Global Trends in
Transport Fuels and the
Role of Natural Gas
Tony Pytte
Australian Institute of Energy
Perth October 2003
The world wants future transport fuels
and technologies that deliver:
Lower toxic emissions
Lower greenhouse emissions
Greater energy efficiency
Less dependence on foreign oil
Affordable transport
For many, this evokes visions of a Hydrogen
Economy requiring major technological
breakthroughs and infrastructure investments.
Incremental technology improvement is
the lower risk pathway to efficiency
CO2 Well to Wheels [g/km]
300
Lower technology risk pathway;
incremental technology improvements
H2 engine/Stop/Start
250
H2/Mild Hybrid
200
2002 TDI
APU@4Kw
H2 Parallel Hybrid
150
100
Higher technology risk pathway;
Forced early hydrogen
Stop/Start
H2 Fuel Cells?
Regen
Mild Hybrid
50
Further reduction
requires H2 fuel
without GHG cost
Diesel Parallel Hybrid
0
2000
2005
2010
2015
2020
2025
2030
Source: Ricardo Consulting Engineers, Carbon to Hydrogen Roadmaps for Passenger Cars, 2002
2035
Europe is leading the way to
sustainable transport
European policy promotes ultra-clean diesel fuels and
advanced diesel engine technologies because:
Diesel cars use 30-50% less fuel than petrol cars
Diesel engines last longer and require less maintenance
Greater engine efficiency lowers emissions of CO2 and
reduces petroleum consumption
The latest diesel technology requires no performance
sacrifice
A combination of tax incentives and emissions regulations
has shifted industry and consumers.
Europeans are shifting to diesel cars
9000
60
8000
55
7000
50
45
6000
40
5000
35
4000
30
3000
25
2000
20
1000
15
10
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Source: AID: Diesel Car Prospects to 2008; Nov,2002
% Market Share
1000 units sold
Forecast: CAGR 7%
Growing demand for diesel is shifting
the fuels market
45%
Middle distillates share of oil consumption
40%
35%
30%
25%
20%
World (excluding ex-Soviet Union)
15%
Europe
Asia-Pacific
10%
5%
0%
1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000
Source: BP Statistical Review of World Energy, June 2002
Sulphur is being regulated out of diesel
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
United States
EU
Japan
Australia
Bangladesh
Cambodia
PRC
Hong Kong
India
Indonesia
Korea
Malaysia
Pakistan
Philippines
Singapore
Sri Lanka
Taiwan
Thailand
Vietnam
Key:
500
500
500
2000
15
350
50
50
500
5000
10
10
50
2000
5000
2000 500
5000
5000
2000
5000
10000
5000
5000
5000
500
2500
10000
>5000ppm
2000
50
2500
500
500
3000
350
430
500
5000
2000
500
500
3000
350
500
2000
3001-5000ppm 501-3000ppm
500
51-500ppm
16-50ppm >15ppm
Changing fuel demand/specifications is forcing major investments
GTL diesel can supplement refining
Total
Aromatics
(%)
USA
Europe
CARB
35
1993
1997
1998
15
10
2000
2005
2007
GTL
diesel
50
15
5
350 500
Sulphur (ppm)
Over 40% of new cars purchased in
W. Europe are diesel
Austria
Belgium
France
Luxembourg
Spain
Italy
W. Europe
Germany
Portugal
Great Britain
Netherlands
Denmark
Switzerland
Norway
Finland
Ireland
Sweden
Greece
10
20
30
40
50
60
70
80
Diesel penetration in percent for year 2002
90
100
Diesel cars are reducing CO2 emissions
in Europe
240
European Petrol Fleet*
European Diesel Fleet
European Total
CO2 [g/km]
220
* Diesel penetration greatest in medium/
large cars magnifying apparent improvement
in Petrol fleet efficiency
200
180
172
164
160
153
140
Target of 140 g/km by 2008
120
1994
1996
1998
2000
2002
2004
Source: Ricardo Consulting Engineers, Carbon to Hydrogen Roadmaps for Passenger Cars, 2002
2006
2008
Diesel advances are impacting USA
OEMs are lining up:
Volkswagen
Major US campaign for its
diesel-powered cars:
VWs Touareg SUV to be
launched as a diesel version
Bora, Beetle and Golf
diesel options
Regulators are moving:
Dingell Bill
Will encourage the sale of
diesel cars by tax credits
Sulphur Law
Legislation passed to
reduce sulphur content in
diesel by 96% by 2006
Source: After BERU, 2002
DaimlerChrysler
Introducing diesel engines
into its US line-up:
Mercedes Sprinter will be
available as a diesel version
Chrysler to double dieselpowered models over the
next five years
Jeep Liberty to be launched
as a diesel version
Consumer appeal:
Want affordability
Rising crude oil and fuel
prices are driving search for
cheaper options
Diesel is at least 30% more
efficient than petrol
Ford
Launching a Focus diesel
version
New generation of V-6 and
V-8 diesel engines in pickup segment
Will the US follow
Europe?
