David Hone

Following on from my previous post, I spoke at the opening lunch of Singapore Energy Week on the same subject  – a trillion tonne carbon budget. The core of the story went something like this.

The starting point is a trillion tonne “glass”, now just over half full with industrial revolution carbon (data from IEA and CDIAC), coming both from fossil fuels and deforestation (in reality it is probably worse than this as my simple analysis did not include the other greenhouse gases). The world is filling the “glass” at an increasingly rapid rate and it is now over half full.

If the world continues to fill the “glass” through to 2100, with emissions growing at 1% per annum (as an example – but energy related CO2 emissions have increased at 2% p.a. over the last 40 years – but have dropped by some 3% in the last 12-18 months) then we end up with some two trillion tonnes of carbon emitted since 1750, well above the trillion tonne level that equates to a 50% chance of hitting 2 degrees C – in other words, “two glasses completely full” and a world quite a bit warmer than 2 degrees C.

In reality, the current global hydrocarbon reserve picture does not fully support such a simple proposition. Using the oil, oil-sands, gas and coal reserves data in the BP Statistical Review of World Energy 2009 and assuming that all those reserves are consumed, together with assumptions on the growth in cement manufacture  and continued land use change, the carbon situation looks more like this – two “glasses”, each not quite full.

I then turned attention to solutions with a focus on the largest overall contributor, coal. Today there is some 1000 GW of coal fired power generation, producing about 8 billion tonnes of CO2 per annum. According to the International Energy Agency, emissions are growing at 6% p.a.  The chart below shows growth is accelerating rapidly in China, but also in the rest of the world outside North America.

If we assume that emissions from coal fired power stations double by 2050, then plateau for the remainder of the century, then this alone fills the trillion tonne “glass” from where the world is today. Coal reserves can more than support such a move although it will be a challenging level of production.

One approach is to look to carbon capture and storage  (CCS) for a solution.  CCS represents a safe and sustainable approach for dealing with CO2 emissions and is based on a family of technologies all in use today. Although large scale end-to-end demonstration needs to happen urgently, deployment need not be some distant dream.  As a thought experiment, what if we started building all new coal fired power stations with CCS and either retrofitted with CCS or replaced all existing coal fired power stations by 2050. The global carbon story through to 2100 would change radically and look something like this – a “glass and a bit”, so still not there, but a huge improvement.

This is a pretty heroic assumption, but nevertheless points toward a solution, or at least part of it. In reality we have to do much more, but the focus need only be in five areas. They are;

1.  More efficient use of the energy sources that are available;
2.  Increased use of renewable and nuclear sources for the provision of energy;
3.  Carbon dioxide capture and geological storage in tandem with the use of fossil fuel sources for the provision of energy [or with the chemical conversion of fossil derived materials for the provision of various manufactured products];
4.  Containment, destruction and reduced usage of greenhouse gases other than carbon dioxide;
5.  Reducing emissions through land use, land use change and forestry, including reducing emissions from deforestation and degradation.

I concluded with some discussion on the policy measures necessary to do all this, which I have discussed in many previous postings.

This week I managed to stay a bit closer to home and met up for lunch with Dr. Myles Allen of the Department of Physics (Atmospheric, Oceanic and Planetary Physics) at the University of Oxford.

Although we have probably all understood the bit about the “area under the curve” when it comes to CO2 emissions, Myles and his team have brought a whole new dimension to the issue with a recent article in Nature. The core of the arguement is that simply emitting carbon dioxide slower will not address the  issue of climate change unless it involves phasing out carbon dioxide emissions altogether, before we reach an upper limit of one trillion tonnes of carbon.

According to Myles the risk of exceeding the EU stated target of 2 degrees Celcius is primarily determined by the accumulation of carbon dioxide emissions over time, not by short-term emission rates. He has shown that total cumulative emissions of one trillion tonnes of carbon (1 Tt C, or 3,670 billion tonnes of carbon dioxide) over the entire ‘anthropocene’ period 1750-2500 causes a most likely peak warming of 2 degrees Celsius above pre-industrial temperatures. Of this budget, emissions to 2009 have already consumed approximately half (0.5 Tt C).

