Gal Luft on crude/carbon

Gal Luft, author of Turning Oil Into Salt (which I reviewed at length in November), has a new column in Foreign Policy whose subtitle speaks for itself:

Since the world can't seem to agree on cutting carbon emissions, maybe it's time to try an easier but equally important target: oil.

Why oil, in the wake of the lack of concrete progress at Copenhagen?

This pushback by the developing world begs for a unified, yet politically feasible, agenda that can be embraced by rich and poor countries alike. One area where such an agenda can emerge is oil. Whereas reaching consensus about significant cuts in the use of fossil fuels in power generation seems to be unlikely, focusing on reducing the use of oil, which powers 95 percent of the global transportation sector, is a goal that offers a real chance of global acceptance (with the exception of certain oil-exporting countries, of course).

His proposals center on the Open Fuel Standard with which readers of his book or my review will be familiar. However, he focuses on flex-fuel vehicles and downplays the plug-in hybrid electric vehicles (PHEVs) which would be central to the electrification of transport. Perhaps this is because the current cost arguments for PHEVs are much weaker, and he doesn't wish to draw attention to that weakness in his overall thesis. In any case, I assert that my previous conclusion holds:

... despite [the authors'] attitude and the optimism it engenders, in the end they do not illuminate a line of sight to the day that PHEVs will be cost-competitive with normal cars. And without that, their OFS story is basically a biofuels (or other hydrocarbon-to-liquids fuels) story... and is that really that revolutionary?

Turning Oil Into Salt (2): Fuel choice via the Open Fuel Standard

The heart Turning Oil Into Salt’s thesis is the idea fuel choice via the Open Fuel Standard (OFS). This basically means turning car engines into flexible platforms that can use a wide variety of energy sources, incentivizing competition and reducing the strategic predominance of oil. One attraction is that it avoids the picking winners syndrome/game that seldom ends well.

One major pillar is flex-fuel vehicles, a la Brazil. I didn’t realize it cost only $100/car, for corrosion-resistant fuel line and a different fuel sensor, to make a car flex-fuel, and if this is true I think the argument for flex-fuel vehicles is strong (although of course consumers will be the ultimate arbiters). The authors’ other push is for flex-fuel vehicles to be certified for a wide range of alcohols (e.g. methanol, their favorite case study), which certainly makes sense if it is similarly inexpensive (is it?).

The other pillar is electric vehicles – unsurprisingly – but more specifically plug-in hybrid electric vehicles (PHEVs), to overcome the issue of limited range which plagues pure EVs. This is also not a new idea, but for me it gains new life in the context of a broader push for an Open Fuel Standard.

Flex-fuel PHEVs could get 500 mpgg (miles per gallons of gasoline, as the authors say) – note that this is not a measure of energy efficiency, but rather of lessening strategic dependence on oil. That said, it is also easy to see this resulting in higher systemic efficiency (using braking energy and charging on off-peak hours) and lower GHG emissions (if electricity generation is clean and if biofuels are environmentally friendly).

The other tiny obstacle, of course, is making flex-fuel PHEVs economical. More on this here.

Flex-fuel nation

Brazil breaks its record for flex-fuel vehicle sales in the first half of 2009:

Data published by the Brazil’s National Association of Automakers (Anfavea) on July 6 shows that more than 1.2 million flex-fuel cars were licensed throughout the country between January and the end of June, which represents 92% of all light automobiles and vehicles (Otto cycle, which excludes diesel engines) licensed during that six-month period. The total is 5% greater than in the same period a year ago, which is a new record for flex-fuel models in Brazil.

"We are experiencing a situation of irreversible consumer preference for flex-fuel cars, an option that is sustainable, economic, creates jobs and develops the national industry," said Marcos Jank, UNICA president.

Within a decade, Brazil's car fleet will be predominantly flex-fuel and ethanol and gasoline will be almost completely substitutable. By contrast, in the U.S. most car engines can't take much more than 10% ethanol (E10), which means that U.S. ethanol consumption is effectively capped at around 10% of total motor gasoline consumption.

This cap isn't constraining ethanol production now (in fact, with current relatively low oil prices, U.S. ethanol consumption is hitting the floor of RFS mandates), but it could in the hypothetical future world where oil prices are sustained above $100/bbl. In that case, corn growers would wish they could sell even more corn to ethanol producers, but buyers of corn for food and feed would be grateful for the cap on fuel demand for corn.

In Brazil, on the other hand, there is no such cap, which means that the entire sugar value chain is, for better or for worse, tightly linked with global petroleum prices.