106/14/2011 v1 national petroleum council future transportation fuels study draft executive...

106/14/2011 v1

National Petroleum Council

Future Transportation Fuels Study

DRAFT Executive Committee Update June 28, 2011

Meeting with Clarence Cazalot June 14, 2011

DRAFT – DO NOT CITE OR QUOTE For Discussion Only

206/14/2011 v1

Section Page #• Antitrust Reminder 3• Meeting Objectives 4• Reminders and Updates 5 – 12• Progress and Timeline to Completion 13 – 14• Study Methodology and Structure 15 – 17• Meeting Conclusion 18

Discuss preliminary draft propositions after conclusion of meeting (30 minutes)


Presentation Table of Contents

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Antitrust Reminders – NPC Studies

• Remember the Antitrust Guidelines, and don’t– Coordinate your companies’ plans, prices, outputs– Disclose your company’s non-public information– Use the study process to create competitive harm

• Check with counsel before you– Collect or discuss non-public data– Evaluate public data about future prices and costs– Discuss topics about whose legality you’re unsure

• Antitrust resources include your lawyer, and:– Mike Young (Anadarko) 832-636-7555– Doug Melin (Marathon) 419-421-3265– Barbara Moran (Caterpillar) 309-494-1270– Jim Haynes (Chevron) 925-842-1298– Courtney Lynch (Chevron) 925-842-6474 – Kenly Webster (NPC) 202-898-0780


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Meeting Objectives

• Review Progress and Schedule

• Approve Continuation of Study

• Approve Revised Schedule


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Reminder: Request to NPC from Energy Secretary Chu

• Study Future Transportation Fuels prospects through 2035/2050 for auto, truck, air, rail and waterborne transport

• Address fuel demand, supply, infrastructure, and technology

• Advise on policy options and pathways for integrating new fuels and vehicles into the marketplace, including infrastructure development– Address the transition to an expanded suite of reliable, secure and clean, low-carbon

transportation fuels– Evaluate options, risks, and consequences

• Factors to consider include:– Technological advances– Energy efficiency– Environmental, e.g., impact on carbon, land and water– Economic competitiveness and market dynamics– Cost/benefit tradeoffs– Manufacturing, distribution and infrastructure– Customer expectations and acceptance

• Address the following question: (Supplemental Letter Apr 30, 2010)– What actions could industry and government take to stimulate the technological advances and

market conditions needed to reduce life-cycle greenhouse gas emissions in the US transportation sector by 50 percent by 2050 relative to 2005 levels while enhancing the Nation’s energy security and economic prosperity?


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Reminder: Study Deliverables

DELIVERABLES

• Deliver a report to the Secretary of Energy on Future Transportation Fuels prospects through 2035/2050 for auto, truck, air, rail, and waterborne transport which– Address fuel demand, supply, infrastructure, and technology in the context of U.S.

objectives to:• Protect the environment• Promote economic growth & competitiveness• Support energy security

• Describe accelerated technology pathways to: improved fuel efficiency, reduced environmental impact, and deployment of alternative fuels at scale

• Deliver insights into potential policy options and investments which industry and government can take to accelerate the acceptance of alternative fuels, engines, and vehicles

• Describe actions industry and government can take to stimulate the technological advances and market conditions needed to reduce life-cycle GHG emissions in the U.S. transportation sector by 50% by 2050 relative to 2005 levels, while enhancing the nation’s energy security and economic prosperity.


