Transportation Policy for America
By Kevin Hughes
America is currently addicted to oil, we consume 20-21Million Barrels of oil Per Day (mbpd), and this number continues to increase at the rate of about 2% per year. Against this, US Crude Oil production is roughly 8mbpd, a level which is declining over time. The US currently uses some 25-30% of global crude oil production, with less than 5% of the world’s population.
The need of the US to import 12-13 mbpd of Crude Oil has a significant effect on balance of trade and on foreign policy. Oil is the US’s largest import measured by cost or volume, and the country’s oil requirement places the US in a position of increased risk from a geopolitical perspective. There is also the fact that at some point, “Global Peak Oil” will arrive (the point at which oil is being pumped out of the ground at its maximum rate), meanwhile global demand also continues to increase at about 2% per year. In the free market, this supply-limited capacity and increasing demand will likely increase the costs of crude oil, increase price volatility, and increase America’s requirement to defend its energy interests globally.
The US also produces 30% of the worlds CO2, the largest proportion by any single country, again, despite the fact that the US represents only 5% of the global population. To come closer to the average global CO2 per capita, the US needs to reduce green house gas emissions by 60-70% .
The US needs a bold energy policy which accounts for this changing environment, maintains it’s “Leading Nation” position, and the standard of living of its citizens. The policy must be:
- Evolutionary; progressing from our current position
- Reasonable; not expecting any section of our society to bear an unfair part of the burden
- Sensible, rather than radical; to gain broad support from a wide range of political, scientific, environmental, and business interests.
The application of these criterion increases the chance of a policy being implemented successfully. The real need is to start the journey, and quickly!
This paper will look at the US’s transportation energy needs over the next 15 years, and suggest policies to transition the transportation sector to a more sustainable operational environment.
Efficiency is a national imperative
From a quantity perspective, the use of energy is an urgent problem globally, humans use vast amounts of non-renewable resources, but this happens primarily because of the ineffective and inefficient use of energy, and this issue is truly critical. At present, energy is directly consumed in the US with an efficiency of less than 35% and indirectly consumed with an efficiency of less than 2.5%. One could easily argue that there are massive amounts of cheap energy from all sources, readily available, to the point where humans fail to use this energy effectively. As we develop a better understanding of the impact of this inefficient use of energy we must make a choice to use it more wisely.
Let us use an automotive example to explain the difference between direct and indirect consumption efficiency. The internal combustion engine in your car operates at an efficiency of somewhere between 25 and 32%, that is, it converts the potential energy in the gasoline into available drive for turning the wheels and running other systems at a ratio of 3.5 to 1, this is direct consumption efficiency.
Indirect consumption efficiency is about what is done with the available energy, if it is used to power a 4000lbs SUV with one person in it, weighing 200lbs, the systems indirect consumption efficiency is just 5%. This is further reduced by inefficiencies in the gearbox and drive systems, and the fact that the system ‘throws away’ energy when the SUV sits at a red light, and every time the brakes are used. The end result is a systemic indirect consumption efficiency of less than 2.5%. In the SUV case above the overall efficiency of the system is just 0.75%.
From this example we can immediately see four things:
- There is massive potential to improve efficiency.
- If we could increase indirect efficiency by a multiple of only 4, we don’t have an energy problem (or we have delayed it for at least 25 years).
- At a multiple of 4 we would have no requirement for imported energy.
- Any movement towards more efficient use of resources would have a radically beneficial effect on our production of green house gases.
The policies outlined below focus on systemic direct and indirect efficiency, but in a way that does not require wholesale changes in the way that people live their lives.
The balance of non renewable to renewable energy production and consumption
At present the US consumes energy that is 76% non renewable and 24% renewable (Nuclear and Hydroelectric are included in renewable), this has to move incrementally to balance over the next 25 years, and have the potential to move further towards renewable energy after that, however in the transportation sector the situation is much worse with more than 95% of energy consumption being non renewable.
To affect the transportation sector in a meaningful way, any solution proposed has to be massively scalable; it has to encourage involvement of the population at large, and has to leverage the existing delivery infrastructure. These requirements radically limit the options to just these 5:
- Improving the efficiency of the internal combustion engine
- Adopting energy recovery systems (hybrid regenerative braking)
- Adopting the distribution of more efficient energy sources (pluggable hybrids)
- Getting the population involved at an operational level in fuel economy
- Switching to Bio-fuels
Regarding point 5, this paper concentrates on Bio-diesel as the “bio-fuel of choice”, this is for several reasons, firstly, Bio-diesel has a significantly higher energy density than ethanol, by perhaps as much as 50%, therefore the volume requirements are significantly smaller. Secondly, I find it hard to believe that the public can be convinced to apparently see fuel economy decrease as a result of the transition to bio/eco friendly fuels, as would be the case in transitioning from gasoline to ethanol, against the reverse of moving from gasoline to Bio-diesel. Thirdly, without significant progress in developing cellulosic ethanol (i.e. from the stems or cellulose of plants , rather than fruits, the sugars and starches, of agriculture) there appears to be no real advantage in moving to ethanol.
The policies focus heavily on these options above to affect the balance between non renewable and renewable energy.
Transportation Energy Policy
The US should take action to achieve 5 principal goals:
- Significantly and urgently reduce its need for imported crude oil
- Encourage fuel consumption and efficiency awareness
- Encourage the adoption of Bio-fuels, particularly Bio-Diesel
- Give clear direction to the automotive industry regarding fuel consumption
- Implement changes which radically reduce GHG production in the US
Specific Policy Steps
With these policies and goals in mind, I believe that the following specific steps will drive the US towards a transportation energy independent, and ecologically more sustainable future: Significantly revamp Corporate Average Fuel Economy (CAFE) standards to drive fuel consumption efficiency
- Legislate to require MPG in advertising
- Legislate to require Fuel Consumption instrumentation in the dashboard
- Legislate taxation based on fuel consumption at purchase and annually
- Support the Bio-diesel industry, facilitating fast permitting and approval
- Align US and European emissions regulations
- Support the Bio-diesel industry, B0 to B60 adoption
Each of these steps is outlined in more detail in the next installment, with a view to showing how the policy steps will work both as single measures and grouped together for cumulative benefit.
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