"The Road Not Yet Taken," Feature Article, April 2007

the road not yet taken

To end our dependence on rapidly dwindling oil supplies, switching to hybrid vehicles and ethanol fuel from corn simply isn't enough.

by Frank Kreith and Ron West

in his State of the Union speech this past January, President George W. Bush declared, "It's in our vital interest to diversify America's energy supply." He then went on to outline what he called "ambitious goals": reducing gasoline consumption by 20 percent in 10 years, boosting use of gasoline alternatives to 35 billion gallons over the same period, and incrementally increasing automobile fuel efficiency standards.

One word that was barely uttered in the speech was hydrogen. It was just a few years ago that hydrogen promised to deliver the clean, fuel-efficient transportation system President Bush has called for. But as knowledgeable scientists and engineers have pointed out, hydrogen is not a fuel source, but merely an energy carrier that must be manufactured. And a "cradle-to-grave"—or, more accurately, a "well-to-wheel"—analysis clearly demonstrates one thing: There is no currently available pathway to produce hydrogen, store it, transport it as an energy carrier, and use it to generate heat or electricity as efficiently as using the heat or electric power from the primary energy source (fossil or nuclear fuels, or sunlight) directly.

Although the current electric grid will have to be strengthened as more electric power is needed, the cost of expanding the existing grid would be much less than building a new hydrogen distribution and storage system from scratch. The cost of building a hydrogen distribution system has been estimated by various sources as costing from 500 billion to one trillion dollars.

These facts are especially relevant to building a secure transportation system for the United States. The U.S. transportation system depends almost entirely on oil. Imports have risen steadily since 1973 as demand increased, and domestic supplies reached a peak and began to decrease. Today, more than 60 percent of the oil consumed in the U.S. is imported, and the dependence on foreign oil, much of it from countries hostile to the United States, is bound to increase. Moreover, oil demand in developing countries, especially China and India, is increasing rapidly just as worldwide production is beginning to approach its peak. Once the world oil peak is reached and oil production begins to drop, the cost of fuel will increase steeply. Unless demand can be curtailed and alternative fuels can be supplied from domestic sources soon, an unprecedented social and economic crisis is likely to ensue.

Replacing the petroleum-based transportation system is of the utmost importance. We have available today options that will enable the development of a transportation system that is more efficient, more secure, and has less negative impact on the environment than the one the United States has currently. Access to petroleum is a problem today. Giving it up will actually be a blessing.

Some energy economists have claimed that there will be no oil supply crisis: Thanks to the so-called magic of the market, as oil becomes more expensive, producers will have incentive to provide more of it. Unfortunately, geology is not subject to the market. Even if the amount of ultimately recoverable oil reserves were to increase from the Energy Information Agency's mean estimate of three trillion barrels to its maximum estimate of four trillion barrels, that only pushes back the peak of production by 11 years. No matter how many places we open up to exploration, production will peak in this generation.

An electric car (top) or plug-in hybrid (above) gets power by plugging into the electrical grid (below).

Unconventional supplies of oil also won't provide relief any time soon. The vast oil-shale deposits in Colorado, Utah, and Wyoming have long been hailed as a future energy source. However, more than half a century of research has not found an economical and environmentally benign way to use oil shale. Therefore, we cannot bank on this resource to help us now. We must instead start to supplement oil as the primary transportation fuel because an orderly transition to develop petroleum substitutes will take time and careful planning.

For instance, turnover in the national automobile fleet is achingly slow. The number of cars that are retired each year, according to statistics compiled by the U.S. Government, can be approximated as a steady 5 percent over 20 years until none remain on the road. The number of new cars added each year can be approximated as 7 percent of the existing fleet. With these rates of turnover and assuming that suddenly all new cars were high-efficiency vehicles, after 10 years 41 percent of all vehicles on the road still would be from the initial low-efficiency fleet, and only after 20 years would essentially all vehicles be high-efficiency. Any realistic scenario would require much longer to convert the fleet to high-efficiency vehicles. To make a large difference in fleet fuel efficiency, then, changes need to be initiated immediately and must be substantial.