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Reminder: Guiding Principles

• Scope then execute– Develop a detailed scope of work for each task group before commencing work

• Diversity of thought– Identify and involve a broad and diverse set of interests to participate in the study to

maximize input and acceptance

• Promote consensus based leadership

• Maximize the use of prior studies– Provide a broad review of current research– Conduct new studies only as needed

• Examine the facts then address policy– Advance basic analytical work to reach consensus on the facts– Assess policy through three lenses

– Environment– Economic– Security

• Communicate and encourage outreach throughout the study

• Integrate with NPC Resource Development study


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300+ Total Study Participation(Committee, CSC, Task Groups, Subgroups)

June 2011

By Organization Type By Skill

Reminder: Fuels Study Demographics

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Update: Fuels Study Structure

Committee on Future Transportation Fuels

Committee on Future Transportation Fuels

Demand Task GroupDemand

Task Group

Supply and Infrastructure Task Group

Supply and Infrastructure Task Group

Technology Task GroupTechnology Task Group

National Petroleum CouncilNational Petroleum Council

BiofuelsBiofuels Hydrocarbon Liquids

Hydrocarbon Liquids Natural GasNatural Gas HydrogenHydrogen ElectricElectric Engines/VehiclesEngines/Vehicles Fuel/Vehicle

Characteristics

Fuel/Vehicle Characteristics

Carbon & GHG Emissions

Carbon & GHG Emissions

Fuels Study Coordinating Subcommittee

Fuels Study Coordinating Subcommittee

Report IntegrationSubgroup

Report IntegrationSubgroup

Antitrust AdvisorySubgroup

Antitrust AdvisorySubgroup

Subgroups

Resources Study GHG Emissions

Resources Study GHG Emissions

Resources StudyPolicy

Subgroup

Resources StudyPolicy

Subgroup

Resources StudyCoordinating

Subcommittee

Resources StudyCoordinating

Subcommittee

Heavy Duty Vehicles Team

Heavy Duty Vehicles Team

Data Integration TeamData Integration Team

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Update: Outreach and Review Process Ongoing

✓ Dec 3 L1 Technical Review (Cambridge, MA)

✓ Jan 18 NGO Outreach Event (San Francisco, CA)

✓ Feb 15 Cell Hydrogen Energy Association (Washington, DC)

✓ Feb 16 Fuels/Resources: NGO Outreach Event (Washington, DC)

✓ Feb 22 Fuels/Resources: Natural Gas Round Table (Washington, DC)

✓ Mar 3 CSC Review (Washington, DC)

✓ Mar 9 L1 Technical Review (Cambridge, MA)

✓ Mar 21 National Research Council (Washington, DC)

✓ Apr 5 Toyota Sustainability Conference (La Jolla, CA)

✓ Apr 7 CSC Review (La Jolla, CA)

✓ May 4 Montreux Global Energy Roundtable (Washington, DC)

✓ May 20 Univ. of Chicago: Future of Transportation (Chicago, IL)

Jul 14 Aspen Institute Forum on Global Energy (Aspen, CO)

TBD - Resources Study Policy Subgroup Review

TB Sep 1 L1 Technical Review (Cambridge, MA) (considering postponing)

Dec 7 20th World Petroleum Congress (Doha, Qatar)

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Update: Technology Subject Mater Experts

Area Subject Matter Expert

Solar Fuels Dan Nocera, MIT

Agriculture – Biofuels Robert Fraley, Monsanto

Biotechnology Jay Keasling , UC Berkeley/JBEI

Materials Science / Nanotechnology George Whitesides, Harvard

Engines John Heywood, MIT

Batteries/ Electrochemistry Yet-Ming Chiang, A123 Systems/MIT

Energy Efficiency Amory Lovins, Rocky Mountain Institute

Hydrogen / Fuel Cells Henry White, University of Utah

Cryogenic Storage Tom Drube, Chart Industries

Applied Physics, Eng, and Policy Venkatesh Narayanamurti, Harvard (NEW)

Engines Robert Dibble, UC Berkeley (NEW)

Energy Security and Policy John Deutch, MIT (Chair)

• Provide evaluation and analysis guidance• Review - scope, technology barriers and gaps

– normalization and standardization across supply chains– technology acceleration, scalability and cost reduction

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NGO Outreach – San Francisco, CA & Washington, DC

Maximize Diversity Of Thought • Solicit NGO feedback and insights on issues of interest• Document and review participant feedback at the end of the meeting to assure accuracy• Communicate feedback to appropriate study groups• NGOs have expressed a strong desire for continued engagement in the study process

