concept of a 20%-40% volume reduction in fuel usage and emissions when comparing same make/model vehicles in the gasoline vs. advanced diesel versions. Replacing spark-ignition gasoline engines with advanced diesel engines with components expected to be available in the next 5 years would yield over-all fuel savings of as much as 46%. Start/Stop technology now available on most advanced diesel vehicles raises the engine efficiency to near 80%.
Over the past 2 years, U.S. sales of diesel powered cars, trucks and SUV's have increased at the highest rate in history. JD Powers and Associates and other polling firms are reporting advanced diesel vehicles may outsell gasoline only and gasoline/hybrid powered vehicles in the U.S. by 2014. Over the next 3-4 years, we expect this growth will be exponential where 80% of all vehicles sold in the U.S. by 2018 will be diesel powered. ETC Green Staff have recently conducted a poll to see if people understand the cost savings of diesel powered vehicles compared to gasoline powered vehicles. When asked, only 3 out of 500 people (all non-diesel vehicle owners) calculated the savings correctly. This savings is the combination of the higher efficiency diesel engines, higher energy density per gallon of diesel fuel, the much longer life expectancy of diesel engines over gasoline engines and no fuel evaporation loss.
Virtually every advanced diesel engine car, SUV and truck is also offered with a gasoline engine version (same make, same model, same options other than engine). If the price of gasoline is $4.00 gallon (as it is currently), then the equivalent price of diesel to drive the same distance in the same car could be in the range of $4.80 to $5.30 gallon. Yet, diesel fuel is typically within +/- 5% of the cost of 87 octane regular gasoline so diesel fuel is typically 25% less expensive than gasoline today due to its higher energy density. Diesel fuel is actually often less expensive than gasoline in real cost at the pump during the summer months (this results in diesel based vehicles being 30-35% less expensive than gasoline) as the warm weather blends require less additives than the cold weather blends. Also, various states tax gasoline and diesel at different rates. Every driver in Illinois, for example, should own a diesel powered vehicle as the pump price of diesel is virtually always less than gasoline. Upgrading to a diesel powered vehicle would provide an immediate 30%-35% fuel savings for Illinois residents.
Diesel engines achieve greater fuel efficiency than gasoline engines as diesel engines have a higher compression ratio than gasoline engines so typically produce an energy efficiency rating of 45% while gasoline engines only 30%. The following chart shows the fuel side of this advantage via standard energy units.
The 3rd way advanced diesel engines save on costs and resources is their extended life cycle compared to gasoline powered or hybrid powered vehicles. Diesel vehicles have a proven history of reaching 300K miles with only regular maintenance costs and $100 batteries. This advanced diesel cost model results in 1/2 to 1/3 the environmental impact and recycling compared to EV's and Hybrids.
Also, every refueling station in the nation posts signs banning the use of cell phones while refueling. This is due to the potential hazard of igniting the evaporating ethanol and gasoline in the air with the static electricity that accumulates around a cell phone. There will be a day where there will be no gasoline or ethanol fuel sold at refueling stations and this hazard will no longer exist as biodiesel has virtually no evaporation fumes and will not ignite unless under extreme pressure.
Lastly, a diesel engine is heavier than a gasoline engine. This additional mass will, in an accident, protect the driver and passengers better than a lighter weight gasoline engine.
We project that within 4-5 years, biodiesel blends will be 50% less expensive than gasoline and within 6-8 years, B100 will be sold at about 1/3rd of the cost of petroleum sourced fuels - $2-$3 gallon - at the pumps. UOP, the world's leading transportation fuels chemical engineering firm, has embraced 2nd Generation feedstock sourced biodiesel and has developed additives for biodiesel down to -45 F for northern climates and cold weather engine applications (jet aircraft).
Send the message to our legislators, car manufacturers and petroleum companies:
The Emerging Technology Corporation (ETC) - Green Division includes Professional Engineers, seasoned Project Managers, Scientists and Researchers in various related disciplines and experienced Field Staff - a total of over 30 committed individuals. ETC Green and the Emerging Technology Corporation have also established relationships with U.S. National Laboratories, USDA, EPA, DoE, NRC, DoI, BLM, DoD, USGS and several universities. We are active in the development and authoring of new Renewable Energy legislation working with current and past state governors, state and federal legislators, county governments and municipalities.