You can track the “progress” (hardly seems the right word for this) of global carbon emissions on his website. As of today 532 billion tonnes of the trillion tonne budget have been consumed. Extrapolating emission rates forward leads to the forecast that the trillionth tonne will be emitted sometime in the late first quarter of 2045 (although the website shows this moving forward all the time). All this means we have 468 billion tonnes left – which might sound alot, but carve that up amongst 200 countries with populations ranging form 1.4 billion down to a few thousand and it presents quite a problem.

The EU and the USA are already in the process of carving their bit out. Have a look in Waxman-Markey and add up the number of allowances to be issued into the US economy between 2012 and 2100 (from 2050 onwards one billion tonnes of CO2 per annum are allowed) and it comes to 50 billion tonnes of carbon (which doesn’t even account for the whole economy, but most of it). This represents nearly 11% of the total remaining carbon emissions for some 5% of the global population.

Whilst this is a huge reduction from current US emissions (which, according to the IEA, account for some 20% of global energy related CO2 emissions), it of course raises the difficult question of equity. Add to this the fact that US and EU economies will be able to emit more as they purchase offsets from other countries. This in turn raises the issue as to the nature of offsets. In order to keep this system whole all offsets should really only be sequestration based – i.e. a tonne stored away for every tonne emitted. That means forestry and carbon capture and storage and that’s all, although GHG destruction should probably also qualify. By 2050 of course we may also be talking about a tonne removed from the atmosphere, but that will still have to be sequestered somewhere as well. There is a certain irony here in that neither forestry nor CCS qualify as offsets under the EU-ETS today – in the case of forestry it is because the EU doesn’t want to allow it and in the case of CCS because the international community won’t allow it to qualify under the CDM.

Another aspect to all of this is that very long tails of low emissions can’t be allowed. Waxman-Markey does an excellent job of driving down US emissions to very low levels by 2050, but then has a billion tonnes of CO2 remaining indefinately, i.e. a very long tail. Over time that continues to accumulate which just adds to the problem. As I have noted in a previous posting, the last 20% is indeed problematic, but under a trillion tonne scenario it cannot be. As it will be extraordinarily difficult for an economy to get to zero emissions, the solution will doubtless be net zero emissions, which could mean sequestering a tonne of CO2 from the atmosphere for every tonne emitted, either by direct removal or by gasification of biomass to produce electricity with the resultant CO2 being stored.

This will indeed be a brave new world.

One of the most important moments at the recent Bangkok UNFCCC meeting was the release by the IEA of its Climate Change Excerpt to the World Energy Outlook 2009. The full World Energy Outlook will be released in November as usual, but the pre-release was done to coordinate with the talks in Bangkok.

The excerpt lays out a possible 450 ppm energy scenario, built in part on the fact that the recession has given us something of an emissions break, with the IEA estimating that global emissions have fallen some 3% as a result. Whilst emissions will start growing again (and probably already have), the drop is akin to at least a 3 year reprieve, which means that the window of opportunity for 450 ppm is slightly open. But this is no easy scenario and in fact doesn’t plateau at 450 ppm, but overshoots it and reaches some 510 ppm in 2035 before beginning a gradual decline from about 2045. Global energy emissions must peak just before 2020. By contrast, the reference scenario sees atmospheric levels of CO2 eventually rising to over 1000 ppm and 2030 emissions some 14 GT greater than the 450 ppm scenario.

Key mitigation approaches are shown in the chart, but energy efficiency is clearly a major part of the pathway forward. The assumptions are very challenging and will really test our capacity for change.

But the evidence we can do this is starting to appear. Whilst in Abu Dhabi this week I was taken on a short tour of the construction site that will become Masdar City. This will be the worlds first carbon neutral, zero-waste city. It will have a working population of 90,000 of whom 40,000 are residents and be powered entirely by renwable energy. The city is being built in traditional Arabic style, with narrow streets and natural shading and with a number of features to improve the circulation of air and therefore energy efficiency of the buildings.

Masdar City CO2 compared to a conventional city.

The transport infrastructure of Masdar City is also different to every other city in the world. There are no cars, just light rail and personal rail transport (PRT) – in effect small capsules on a rail system for individual and family use. The railway system is starting to appear on the construction site and a test PRT capsule has been delivered.