Participating NGOsAmerican Council for an Energy-Efficient Economy

California Energy Commission

California Public Utilities Commission

Center for Climate Strategies

Center for Energy Efficiency and Renewable Technologies

CleanTech Partners

Commonwealth Club-Climate One

Electrification Coalition

Energy Coalition

Environmental and Energy Study Institute

International Council on Clean Transportation

National Wildlife Federation

Natural Resources Defense Council

Resources for the Future

Securing America's Future Energy

Sierra Club

Focus of NGO Questions and Insights

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Progress

✓ Jun 2010 Executive Committee Approval of Study Work Plan

✓ Sep 2010 Committee Approval and Presentation to NPC

✓ Oct 2010 Reference Case Analysis Complete

✓ Nov 2010 Executive Committee Update

✓ Dec 2010 Step 1 Supply Chain Analysis Complete

✓ Jan 2011 Begin Step 2 Integration and Scenario Development

✓Feb 2011 Demand and Step 1 Draft Chapters Available – Review Begins

✓ Mar 2011 Executive Committee Update

✓Mar 2011 Step 1 Chapter Feedback and Edits – L1 Technical Peer Review

✓Apr 2011 Step 1 Draft Chapters Update and CSC Review - April 7

✓Apr 2011 Focus of Subgroup Work Moves to Step 2

Jun 2011 Executive Committee Update

Jul 2011 Begin Final Report Drafting, Validation, Review, and Policy Insights

Oct 2011 Submission of Draft Report to Study Committee

Nov 2011 Submission of Proposed Final Report to NPCEvaluating

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Timeline to Completion

May 2011 Begin Drafting Preliminary Findings

Jun 2011 Executive Committee Update (Propose Study Extension to Mar 2012)

Sep 2011 Executive Committee Update (Confirm Study Schedule)

Jun - Nov 2011 Report Drafting, Policy Insights, and Review

Dec 2011Dec 2011

CSC Releases Draft Report to Executive Committee (~12/8)Executive Committee Provides Feedback (~12/15)

Dec - Feb 2012 Feedback and Report Revisions

Feb 2012 Executive Committee Approves Release to Study Committee

Mar 2012 Study Committee Approves Release to Full NPC

Mar 2012 Full NPC Approves Report

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Biofuels Fuel / Vehicle

System

Hydrocarbon Liquids

Fuel / VehicleSystem

Natural Gas Fuel / Vehicle System

Hydrogen Fuel / Vehicle System

• Describe fuel/vehicle supply chain pathways and supporting infrastructure

• Identify opportunities and describe technology options which significantly accelerate supply with improved environmental, economic, and energy security characteristics

• Evaluate requirements to overcoming barriers

• Develop “supply curves” and associated environmental impacts

Step 1: Individual Fuel / Vehicle Options

Develop supply chain technology pathways that maximize commercial availability of more environmentally desirable, economically competitive, and energy secure vehicle systems in 2050

Use EIA’s Annual Energy Outlook (AEO) 2010 as the Reference Case for analysis– Includes extrapolation of EIA/AEO 2010 reference case to 2050 and 2005 carbon baseline– Accounts for potential impact of Federal, State, and local laws/regulations as of October 2009– Does not account for potential impacts of pending or proposed legislation, regulations, and standards

Method of Analysis

UPDATE

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Step 2: Demand/Supply Integration

• Describe an illustrative range of mobility demand for passenger and freight

• Describe potential commercially available fuel/vehicle portfolio mixes that meet mobility demand in 2050 in an environmentally desirable, economically competitive and energy secure way

• Include response to Secretary Chu’s supplemental question concerning 50% reduction in transport sector GHG emissions by 2050