Hybrid electric vehicles like the ones on the road today are twice as fuel efficient as the current average vehicle. But the near-term reduction in fuel consumption of hybrid vehicles has been overstated. Even if starting tomorrow half of all new cars and trucks sold in the U.S. were hybrid electric—an absurd proposition—the annual fuel savings in 10 years' time would be less than 15 percent. Even after 20 years, the cumulative savings would be less than one-sixth of what would be otherwise consumed.

Therefore, we need to introduce technologies that use even less petroleum. One technology that can achieve this is the plug-in hybrid electric vehicle. A plug-in hybrid can run moderate distances drawing only on its stored electricity, like a pure electric vehicle, then switch on the engine to extend its range when the battery is drawn down.

The diesel engine is inherently 25 to 30 percent more efficient than the spark-ignition (Otto cycle) engine. Diesel engines are now much cleaner and quieter than they were in the past. In Europe, roughly half of all new vehicles sold are diesel-powered. Furthermore, diesel fuel is more readily produced from coal and biomass than is gasoline. The gasoline engine in hybrid and plug-in hybrid vehicles could just as well be diesel engines to further improve efficiency.

The ultimate gasoline savings that a plug-in hybrid can provide depends on the size of its on-board battery pack, and the driving profile of the vehicle. They can be designed with different all-electric ranges. A PHEV60, a plug-in hybrid electric vehicle that could travel 60 miles on batteries alone, would see a greater number of miles traveled per year in all-electric mode than a PHEV20, with an all-electric range of 20 miles.

According to a study by the Electric Power Research Institute in Palo Alto, Calif., about one-third of the annual mileage for a typical PHEV20 would be electric-powered (EPRI, Technical Report 1009299, May 2004). Given the excellent efficiency of all-electric drivetrains (more than 80 percent, according to recent EPRI data), plug-in hybrids can reach parity with conventional vehicles in terms of life-cycle costs if the price per kilowatt-hour of battery storage were to come down to $316 per kilowatt-hour for a PHEV20 with gasoline at $1.75 a gallon. We have calculated that parity can be reached at a battery cost of about $1,600 per kWh if gasoline costs $2.50 a gallon.

The assumptions made in the EPRI report are very conservative because plug-in hybrid electric vehicles and battery technology are developing rapidly. There are companies, such as Hybrid Prius Inc. and CalCars, that claim PHEV30s can achieve 100 mpg.

One way to obtain liquid fuel from coal is the Fischer-Tropsch process, in which a synthetic gas made from coal is catalyzed. The liquid is similar to petroleum-derived diesel.

Also important is that plug-in hybrid vehicle technology provides utilities with a new and sustainable market for off-peak electric power. According to EPRI, consumer demand for electric power peaks during the day, while more than 40 percent of U.S. generating capacity sits idle or operates at reduced loads overnight. Vehicles could be recharged during these off-peak hours by installing software in the cars that would initiate battery charging only when excess power is available. This arrangement would also even out electricity consumption. Moreover, since no new production facilities or infrastructure would be required, the cost of recharging plug-in hybrids during off-peak hours would be only the extra fuel and operation and maintenance, much less than average utility rates.

High-efficiency vehicles won't solve the gasoline consumption problem alone. Even if every new car from this point forward were a diesel plug-in hybrid or battery electric vehicle, it would take until 2025 at the earliest to achieve a cumulative reduction in gasoline consumption equal to half what an all-gasoline fleet would use. Demand-side solutions are critical, but what is needed is a new way to obtain automotive fuel.

Fortunately, there are options beyond petroleum. Coal, natural gas, and biomass can be transformed chemically into liquid fuels. In the United States, the conversion of coal to liquid fuel has received a great deal of attention of late. The governor of Montana, Brian Schweitzer, as well as senators from Pennsylvania and other political leaders have been promoting the idea as a means of achieving energy independence.