Masdar still faces challenges, particularly water supply. There is none, so pretty much all the water comes from desalination plants, which also means that the water has a high energy footprint. But tremendous efforts are being made to conserve and recycle, so net use will be low.

Masdar represents a truly large scale working demonstration of what is possible if we are prepared to invest in infrastructure and push technologies and design well beyond business as usual. Demonstration is also a vital step in the commercialisation of new technologies and approaches and Abu Dhabi Future Energy Company know this – I am sure they will build a flourishing business on the back of the techniques they develop in Masdar City. A truly remarkable transformation is taking place in this arid region.

A final interesting observation (at least to me) from the excerpt is that IEA have started showing total cumulative emissions since 1890 and national shares of the accumulation. This is important as the real measure should not be the particular level of emissions in any given year but the total cummulative emissions compared to the carrying capacity of the atmosphere, which is about 1 trillion tonnes of carbon (3.7 trillion tonnes of CO2). The figures shown are of course energy emissions and do not account for other gases, forestry and agriculture.
 
Photos and charts: Abu Dhabi Future Energy Company & International Energy Agency

Late last week a significant development came from an equally significant slice of the global shipping community – support for action to reduce CO2 emissions from international shipping in the form of a global cap-and-trade system. International marine and aviation bunkers were excluded from the Kyoto Protocol, but if there is one thing I can be sure of seeing from Copenhagen is that this exclusion will no longer be the case. Shipping emissions will almost certainly be included and the shipping community will either grasp the opportunity to shape its future in terms of policy or it will have its future shaped for it by national governments and the UNFCCC.

The announcement comes in the form of a discussion document released by the British, Australian, Belgian, Norwegian and Swedish ship owners associations. The document clearly outlines the issue and challenges, spells out the advantages of a trading approach and then outlines two different constructions for a possible system. At this stage the document doesn’t discuss the scale of reductions, but I don’t think that is important right at this moment. Rather, the industry is taking a major step into the policy arena with a view to charting its own course foward (pun intended, sorry).

What really differentiates the two models in the document is the flow of money. In the “sectoral” approach, the industry pretty much creates its own allowances (although they originally come from the UNFCCC in the form of AAUs), auctions them, manages the revenue from the auctions and establishes registries and compliance mechanisms. Revenue management is not discussed in great detail, but it is clear that some portion is directed towards technology development. By contrast, the “distibuted” approach sees national governments being issued additonal AAUs to cover international marine bunkers (but only those governments with national targets also underpinned by AAUs)  and the shipping market buying either CERs from developing country projects or AAUs from government auctions. The industry maintains its important role in the compliance process but has little control over the money flow. That rests largely with governments.

The flow of money is bound to be a divisive issue, with many shippers, as with big emitters in land based systems, arguing that they should be in control of the auction revenue raised. It is difficult not to be sympathetic with this, but the reality of our world is that governments control the money flow, not sectors or industry associations or even banks. This is almost certainly a subject for further postings.

I will certainly write more about shipping in the weeks ahead, but in the meantime I would recommend reading this document. The shipping community that put it together deserves a round of applause for taking on a difficult subject at a pivotal moment for the industry.

At a recent UK Government stakeholder meeting in London the issue of transport and electric cars came up. Based on information from an adviser on climate change to the government, there seems to be a working assumption that electric cars will take hold in the market with significant sales and that by 2020 we could have between 1 and 2 million such cars on the road in the UK.

Today the UK car population is some 28 million, so this would represent nearly 7% of the total fleet if we actually reach 2 million vehicles. We have just 10 years to 2020 and the statement really made me think about the feasibility of such an achievement.

A few years back when developing the WBCSD publication Facts and Trends to 2050, I did some calculations on vehicle fleets to illustrate the scale of change needed to turn over the entire global fleet. We assumed the following;

• An “alternative (e.g. electric) vehicle” was available for large-scale manufacture in 2010.
• Initial production would be 200,000 units per annum and production would increase by 20% per annum until the entire world’s manufacturing capacity was making this sort of vehicle.
• The global vehicle fleet would be growing at 2% p.a.
• Global manufacturing capacity would be increasing at 2% p.a.

This very simple calculation resulted in the adjacent chart, which shows that it is not until 2040 that the total traditional vehicle fleet start to decline, but then it falls very quickly. The point of this calculation was to illustrate that unless we start now, it will not be possible to achieve significant CO2 reductions by 2050 given the scale of the energy system we live with today and the lag before it really starts to change.

