There would have to be compelling reasons to justify switching from petroleum for transport. Why? For one, as liquids, gasoline and diesel are easy to distribute. They are also energy-dense. A gasoline or diesel tank can be filled in a few minutes and carry the vehicle hundreds of miles more conveniently than any other fuel type.
Another stark fact stands out: the petroleum infrastructure is well established. There are 7000 oil rigs worldwide. There are 150 refineries in the U.S. alone, each processing between 5,000 and 500,000 bbl per day. Worldwide there are more than 700 refineries pumping out about 80 to 85 million bbl per day of refined products, mostly gasoline and diesel. Oil refineries and rigs cost billions of dollars, representing a vast sunken cost. There is understandable inertia to keep producing and using gasoline and diesel.
One good reason to switch would be if we were running out of petroleum. At least for the near future, that seems unlikely as proved oil reserves continue to grow. Oil industry professionals continue to innovate, finding ways to extract oil profitably from miles under the sea floor or coax it from once recalcitrant tight and heavy oil formations with enhanced oil-recovery techniques such as hydraulic fracturing.
So, is there any reason to expect a rise in alternative fuels? Natural gas is growing in North America, especially in commercial vehicles, largely driven by the price difference compared to gasoline. Big automotive companies continue to invest in electric and hydrogen fuel cell vehicles. They must have their reasons.
Here are a few likely scenarios that might drive adoption before 2035.
Demand outstrips supply. The International Energy Administration (IEA) in 2012 projected worldwide demand for petroleum rising to almost 100 million bbl per day by 2035, from its current level of about 85 million bbl per day. The agency also predicted a doubling in worldwide growth in passenger cars to 1.7 billion. Countries such as China, Brazil, and India could rapidly increase their car fleets beyond the IEA projections. If the oil industry could not invest rapidly enough, the resulting high gasoline prices might impel a switch to alternatives, although this might be economical only for a short time.
Urbanization and Local Air Quality. Controlling pollution on a local basis within congested cities may spur local uses of alternative energies. Many countries are researching low emission zones (LEZ), where polluting vehicles are restricted. As an example, London’s LEZ primarily targets diesel vehicles with gross vehicle weight (GVW) over 7000 lb. Besides outfitting either cleaner engines or filters, the London authorities also encourage a change to alternative fuels such as natural gas (though biodiesel does not meet the cleanliness standard). LEZs seem like a natural fit for either electric or hydrogen fuel cell vehicles.
Massive Disruptions in the Oil Market. The oil market of 2013 is a global affair, with oil shipped far and wide to refineries that re-export refined products. There are a few choke-points in this distribution system. Supply problems could arise from earthquakes, hurricanes, wars, or civil disturbances in key critical areas. If this happens, the price of gasoline and diesel could rise to the point where alternatives become economical.
In some ways, the anxiety over supply is seen in countries that import more oil than others. The European Union countries, Japan, India, and South Korea all import 70-90% of their oil. Not surprisingly, some of them are investing in a number of alternative-fuels programs. India is the world’s fifth and Italy is the world’s sixth largest users of natural gas for transport. In 2012, 11 percent of Italy’s new cars were natural-gas-powered vehicles. If supply anxieties were to bleed into other countries, expect alternative fuels programs to increase.
Technological Breakthrough in Electric Batteries. On an energy basis, in many areas of the world, driving on electrons is cheaper than driving on oil. One estimate by General Motors in 2008 showed that at 10 cents/kW·h, it would cost a Chevrolet Volt owner only about 2 cent/mi, compared to about 12 cent/mi for gasoline at its price in 2008. While improving fuel efficiency will certainly change that ratio, the fact remains that electricity is usually cheaper. Building the initial infrastructure to deliver that electricity is also relatively cheap, easing the transition to electron mobility. If batteries could hold more, cost less, and charge faster...who knows? The economics of the fuel itself is compelling.
(The facts, pictures, and conclusions for this article were drawn from the new SAE book, Future Automotive Fuels and Energy Technology Profile by Bruce Morey, published in August 2013, ISBN 978-0-7680-7502-1, SAE Order Number T-128.)