## Report Projects Electricity, LPG and CNG Will Be First Alt Fuels with Expanded Use in Australia If Oil Supply Declines

##### 11 July 2008
 Transport sector fuel consumption in the scenario of fast decline in oil supply, slow technology response, and a 60% reduction in GHG from 2000 levels. Click to enlarge.

Australia’s transport fuel mix will substantially change in response to the increasing cost of oil and the need to reduce greenhouse gas emissions, according to a report produced by the Future Fuels Forum (FFF) and released today in Melbourne by CSIRO, Australia’s national science agency.

Modelling for the report indicated that over the next ten years, electricity (used in all-electric, plug-in hybrid and conventional hybrid vehicles), liquefied petroleum gas (LPG) and natural gas (particularly in freight) will be the first fuels to expand their use, particularly if there is an abrupt decline in the availability of international oil supplies. The modelling found that if oil production peaks, prices could climb as high as A$8 per liter (US$29.26/gallon) by 2018 in the most extreme case.

Only these among the non-conventional fuels have the capacity to expand their availability into the transport market in a relatively short time frame due to existing production and distribution infrastructure. However, even these fuels will take considerable time to be fully commercialised.

—“Fuel for thought. The future of transport fuels: challenges and opportunities”
 Transport sector fuel consumption in the scenario of slow decline in oil supply, fast technology response, and a 60% reduction in GHG from 2000 levels. Click to enlarge.

The report projects that in the longer term—beyond 2020—advanced biofuels that limit competition with food production and synthetic fuels derived from gas and coal (using carbon capture and storage) will come into use once production infrastructure has had sufficient time to scale up. The extent of their use, the report says, will depend on primary fuel prices and government greenhouse gas emission targets.

The Future Fuels Forum was convened by CSIRO to engage leading community, industry and government bodies in discussions about a range of plausible scenarios for establishing a secure and sustainable transport fuel mix to 2050. Specifically, the report addresses two critical issues: the need to dramatically reduce the transport sector’s greenhouse gas emissions; and, how to deal with the economic risks associated with increasingly costly and scarce oil supplies.

Other conclusions in the report are:

• Australia is more vulnerable to changing market circumstances than some other countries due to its relatively high vehicle use, the relatively high fuel consumption by vehicles in its fleet, its 97% reliance on oil-based fuels for transport and declining domestic reserves of conventional oil.

• Australia will be forced to manage its response to reducing greenhouse gas emissions and the risk of increasing costly and scarce oil supply simultaneously rather than sequentially.

• Any increase in transport costs will adversely impact low income Australians for who transport accounts for a higher proportional share of household income. This impact will be more acutely felt by those living on the urban fringe or in regional areas where average kilometers travelled per day is higher.

• There is likely to be only moderate preparatory responses by individuals and businesses in relation to a possible decline in oil supplies, implying a role for government.

• Technology alone will not be sufficient to meet the potential fuel supply gap. Reduced travel across freight and passenger transport will be necessary. If reduction in oil supply is rapid and alternative fuel vehicles are slow to become available then passenger and freight travel may be reduced by up to 40%.

Reduction in travel of this magnitude can be expected to have significant social and economic impacts, but these were not quantified in this study. Literature, however, indicates at least a three per cent decrease in GDP... Early action to accelerate the availability of non-oil based alternative fuels and less fuel intensive modes of travel is key in avoiding impacts in the high end of this range.

• The choices Australians make about the size of their vehicle, how much they need to travel and in what mode (e.g. public versus private passenger transport) are likely to be equally as important as the fuel and technology choices that they make in reducing greenhouse gas emissions and their vulnerability to the impacts of higher prices for oil products.

This is important because of the uncertainty that still remains over which future technologies and fuels will proceed to be commercially available at reasonable cost. The modelling projected that a greater shift toward public transport and lighter vehicles, and increased use of rail and sea freight could reduce kilometres travelled by 30 per cent and greenhouse gas emissions by 17 per cent.

CSIRO also released a companion report, Modelling of the future of transport fuels in Australia, that describes the modelling framework that was applied, the scenario and model assumptions that were used to underpin the modelling and the detailed model results associated with each scenario examined in the Future Fuels Forum.

