Peak Oil Futures

Peak Oil Futures:a possible transport scenario to 2030 and itsconsequences, using the “4see” model By Simon Roberts, Arup (Foresight, Innovation and Incubation Group) 15th November 2011 For APPGOPO, Westminster

• “Peak oil” is a global problem..→ • ..but take a UK perspective • How might the UK prepare? • Apply Arup’s “4see” model (socio-economic and energy) • Develop an example scenario (not a forecast) of possible ITPOES Report 2, February 2010 feasible proactive steps to reduce oil dependency Global oil demand for 1920-2008 with extrapolations to 2050.2 Introduction

Challenge for the scenario • Acceptable by society: - acknowledge driving behaviour • Technically feasible: - scaleable over next 10 years • Economically affordable: - not bankrupt UK economy • Politically acceptable: - check side effects on economy • Data sources: - use official statistics and other reputable sources3 Scenario constraints

• Total oil (petroleum Total petroleum products consumed products) use by UK, 4,000 historical data → 3,000 PJ/y 2,000 1,000 0 1990 2000 2010 2020 2030 • Petroleum products (pet-prod) use in transport → • Chart shows the main users: - vans (LGV) - trucks (HGV) * - aviation - cars *4 Use in the UK of petroleum products

4see modelIntroduction to one part of the model

Cars6 Cars

Cars: data for numbers of Size of car fleet New cars per year 32,000 3,200 24,000 2,400 k veh/y 16,000 1,600 k 8,000 800 0 0 1990 2000 2010 2020 2030 1990 2000 2010 2020 20307 Cars data

Cars: stocks-and-flows model Size of car fleet New cars per year 32,000 3,200 24,000 2,400 k veh/y 14.5 years 16,000 1,600 k 8,000 800 0 0 1990 2000 2010 2020 2030 1990 2000 2010 2020 20308 Cars stocks and flows

Cars: data for fuel use and distance travelled Pet-prod use by cars Total car km 1,200 440,000 900 330,000 M veh km/yPJ/y 600 220,000 300 110,000 0 0 1990 2000 2010 2020 2030 1990 2000 2010 2020 2030 9 Cars data

Cars: process flows model Average car fuel consumption Average car km per year 0.004 20 0.003 15 k km/(y*veh)PJ/M veh km 0.002 10 0.001 5 0 0 1990 2000 2010 2020 2030 1990 1998 2006 2014 2022 2030 10 Cars process flows

Cars: full model, trended forward New cars per year 3,200 14.5 years 2,400 k/y 1,600 800 0 1990 2000 2010 2020 203011 Cars model

Trucks12 Trucks

Trucks: stocks-and-flows and process flows model New trucks per year New trucks per year 8060 10.2 years 6045 k veh/y k veh/y 4030 Average truck fuel consumption Average truck km per year Average per year Average truck fuel consumption 0.016 80 80 0.016 2015 0.012 60 60 0.012 0 0 k km/(y*veh) PJ/M veh kmPJ/M veh km 1990 2000 2006 2014 2022 2030 1990 1998 2010 2020 2030 0.008 40 40 0.008 Size of truck fleet 0.004 20 20 0.004 600 0 0 0 0 450 1990 1998 2006 2014 2020 2030 1990 2000 2010 2022 1990 2000 2010 2020 2030 1990 2000 2010 2020 2030 300 k 150 0 1990 2000 2010 2020 2030 13 Trucks model

ScenarioDeveloping the transport part

Business as usual (BAU) Petroleum products for transport 2,400 • Total consumption of 1,800 petroleum products used by all transportation → PJ/y 1,200 600 0 1990 2000 2010 2020 2030 • Cumulative costs of measures £(1990) cost of measures to reduce use of petroleum 16,000 products by transportation → 12,000 AM£/y 8,000 4,000 0 1990 2000 2010 2020 203015 Developing scenario I

