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