Kyle Datta Senior Director Rocky Mountain Institute Can India Win The Oil End Game? June 29 2006...
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Transcript of Kyle Datta Senior Director Rocky Mountain Institute Can India Win The Oil End Game? June 29 2006...
Kyle Datta
Senior Director
Rocky Mountain Institute
www.rmi.org
Can India Win The Oil End Game?
June 29 2006
Copyright © 2006 Rocky Mountain Institute. All rights reserved.
The United States can get completely off oil and revitalize its economy—led by business for profit
There are some skeptics….
Getting off oil, you say?
Winning the Game: restoring competitive-ness and eliminating oil dependence
National competitiveness and national security at risk
Why should the U.S. care?
Japan, European Union, China will eat Detroit’s jobs for lunch
Energy insecurity, price volatility, and climate concerns
Save net US$70 billion/y by 2025, create 1 million net jobs
How do we win?
1. Efficient end-use can save half the oil at US$12 a barrel
◊ Biofuels substitute for another fourth
◊ Saved gas can displace the rest, preferably via hydrogen
A profitable U.S. transition beyond oil within 20 years
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5
10
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35
1950 1960 1970 1980 1990 2000 2010 2020 2030
Pe
tro
leu
m p
rod
uct
eq
uiv
ale
nt
co
nsu
mp
tio
n
(mil
lio
n b
arr
els
/day)
government projection (extrapolated after 2025)
end-use efficiency @ $12/bbl
plus supply substitution @<$26/bbl
plus optional hydrogen from leftover savednatural gas
U.S. oil use and imports, 1950–2035
Petroleum use
Petroleum imports
)
plus optional hydrogen from leftover saved natural gas and/or renewables (illustrating 10% substitution; 100%+ is feasible)
Globally, the U.S., China, India and Asia drive 58% of incremental demand for oil
25-Year Growth in Oil Demand: 44 Mbbl/d (1.9% p.a)2001 to 2025: From 77 to 121 Mbbl/d
U.S.8.7
China7.8
India3.2
ROW8.2
Asia5.8
Brazil& FSO
5.2
Industrial5.2 58%
Source: World Energy Outlook, IEA, 2004.
India dependence on imported crude oil will grow from 75% to 88%, raising security concerns
I ndia's Oil Consumption
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Year
mb
pd
I mport Domestic
Source: World Energy Outlook, IEA, 2004.
Transport fuel will be primary driver for future demand for oil
Crude Oil Demand
49%
12%
12%
12%
15%
transport Industrial fuel LPG+kerosene Naptha Others
Transport Fuel Demand
30%
10%
18%8%
34%
HCV+LCV Cars/ PV 2W + 3W Aviation Others*
Source: World Energy Outlook, IEA, 2004. *: Defense, Railways, Shipping, Tractors etc.
India’s auto growth is driven by increased affluence and urbanization
Double digit growth in near term
8% CAGR for next 10 years
Two wheelers
GDP growth of 8% yoy
Strong rural demand driven by agriculture sector
Demographics- Youth power
Double digit growth in near term
6-8% CAGR for next 10 years
Cars/MUV
More disposable income; smaller families
Rationalization of tariffs, presence of global players
Easy financing
6-8% growth in short term
Road freight competing with railways
LCV/HCV
Urbanization- growth in towns and cities
Infrastructure debottleneck- Golden Quadrilateral
Safety- Ban on overloading
Number of vehicles on road will quadruple by 2025
Vehicles by Segment
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Two-wheelers Cars/MUV LCV/HCV
Mn
Ve
hic
les
2005 2015 2025
Unlike the US, heavy vehicles and motorcycles account for most of the growth in oil demand
Vehicles by Segment
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
Two-wheelers Cars/MUV LCV/HCV
Mil
lio
n l
t/yr
2005 2015 2025
India to become the second largest auto market by 2035
Young demographics
Ageing car population
High Economic growth
Price sensitive
Technology savvy
Small and medium cars are the norm (hatchbacks)
Two-wheelers market (7:1)
Strong domestic industry
Govt. focus on developing public transport
Ease of bank financing
Technology transfer and strong supplier industry
Cross subsidization of domestic fuels (problem of adulteration)
Aspire to be globally competitive
Customers Collaborators CompetitionContext Regulation
CARS: save 69% at 57¢/gal
BLDGS/IND: big, cheap savings; often lower capex
Integrating low mass & drag with advanced propulsion saves ~2/3 of demand very cheaply
QuickTime™ and aTIFF (Uncompressed) decompressor
are needed to see this picture.