So getting back to the UK, what might be achievable by 2020. There are in fact two issues; the vehicles themselves and the necessary infrastructure to support an electric fleet. I will just look at the number of vehicles for this posting.

Today in the UK there really aren’t any electric cars. Although I met someone who bought a Tesla Roadster and there are a few mini-electrics in London, principally to avoid the Congestion Charge, I don’t think this really constitutes a “fleet” as such. But at least we do have a number of manufacturers showing prospective cars; the Chevrolet Volt, the Nissan Leaf, the Daimler Smart and several others talking about their plans. It looks like we might have some global manufacturing capacity by 2011.

An electric car in London today

To get to around 1.8 million by the end of 2020, the UK would have to put 10,000 cars on the road in 2011 and grow that number by some 60% per annum, such that by 2020 about a quarter of all car sales (i.e. 680,000 out of 2.5 million per annum) are electric. Assuming no cars are lost along the way, the cummulative total comes to 1.815 million.

The 2011 start won’t be easy either; this is the equivalent of the total annual UK sales of the Smart car. However, cities like London are ideal places for electric cars so there may well be the demand here, particularly with policies such as the Congestion Charge.

Globally, there are about 70 million cars produced annually. The UK takes in 2.5 million of these or less than 4%. An electric car manufacturer isn’t going to direct all its sales to one market, but let’s assume that the UK is a premium market and can attract 8% of the production of these models – i.e. double its normal market share.

If we want 10,000 cars on the road in 2011, that means global production must be 125,000. Assuming a number of manufacturers start off with modest production lines (i.e. 20,000 vehicles, similar to the initial production of the Prius), we would need at least six big launches followed by immediate production in the next 18 months. By 2020, global production would need to be nearly 10 million cars per annum, which is the equivalent of about 100 major production lines.

In 1998 annual Prius production was about 17,000 vehicles. Just prior to the recession it was close to 300,000.

Somehow I think that the UK assumption is quite a bold one.

A tectonic shift may be underway in Japan, but not of the sort normally associated with this country and its frequent earth tremors. Rather, a new era in climate politics may dawn as a result of the recent win by the DPJ in the national elections. This is because within the manifesto pledges of the DPJ sit two key policy choices, now (Monday September 7^th) formally announced by incoming Prime Minister Yukio Hatoyama;

1. A commitment to reduce national emissions by 25% by 2020, relative to 1990 – this compares with the proposal by the LDP of an 8% reduction, one which was heavily criticised internationally as being insufficient support for the developed country contribution to an agreement in Copenhagen.
2. A commitment to implement a cap-and-trade system within the Japanese economy. Although the previous government had talked about this policy instrument, little progress was made in implementing it given the negative position that some business groups took towards it.

Whilst much domestic “nemawashi” is still to take place, this shift could be critical for the success of an agreement in Copenhagen.

But Japan already finds itself an international leader in energy management, given the energy legacy inherited from the previous administration. However, the CO₂ story in Japan, whilst positive, has not delivered an overall drop in emissions. Whilst energy diversity and efficiency have been key policy objectives for many years now, absolute CO₂ emissions have risen by nearly 15% from 1990 (to 2006, IEA). At the same time emissions in the EU-27 have fallen, but only slightly. Over the same time period CO₂ emissions in the USA have risen by just over 19%. 

A big difference lies in the power sector, with Japanese power emissions staying at around 430 gms CO₂ per kWh over a 20 year period, but EU power emissions falling from over 430 gms per kWh to some 350 gms per kWh in the same period. This is due to the continuing rise of nuclear power in the EU, the influx of natural gas and the more recent aggressive build of renewables in countries such as Germany and Denmark.  By contrast, Japan has seen emissions from coal grow by 45% over the same period, much of that in the power sector.

With a transport sector already one of the most CO₂ efficient in the world and an efficient manufacturing base, the power sector will become a particular area of focus.  But efficiency alone is not going to deliver the necessary change, so fuel switching (i.e. more natural gas), renewables and international offsets will all play important roles.

