Posted on 11/24/2014 4:54:32 AM PST by thackney
One day, crude oil will lose its grip on cars and trains and ships, but with costs to produce alternative energy still high, a change that big will likely take many decades. How long is anyone’s guess, says one man with a head start on most prognosticators.
Henrik Madsen, the CEO of Norway’s international shipping and oil field equipment classifier DNV GL, says the commercial automobile market is the last bastion of crude oil, after its disappearance from power plants and heating fuels in the second half of the 20th century. Its days in vehicles and vessels are numbered.
Searing cold liquefied natural gas — don’t spill it, it’s minus-261 degrees — and compressed natural gas are elbowing their way into crude’s territory, powering some large trucks and locomotives, and finding prime real estate aboard big tankers as international demand for gas surges.
LNG’s advance in vehicles is likely good news for those counting on the earth’s resources in coming decades, Madsen says. Oil, he added, is too precious to burn in a combustion engine, and should be reserved as a feedstock for ingredients to make high-end products including clothing, plastics, coatings and pharmaceuticals.
The emergence of alternative energy sources in transportation isn’t great news for oil-producing nations like Saudi Arabia whose economies are linked to crude-pumping wells, he said.
“They might be a little bit afraid of shale oil, but I think they’re more afraid of the use of oil in transportation disappearing,” Madsen said.
DVN GL has an office and oil and gas operations in Katy. Madsen, recently in Houston, spoke with the Chronicle about the pivot to LNG and compressed natural gas fuels in trucking, and the early signs that point to a future of lower oil consumption. Edited excerpts follow:
Q: You describe the “energy trilemma” as the balance between protecting the environment while retaining affordable energy costs and ensuring we have enough energy. Where is that effort today?
A: I think everybody agrees we need many energy sources in the future. We need oil, gas, coal, wind, solar, geothermal. One of the things we’re focused on is how we use the different forms of energy. We think there will be a transformation in that oil will lose its position in transportation. On the trucking side in the U.S., that transformation is happening fast, because the price of LNG is 10, 20 percent of the price of diesel. You’ve seen some train companies consider using gas instead of diesel, you’ve seen it in the oil field service sector, where they’re using gas to drill for shale oil.
Q: Expand on what’s driving this.
A: In terms of emissions, you will reduce local pollution a lot. But primarily it is because gas is much cheaper. From a technical point of view, this major change would not be impossible, say over a 20- to 30-year period. But at the same time, it will be as the cost of transportation fuels goes up, so how slow the transformation will be is anybody’s guess.
Q: Do you envision less oil exploration in the future?
A: That may be 30 or 40 years from now. I think consumption will be lower then. But people don’t talk much about that. They’re talking about how we’re at peak oil and how we can find more oil and so on, instead of looking at what it’s used for. I personally think it would be nice to reserve oil for high-value products.
Q: What are the safety concerns related to using LNG as a transportation fuel?
A: It’s very cold, so if you spill it on a ship, the steel will crack. LNG can burn but it doesn’t explode, so LNG is remarkably safe. They’ve been transporting LNG around the world in tankers for 40 years and there have not been any fatalities.
Q: Are renewable energy sources growing fast enough?
A: Many people talk the growth down, but at least in Europe there’s still a high growth in renewables, and there’s also high growth in the U.S. I think the International Energy Agency constantly underestimates the growth. If you look at solar now, prices are coming down much faster than we thought, and it’s actually competitive for local production. Onshore wind costs are coming down and we’re trying to drive offshore wind costs down.
Q: Is wind held back by its reliance on subsidies?
A: They don’t need subsidies. The more they talk about subsidies, the more everybody thinks they’ll need subsidies forever and that it’s not a long-term solution, which is actually wrong.
Some people have an intuitive grasp of the obvious.
And some people do not have an intuitive grasp of the obvious.
