Transcript Transportation Fuels Lou Burke Manager, Emerging Technology ConocoPhillips World Energy Demand Outlook Million Tons of Oil Equivalent 18,000 Hydro & Other Renewables Nuclear 16,000 14,000 12,000 10,000 Coal 8,000 Natural Gas 6,000 4,000 Oil 2,0001971 • Fossil fuels will still.

Transportation Fuels
Lou Burke
Manager, Emerging Technology
ConocoPhillips
World Energy Demand Outlook
Million Tons of Oil Equivalent
18,000
Hydro & Other
Renewables
Nuclear
16,000
14,000
12,000
10,000
Coal
8,000
Natural Gas
6,000
4,000
Oil
2,000
0
1971
2002
2010
2020
2030
• Fossil fuels will still have over 80% market share
• Natural gas is gaining share
• Nuclear losing share
• Renewable sources only 14% share by 2030
Source: International Energy Agency, “2005 World Energy Outlook”
The Fuels Market
US Demand (mbpd)
12,000
World Demand (mbpd)
35,000
Gasoline
Gasoline
Gasoil/Diesel
10,000
30,000
Ethanol
Gasoil/Diesel
Ethanol
Biodiesel
25,000
Biodiesel
8,000
20,000
6,000
15,000
4,000
10,000
2,000
5,000
0
0
2005
Source:
2010
2015
Purvin & Gertz – Gasoline & Gasoil/Diesel
CERA – Ethanol & Biodiesel – includes US, Europe and Brazil
2005
2010
2015
Renewable Fuel Drivers
• U.S. Energy Policy Act of 2005
– 7.5 billion gallons renewable fuel use in 2012
– Renewable fuel is fuel from biomass used to
reduce fossil fuel used in motor vehicles
• EU Directive
– 5.75% renewable in transportation fuel by
2010 on an energy basis
U.S. Fuels
Gasoline +
Diesel
Volume,
Billion Gal
Relative
Capex
Relative
Opex
198
1
1
3-5x
5-12x
4-6x
4-9x
Approximation
of EIA data
Ethanol
4.2
Renewable Fuels Assoc
Biodiesel
0.075
National Biodiesel Board
Product Comparison
• EtOH vs. Gasoline
–
–
–
–
Octane
Fuel Economy
Infrastructure
Emissions Impact
• VOC
• NOx
• CO
– Refinery Impacts (BOB Volatility)
– Quality
Positive
Variable
Negative
Product Comparison
• Diesel vs. Biofuel
–
–
–
–
Cetane
Lubricity
Cold Flow (CFPP)
Emissions
Positive
Variable
Negative
• NOx
• PM
• HC
(Biodiesel Only)
Distribution expense
(Biodiesel Only)
Quality
Food vs Fuel
• Oils
– US # 2 40 B gallons - All oils could make small percentage
– Germany biodiesel = oil crop today
– Palm oil – sustainable?
• Carbohydrates
– E 10 would take ~ 50% of corn market (x DDG credit)
– World sugar market price increase?
– WTI Link?
• Or is Biomass the only way to large volumes
– What happens to oil/carbohydrate based fuels post biomass?
Or does transportation electrify?
• Hybrid
–
–
–
–
Mileage impact maximum during stop and go
Buyers remorse vs Sticker EPA delaying pay-back
Commercial applications look potentially attractive
New battery and ultra-capacitor technologies
commercializing
• Plug In Hybrid
– Large Impact on city driving with 50 mile range
– Li-Ion batteries may further enable commercialization
• Fuel Cells
– Advances continue, but most see impact post 2025
– Transition looks ominous
Let the market decide
• Mandates cause problems
– Minnesota’s biodiesel transition
• Market Distortions drive sub-optimal solutions
– Supply/Demand imbalances lead to undesired pricing
changes
– E85 CAFÉ methodology
– Small manufacturers supported (rural jobs)
irrespective of large plant efficiency gains
• Focus on the feedstock not the molecule
– Ethanol and FAME support may delay introduction of
better, more cost effective solutions