The last item above will be critical to the strategy. But to be truly effective, the tougher target must be backed by an emissions trading system, which is also a preferred policy position of the DPJ. A Japanese emissions trading system, with very open access to international markets will allow the domestic target to be met but importantly will direct significant funding to developing countries.

Some quick numbers – let’s assume domestic emissions in 2013 are down to 1100 MT (with the Kyoto target met through CER and AAU purchases) and that the country can reduce this to 1000 MT by 2020 (i.e. a ~20% reduction from 2006 to 2020). Therefore, meeting a 2020 target of 810 MT CO₂ (i.e. 25% lower than 1990) could mean the purchase of over 800 million tonnes of international credits from projects between 2013 and 2020.

Between Japan, the USA, the EU, Canada, Australia and New Zealand, six cap-and-trade systems could be buyers of some 10 billion tonnes of international reductions in the period 2013-2020, giving rise to not only a very large and liquid global carbon market but also an ability to fund very significant step changes in developing country emissions. In tandem, new avenues of supply would have to be rapidly developed, including a mechanism that supports some kind of sectoral crediting, although this will likely be more successful as an outgrowth of the CDM through the creative use of methodologies rather than an entirely new approach.

The announcements by the new government in Japan, if put into practice over the next three years, could have very far-reaching effects. Rather than facing the prospect of a lone EU-ETS struggling to hold the fort for this powerful market instrument, we instead head rapidly into the brave new world of a global carbon market.

During my second year at University I worked for two months in a cement plant as part of the “practical experience” element of my chemical engineering studies. This was about 30 years ago and in those days nobody talked about CO2 – I don’t recall any mention of the CO2 footprint of cement or the overall impact of the industry on the environment (nor, for that matter, when I worked for the local electricity generator – mainly coal – a year later).

Today, CO2 emissions have a very high profile in the cement industry. The CO2 intensity of cement manufacture is one of the main issues being addressed by the Cement Sustainability Initiative (CSI) formed under the auspices of the WBCSD. Of course there are good reasons why this is necessary – the manufacture of a tonne of cement can deliver up to three quarters of a tonne of CO2 released into the atmosphere. This comes from two sources;

1. The chemical reaction that converts limestone into cement, which results in ~0.42 tonnes of CO2 per tonne of cement produced;
2. The energy required in the cement plant to drive the conversion, which varies significantly depending on efficiency and fuel types, but for a modern cement plant 0.3 tonnes of CO2 per tonne of cement is probably a fair number. Some are better but equally some are worse, although the CSI is doing much in this area.

I think that the issue with cement is not so much the impact it is having today (although with global production of some 2.7 billion tonnes total emissions are about 4%) but the impact this industry will have over the rest of this century. A simple analysis shows that the industry must also deliver on some very substantial reductions in the relatively near future.

Cement (and the concrete it is used to make) is quite literally the backbone of our civilization. It is hard to imagine the cities we have built existing without cement. But with production growing rapidly as new cities spring up across the developing world, a very substantial emissions impact is in store for us.

Current estimates show cement production reaching over 5 billion tonnes per annum by 2030. Let’s also assume that after that it continues to grow, but plateaus between 7 and 8 billion tonnes per annum in the second half of the century. That will mean a total cumulative cement production between now and the end of the century of more than half a trillion tonnes.

In a previous posting I discussed the issue of cumulative CO2 emissions as the better measure of what must be managed, rather than emissions in any given year. The researchers who presented this concept made the point that to stay under 2⁰ C we should limit total carbon emissions to 1 trillion tonnes, or 3.7 trillion tonnes of CO2 – of which we have now used half. So we have 1.8 trillion tonnes of CO2 emissions left at the very maximum (there were various confidence level reasons why they thought we should actually aim for less than this, but I will work with the upper limit).

Society has now recognised that the oil, gas and coal industries must develop technologies such as carbon dioxide capture and storage (CCS) in response to this. But the fossil fuel industry won’t be on its own. Industries like cement are going to have to respond as well, and energy efficiency is not going to get them there.

The half trillion tonnes of cement could lead to total CO2 emissions this century of some 400 billion tonnes, or about 22% of the available emissions space. Even the chemical process emissions on their own would use up some 13% of the total (assuming a zero emission alternative fuel is used – e.g. bio derived).