Oil will be king for along long time. Oil is not only fuel, but raw material for many other products from fertilizer to plastics etc. It is what “renewables” are made from both ion terms of power to manufacture as well as base materials.
Oil has more power to mass than most anything other than nuclear, is cheaper to harvest, we don’t eat it nor do we have to do much more than cook it to make fuels and other byproducts (wax to asphalt etc). Unlike etoh, h2 etc, it gives us more power than it costs/consumes to produce.
Oil will be the fuel of the 24th century and beyond!
The majority of that feedstock for petrochemical is natural gas liquids, ethane to pentane+. Refineries do produce it, but we are getting more from Natural Gas processing.
I suspect it won’t happen for a while. Oil prices will simply adjust - i.e. fall until they reach some kind of equilibrium with CNG. Isn’t CNG’s problem energy density? Shouldn’t an all-CNG vehicle will require at least 50% more space for fuel storage? Aren’t CNG fuel tanks also heavier than the average gas tank because the walls have to be thick enough to handle the stresses of highly pressurized gas?
So they’re saying that SOME DAY we won’t use as much oil as now. That was useful.
I agree. The magic question is: "How long is a while?"
Oil prices will simply adjust - i.e. fall until they reach some kind of equilibrium with CNG.
I doubt they fall that far, at least not beyond a very short-term dip if that. I don't see gasoline equaling CNG for many months before climbing.
Shouldn’t an all-CNG vehicle will require at least 50% more space for fuel storage?
About that much.
Aren’t CNG fuel tanks also heavier than the average gas tank because the walls have to be thick enough to handle the stresses of highly pressurized gas?
They are mostly carbon fiber these days, but yes, a I would expect tanks storing equal amounts of energy would have a heavier CNG tank.
But it all comes done to dollars per mile, in my opinion.
;-)
The best option for automobiles is Telsa's new cars that may be coming out. With batteries that may last more than 300 miles and shorter charging times, their may be more of these. However, I don't see the public going over en-mass till 400 miles and 30 minutes or less charging times.
Even so, most electricity will be generated by fossil fuels for a while. Nuclear is still unpalatable and hydro only does a fraction. Wind power has been a joke.
No, until something better is out there than what is available I see no turnaround for the foreseeable future. But that could change if the situation becomes dire enough.
I will make a prediction. It won’t happen untill the alternative is cheaper!
” That may be 30 or 40 years from now.”
Well, that’s a specific prediction! I love these folks taking wild swings into the future and the “reporter” proclaiming they have an amazing story.
I am a complete agnostic on the transportation fuel of the future. Fuel cells and electrics are possibilities, but both require a primary energy source working in the background. Nuclear remains the best option for that. Electrics also face the limitations of current battery technology; whether and when that will be solved is an open question. Biofuels are currently a bridging option, but if costs can be reduced for third generation feedstocks, probably algae or microbes, change could be very rapid. The production potential is staggering. Process costs are the issue, and there is a good chance that these can be significantly reduced. This would be a major game changer.
It discusses Natural Gas to take the lead over oil.
That doesn't mean we shouldn't use it now and the near term future. You could say the same thing about oil in 1940. Would it have been a good idea to not use it for several decades because of that?
Near my area, with the recent drop in gasoline prices, CNG is ~20% cheaper. But the CNG option for the vehicles is several thousands more. Depending on the miles you drive your vehicle before a trade in, there is savings. Far more savings when gasoline is back over $3.
Wind is held back by nature. When it blows too hard, you have to shut down the devices or they will self destruct, if it doesn't blow enough, they produce no out put.
Without tax dollars {mine and yours}, there would not be any wind mills in the USA and certainly not the 14,000 abandoned ones that have seen their tax subsidies expire.
Yet another lefty scam based on fraud.
Many of the big Great Lakes ore carriers are undergoing repowering just now. Their V-16 Pielstick motors, in service since the early 80s, are reaching the end of their lives.
Their solution is more of the same; a pair of light distillate burners.
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