JKwinningoilendgamepreview
 

JKwinningoilendgamepreview

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This is a talk I gave at the end of my first visiting professorship at Stanford in 2004. It gives a preview of Rocky Mountain Institute's Winning the Oil Endgame study, which was released in ...

This is a talk I gave at the end of my first visiting professorship at Stanford in 2004. It gives a preview of Rocky Mountain Institute's Winning the Oil Endgame study, which was released in September 2004. http://www.oilendgame.com

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JKwinningoilendgamepreview JKwinningoilendgamepreview Presentation Transcript

  • Confidential preview Jonathan Koomey of work in progress, Stanford University strictly embargoed JGKoomey@stanford.edu to release on 20 Advisory Board Meeting, Mineral Acquisition September 2004 Partners, Inc. 21 July 2004 Copyright © 2004 Rocky Mountain Institute. All rights reserved. Hypercar® is a registered trademark of Hypercar, Inc.
  • Introduction ◊  “Winning the oil endgame” report to be released in September 2004 ◊  Audience is business and military leaders ◊  Focus on 4 potential sources of oil displacement   Efficiency   Substitution of natural gas   Substitution of biofuels   Substitution of hydrogen
  • The U.S. oil problem   Americans use 26%, produce 9%, and own 2-3% of the world’s oil. So we can’t drill our way out   Fungible in world market; issue is use, not imports   The next barrel is cheaper abroad than at home   Security is an issue at 70% import dependence, with Saudi Arabia as the only swing producer   Only three solutions in a market economy   Protectionism   Trade   Substitution   Three basic approaches to oil strategy   Ostrich   Drill and kill   Innovate and revitalize – cheaper, safer, surer; our focus
  • Growth in U.S. oil use dominated by light trucks & heavy vehicles Transportation Petroleum Use by Mode (1970-2025) 22 20 Actual Projected Millions of Barrels per Day 18 16 Air 14 Domestic ehi cles 12 Production Marine Hea vy V 10 8 6 Light Trucks Off-road Rail 4 Cars 2 0 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 Year Source: Transportation Energy Data Book: Edition 23, DOE/ORNL-6970, October 2003, and EIA Annual Energy Outlook 2004, January 2004 1
  • Three illustrative scenarios More innovation→ technology→ More business leadership → Conventional State of the Art Wisdom (CW) (SOA) policy↓ [State of the Gridlock as Usual DRIFT Shelf] Coherent LET’S GET MOBILIZATION Engagement STARTED
  • The future is very flexible U.S. oil consumption and net oil imports 1950–2025 30 Total Petroleum Use (AEO) Net Imports (AEO) Total Petroleum Use (CW) Net Imports (CW) Total Petroleum Use (SOA) Net Imports (SOA) 25 preliminary data; transition dynamics schematic; only efficiency 20 million barrels/day shown, not alt. supply 15 10 5 0 1950 1960 1970 1980 1990 alt. supply exceeds this 2000 2010 { 2020 Year
  • To Win: Four Issues to Resolve   Is there cost effective technology on the horizon to radically improve end use efficiency?   What will it take for business to adopt these innovations?   What is the most effective role of government to accelerate change?   What will it cost, and where do we get the money?
  • Ultralight-but-safe light vehicles open a new and roughly free design space 1990–2004 comparison of absolute mpg vs. incremental costs for new U.S. light vehicles 5000 4500 NRC High Price increase (MSRP 2000$) 2001 Light Trucks 2004 Prius 4000 (2004 actual to ~2007 goal) NRC Low DeCicco & Ross 1995 Full Avg 3500 2001 Light Cars NRC High Trucks 2001 Cars 2004 RMI State of 3000 the Art average light 2004 RMI truck Conventional 2002 ULSAB-AVC NRC Low Wisdom average hybrid (rough RMI 2500 2001 Cars light truck estimate of initial 2000 Revolution w/AWD and more mature hybrid powertrain cost) 2000 2004 RMI State of the Art DeCicco, An, & Ross average car 1500 2001 Mod & Adv Cars 2004 RMI Conventional 1000 Wisdom average car 1992 VX subcompact All vehicles shown in green are adjusted to EIA's 2025 acceleration capability for that 500 class of vehicle (treating Revolution as a 2000 Revolution 2002 ULSAB-AVC small SUV). RMI's 2004 average vehicles are w/AWD ICE for EIA's 2025 sales mix. 0 20 30 40 50 60 70 80 90 Absolute miles per U.S. gallon (EPA adjusted, combined city/highway)