So it seems to me that the cement industry and probably some other industries as well are also going to have to develop CCS solutions. One of the issues faced by this industry could be cost. Whilst sequestering all the CO2 emissions associated with a barrel of oil might amount to a third or less of the cost of that barrel (assuming $60 per tonne for CCS in the long term and 0.3 tonnes of CO2 per barrel and oil at current prices), in the case of cement which costs something like $60 per tonne, the implication is an 80% price rise.

This presents the industry with quite a challenge.

It may be vacation time, but I find I am not far away from the world of climate policy – in fact a trip with my son up to Norway by ship gives an excellent perspective on policy measures that are delivering real results.

We started out in Copenhagen, with the main convention centre near the airport already sporting a Vestas wind turbine out the front, presumably in readiness for COP 15 in just a few months time. This turned out to be the first of many that can be seen around Copenhagen and in the near vicinity. Although Denmark still relies on both coal and natural gas for electricity generation, it now also generates more than 6000 GWhrs per annum from 5212 wind turbines (2007), making up nearly 20 % of domestic electricity supply.

Wind, coal and gas are all used in Denmark

A spectacular array of turbines can be seen in Copenhagen harbour and the main shipping channel serving the city. Oddly, the actual number of wind turbines in Denmark is expected to decline in the near term as older small units (< 500 MW) are decommissioned and new large units are built (now up to 4+ GW).

Copenhagen harbour

This transformation in the energy mix comes through the application of a focussed policy agenda which supports wind energy through a fixed tariff approach. In the process Denmark has built a significant wind industry, employing nearly 30,000 people and delivering export earnings of €5.7 billion per annum.

Norway has led the way in carbon dioxide capture and storage (CCS) and some 8 million tonnes of CO2 has been successfully sequestered within the Utsira formation by Statoil Hydro. The CO2 comes from the Sleipner natural gas field where it is removed from the natural gas by amine treatment. Importantly, 12 years of storage experience now exists in this location and there has been no trace of any leakage despite extensive monitoring. The CO2 sits in the formation about 1000 metres below the sea bed, protected by some 800 metres of cap rock.  Today, the north-south extension of the Utsira / Sleipner carbon dioxide plume is about three kilometres long. Over time the CO2 will dissolve in the formation water and sink to the reservoir bottom.

Oil, gas (and now CO2) rigs can be seen in the Norwegian North Sea

Getting back to the policy aspect of this, this pioneering CCS project has been underpinned by a long standing CO2 price in the Norwegian offshore sector, delivered by a ~$50 per tonne CO2 tax. Similarly, the EU-ETS and other nascent trading systems are beginning to deliver a CO2 price into the broader developed country markets.

The experience in Scandinavia supports a number of points:

• That big changes can be made in the energy system over a number of years, provided policy is focussed, long term and that the government stays with it.
• That CCS is a viable technology that can be delivered on commercial terms provided a suitable CO2 price exists in the market.
• That CCS is a safe technology, backup up by experience and monitoring for over 10 years.

Both Norway and Britain have their eyes on a large-scale CO2 storage industry. One of the Norwegian maritime schools has even proposed a design for a multi-purpose vessel which could be used for backhaul transport of CO2 to suitable storage locations. In such a service, CO2 transport costs from other Northern European ports to the North Sea could be less than €10 per tonne.

Replicating the achievements of Denmark and Norway is now a priority for many countries. But results will take time and successive governments will need to persist with and build on the foundations put down by their predecessors. On this issue at least, bipartisan politics will need to be the name of the game in the years to come.

Our ship in Geiranger Fjiord at the norther end of the Utsira formation

Probably without really thinking much about it, we have pretty much engineered our entire society around the distillation curve of a barrel of crude oil – or at least the barrel that was easy to find in the 1950s or there abouts.

Most of our cars run on gasoline, largely because of the invention of the spark ignition internal combustion engine, where the fuel is a compromise between one that is volatile enough to vaporize but not too volatile to result in pre-ignition.

Rudolf Diesel originally designed his engine to run on peanut oil in the 1890’s, so it then found a home with the heavier distillates from crude oil. Since then it has become the backbone of heavier forms of transport such as trucks, ships and industrial vehicles. It is also making significant inroads into the passenger vehicle segment given its high efficiency (50% in the EU but much less in the USA).