The transport sector accounts for about 41% of Australia’s final energy consumption, and the demand for transport energy is growing at about 2.4% per year. On-road vehicles account for 75% of transport fuel use in the country, with air transport the second highest consuming sector at 16%.

Future Fuels Forum partners include: Australian Automobile Association, Australian Association for the Study of Peak Oil and Gas, Australian Conservation Foundation, ARRB Group, Biofuels Association of Australia, Caltex, Engineers Australia, Future Climate Australia, Heck Group, GM Holden, NRMA, National Transport Commission, Public Interest Advocacy Centre, Queensland Rail, Sasol Chevron, South Australian Government, Victorian Government and Woolworths.

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The Australians are not expecting much of a showing from the Electric Car.

I think they seriously underestimate it's impact.

Long distances and car dependancy is similar to the US with a traditional preferace for six cylinder vehicles, but the heavyweight F100's etc were never that popular. Most of the local ford and GM Holden models were 3or4/5ths scale of the American counterparts.
4wd mums taxis or Toorack taxis (a suberb of Melbourne) are still very heavily represented.
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With an emissiions trading scheme impact on fuel prices of 10c perv liter at $40 per ton, the analysis is sugesting that 4 cents goes to the tax and 6c to ? administration. I find that(administration) component quite appaling in the circumstance. This may lead to incentive for small collective and 'in house' alternatives. Other reports suggest that the figure required to achieve the "required response is in the order of$200 per ton co2.

This sounds about right if a little optomistic and laid back as far as the option of long lead times.
I think we can expect some rude shocks from the climate much sooner.

However "that only moderate preparitory responses" from the public appears to be the accepted version.
That government will have a role to play?
I think their hearts in the right place (unlike the previous govt that cant find one),but the H*m* (spam avoidance) destructor denialists are still basking in thier last days of irreverence.
There is at least signs of and acceptance of active grass roots push.
History tells us that these people can be effective when they get organised.

US$29+/gal may be an unbelievable high price for liquid fuel. One would think that all Australians would have switched to BEVs before fuel price goes that high. If that's was it takes to switch, so be it. However, driving habits are changing. Stats Canada said today that young drivers, 16 to 24, reduced their driving and road accidents by 6% for each 10 cents/liter increase in gas price. For older drivers, the effect was much less, i.e. 2.6% instead of 6% because they do less fun driving. Will that trend continue? If so, public transportation + car sharing will do much better when fuel price goes up from$1.50/L to $2.25L by mid 2009. This may not be a generous thing to say, but I wouldn't mind fuel at$CAN3.00 to $4.00/liter (US$11 to $US15/USgal) by 2011-13. With half the ICE conventional vehicles off the streets and highways, it would be a pleasure to drive a car again, for useful purposes. Hopefully, many of the conventional ICE gas guzzlers would be replaced with PHEVs and quiet BEVs. Just visited Australia for the first time. Gasoline "petrol" is around$1.70 per liter--roughly $6.50/gallon. Diesel is$1.85/liter, closer to $7.50/gallon. What surprised me is the utter dearth of hybrid vehicles on the road. During my 2 week stay I counted precisely 7 Priuses. They were being sold for$37,000--approximately $10,000 more than they cost in the U.S. I wonder why? To be sure there are many more small vehicles (Smarts, Fits, Yaris, etc.) than in the U.S. But there are also far too many "yank tanks" on the road, as well as large pickup trucks "utes" and locally produced large Holdens that I'm sure don't get better than 20 mpg. Also, I saw truckloads of trailers "caravans" being delivered to dealers, and plenty being towed around. Apparently, today's energy prices aren't that overwhelming for Australians. People I talked to were resigned to the fact that$2.00/liter was inevitable. It's going to take a lot more than that to change consumption patterns.

Oh, and almost every petrol station has an espresso/cappucino machine.

Time for the Auzzies to get their Solar Tower(s)
churning: http://tinyurl.com/6p5rb8

According to their fisrt graph they envision a severe energy crisis between 2010 and 2020 culminating in 2018 with energy consumption down 25%.

on overwhole their analysis is quite reasonnable though giving limited room to electric (20% of road transportation by 2050. I am afraid that without major breakthrough they might be right...

Anyway, would be good to see the same kind of prediction for US

Low percentage of electricity could be attributed to the fact that there is no subway (metro/U-Bahn) system in any of Australian cities.
On the other hand Buenos Aires got its subway in 1925, also southern hemisphere.