TRUCKS: save 65% @ 25¢/gal
TWO-WHEELERS: save 20%
Technology is improving faster for efficient end-use than for energy supply
Where does a car’s gasoline go?
6% accelerates the car, <1% moves the driver
2/3 to 3/4 of the fuel use is weight-related
Each unit of energy saved at the wheels saves ~7–8 units of gasoline in the tank (or ~3–4 with a hybrid)
So first make the car much lighter!
0% 20% 40% 60% 80% 100%Braking resistance Rolling resistance Aerodynamic dragEngine loss Idling loss Drivetrain lossAccessory loss
87% of the fuel energy is wasted
13% tractive load
Baseline Vehicle (2004 Audi
AllRoad 2.7T)
51% Mass Reduction *
Reduced Power From Better
integration, Aero, Tires, Powertrain
Hybridization Gallons Per Year used by
Lightweight Hybrid Vehicle
Critical insight: light weight before aerodynamics and powertrain creates
68% of a typical SUV’s fuel savings
956 461
105
111279
Issues: crashworthiness and manufacturing cost
US gallons per year
Three technology paths: aluminum, light steels, carbon composites (the
strongest & lightest)
◊ Opportunity: Advanced Materials Lightweight Steel Alloys
› Ultra-Light Steel Auto Body (ULSAB):
– Mass savings of 25% over the benchmark at no cost penalty
– 80% improvement in torsional rigidity
– 52% improvement in bending rigidity
– 58% improvement in first body mode
– Meets all mandated crash requirements Aluminum Titanium Alloys: 40% lighter, 3–4x cost Carbon Composites: 50% lighter, absorbs 6–12x crash energy per lb.
vs. steel; cost and manufacturing speed improving Advanced materials could integrate into existing processes
› BMW applying carbon composites to roofs and hoods 60% of the high-performance steel materials in automotive use today
were not available 10 years agoSource: Fiberforge, Winning the Oil Endgame
A diesel hybrid has the same Well-to-Wheels Efficiency as a FCV
88
88
5838
50
30
16
*1
*2
*2
Source: Toyota Motor Corporation, 2003; US EPA efficiency labels and US fuel systems
Heavy trucks: save 25% free, 65% @ 25¢/gallon
Better aero & tires, better engines etc., less weight
6.2 to 11.8 mpg with 60% IRR by improving aero drag, tires, engines, mass, driveline, acces. loads & APU; then ~16 mpg via operational improve-ments; being built 2005
PACCAR high-eff. concept truck
Colani/Spitzer tanker (Europe), reportedly 11.25 mpg
Big haulers’ margins double from 3% to 6–7%…so create demand pull — currently underway, led by major customers
Two recent concept trucks
Basic physics: Overcoming aerodynamic resistance consumes the majority of truck fuel
on a typical highway
◊Aerodynamics = ~2/3 of tractive load on highway
◊To lead:Need to pay attention to COMBINATION of (tractor + trailer)
ETR = Inertia + Rolling resistance + Air resistance
* Approximate valuesSource: Technology Roadmap for the 21st Century Truck Program (DOE 2000)
Power Used to Overcome Resistance
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100
150
200
250
45 50 55 60 65
Speed (mph)
Hors
ep
ow
er
Rolling resistance Aerodynamic drag
*
* Assuming driver utilizes engine at 95% of max efficiency due to driving habits (it’s probably much less in reality)Source: Technology Roadmap for the 21st Century Truck Program (DOE 2000), RMI analysis
Where a long-haul Class 8 truck’s diesel fuel goes
Focus: End of Chain [Fuel] [Engine] [Drivetrain] [Tractive Loads]
0.02
1.00 0.070.93 0.56
0.02 0.030.30 0.19
0.11 0.050.06
• ~38% efficient today: Engine & drivetrain
• Represents >100 years’ R&D: Engine efficiency is more difficult to improve further than is end-use efficiency
End-use: Consider what would happen if we halved aerodynamic drag and mass
Total PrimaryEnergy
IdlingLosses
Used in Hauling
EngineLosses
Driver Losses*
