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.
As pointed out by ‘Manly Warrior’, oil/gas/diesel has the highest weight-to-energy ratio of any envisioned power source. In addition to this, is the fact that our technology to reduce tailpipe emissions constantly improves. An emphatic example is the fact that I drive a diesel (TDI) car that does not make black clouds when the pedal is pressed.
The best base power, least polluting chain leading to transportation nirvana would be nuclear power station creating H2 feedstock leading to ‘gas stations’ allowing individuals to fuel their vehicles in the same time frame as current petrol vehicles. Fuel cell technology is minimally polluting while electric drive trains seem only to be improving daily.
Cars should have solar panels and windmills.....that’s the wave of the future......do I really need a sarc tag!!!
He does not tell the complete story. The energy density of LNG is one-half of gasoline. You would have to burn 2 gallons of LNG to travel the same distance provided by 1 gallon of gasoline. That makes the cost per mile about the same. You would also need a gas tank twice as large to hold the LNG. They never tell you that.
Shell is hoping some go LNG.
In the Great Lakes Corridor, Shell plans to install a small-scale liquefaction unit (0.25 million tons per annum) at its Shell Sarnia Manufacturing Centre in Sarnia, Ontario, Canada. Once operational, this project will supply LNG fuel to all five Great Lakes, their bordering U.S. states and Canadian provinces and the St. Lawrence Seaway. The Interlake Steamship Company is expected to be the first marine customer in this region, as it begins the conversion of its vessels.
Budweiser recently replaced diesel in its Houston-based trucks with compressed natural gas. http://www.forbes.com/sites/christopherhelman/2014/09/09/budweiser-puts-its-diesel-trucks-out-to-pasture-switches-to-natural-gas/ People in Houston seem to know a bit about fuel.
On the Canadian side of the lake, Canada Steamship Lines has booked construction of four new iron ore/coal/stone carriers to be built in China.
The carriers are to be equipped with scrubbers, allowing continued use of Number 6 oil.
Yep, eventually, oil will run out. Maybe in the next 300 years or so. In my opinion, by then, we’ll be using HYDROGEN as our fuel. Just think, no pollution, and every one will be able to make it in their kitchen. It’s really very easy to produce, but the big problem is, at the present time, there is no way to store it safely. Once the problem of storing HYDROGEN safely can be figured out, then no one will ever think of using anything else. Once that happens, the government will be in a terrible “TIZZY”. HOW TO TAX IT?
What is the magic source of hydrogen?
” says the commercial automobile market is the last bastion of crude oil,”
Well, except for textiles, medicines, packaging, plastics and just about every other thing every human being touches every day.
Those are produced mostly from Natural Gas Liquids. Most of those are sourced from Natural Gas Processing plants A much smaller percentage comes from refinery processing.
Because we will all be walking instead?!?
Oil starts with saltwater algae, which is highly renewable.. Growing genetically engineered super algae on the open ocean seems like an obvious contender for a replacement, with the added benefit it forms a CO2 closed loop. Likely the military will fund the research that cracks this nut. Any legacy oil still left in the ground might become worthless overnight, so now is the time to drill baby drill!
I firmly believe God put enough oil here for us to use as “compressed sunlight” until He decides to come back.
I think cost still leaves this as a non-option for now.
Oil has the benefit of the same processing already completed.
That's why it will require the U.S. Military, the world's largest oil user, to make it happen. The first integrated circuit chip cost $1,000 each. The first orders were for a new advanced bomber's navigation system. Thanks to the military having a price is no object motive, they jump started the industry. Today ICs cost pennies. That has been the sequence for pretty much all major technologies we take for granted today.
I would prefer not to use tax payer dollars.
Why benefit that technology over gas-to-liquid?
Politicians are not the best for making such decisions.
LNG for military jets isn’t practical. Gas is relatively cheap now but its price will rise as use catches up to the new supply.
I do not mean LNG. Gas-to-Liquids is creating diesel, Kerosene, etc from a Natural Gas.
For Example:
http://www.shell.com/global/aboutshell/major-projects-2/pearl/overview.html
Gas is relatively cheap now but its price will rise as use catches up to the new supply.
Eventually yes, just as oil eventually did. I recommend you include methane hydrates in your estimates of Natural Gas Supplies.
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