The Global Oil Consumption Reduction Programme

Mandatory 100mpg Fuel Economy

By William Tahil, B.A. (Cantab.) wtahil<AT>meridian-int-res.com

Somewhat over a year ago when I started looking at developing a coherent Global Strategy to meet the challenge of Peak Oil, most business people still did not even know what Peak Oil was. Since then, there has been an unseen revolution in global awareness as oil prices – and in particular prices at the US gasoline pump – hit record levels after Hurricane Katrina and have continued ever upwards. History will look back and mark Hurricane Katrina as the defining moment when the complacency over oil supply evaporated and reality sank in.

The facts about the Global Oil Situation are now covered in detail in many articles on the Internet. It can perhaps be summed up in this compelling graph from Exxon Mobil.

Simply put, the “Required New Production” to make up for the decline in existing production, let alone to meet ever increasing growth in demand from China, India and western SUVs, is not geologically available.

The potential growth in demand for oil that the World has not yet fulfilled can be grasped by considering this: the 1 billion people in the OECD each use 18 barrels of oil per year. The 5.2 billion people in the rest of the world each use 2.3 barrels of oil per year.

If they were to use as much oil as the OECD, Global Oil Consumption would rise from 85 million barrels a day today to over 300 million barrels a day. This is not going to come to pass. In reality, the world is already at the Peak Oil Plateau now and by 2010 we will definitely be starting to notice the decline in production. Already, poorer countries are tightening their belts with:

· Blackouts in the diesel powered electricity grid in Central America

· The Philippines putting civil servants on a four day week

· South Korea banning government employees from driving to work one day per week

· Petrol shortages in South Africa

Supply has become so tight that small events now cause big ripples in the oil market. It will not be long before, as Kjell Aleklett, co-founder of the ASPO puts it, the Oil Tsunami arrives.

So there is really no time to lose to start adopting intelligent measures to reduce global oil consumption. The most immediate place that most of us notice oil is when we fill up our cars – but if you look around you, you will realise that the very fabric of modern life depends on oil. Everything made of plastic in the room you are sitting in is produced from oil. The clothes on your back. Rubber. Pharmaceuticals and drugs. Household chemicals. Washing up liquid, laundry detergent. Insecticides and paint. Herbicides. Cosmetics. Advanced structural composites. The range is immense and life without these materials would revert back to the nineteenth century. Can we imagine having to use only wood, metal, leather and natural fabrics to make everything? We would be severely constrained.

Therefore the need to reduce oil consumption is driven by two imperatives – to maintain the transportation infrastructure on which we depend and to maintain the chemical feedstock for the materials on which we depend.

· Oil is too valuable as a chemical to waste in combustion.

As the global supply of oil falls inexorably from now on, we must therefore reduce our consumption in step. The single biggest user of oil is Road Transport. Road Fuel accounts for 45% of total global oil demand, while other transport modes such as shipping, air and rail use only a quarter as much. While oil cannot easily be replaced in other transport modes – or in the non-transport uses of oil - other forms of propulsion energy are technically and economically feasible – and available – for road transport.

· In 1995, Transportation used 56% of the World's Oil or 40 Mb/d.

· Of that, nearly 80% is used by Road Transport, i.e. 45% of the World's Oil is used for Road Fuel

The next question is – where can the single greatest Road Fuel savings be made? Light Duty Vehicles (passenger cars etc.) in the USA use over 9 million barrels of oil per day – a quarter of the World's Road Fuel and over 10% of the world's daily oil. These US Light Vehicles have an abominable average Fuel Economy of less than 21 miles per US gallon. This is worse than the Model T Ford.

US Light Vehicles each consume more than twice as much fuel per year as European vehicles.

The single most effective measure to reduce global oil consumption is therefore simple to deduce. All new light motor vehicles must be required to have a minimum fuel economy of 100 miles per gallon. With the way fuel prices are going, consumers will demand this too. The manufacturers that can achieve this will sweep the market. Those that do not will fall into oblivion.

How can this be achieved? The only feasible solution in the timescale available is with Electric Vehicles (EVs) i.e.:

· Power Assist Hybrid Electric Vehicles like the existing Toyota Prius (HEV0)

· Plug In Hybrids (PHEVs)

· Pure Battery only Electric Vehicles (BEVs)

The Toyota Prius achieves between 50 and 60mpg fuel economy. This is about half way to the goal. Hybrid concept cars from the Japanese manufacturers (Honda IMAS, Daihatsu UFE II) with lightweight bodies have demonstrated 120 – 140 mpg. So standard hybrid technology can achieve the fuel economy we need today. Reducing vehicle weight is the key.