• The upper estimate assumes 10% supply from first generation biofuels because biofuels will also be important to achieving the Fuel Quality Directive • A significant proportion of "Analysis of Renewables Growth to 2020", AEA Techology, March 2010, July 2011 UK biofuels are currently sourced abroad • First generation technologies for biofuel: • Difference between AEA’s - bioethanol technologies use upper and lower estimates in sugar beet or wheat 2030 is 2,000 Ml/y (53 PJ/y) - biodiesel processes use rape seed oil, palm oil or soy oil16 Bioliquids

• Bioliquids Petroleum products for transport - Additional 53 PJ/y (2,000 Ml/y) 2,400 ↓ in 2030 1,800 PJ/y 1,200 600 0 1990 2000 2010 2020 2030 £(1990) cost of measures 16,000 12,000 AM£/y 8,000 4,000 0 1990 2000 2010 2020 203017 Developing scenario I

• Cars energy efficiency - Lightweighting 10% - Low rolling resistance tyres 3% - Improved aerodynamics 3% - Direct injection and lean burn 11% - Variable valve actuation 6% - Downsizing engine capacity with - turbocharging or supercharging Interim analytical report , October 2007 12% “By adopting a small selection - Dual clutch transmission 4% of the most cost-effective - Stop–start 3% technologies, 30 per cent - Stop–start with regenerative efficiency savings could be braking 7% - Electric motor assist 7% achieved for the average new - Reduced mechanical friction vehicle, relative to today’s components 4% equivalent model.”18 Car energy efficiency

• Bioliquids Petroleum products for transport 2,400 ↓ • Energy efficiency of new cars 1,800 - “by adopting a small selection of the most cost-effective PJ/y 1,200 technologies” - 30% improvement 600 - £1,500 per vehicle (in 2007) 0 - 50% of all new cars 1990 2000 2010 2020 2030 £(1990) cost of measures 16,000 12,000 AM£/y 8,000 4,000 0 ↑ 1990 2000 2010 2020 203019 Developing scenario I

Trucks energy efficiency: • Aerodynamically shaped trailers • Aerodynamic fairings • Spray reduction mud flaps Ricardo report, March 2010 • Low rolling resistance tyres • Single wide tyres • Automatic tyre pressure adjustment • Vehicle platooning20 Truck energy efficiency

• Bioliquids Petroleum products for transport 2,400 ↓ • Energy efficiency of new cars 1,800 • Energy efficiency of new PJ/y 1,200 trucks - 44% improvement 600 - £16,300 per truck (in 2009) 0 - 50% of all new trucks 1990 2000 2010 2020 2030 £(1990) cost of measures 16,000 12,000 AM£/y 8,000 4,000 0 ↑ 1990 2000 2010 2020 203021 Developing scenario I

1999: Peugoet 106 electric with on-street charging point, opened by Kate Hoey MP 2004: 1kWp PV array on roof providing 2/3 of electricity for EV Prius hybrid (2000) Vegetable oil filling diesel VW camper22 Personal experience

23 "Review of low carbon technologies for heavy goods vehicles“ April 2010Cars trips and fuel use

24 Opel/Vauxhall Ampera, range-extended EV

• Bioliquids Petroleum products for transport 2,400 • Energy efficiency of new cars ↓ 1,800 • Energy efficiency of new PJ/y 1,200 trucks 600 • Plug-in hybrid/ ranged-extended EV 0 1990 2000 2010 2020 2030 - range 35km corresponding to 57% of usage £(1990) cost of measures - but presume plugged in for only 16,000 2/3 of potential electric range - £6,500 per vehicle (in 2007) 12,000 from The King Review AM£/y - 50% of new vehicles 8,000 4,000 ↑ 0 1990 2000 2010 2020 203025 Developing scenario I