Low Reference Case High

Environmental

U.S. Economic Growth and

Competitiveness

Energy Security

2050 Mobility Demand

Ob

ject

ives

CO2e emissions

Cost per mile Infrastructure cost Vehicle cost

Oil consumption Diversity of supply Domestically-

produced fuels

Examples of Possible Proxies

Potential 2050Commercially Available

Fuel / VehiclePortfolio Mixes

UPDATE

1706/14/2011 v1

Proposed Report Topics

• Introduction / Sec. Chu’s request

• Executive Summary

• Scope and Objectives

• Mobility Demand

• Reference Case Description

• Fuel / Vehicle Supply Chains & Technology PathwaysElectric Natural GasEngine Vehicle HydrogenBiofuel Liquid Hydrocarbons

• Fuel/Vehicle Portfolio Integration

• Recommendations

• Additional Considerations

• Bibliography and References


• Fuel/Vehicle Supply Chain discussions will:– Consider technology pathways– Maximize commercial availability of more desirable,

economically competitive, and energy secure fuel/vehicle systems in 2050

– In an environment unconstrained by competition from other fuel/vehicle systems

• Integrating Fuel/Vehicle Portfolio discussions will:– Integrate across supply chains– Consider a range of plausible fuel/vehicle combinations

that follow from different technical, environmental, economic, and energy security

• Extensive bibliography and references

UPDATE

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Meeting Conclusion

• Approve Continuation of Study

• Acknowledge• Proposed Schedule Extension to Mar 2012• Schedule Confirmation at ExCom Sep 2011


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End Executive Committee Meeting

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After Meeting DiscussionSample of Preliminary Draft Propositions Being Examined

NOTE• Technology Breakthrough are defined as overcoming technical barriers coded as red (not yellow

Highlight Technology Pathways work that has been done during Part 1• Talk about methodology• Describe process for including diverse and dissenting points of view• Voice over implications – do not include on slide because it gives the impression of completeness

UPDATE

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Technology breakthroughs are required in some fuel/vehicle combinations but not allTechnical breakthroughs are defined as those needed to overcome technical barriers coded red)

• The BEV will struggle to compete with other fuel/vehicle combinations in cost, range and longevity without a breakthrough in batteries

– The most optimistic projections do not reach US Advanced Battery Consortium (USABC) consortium’s target of under <$150/kWh as a minimum for long-term commercialization and $100/kWh as an ultimate end goal

– The battery mass can be a substantial fraction of the total vehicle mass, affecting traction energy requirements and overall vehicle dynamics, i.e., lower energy density relative to liquid fuels

– Decrease in capacity due largely to the decomposition of electrolyte species into the electrodes, a reaction which consumes functional Li thereby limiting the amount of total Li to be used in energy storage; thus the EV range decreases year by year, at a higher rate in extreme temperatures and higher use cycles

– The PHEV’s design mitigates or lessens the impact of some of these hurdles, but cost is still an issue

Implication: Without technology breakthroughs, it is likely that market penetration for electric vehicles will be dominated by PHEV’s. However, even in that instance, cost is still a barrier

Proposition Being Examined (1a electric)


UPDATE

2206/14/2011 v1


• Although there are economic hurdles, Natural Gas does not require significant technology breakthroughs

– There are technology opportunities (see proposition 2) that are important but they are incremental vs. breakthrough.

– NGVs can be configured with all of the relevant gasoline and diesel fuel efficiency technologies, selectively, to optimize either consumer economics, or societal gains in terms of GHG and petroleum reduction

– The main challenges are availability of vehicle models and refueling infrastructure, and the near term economic competitiveness of natural gas vehicle systems with their higher vehicle first cost as compared with incumbent gasoline and diesel engines

– As long as natural gas prices maintain or increase the current differential with petroleum products, increased penetration is likely and potentially over time could deliver the scale efficiencies and fuel savings required to make NGVs and the associated infrastructure competitive with ICEs. Note: the scale assumption is an important assumption as there are economic barriers to reaching this level of penetration

Implication: With no significant technology barriers, policy and incentives can have a significant impact on accelerating the scaling of natural gas use in transportation to a point where it becomes self sustaining

Proposition Being Examined (1b natural gas)


UPDATE

2306/14/2011 v1


• The key technology barriers in scaling hydrogen produced from natural gas are not the vehicle but refueling infrastructure deployment - challenged by limitations in compression storage at the station