A lot of the problem is that Australians chose to be 'spaced out' with large backyards or proximity to farming communities. Many of the people who moved to the rural fringe were on average incomes or had night jobs. It worked out well for the last 20 years of cheap fuel but it will test the limits of public transport and EVs. It already is a near crisis for some with no easy solution in sight.

Australia is an interesting country. They have just about the best solar potential on the planet. Plenty of wind and geothermal potential.

Unfortunately for the rest of the planet. They are floating on coal and natural gas. They have hugely influential fossil fuel vested interests.

The government has about the same visionary powers and testicle size as good ole' Mr Bush.

Most people will roll over and support the cheapest available option. There's likely only one direction they are headed.

The USA is an interesting country. They have just about the best wind potential on the planet. Plenty of solar and geothermal potential.

Unfortunately for the rest of the planet. They are floating on coal and natural gas. They have hugely influential fossil fuel vested interests.

The president is lacking visionary powers. There are concerns over his testicle size. But it's ok, because he is proud to be the biggest polluter on the planet.

Most people will roll over and support the cheapest available option. There's likely only one direction they are headed.

To be fair to everyone:

Europe is an interesting place. They have pretty good wind potential. Some solar and geothermal potential.

Fortunately for the rest of the planet. They have used up all their coal and natural gas. They still have hugely influential fossil fuel vested interests.

The presidents lack visionary powers but do have varied testicle sizes. They think Mr Bush is goofy and fun.

Most people will roll over and support the cheapest available option. But... oh dear me, cor blimey ... they don't have many. There's likely only one direction they are headed.

And just in case you are wondering.....

Which direction are we are headed?

We will try to eat up every little drop of our precious fossil fuel, with our selfish, sticky, greedy little fingers.

The politicians will pontificate and squabble and call each other names.

A few brave souls will inovate and rally against the winds of indifference.

When our resources are gone and we are all very sad. We will find our way. Before then ... I fear not.

Unless of course....

Alternative energy driven vehicles are not just one option to choose but a necessity in a lot of countries where gasoline is far more expensive than the US. And @Andy, agree with you there! We all need to realize the potential for harnessing alternative energy sources wherever we live and whatever geographical and climatic factors we can take advantage of.

Hey Andy,

I hear that people on other planets are war-mongering condescending f**x who invade and enslave people to do the work they're too lazy to do. You don't hear ME whining.

It's astonishing that there are no CNG passenger vehicles in Australia. We have vast reserves of natural gas and virtually no oil left but CNG isn't even on the radar as a fuel option (with the exception of some buses). Most taxis here run on LPG but being tied to oil production there's no great benefit there.

Quite frankly ongoing oil consumption in any proportion be it consistently rising or in slow decline does not change the fact that easily accesible oil will eventually dissapear and civilization will hit a wall of sorts. Expecting rapid upscaling of BEV vehicle production when we are in this predicament. Just hope the grid can cope with it all.

Though I do feel sorry for those that have to travel long distances to work not because they want to maintain a lifestyle in a big house, but because they are poor and cannot afford to live close to the city. These are the people that can't afford an electric car, but ironically they are also the backbone of the country because they do all the real work.
Then their electricity and gas bill will hit the roof because it is used as an emergency source of fuel for transportation by some other guy. Food follows suit.

On the subject of my beloved Australia, the lack of an affordable selection of hybrids at a decent price is more then a bit sad. The lack of any choice for an electric vehicle is infuriating.
In this mining town where I reside petrol is $1.9/l while diesel is now$2.05/l. CSIRO's gloom predictions are spot on though. Fuel here has been going up consistently about 10c/month. Projecting that forward means $2.5/l petrol come end of year. That means$3.70/l as a Christmas present for 2009.
Internal combustion engine improvements can't keep up in this race.

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This sounds about right if a little optomistic and laid back as far as the option of long lead times.
I think we can expect some rude shocks from the climate much sooner.

However "that only moderate preparitory responses" from the public appears to be the accepted version.
That government will have a role to play?
I think their hearts in the right place (unlike the previous govt that cant find one),but the H*m* (spam avoidance) destructor denialists are still basking in thier last days of irreverence.
There is at least signs of and acceptance of active grass roots push.
History tells us that these people can be effective when they get organised.
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