26 Natural & bio Gas Vehicle Association (NGVA)

• Bioliquids Petroleum products for transport 2,400 • Energy efficiency of new cars 1,800 ↓ • Energy efficiency of new PJ/y 1,200 trucks 600 • Plug-in hybrid/ranged- extended electric vehicle 0 1990 2000 2010 2020 2030 • Compressed natural gas (CNG) on new cars £(1990) cost of measures 16,000 - £5,000 per vehicle (in 2003) - 50% of new vehicles 12,000 - convert 1,300 filling stations ↑ AM£/y 8,000 4,000 0 1990 2000 2010 2020 203027 Developing scenario I

• Increased gas use… → Total consumption of gas 4,000 3,000 ↑ “2050 Pathways Analysis” PJ/y 2,000 DECC 1,000 • Onshore wind: - Level 1: 11 GW 0 1990 2000 2010 2020 2030 - Level 2: 20 GW - Level 3: 31 GW Total consumption of gas • Offshore wind: 4,000 - Level 1: 8 GW 3,000 - Level 2: 46 GW PJ/y - Level 3: 68 GW 2,000 1,000 • …offset by wind turbines → 0 1990 2000 2010 2020 203028 Offset gas use by wind turbines

• Bioliquids Petroleum products for transport 2,400 • Energy efficiency of new cars 1,800 • Energy efficiency of new PJ/y 1,200 trucks 600 • Plug-in hybrid/ranged- extended electric vehicle 0 1990 2000 2010 2020 2030 - With extra 9 GW onshore • Compressed natural gas £(1990) cost of measures 16,000 (CNG) on new cars - With extra 27 GW offshore 12,000 ↑ AM£/y 8,000 4,000 0 1990 2000 2010 2020 203029 Developing scenario I

• Bioliquids Petroleum products for transport 2,400 • Energy efficiency of new cars ↓ 1,800 - 25% of new cars PJ/y 1,200 • Energy efficiency of new trucks 600 - 50% of new trucks 0 1990 2000 2010 2020 2030 • Plug-in hybrid/ranged- extended electric vehicle £(1990) cost of measures - 25% of new cars 16,000 - With extra 3.5 GW onshore 12,000 • Compressed natural gas AM£/y (CNG) on new cars 8,000 - 25% of new cars ↑ 4,000 - With extra 17 GW offshore 0 1990 2000 2010 2020 203030 Developing scenario II

• Cost compared to GDP: - 0.76% → Measures cost as proportion of GDP 0.02 0.015 0.01 • Does this low proportion mean the economy can 0.005 ↑ “afford” the investment? 0 • What side effects across the 1990 2000 2010 2020 2030 economy might result from systemic interaction?31 Cost of measures compared to GDP

GDPAnother part of the 4see model

33 Supply and Use Tables for deriving GDP

Output Expenditure ↓ ↓34 GDP from production by three larger economic sectors (2008)

GDP(output) GDP(expenditure) ↓ ↓ ↓35 GDP from production by three larger economic sectors (2008)

Sector dependency (intermediate consumption) ↓36 GDP from production by three larger economic sectors (2008)

Destination of final demand ↓37 GDP from production by three larger economic sectors (2008)

Investment maintains and grows assets ↓38 GDP from production by three larger economic sectors (2008)

Sector inputs: fuels, electricity, jobs ↓39 Inputs to the economy

One sector alone: service sector40 Service sector

Economic sector: stocks-and-flows, process flows41 Service sector stocks-and-flows and process flows

Measures increase investment proportion of GDP ↓42 GDP expenditure components over time

Side effects of measuresSystemic consequences suggested by the 4see model

44 Unemployment

Growth Growth of GDP per year 0.04 • Annual growth peaked at 4% in the past → 0.03 per y 0.02 • Scenario here has growth of about 1.8% → 0.01 0 1990 2000 2010 2020 2030 Unemployment Unemployment rate (%) 12 • Increased by 0.4 percentage points → 9 percent 6 ↑ • 150,000 more unemployed 3 • Results from differing jobs 0 intensity of goods and services 1990 2000 2010 2020 203045 Economic growth and unemployment