– Compression and storage make up 50-75% of the infrastructure cost of approximately $1m/station (compression 20-50%, storage >25%)

– Compression and storage also require a significant amount of land, 9’x12’ for compression and 15’x30’ for storage – not including safety setback requirement - most of today’s retail footprints cannot accommodate these requirements

– Compression technology breakthroughs are required (e.g. reducing or eliminating the need for on-site compression through high pressure delivery (>700 bar), advanced materials for onboard hydrogen storage, development of new compressor technology)

– Storage technology breakthroughs are required (e.g. use of composite versus steel storage tubes could reduce land requirements from 15’x30’ to 12’x10’ - not including safety setback requirement, advanced compression technologies that increase the amount of useable capacity/allow for greater utilization of the total installed storage capacity by drawing low pressure hydrogen from storage and boosting it to fuelling pressures, advanced materials that have greater storage density, development of underground storage systems

Implication: Without a breakthrough in compression and/or storage technology that will reduce the cost and land requirements, it will be difficult to find investors who will build out hydrogen infrastructure

Proposition Being Examined (1c hydrogen)

DRAFT – DO NOT CITE OR QUOTE For Discussion Only UPDATE

2406/14/2011 v1

Advances in light-duty vehicle engine and platform characteristics have potential to improve performance for all fuel / vehicle combinations

Vehicle-level technologies

• The combination of vehicle-level technologies and propulsion technologies is the basis for assessing performance, benefits, and costs of any vehicle.

• Vehicle-level technologies can be combined in various ways to reduce fuel consumption, independently of the vehicle propulsion system.

• Technologies include: reduced rolling resistance, improved aerodynamics, mass reduction

Propulsion systems can be developed for various fuels or fuel combinations, such as liquid-fuel spark ignition ICE’s or ICE/ electric hybrids

Implication:

• This is a finding about technology transfer, insertion and commercialization

• Auto manufacturers routinely apply vehicle-level technology—and propulsion technology, if possible—across vehicle types.

• This finding may prompt a recommendation about accelerating technology transfer and commercialization

Integrated Preliminary Draft Proposition (2)


UPDATE

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It will take significant time for many advanced engine/vehicle/fuel technologies to materially impact overall U.S. fuel/vehicle portfolio performance after initial commercialization of those technologies

• Complexity and constraints of engine/vehicle supply chain operating model results in slow and incremental introduction of advanced technologies over time.– Lead time for new core vehicle architecture is approximately 4 yrs– Core architecture usually intended to remain in production for 10-12 yrs – Conceptualization and development of new vehicle can take 2-4 yrs– OEMs manage product portfolios with 5-10 year horizons, and cadence development/launch of vehicles

Implication: Even under favorable conditions, deployment of a new technology across full portfolio of an OEM’s fleet can take 10-15 years; achieving near-term material impacts of new technologies on fuel/vehicle portfolio mix requires speeding of technology introduction cycle times

• New vehicle programs are rarely done as a “clean sheet”; existing architectures, systems, and components are highly leveraged to minimize risks, expenses, and development time; Most programs consciously avoid “invention” on the critical path to maintain program timetables and reduce overall risk.

Implication:“Clean sheet” design/architecture further increases lead time, cost, and risk of technology introduction

• Once available to consumers, advanced technologies require significant time to penetrate U.S. vehicle stock.

Implication: Vehicle stock turnover rate further compounds delayed material impact of new engine/vehicle technologies.



UPDATE

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In 2050, there will be a significant and diverse set of fuel / vehicle options to satisfy mobility demand

• Global demand for transportation energy will continue to grow, as emerging economies and other factors sustain the trend of increasing demand for energy in all sectors of the global economy.

• Economic competitiveness (low cost), energy security (resiliency to changes in supply or cost spikes), environmental protection (minimization of environmental impacts) are all important drivers of energy choices. Today, no one fuel/vehicle type has superior attributes in all three of these areas.