A jet engine can run on a wide variety of fuels, but owing to the shortage of gasoline during the second world war, illuminating oil (kerosene) was the chosen product. Since then we have optimised this engine for this type of fuel and built a wealth of infrastructure at airports to support its use. Even its flashpoint specification was in part due to the need for safe handling on an aircarft carrier.

We have also optimised at the bottom of the barrel, using heavy fuels in ships and putting bitumen on our roads.

So as we seek lower carbon emission fuels for transport, do we try to replicate the exisiting approach or develop alternatives? Picking and choosing may not be an option here. For example, if we were to move away from deisel and gasoline for personal road tranport but decide to retain kerosene for aviation it unbalances the product slate that is produced by refineries. But the aviation sector is pretty much locked into kerosene, with no immediate developments on the horizon for alternative fuels. That then points to a solution which replicates kerosene from bio-sources, thereby utilising all the existing infrastructure. Alternatively, we continue to extract kerosene from crude oil and use the remaining products in gasifiers, combined with CCS, to make hydrogen and electricity. Interestingly, the very early use of crude oil also focussed on this cut of the barrel. The illuminating oil was extracted as an alternative to whale oil and the remaining distillates were “disposed” of.

Just looking at road transport alone, the future could well become quite complex. As other forms of transport are included it is not difficult to see that the relatively simple energy supply route we enjoy for transport today is going to change.

On a shopping trip in London’s West End on Saturday I came across the first real signs of the dawn of the electric car – charging poles. These have been installed by EDF, look a bit like parking meters and are available, with a free dedicated parking spot, for electric car owners needing a recharge. Then on Sunday at a BBQ I met someone who is about to take UK delivery (the 7th in the country) of a Tesla Roadster from Tesla Motors. Tesla now market two electric cars, the aforementioned Roadster which is available today and a small Sedan, the Model S which is targeted for 2012. Both seem to have excellent performance and reasonable range (some 400 km). Tesla is a US company.

So has the electric car now arrived?

Certainly there are now some real models startring to appear in the showrooms and judging by the announcements by many manufacturers, quite a few more models could appear in the near future. In London today there are also a number of very small electric cars which people use for local commuting and avoiding the £8 per day congestion charge. The most popular of these is the G-Wiz car, now available with a Lithium Ion Battery. These cars are manufactured by the REVA Electric Car Company in Bangalore (India), currently the world’s leading electric car manufacturing company.

We might therefore imagine that electric cars will be everywhere in just a few years and that the days of the internal combustion engine are over. I remember getting my first digital camera in 1995, a model from Apple (who don’t even make them now). At that time I was incredibly impressed by the 1 million pixel images and imagined that within 10 years film cameras would be well and truly on the way out. Today it is hard to even find one in a camera store. But electric cars will be different. Hybrid technology has been around for over 10 years now and whilst Toyota and Honda have been incredibly successful with them, less than 2 million have been sold globally. In the same 10 years global auto production was some 700 million units.

Back in 2005 I did some work for WBCSD for an upcoming publication. We looked at how rapidly new vehicle technology might deploy throughout the world. We assumed a zero emission (at the vehicle itself) vehicle would be available in 2010 and that production would commence at some 200,000 units globally. We then assumed this would grow at 20% per annum until all produciton globally was this type of vehicle. Meanwhile, global vehicle numbers were also growing at 2% per annum. The end result is shown below – it is not until about 2040 that the number of internal combustion vehicles peaks and then begins a sharp decline. Certainly by 2050 they are well on their way out.

Despite very ambitious assumptions on deployment, the size of the industry today and the reality of turnover of both the vehicles themselves and the production facilities means that the lag in the system is huge. The simple study strongly underlined the need for action to start early if there is any chance of meeting the very ambitious 2050 emission targets now being tabled. It also highlighted that we are not about to see the end of the internal combustion engine, despite our love/hate relationship with it.

But on a national level some markets may move faster.  A recent study by The Center for Entrepreneurship & Technology at UCal/Berkeley has a baseline forecast showing 64% of US LV sales to be electric by 2030, at which time the e-car will have a share of 24% in the US LV fleet. Decoupling of battery ownership (to keep upfront cost for the customer low) is seen as crucial. We certainly live in interesting times!!