“The greatest obstacle to discovery is not ignorance; it is the illusion of knowledge.”
– Daniel Boorstin
By Gina Grey
A question those of us who work in the petroleum industry hear often is, “Why doesn’t the oil industry get with it and invest in alternative fuels so we can wean ourselves off of our addiction to oil?”
This common refrain is expressed in a variety of ways and sounds simple enough. The answer, however, is not simple.
First, the fact is that our industry has invested in oil-related infrastructure in this country over the past 150 plus years – most say the first oil well drilled in the U.S. was in 1859. Billions of dollars have been spent, and continue to be spent, annually to improve the supply system for transportation fuels and hundreds of other everyday products derived from crude oil, such as anesthetics and aspirin, cameras, pens and ink, deodorants, glue and toothpaste and many, many more.
We do this seamlessly so the public is provided adequate, reliable, and affordable fuels in a similar way electric utilities provide electricity.
Second, our industry HAS been investing in advanced and alternative fuels to diversify the portfolio. That investment, according to API, was an estimated $121.3 billion from 2000 through 2007 on emerging energy technologies in the North American market. This investment represented 65 percent of the estimated total of $188 billion spent by U.S. companies and the federal government.
Many of the initial alternative energy investments focused on alternatives like wind, solar, geothermal and landfill gas that can be used to generate electricity. This has been followed by significant investment in the transportation fuels arena including biofuels from many different sources, hydrogen, and other emerging technologies.
You can get a sense of the scope of the petroleum industry’s investments in these fuels and technologies in an updated report WSPA has posted on its website. Click HERE to review or download a copy.
Third, evolving the transportation system to a future with a diverse portfolio of fuels and technologies requires a much more lengthy timeline than many would like. Some of the reasons for this extended timeline are simply the natural way new technologies are developed, commercialized and integrated into a vast transportation system. Others involve federal and state government requirements. For example:
- New fuels and technologies must ensure that extremely large volumes of the new fuels are commercially available. We consume about 220 billion gallons of liquid hydrocarbons in the transportation sector annually – 140 billion being gasoline – which is approximately 378 million gallons PER DAY for personal transportation. The size and scope of current fuel use is rarely focused on by those advocating a quick transition to alternatives.
- Similarly we must make sure there are large volumes of new technology vehicles prepared to use the new fuels and that the length of time for normal fleet turnover is taken into account.
- It’s also necessary to ensure new fuels and technologies are not more energy intensive to produce than conventional fuels and are as energy dense as conventional fuels so they propel a vehicle equivalent miles. An E85 fuel, for example, is approximately 25 to 30 percent less fuel efficient than gasoline. That means, while ethanol may be cheaper than gas at the pump it is actually more expensive on a per mile basis.
- We also need to provide the infrastructure necessary to produce, store, market and distribute new fuels to the marketplace. The scale of these infrastructure requirements is enormous and all of it must undergo lengthy government oversight and permitting.
- New fuels must be compatible with vehicles now on the road and on the road in the future and won’t create performance or vehicle warranty problems.
- And perhaps most importantly for consumers, the cost of new fuels must be competitive with conventional fuels.
Some of these issues, particularly the government-related issues, can be reviewed in more depth in an API paper you can read by clicking HERE. We all agree the transportation fuels system is likely to evolve over time. But we need to be realistic about the pace and timing of that evolution, along with being thoughtful and prudent about the costs and the hurdles that will need to be overcome. As the eminent American writer and historian, Daniel Boorstin said, “The greatest obstacle to discovery is not ignorance; it is the illusion of knowledge.”