• Trade in fuel: derive price Crude oil price from actual trading costs 12 (from the “Pink Book”) → 9 FM£/PJ • Reference price to basket of 6 27 economies using REER 3 (Real Equivalent Exchange Rate) 0 1990 2000 2010 2020 2030 • Oil refineries Petroleum products price - historical constant capacity 12 - so constant demand for crude 9 - and constant output FM£/PJ 6 • Therefore, 3 - as less petroleum products are used, 0 - more petroleum products exported 1990 2000 2010 2020 203046 Trading price of fuels with respect to a basket of currencies

• Imports of fuel decreased Fuel net exports (higher level on chart of net 14,000 exports) → 0 • Cost reduction by M£6,000/y EM£/y -14,000 (at 1990 prices) -28,000 ↑ -42,000 1990 2000 2010 2020 2030 • Imports of goods (less fuel) Goods (less fuel) net exports increased (lower level on 0 chart of net exports) → -30,000 EM£/y • Cost increase of M£4,000/y -60,000 (at 1990 prices) -90,000 -120,000 ↓ 1990 2002 2014 202647 Changes in trade

• Effect on CO2 emissions compared to BAU (reference case) • Reduction by 40 MtCO2/y in Total CO2 emissions 2030 → 600 450 ↓ MtCO2/y 300 150 0 • Implementation of low- 1990 2000 2010 2020 2030 carbon measures for other parts of economy not considered in this scenario48 CO2 emissions

Final comments

Generation: Consumption: • Biomass electricity • Efficiency in workspace, warehouse and retail • Bioenergy boilers • Aviation efficiencies • Solar thermal hot water • Passiv haus new housing • PV (photovoltaics) • Double glazing • CCS (carbon capture and sequestration) • Loft insulation • CSP (concentrator solar • Cavity wall insulation power) electricity transmitted from North Africa • Solid wall insulation • Heat pumps • LED lighting50 Other measures in the 4see model

• GDP analysis blind to ownership within economy • If full cost of measures were put onto use of petroleum Measures cost per litre of fuel products then.. 0.4 • ..about 20p per litre (at current prices) → 0.3 £curr/litre 0.2 ↑ 0.1 0 1990 2000 2010 2020 203051 Possible payment system

Petroleum products for transport • 1,300 CNG refuelling 2,400 stations ↓ 1,800 • 3.5GW increase in onshore and 17GW in offshore wind PJ/y 1,200 600 • Unemployment up 150,000 0 1990 2000 2010 2020 2030 • Fuel imports down M£1,100/y (1990£) • Petroleum products 22% • Goods imports up M£600/y reduction in 2030: (1990£) - 2% from biofuels - 3% from efficiency of cars • CO2 emissions reduction - 4% from efficiency of trucks 40MtCO2/y - 3% from plug-in hybrid or range- extended EV • Cost 0.7% GDP as 20p/litre - 9% from CNG fuelled on fuel52 Scenario II

Observations from applying the 4see model to reduce petroleum products use by transportation • Main pet-prod users: cars, HGVs, LGVs, aviation • Note trends in vehicle ownership and driving behaviour • Apply a combination of technology and fuels • The 4see model can calculate marginal costs to the economy • A shift from final consumption (of GDP) to investment might increase unemployment • Comparing changes in value of imported fuel to imported goods could show a benefit • This scenario is a starting point for examing the system interactions and sensitivies of these issues53 Conclusions

www.driversofchange.com peakoiltaskforce.net Simon Roberts simon.roberts@arup.com

Supply Table55 Supply Table

Use Table56 Use Table

Factor incomes57 Factor incomes

Final demand58 Final demand

Peak Oil Futures

by APPGOPO on Nov 17, 2011

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Peak Oil Futures — Presentation Transcript