  • Critical Insight: Light weight before aerodynamics and powertrain creates 68% of the light-vehicle fuel savings Reduce mass first, because 2/3 to 3/4 of fuel use is mass- related, and energy saved at the wheels saves ~7–8× in gasoline Yet other studies ignore much or all of effect from mass 956 461 reduction, focusing instead just on hybridization! 105 111 279 Baseline Vehicle 51% Mass Reduced Power Hybridization Gallons Per Year (2004 Audi AllRoad Reduction * From Better Used by Lightweight 2.7T) Gal/Y Integration, Aero, Hybrid Vehicles Tires, Powertrain
  • Carbon fiber is strong but light Fig. 14. The strength of ultralight carbon-fiber autobodies was illustrated in November 2003 in Capetown when a Mercedes SLR McLaren was rammed by a VW Golf running a red light. The SLR—a 1,768-kg hand-layup, 626-hp, 207-mph, 16-mpg, street-licensed Formula One supercar priced at a half-million dollars—sustained only minor damage despite being hit on the driver’s-side door (the photograph shows a carbon side panel popped off). The unfortunate steel Golf, roughly one-fourth lighter than the SLR, had to be towed.
  • Modern materials = lighter, safer, & bigger vehicles — AND less fuel-burn Carbon composites absorb ~12× more energy than steel (2× for Al) per kg Energy-absorption ability, kJ/kg, best shape Lighter Materials: 250 = Safer   Better head-on energy absorption:   Light CC car at ~1/2 mass of 40 steel car 20   CC-on-steel 3–5× safer than same-mass steel-on-steel* Steel Aluminum Carbon/ Thermoplastic = More efficient Carbon composites (CC) absorb ~6× more   Less mass, less fuel energy than steel per car* Normalized energy-absorption for m = 1/2M and = Bigger absorption by M of steel set to 100 kJ/car   More volume even at reduced mass   Size is protective, mass is hostile 638   So big-but-light provides protection without hostility 100   U.S. policy shift toward penalizing downweighting and rewarding upweighting (except for the heaviest M, Steel M, Carbon/ vehicles) is technically unsound and will make U.S. cars unsellable abroad thermoplastic * Without momentum-change correction, factor would be ~638/100, but momentum difference reduces this
  • Heavy trucks use 19% of all US oil, same technologies could save 65% at 33¢/gal diesel $2.50 Cost of Saved Energy (2000$/Gal Diesel) End: $2.00 State of the Art Average 12.5 mpg, CSE = $0.33/gal then ~16 mpg- $1.50 EIA 2025 Post Tax Diesel Price (1.34/gal) equivalent w/further EIA 2025 Pre Tax Diesel Price (1.04/gal) improve- $1.00 Conventional Wisdom ments Average CSE = $0.13/gal $0.50 $0.00 -$0.50 0.00 0.20 0.40 0.60 0.80 1.00 1.20 Diesel Fuel Saved (Mbbl/d) in 2025 Start: 6.2 mpg (From EIA Reference Case by Fuel Adoption) Main sources: MIT, ANL, industry tests