Daihatsu UFE II: 60km/l or 140miles per USG

The PHEV is an enhancement to the hybrid cars now experiencing rapid sales growth in the USA. It has a larger battery which can be recharged at night for only a few pence. The battery gives 20 – 30 miles all electric range, which will allow most people to commute to work and back without using any petrol at all, or very little. 50% of US drivers travel less than 20 miles per day. The driver still has the petrol engine available for longer trips if required. Third party conversions of the Toyota Prius are now demonstrating 100mpg overall fuel economy.

Pure Electric Battery cars with a 100 mile plus range are more than feasible on all counts (if they use the right battery, which are available) and could be used as second cars or urban vehicles. Under the Zero Emissions Vehicle Mandate established in California in 1990, Battery Vehicles should have reached 10% of Californian car sales in 2003 and California represents 11% of the US car market. Five other New England states also intended to adopt these Californian rules. If the rules had not been undermined by the car manufacturers, there would be a minimum of 800,000 BEVs on California's roads today – and the same proportion in the North East USA. Over 180,000 BEVs should have been sold in California last year – instead, Detroit recalled and crushed the minimal 3,000 BEVs they had grudgingly made.

Total US Hybrid sales last year were just 200,000 vehicles.

Imagine the impetus and development there would now be in Electric Vehicles and Solar Power if California had stuck to its guns. We would be well on the way to overcoming Peak Oil. History will judge Detroit as criminally delinquent for their destruction of the BEV. It ranks as a crime against humanity.

As for hydrogen, many people have quipped “hydrogen is the fuel of the future – and it always will be”. Without a radical breakthrough or completely different approach to producing hydrogen, this is true. Today, hydrogen can only be produced from Natural Gas or by electrolysing water. The first still uses a fossil fuel which is also about to enter steep decline; the second is very energy intensive and a waste of electricity. It is far, far more efficient to use electricity to recharge batteries in an EV directly, rather than to use it to electrolyse water, to then compress, store and transport highly dangerous hydrogen for use in fuel cell cars. The best fuel cell cars today have a range of less than 200 miles and cost $1 million each. In June 2005 Honda's Fuel Cell Project Director said: “It may take another 10 years from now to get the cost of Fuel Cell cars to $92,000”. This is not a mass market proposition.

Biofuels such as ethanol and biodiesel cannot possibly replace road fuel due to the vast amounts of land required and the energy inputs to grow the crops. It would make more sense to use biofuels for aviation, marine and rail, where electric propulsion is not feasible and to use electricity or hybrids for road transport. As BEVs, Hybrids and PHEVs improve fuel economy, then biofuels for road transport can make a meaningful contribution. Therefore expansion in biofuel production should certainly be prioritised but in an environmentally sustainable way and should be focused on the tropical countries where higher yields can be obtained without fertiliser inputs.

The urgency of mandating minimum 100mpg fuel economy cannot be overstated. It is the only civilised intelligent response. If the 60 million Light Vehicles sold in the world each year were mandated to have a fuel economy of 100mpg, the following scenario would result:

This measure alone would save just enough oil each year to keep Global Oil Consumption within the declining Available Supply (assuming no further additions to fossil road fuel demand). This will require putting the global automobile manufacturers on a “war footing” to convert their production to maximum fuel efficiency vehicles immediately. What is the alternative?

In parallel with this, there are significant issues to be addressed with Electricity Production.

In most of the world, between 60% and 80% of electricity generation comes from Thermal Power Stations – Oil, Gas and Coal. While most of the focus has been on Peak Oil, Peak Natural Gas will also soon be upon us. 40% of UK electricity generation comes from gas; 15% depends on gas in the USA but this has doubled since the late 1980s and more gas power stations are still being built. Italy is very badly affected with nearly 80% of electricity coming from Oil fired power stations: they too have been rapidly building gas fired stations. Japan relies on imported coal and gas for 62% of its electricity.

July and August are the lowest months for natural gas production, due to low domestic heating demand; however, the UK's gas production in August 2005 was 25% lower than August 2004 – the lowest since UK gas production peaked in 2000. The UK has just shifted from being a net exporter to a net importer of gas. This winter saw record increases in UK natural gas prices and disruptions in the supply from Russia to Europe. The writing is on the wall.

Excess US Natural Gas Production Capacity ended in 2000. Since then the price of gas has increased from an average of $2.18/MMBTU during the Nineties to over $12 this winter (Source: Presentation by Peter Dea to the Denver World Oil Forum, 11/11/05). According to the same presentation, since January 2003 the number of gas drilling rigs in the USA had increased by 63% - the result was still a 2% decline in gas production.

With existing gas wells in steep decline, Dea goes on to say that by 2012, 50% of current US domestic gas demand will have to come from not yet discovered gas fields (or imports).

