Posts

Arctic Leaf

Car buyers go shopping for better mileage

/in , , /by

With the price of oil down from about $115 to $63 since last June, the impression has been created that the auto world is once again in the hands of the oil industry, and that the gasoline engine is here to stay.

But this week at the Bloomberg New Energy Finance Conference, there was the distinct impression that alternatives to the gasoline engine are moving up so fast that within another five years we may see big changes. Bloomberg Business wrote that the result is “Future transport is likely to look a lot different than what the major oil companies are fueling now. Instead of biofuels such as ethanol and green diesel making the internal-combustion engine fit into a world with greenhouse gas limits, wholesale new solutions are coming fast.”

“Where we are is in an age of plenty,” Michael Liebreich, BNEF’s founder, told Bloomberg. “We have cheap oil, cheap gas, cheap renewables. You do have an abundance of supply in a way you haven’t had for decades. We also are in an age of competition.”

The biggest piece of news is that gasoline consumption has leveled off over the last decade and now is lower than it was in 2006. This is a remarkable development that no one knows quite how to explain. Part of it may be the lingering recession. Fleet mileage improvement has definitely made a difference, improving from 24.5 in 2001 to 31.6 today, a dramatic surge of 29 percent in 13 years. The Age of the Hummer is over, and people are being more selective in shopping for better mileage, even as the vehicles improve.

But Bloomberg Energy sees alternatively fueled vehicles also making headway in a way that is just becoming visible. Electric car sales have quintupled over the last four years, although they did start at a very low base. But battery prices are coming down as rapidly as solar-panel prices, which means that they soon will be in a range where the average American can afford them. Tesla’s 2017 debut of the Model 3, priced in the $35,000 range, is going to be a real turning point, if everything goes right.

Also coming along rapidly is the hydrogen car, which the Japanese auto industry has chosen as its alternative to gasoline. Toyota and Honda are just beginning to market their models in Japan, and BNEF anticipates there will be 4,200 on the road in Japan by 2018. But California is another big potential market, and sales are scheduled to begin there sometime late this year. The California Legislature has responded by expanding the Hydrogen Highway initiated by former government Arnold Schwarzenegger, making it easier for drivers to refuel.

Of course, all these predictions are taking place on a world scale, and there the progress may be even more rapid than in the United States. One thing Tesla discovered in its relatively abortive attempt to crack the Chinese market is that China already has a thriving electric-car industry. The cars, moreover, are not scaled-down versions of powerful sports cars but slow-moving vehicles that have been designed from the ground up.

In an article in Forbes last week, Jack Perkowski outlined what he called “China’s other electric vehicle industry:”

While the global automotive giants struggle to find a winning formula for electric vehicles, approximately 100 manufacturers in China have already identified a large potential market undiscovered by the traditional players. The common problems faced by EV automakers — high cost, driving range, and the availability of charging stations — are not issues for these manufacturers because their target customers are satisfied with low-speed and limited range EVs, as long as they provide affordable transportation. In 2014, 400,000 so-called ‘low-speed’ EVs were sold in China, compared to only 84,000 conventional all electric and hybrid electric vehicles.

To get a glimpse of the size of China’s potential market, consider this: China is already the world’s largest vehicle market, accounting for 25 percent of all vehicles manufactured globally. Yet there is only 1 vehicle per 10 people in China, whereas in the United States there are 8 for every 10 – more than one vehicle for every person of driving age. China also has another huge market for other electric vehicles. It has sold 90 million motorcycles and 120 million electric bicycles.

Estimates are that China now has a million such low-speed EVs on the road now and might reach 3 million by 2020. These cars can do about 48 miles per hour and are used for short runs around town in smaller cities, so range is not a problem. They are doing wonders for air pollution. Manufacture only began in 2006, and already some provincial governments are starting to write requirements that they be preferred to the older gasoline types.
Surprisingly, the only government entity that has been slow to embrace the low-speed EVs is the national government in Beijing. The Central Government has not counted these EVs is their official automotive statistics and is only now starting to write regulations on how crash-worthy they must be and on what roads they will be allowed to travel.

Perkowski concludes: “Low-speed EVs may not fit the stereotype of today’s modern passenger car, but in China, where incomes remain low for a large part of the country’s population, affordability often trumps those values held dear in more developed countries.”

Could China’s low-speed EVs find a market in the United States? It’s certainly possible. In any case, the anti-gasoline revolution may be coming in ways we did not anticipate.

Landon Hall

PUMP debuts on Netflix, so stream at your leisure

/1 Comment/in , /by

PUMP the Movie is now available on Netflix, giving millions of Americans the chance to watch an important film that shows the patch forward to ending our dependence on oil.

The documentary, produced by Fuel Freedom Foundation and narrated by Jason Bateman, was originally released in theaters last September. In fact, it’s still showing on big screens around the country, as the foundation has worked with partners to host screenings on college campuses and for nonprofits.

(For a full schedule of showings, as well as movie reviews and other content, check out PUMPtheMovie.com.)