  • The future is already here: today’s concept vehicle approaches will be tomorrow’s mainstream … Top-left, clockwise: Four carbon-fiber concept cars   1991 GM 4-seat Ultralite (635 kg, Cd 0.192, 0– 60 mph in 7.3 s, 84 mpg [2.8 L/100 km], gasoline ICE, not hybrid   2002 Opel 2-seat Eco-Speedster Diesel hybrid (660 kg, Cd 0.20, max. 155 mph [250 km/h], 94 mpg [2.5 L/100 km], below Euro 4 emissions.   2004 Toyota Alessandro Volta, 3 seats abreast,   CARS by-wire, 408-hp hybrid, 32 mpg, 0–60 mph in <4 s, top speed governed to 155 mph.   2000 Hypercar Revolution show car of a midsize SUV virtual design (857 kg, 5 seats, by- wire, Cd 0.26, 0–60 mph in 8.2 s, 114 mpg- equiv. [2.06 L/100 km-equiv.) w/ direct-hydrogen fuel cell, ~68 mpg [3.5 L/100 km] with gasoline hybrid). Top-left, clockwise: Four high-efficiency Cl. 8 trucks   TRUCKS   ~7.5-mpg Kenworth T2000.   PACCAR concept tractor. Photo Copyright 2004 courtesy PACCAR Inc.   Engineer’s rendering of a lightweight, highly aerodynamic future tractor   11.25-mpg tanker truck designed by Luigi Colani, from http://www.spitzer-silo.com/ colani/index.htm
  • It pays to be bold: although CW efficiency technologies can save 26% of oil use cheaply ($8/bbl), State of the Art eff. technologies can save ≥50% of 2025 oil for only~$12/bbl $50 Conventional Wisdom (Avg. CSE = $8/bbl) Cost of Saved Energy (2000 $/bbl) State of the Art $30 (Avg. CSE = $12/bbl) EIA 2025 Crude Oil Price $10 0 5 10 15 -$10 25% of 2025 50% of 2025 Baseline Use Baseline Use -$30 -$50 -$70 Oil Saved by Full Deployment in 2025 (Mbbl/d)  Results hypothetically assuming full deployment in 2025
  • New biofuels technologies could provide 3.7 Mbbl/d cheaper than oil without subsidies Biofuels Substitution Supply Curve (Net Mbbl/d) $90 $80 2000 $/bbl at Biofuel Refinery Gate CW Net Mbbl/d SOA Net Mbbl/d $70 $60 $50 $40 $30 $26/bbl $20 $10 $0 0.00 1.00 2.00 3.00 4.00 5.00 Biofuel Supply (Net Mbbl/d) + 1 Mbbl/d in biomaterials
  • 2025 demand-supply integration Crude Oil Equivalent Supply & Demand, 2025 $30.00 25.49 8.52 Demand on Supply (Mbbl/d) $25.00 $20.00 16.97 4.71 $15.00 1.28 8.62 $10.00 $5.00 2.36 $0.00 EIA 2025 SOA & Net 2025 Biofuels Natural Gas Domestic Oil Imports Demand Coherent Demand Mobilization “Imports” includes oil, product, or biofuel imports H2 just from leftover saved US gas exceeds the US 2025 oil output shown.
  • What will it take for business to adopt these innovations?   Consumer demand   Consistent and coherent government policies   Capital   Management leadership
  • Key issues that must be solved to accelerate technology adoption   Create an advanced-materials industrial cluster   Dramatically accelerate capital stock turnover   Shift customers’ choice to superefficient vehicles while enhancing customers’ freedom of choice and increasing consumer & producer surpluses   Capitalize retooling/new plants to make efficient vehicles (hard to do with OEM balance sheets)   For all vehicles, marginal investment ~$90b   For light vehicles, new technologies can lower investment risk ›  Capital intensity ÷2–4, plant scale ÷2–6
  • 5 ways Government can help 1) Stimulate Demand   Feebates   Military and Govt. fleet procurement   Create new markets through leasing to low income 2) Build vibrant 21st Century industries by sharing research and development risk   Military R&D should finance advanced materials 3) Lower Risk of Investment for new manufacturing plants through loan guarantees and/or tax credits 4) Support Development of domestic energy supply infrastructure 5) Remove barriers to efficiency through coherent policies and elimination of perverse incentives
  • How the strategy could unfold 35 Civil Society 30 Oil Companies 25 New Sales New Sales Reach 15% Reach 50% Mbbl/d 20 Automotive Manufacturers 15 Feebates Platinum RFS Retooling Policy Enacted Carrot Enacted Loan US 10 Awarded Guarantees Oil Demand Military & 5 Government 0 2005 2010 2015 2020 2025
  • Conclusions ◊  Large reservoirs of potential oil savings appear to be cost effective from society’s perspective ◊  The transition will likely be led by business, but some policy changes are also needed ◊  If we don’t change our direction, we’ll end up where we’re headed!
  • “We are the people we have been waiting for” Coming 20 September 2004 at www.oilendgame.org