This imminent steep decline in the availability of Natural Gas will bring a sharp halt to the construction of gas fired power stations and put pressure on electricity production. The UK is already experiencing significant Natural Gas shortages, leading to the cessation of ammonia production and blackout threats. Many chemical facilities have left the USA over the last few years due to high Natural Gas prices. They will increase gas consumption in the producing regions, reducing the export surplus.

Another serious problem is the rapidly ageing scientific and engineering workforce of the developed nations. A retirement crunch is about to hit the USA.

A recent study by the Hay Group found that over the next four years a large number of mission-critical employees in the utilities sector will retire: 40 percent of senior electrical engineers and 43 percent of shift supervisors will be eligible for retirement by 2009. “The likely retirees are in key roles including management, senior engineers, operations, nuclear operators, gas transmission specialists, and control supervisors. The Hay Group Utilities study found that on average these employees are older than their counterparts in other industries and represent approximately 50% to 60% of the industry's knowledge assets”. The study also says that last year, US universities produced only 10 power engineers per state, compared to 2000 per year per state in the mid 1980s. 500 power engineering graduates for the entire United States.

The article goes on: "The electric and gas industries could easily collapse if they don't put a plan in place for staffing, retention, recruitment, and training," said Mike Brown, Senior Consultant and Utilities Sector Leader for Hay Group. "We need to seriously question if we will be able to keep the lights on in the next ten years."

More than two-thirds of utility companies apparently have no succession plan for supervisors and 44 percent have no plan for vice presidents.

If this study is correct, the shortage of engineers in the electricity and gas utilities in the USA is about to reach crisis proportions – utilities are warning they may not be able to maintain generating capacity for this reason alone, let alone gas shortages.

What is the answer to this double crisis?

The immediate priority is Electricity Conservation. Save It!

Analysis by the American Council for an Energy Efficient Economy (ACEEE) shows that a conservative 24% of existing US electricity consumption could be eliminated by straightforward energy saving and conservation measures. This is economic at current electricity prices. As the price rises, it becomes cost justifiable to adopt further energy conservation measures. 33% of current US electricity consumption could be saved in total. In 2001 alone, California reduced its electricity consumption by 6.7% as a result of the Governor's incentives to avert threatened power shortages.

24% of current US electricity consumption could power the entire US Light Vehicle fleet – it it was converted to pure battery electric propulsion – for a third more miles than are driven in the US today.

In other words – if the USA saves 18% of its electricity consumption – it could use it to power all its cars on electricity for no petrol or gasoline at all. 9.1 million barrels a day, 10% of World Oil Consumption, saved. The UK is similar – 15% of its electricity consumption could power the entire road vehicle fleet – including trucks.

Electric Vehicles are simply far, far more energy efficient than Internal Combustion Vehicles. An EV is about 80% efficient. An ICV is at best 15% efficient at turning the energy in the petrol tank into drive at the wheels.

Along with electricity conservation, a parallel massive expansion in renewable electricity production – wind, solar, solar thermal, wave power must be prioritised. One wind farm the size of Saudi Arabia could power the entire world. Solar energy could power the world 1000 times over. Ageing engineers will have to be asked to stay on to train up replacements and education programmes put in place to re-invigorate scientific education and transfer skills and knowledge to the younger generation. It has been pointed out that if a Wind Farm is costed on the basis of its electricity replacing petrol, the economic case is overwhelming.

Conclusion

We require a 4 Point Strategy to Reduce Global Oil Consumption.

· Mandate 100mpg minimum fuel economy for new Light Vehicles and an equivalent level for Heavy Trucks (20mpg).

· Mandate and incentivise wholesale adoption of electricity conservation measures, with a goal of saving 5% of electric consumption per year.

· Set challenging targets for wholesale installation of renewable electric power generation and ensure they are achieved with whatever mix of incentives and mandatory instruments is required.

· Instigate the renewal of scientific, technical and engineering education and apprenticeships to renew the technical workforce base of the western world and ensure continuity from the current pool of expertise to a new generation.

In short – the active participation, co-operation and contribution of every member of society is required as if we were at war to meet the greatest collective challenge humanity has faced in recorded history. That contribution can only be harnessed if people are informed of the truth immediately. In a way, it is a war – a war on the last 30 years of Ignorance, Stupidity, Myopia, Incompetence, Wilful Selfishness and Dishonesty that has produced this unholy convergence of crises.

One may well ask – how has the human race let itself get into this fix?

To quote an important dictum of Albert Einstein's – the solutions to our problems cannot be generated by the same thinking that created them.

That is why those of us who are New Thinkers – who have direct experience of the problems and who want to solve the world's problems, not maintain the existing sclerotic power structures – must come together in a network or dare I say it – a Coalition of the Willing - to create that Change.

The Global Oil Consumption Reduction Programme will lead to a Society and Humanity more in harmony with itself and this planet which is our life support system. If we look in our hearts, that is what we all want, isn't it?