But Netflix is a whole new level. The video-on-demand service is now available in 36 percent of U.S. homes, compared with 13.5 percent for Amazon Prime and 6.5 percent for Hulu Plus. Thirty-five million people watch movies and TV shows using Netflix’s streaming service, while another 5 million still get DVDs by mail. (We have DVDs for sale too, in an attractive blue case, on our website).

PUMP charts the century-long story of oil and how it built its monopoly on the U.S. transportation-fuel industry. There are interviews with major energy and auto-industry players like John Hofmeister, former president of Shell Oil Company, and Tesla Motors founder Elon Musk.

Much of the film is dedicated to solutions to our oil addiction: For example, ethanol, which is cheaper than gasoline and burns cleaner, with fewer toxic emissions, can be made from plenty of “feedstocks” besides corn.

Here’s a clip from the film featuring alcohol-fuels expert David Blume, telling us about the possibilities:

Another voice in that snippet belongs to Marc Rauch, editor of the Auto Channel website, who says: “Ethanol is not just any competitor [to gasoline]. It is the better fuel. It has always been the better fuel.”

The point is choice: American drivers deserve more than just one. To learn how we can achieve it, in the cars, trucks and SUVs we drive today, pick up the remote and watch PUMP.

Arctic Leaf

Innovations in natural gas processing could revolutionize the fuel market

/in , , , , /by

America has abundant fossil fuel resources, and an enormous fossil fuel appetite. But the majority of our resources are in the form of natural gas, while nearly all of our usage depends on liquid gasoline made from crude oil. That’s why the announcement last week by a California company that it has a new technology for converting natural gas to liquid fuel in an economical manner is so exciting. We may, someday soon, be able to use natural gas in our cars at a price competitive with gasoline.

Siluria Technology, a small San Francisco operation, says it has found catalysts that make the conversion of natural gas to liquid fuel cheaper and easier than it has ever been. CEO Ed Dineen says he has been working on the problem since the 1970s when he became interested in finding a use for the huge amounts of natural gas that were “stranded” in Prudhoe Bay, on the northernmost coast of Alaska.

“Economical gas-to-liquid technology is something that the industry has long sought after,” said Dineen, who was formerly CEO of the chemicals company LyondellBasell Industries NV. “It’s a kind of a holy grail.”

Both natural gas and coal have been synthesized into motor fuel since the 1920s by using a process called the Fischer-Tropsch method, but this technique is both costly and energy-intensive, and has never been economical except under the most extreme circumstances. The method was invented in 1922 by German scientists Franz Fischer and Hans Tropsch at a time when the Germans led the world in chemistry but had no domestic oil reserves. The process aroused little interest until the 1930s, when Hitler began to isolate Germany and build up its military. For the better part of the decade both France and Britain were confident that another war could not start because Germany had no oil to fuel one. But by 1943 Hitler had built 13 synthetic fuel plants that were supplying half of Germany’s oil needs. The Allied bombing of those 13 plants hastened the end of the war.

The Fischer-Tropsch method got another lease on life when South Africa used it to synthesize oil from its abundant coal supplies during Apartheid. The effort gave birth to Sasol, which has become the world’s largest manufacturer of synthetic fuel.

Royal Dutch Shell is the other player in the field, having built a smaller, 140,000-barrel-a-day conversion plant in Malaysia. Shell made its first shipment of commercial gasoil in 2011. The company has since completed a second phase of the plant that expanded it even further.

Still, apart from Sasol’s, all these facilities are dependent on the Fischer-Tropsch method, which remains expensive and cumbersome. But Dineen claims he has developed a catalyst that cheapens the process. He worked on it in Alaska, but the catalyst tended to fall apart after one or two uses. Innovations such as nanowire technology now test the catalyst and speed up the trial-and-error process.

“It makes finding what works more affordable,” he says.

Several other small companies are also dabbling in the process of trying to arbitrage the price difference between oil and gas. Natural gas prices used to be keyed to oil prices but have now broken out on their own, creating a large gap between the two. If economical ways can be found for converting gas to something that can be easily used in cars, it will be cheap enough to catch the ordinary consumer’s attention and provide a domestic market for a valuable domestic resource.

Velocys is a company that is trying to make gas-to-liquid conversion economical on a much smaller scale. Their targets are remote wells in the Bakken and other oil fields where natural gas is viewed as a dangerous waste product that just gets flared off — a huge waste of resources. Velocys’s system is designed to turn that waste into profit, with a small, portable, modular conversion system that can be deployed in isolated locations. Pending laws that would penalize companies for flaring gas could create even more demand for Velocys’s technology. The company currently has a joint venture with Waste Management to build its first small-scale gas-to-liquid plant.

Another company is Petro River, which has developed and patented another alternative to the Fischer-Tropsch method known as the Havelide System. The company says it has a molten salt catalyst that operates at half the cost of Fischer-Tropsch.

“What I like about the two small companies is their intention to try and provide a solution to rescue stranded natural gas assets and capture the huge amounts of natural gas that is wasted through flaring,” Devon Shire wrote on Seeking Alpha. “Those are two issues just waiting for a big solution.”