AuxiliaryLoads
DrivetrainLosses
Reachesthe Wheels
Aero-Dynamic
Drag RollingResistance
Moves thePlatform
Hauls the Freight
0.01
0.47 0.46 0.28
0.01 0.02 0.14 0.09
0.06 0.02 0.04
Cut aerodynamic drag and rolling resistance by 50%
Focus on fuel end-use: Reducing air drag & roll-ing resistance by 50%, and idling by 80%, saves ~50% of
fuel—without engine improvements
• Eliminate >50% of fuel use• No change in engine &
drivetrain: same 38% efficiency
0.01
* Assume no change in driver behavior from previous slideSource: Technology Roadmap for the 21st Century Truck Program (DOE 2000), RMI analysis
Total PrimaryEnergy
IdlingLosses
Used in Hauling
EngineLosses
Driver Losses*
AuxiliaryLoads
DrivetrainLosses
Reachesthe Wheels
Aero-Dynamic
Drag RollingResistance
Moves thePlatform
Hauls the Freight
Efficient vehicles can save 1.4 mbpd by 2025
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2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
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200,000,000
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CW SOA Vehicle Stock
Mil
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n B
arr
els
Pe
r D
ay
Millio
n V
eh
icle
s
End-UseEnd-UseEnd-UseEnd-Use
Fuel Cell VehiclesFuel Cell Vehicles
Gasoline VehiclesGasoline Vehicles
Diesel VehiclesDiesel
Vehicles
Biofuels Technologies are maturing
FeedstocksFeedstocksFeedstocksFeedstocks
Consumer Residues
Consumer Residues
Agricultural Residues
Agricultural Residues
Fiber Residues
Fiber Residues
Cellulosic Peren. Crops
Cellulosic Peren. Crops
Energy Crops
Energy Crops
Oil CropsOil
Crops
Biochemical Conv.Biochemical Conv.
ConversionConversionConversionConversion
Thermochemical Conv.Thermochemical Conv.
AnaerobicDigestionAnaerobicDigestion
Fermentation & DistillationFermentation & Distillation
Microbial DigestionMicrobial Digestion
ExtractionExtraction
GasificationGasification
Pyrolysis Liquif & HTU
Pyrolysis Liquif & HTU
Syn
gas
Syn
gas
FuelFuelFuelFuel
HydrogenHydrogen
MethanolMethanol
Bio-Oil (Fischer-Tropsch)
Bio-Oil (Fischer-Tropsch)
BiogasBiogas
EthanolEthanol
Biodiesel (Veg. Oil Methyl
Esters)
Biodiesel (Veg. Oil Methyl
Esters)
Cellulosic ethanol is on the horizon
Process Description Pilot plants
Fermentation Conventional ethanol from sugars (corn, sugarcane) are marginally energy positive. 100-110 gal/ton
2% of U.S. gasoline demand currently comes from ethanol made this way from 7% of corn
Acid hydrolysis Strong acids are used to break down cellulose into sugars. Dilute and concentrated acid processes exist; dilute process requires high temperature and pressure. 70-80 gal/ton
Commercial plants in operation. Used mainly in niche markets for waste disposal.
Thermal gasification High temperatures convert biomass into synthesis gas of carbon oxides and hydrogen. In the presence of a catalyst, these gases are converted to ethanol. 70=>140 gal/ton
Arkansas and Colorado
Enzymatic reduction Enzymes turn woody biomass into sugars. Novozymes recently announced a 30-fold reduction in enzyme cost. 90=>120 gal/ton
Ontario
su
gar
cellu
lose
Jatropha has potential to rival Palm Oil as biodiesel feedstock
High yield, 7.5 tonnes seed/hectare = 2.5 tonnes oil converts to 2,750 l biodiesel
Drought tolerant, perennial, grows on marginal lands
Multiple products (oil, seed cake)
Market acceleration needed to win the game
Pubic Private Consortium to for RD&D advanced composite material manufacturing
Feebates to drive innovation in industry based on customer demand
Technology collaboration and making India as global manufacturing hub for small fuel efficient cars
Rationalization of fuel subsidies to assure quality fuel
India’s Energy Future is Choice, Not Fate