• The resulting inconsistencies in global transportation programs, policies, and regulations tend to favor different transportation fuels under different circumstances (i.e. emphasis on economics, security, or environment). In addition, different fuel/vehicle type attributes inherently align better with the needs of specific vehicle classes (e.g. electric is not well suited to heavy duty).

Implication: • Transportation products continue evolutionary advancement to more favorable attributes:

– hybrid electric continues to improve energy efficiency– hydrocarbon liquids/biofuel blending ratios may respond to shortages and environmental impact– PHEV10 / PHEV40 may allow balance of hydrocarbon liquids, biofuels and electric

• This trend will continue until a breakthrough enables a revolutionary step change.• But if the breakthrough is not available for commercial release until 2030 or 2040 – transportation

sector may have already evolved to comfortable integration of HEV and PHEV using blended liquid fuels



UPDATE

2706/14/2011 v1DRAFT – DO NOT CITE OR QUOTE

For Discussion Only

Stop at 3-4 insights for Fuels ExCom Discussion

The following have not been updated

2806/14/2011 v1

• While a broad market migration from ICEs to electric vehicles across all vehicle classes is not possible without major advances on multiple fronts, there is still significant opportunity to replace gasoline miles driven with electric miles driven.

• In a scenario where a larger percentage of vehicles are grid-connected, e.g., the 30% case, “smart grid” technologies and applications will be necessary to avoid adding generation and transmission capacity.

• Based on projected battery cost reductions, up-front cost parity between electric and conventional vehicles does not appear to be possible through incremental improvements in lithium-ion batteries. To reach up-front cost parity to an ICE vehicle, a breakthrough in battery cost is needed.

Proposition Being Examined (Electric)


UPDATE

2906/14/2011 v1

• While there are infrastructure and initial vehicle cost challenges, NGV are a credible long term contributor to the FTF portfolio providing a viable pathway to achieve x% GHG reduction across the transportation fuel portfolio.

• Implication: With initial support for infrastructure build-out and maturity coupled with incentives aimed at accelerating technology, NGVs represent a credible contribution to the FTF portfolio and a viable pathway toward x% GHG reduction.

• The EIA Reference case shows a very modest growth in natural gas usage as a transportation fuel, which is a very conservative view not reflecting the full potential of natural gas. It does not reflect a material contribution for natural gas to the nation’s energy security and GHG problems. An alternative to this view provides a credible indication of a greater potential for GHG reduction.

• Implication: An alternative to the EIA base case indicates a range of GHG reduction up to 50% reduction can be achieved through commercial scale of NG HD trucks

Proposition Being Examined (Natural Gas)


UPDATE

3006/14/2011 v1

• The timing for large scale US biomass beyond corn will likely be a decade or more.

• Implication: RFS2 targets related to the use of lignocellulose will not be met

• Growing E85 could be a lower cost way of meeting RFS2 36bn gallon mandate by 2022 than higher blends.

• Implication: The infrastructure to support E15 across the whole gasoline fleet will cost more than E85 for a portion of the fleet

Proposition Being Examined (Biofuels)


UPDATE

3106/14/2011 v1

• While the potential exists for a sizeable XtL industry, it is not likely to displace a significant fraction of the HCL market, nor will it have more than a marginal impact on GHG reduction.Implications:• Long-term development of alternative hydrocarbon liquids (GTL, CTL, oil shale) will require higher prices than are

currently forecast, unless capital costs are reduced significantly. However, a large potential resource remains on the margin of oil supply through the outlook.

• The capital demand is not insignificant in this alternative outlook. When compared with the large lower cost resource base, the legacy investment in refineries, existing infrastructure, and plentiful dispensing network it is expected that hydrocarbon liquids will continue to provide the majority of transportation fuel for the outlook period.

• While improved by CCS, GHG reduction performance of XtL is marginal compared to traditional Hydrocarbon Liquids.

