Q&A: Oil eventually will lose its place as leading auto fuel

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.

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.

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.

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.

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.

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.

It’s the perfect fuel. It burns very hot, the exhaust from burning HYDROGEN is water (H2O). It’s very easy to produce. You need electricity, a strip of metal and water. One side produces oxygen and the other side produce hydrogen. But hydrogen is so volatile that it cannot be stored in a tank, like natural gas or gasoline. But once someone comes up with a safe way to store hydrogen, every one with water, a strip of metal and electricity (like a solar panel), and a safe storage tank. It will do away with electric companies, oil and natural gas companies. The only problem that I can see, is that what to do with the tons of (H2O) that is released in the air? Now, that would be a “CLIMATE CHANGER”. Every internal combustion engine can burn hydrogen just as easy as natural gas or gasoline.

My speculation is a two to three decade period for an “Ideal” non petroleum energy source to totally supplant motor fuels for transportation. Even if a “Mister Fusion” power source was available as an installed option, the investment in current vehicles would preclude dumping them.

Value of petroleum would be stabilized at a price point relative to costs & speed of implementing an alternative energy source with similar utility. As new technology supplants petroleum consumption, initially a price trend down should occur. The older tech would become cheaper to feed and its already paid for. Later the value of petroleum probably would recover due to lack of financial investment toward new sources. Then accelerated adoption would be expected.

It’s the perfect fuel.

You obviously haven't had to deal with H2 in industrial processes, like I have.

It burns very hot

Tell me what you think that means as an advantage as a fuel.

the exhaust from burning HYDROGEN is water (H2O).

Yep. But we will talk about the "exhaust" that produced the H2 in a minute.

You need electricity, a strip of metal and water. One side produces oxygen and the other side produce hydrogen.

That is the expensive and most wasteful way to produce hydrogen. It takes significant more energy to produce the H2 this way, than the H2 contains.

That electricity, in the US comes mostly from Coal and Natural Gas. And it has significant losses of energy before you begin the hydrogen production.

So before you start making your hydrogen, 2/3 of the energy was already lost before you started.

Lose another 1/3 of the remaining power in the creation of the hydrogen. Now lose a 1/4 of the compressing such a low specific gravity gas; a lot of heat is generated compressing it.

So are losses, before we try to transport or use the hydrogen are as follows:

1 x 1/3 = 1/3

1/3 x 2/3 = 2/9

2/9 x 3/4 = 1/6

So for a 100kWH of Hydrogen, we consumed 600kWH of our other fuels, just to make it. And those fuels, did not "exhaust" just water.

But hydrogen is so volatile that it cannot be stored in a tank, like natural gas or gasoline.

False. We use Hydrogen in Industrial processes. Refining is the biggest industrial use. In the Gulf Coast Area, we have a plants that produces hydrogen and distributes it by pipelines to refineries in the area.

This is from one of the companies providing hydrogen in the area, Air Products.

They don't normally do anything as wasteful as electrolysis to generate the hydrogen. Typically, hydrogen is produced by steam-reforming natural gas. It still consumes more energy than the original natural gas, but not as bad as electrolysis.

Every internal combustion engine can burn hydrogen just as easy as natural gas or gasoline.

H2 is a low energy/volume fuel. Just as compressed natural gas has less energy for the same volume of gasoline, hydrogen is far worse. Range becomes a far greater problem. And the modifications of the fuel system use hydrogen are more complex than adding natural gas.

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