ea
y
0
rs
40%
2-3%
US Diesel Share 2001=
Europe Diesel Share 1972
Europe Diesel
Share 2002
Gasoline Equivalent Giga-Gallons Demand/ year
Increasing fleet efficiency will reduce
fuel demand
40
Business
As usual
35
Efficient Tires / Govt Fleets
+Vehicle Maintenance
30
30 mpg
Fleet
Efficiency
25
40 mpg
Fleet
Efficiency
20
15
10
2000
2010
2020
2030
2040
2050
2060
Source: California Energy Commission and California Air Resources Board 2003, Reducing Californias Petroleum Dependence, California US
Modeled direct net benefit of fuel
substitution options
Biodiesel (2%)
Fischer Tropsch Diesel
LNG for Heavy Duty Vehicles
CNG for Heavy Duty Vehicles
CNG for Med. Duty Vehicles
E85 for Flex Fuel Vehicles
LPG for Light Duty Vehicles
CNG for Light Duty Vehicles
Grid Con Hybrid LDV
Electric Battery LDV
Gasoline Fuel Cell
Methanol Fuel Cell
Direct H2 Fuel Cell
-12
-10
-8
-6
-4
-2
Cumulative (2002-2030) Direct Net Benefits (Billion 2001US$)
Source: California Energy Commission and California Air Resources Board 2003, Reducing Californias Petroleum Dependence, California US
Gasoline Equivalent Giga-Gallons Demand/ year
CEC/CARB strategy to reduce
petroleum demand
45
40
35
Forecast Demand
30
25
20
Strategy
15
Target 15% below 2000 Demand
10
5
0
2000
2010
2020
2030
2040
2050
2060
Source: California Energy Commission and California Air Resources Board 2003, Reducing Californias Petroleum Dependence, California US
Australian energy market greenhouse
gas emissions Aviation 7%
Rail 5%
Maritime 3%
Electricity
52%
Road 85%
Transport
14%
Other
16%
Agriculture
18%
Australias declining oil production
800
Total Australia
724 kb/d
Production (000 bbl/d)
700
600
10%
500
453 kb/d
400
50%
313 kb/d
300
200
209 kb/d
Gippsland
90%
100
Actual
Forecast
1975
1980
1985
1990
1995
Year
2000
2005
2010
160
140
140
120
Years of Reserves
120
100
100
80
80
60
60
40
40
20
0
Reserves/Production Ratio - Years of Reserves Remaining
Australian Natural Gas Reserves - Trillions of Cubic Feet
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
20
0
Reserves Volume (TCF)
Australias growing gas reserves and
production
Australias Refinery Position
4000
Refining capacity/domestic demand equilibrium
0
50 KBPD
-2000
Growing Deficit
All Refined Products
Capacity Less Demand (ML/yr)
2000
-4000
150 KBPD
-6000
-8000
250 KBPD
-1000
-1200
-1400
'00
'01
'02
'03
'04
'05
8 refineries
'06
'07
'08
7 refineries
'09
'10
'11
'12
'13
6 refineries
'14
'15
Strategic benefits of a clean diesel
from natural gas industry
Secure domestic supply of clean transport fuel for
decades to come, replacing dwindling crude
reserves and a declining refining industry.
Diversification of gas industry, providing a new
opportunity to commercialise and add value to
remote gas reserves, with sales into a growing
commodity market.
Lower net greenhouse emissions and improved air
quality for the Australian transport sector.
Global Trends in
Transport Fuels and the
Role of Natural Gas
Tony Pytte
Australian Institute of Energy
Perth October 2003