• While Hydrocarbon liquids facilitate the use of biofuels by providing product integration that is seamless to the customer and by providing key distribution infrastructure, increasing use of biofuels raises a number of issues in the distribution system that cause additional capital and complexity for the hydrocarbon liquids supply chain. Coupled with inconsistent regulatory requirements, accelerated penetration of higher bio-blend fuels is hindered thereby delaying the opportunity to accelerate associated GHG reduction. Implications:• Step-wise (E10 –E15 –E20…) introduction of higher ethanol transportation fuels is costly and inefficient. One-step

conversion to E85 compatibility results in the least cost and most flexibility long term.• Associated capital cost for infrastructure & upgrades, limitations in the vehicle and fuel distribution infrastructure and lack

of alignment between fuel and vehicle regulatory requirements will continue to hinder penetration and adoption of higher bio- blend fuels.

• Delayed penetration of higher bio-blend fuels delays acceleration of achievable GHG reduction.• Unintended consequences of regulations (ex: co-processing “penalties” and inconsistency between RFS 2 and vehicle

requirements) discourage certain technological investments, promote uncomplimentary behavior across industries, and ultimately hinder accelerated GHG reduction.

Proposition Being Examined (Hydrocarbon Liquids)


UPDATE

3206/14/2011 v1

• FCEVs are comparable to conventional ICEs in most operating performance measures, and FCEVs significantly exceed conventional ICEs in environmental measures.

• FCEVs will be more costly than conventional vehicles upon commercial introduction and will require incentives to facilitate introduction comparable to those for plug-in hybrids and battery electric vehicles today.

Representative Insights (Hydrogen)


UPDATE

3306/14/2011 v1

Under various conditions, fuel portfolio will shift in different directions. Some fuel/vehicle portfolios will more dramatically change the gasoline to diesel (G to D) demand ratio.

• Shape of the barrel or G to D ratio is an indication of the impact of portfolio changes.

• E.g. as the use of electric passenger cars increases, associated gasoline demand decrease will be disproportionately greater compared to that of the associated distillate demand decrease.

• With decreasing demand (relative to diesel), limited ability to shift refinery product yield from gasoline to diesel, and more substitution alternatives /competitors than diesel, hydrocarbon gasoline shifts from that of a primary product to that of a distillate bi-product.

• Implications:

• With lower demand, limited ability to shift refinery product yield from gasoline to diesel, and more substitution alternatives /competitors than diesel, gasoline shifts from that of a primary product to that of a distillate bi-product resulting in downward pricing pressure thereby making it more difficult for alternatives to compete.

• Future projections indicate a state wherein the ability to cover projected distillate demand is limited by distillate supply (refined hydrocarbon distillate and substitutes).

• Alternative scenarios that further shift the required refining G to D ratio will add additional cost pressure for gasoline alternatives to compete while incentivizing distillate alternatives.

Proposition Being Examined (Engines & Vehicles/Heavy Duty)


UPDATE

3406/14/2011 v1

• It can take many years to deploy new technology throughout a vehicle manufacturer’s full portfolio of products, and a decade or more to significantly penetrate the operating vehicle inventory.

• Implication: High-volume saturation of the U.S. vehicle stock with advanced technology vehicles that consume significantly less fuel can take many decades, driven mainly by the compounding of vehicle and technology development lead times, cascading through a manufacturer’s product portfolio and gradual replacement of old vehicles with new.

• Substantial reductions in fuel consumption will not be achieved with a single technology, but will require appropriate technology combinations.

• Implication: Further R&D and pilot programs are needed in all cases to accelerate these technologies.

• The major barrier to high volume deployment of advanced vehicle and engine technologies for improved fuel economy is that available and forthcoming technologies are not cost effective for the consumer at current petroleum-based fuel prices in the U.S.

• The carbon reduction goals of this study cannot be achieved without high volume, low cost biofuels -- even with improved vehicle technologies.

Proposition Being Examined (Engines & Vehicles)


UPDATE

106/14/2011 v1 national petroleum council future transportation fuels study draft executive...

Documents

v1 reminder

minutes draft

continuation of study

study process

study methodology

secretary of energy

v1 sectionpage

revised schedule draft