To make coal into a vehicle fuel, it must first be converted to a synthesis gas of hydrogen and carbon monoxide. The sulfur contained in the coal is converted to hydrogen sulfide gas and captured; metals are removed as slag. The gaseous product may then be reacted to one of several chemical products that can be used as vehicle fuel. A big advantage of most liquid fuels is that they can use existing distribution infrastructure with little change, although high concentrations of ethanol require different storage materials.

What's more, the gasification process lends itself to the capture and sequestration of carbon dioxide, with an overall efficiency penalty of about 2 percent. Between the capture of CO₂ at the point of manufacture and the greater efficiency of the plug-in hybrid vehicles, such an integrated system could greatly reduce the nation's greenhouse gas emissions.

The most commonly cited method for turning synthetic gas into liquid fuel is the Fischer-Tropsch process, which was invented by German scientists early in the last century and is used today in South Africa by Sasol to make diesel fuel. The Fischer-Tropsch reaction results in a liquid fuel consisting of approximately 75 percent synthetic diesel and 25 percent naphtha that is used to make synthetic gasoline.

Today, Sasol Ltd., the world's largest maker of motor fuel from coal, produces 160,000 barrels per day in Secunda, South Africa. The 50-year-old plant provides 28 percent of South Africa's supplies of such fuels as diesel, gasoline, and kerosene. Several large liquid-fuel projects are in progress in the Middle East, starting with natural gas that is otherwise flared.

Ramping up production of synthetic fuel won't happen overnight. The estimated time of construction for a plant is four to five years, and the capital investment is large. For example, the capital cost of a coal-gasification Fischer-Tropsch synthesis plant with a capacity to produce 20,000 barrels of liquid fuel per day is estimated to be on the order of $1.2 billion. At present, the U.S. uses something on the order of 20 million barrels of liquid fuel each day.

Opponents of coal gasification claim that there will be excessive greenhouse gas pollution from the process. However, in the future, vehicle fuel-cycle emissions of carbon dioxide can be reduced below those of gasoline-only powered vehicles, by the use of plug-in hybrid electric vehicles and by sequestration of the carbon dioxide from the fuel production process. And coal is far from the only feedstock available for the process. Natural gas can be reacted with steam to make synthetic gas that can be processed in the same way as coal. Indeed, the gas-to-liquid technology is so well developed that four major projects, totaling more than 360,000 barrels a day in production, have been announced in the past two years, including a 32,000 barrel-a-day joint project between Sasol and Qatar Petroleum and a 34,000 barrel-a-day ChevronTexaco facility under construction in Nigeria.

Biomass can be gasified either alone or in combination with coal and converted to liquid fuels by the same process as gasified coal. It can also be pyrolyzed and then processed into vehicle fuels.

Before choosing the direction of synthetic fuels, however, it is important to look at the efficiency of the process. Energy is lost in the conversion of coal, natural gas, or biomass into a vehicle fuel, and the energy efficiency of these conversion processes is important in determining the overall efficiency from well (or mine or farm) to wheel of these alternative pathways.

Ethanol from corn is a rapidly growing vehicle fuel, due largely to a federal subsidy of approximately 50 cents per gallon to the producer. This makes ethanol about the same price per gallon as gasoline, though it is still higher per mile driven. Although there has been controversy about the energy efficiency of ethanol from corn, it has been amply demonstrated that ethanol as currently produced from corn contains 1.25 to 1.3 times more energy than the source energy (not including the solar input to the crop) required to produce it (Farrell, et al., Science, Vol. 311, 506-508, 27 January, 2006, and rael.berkeley.edu/ EBAMM/Farrell).

All fossil fuel-based energy sources produce less energy than is input; gasoline contains only about 0.9 times the energy of the petroleum used to produce it, making it one of the most efficiently produced of fossil fuels. Other issues associated with corn-based ethanol are that corn is part of the food-supply chain, and its use results in a rather small reduction in CO₂ emissions. Ethanol from sugar cane, or from nonfood crops such as switch grass, has a much higher energy output per fossil input than corn, and causes a much larger reduction in CO₂ emissions.

One thing that the experience of the past half-century should teach us is not to rely too heavily on one source of energy for our transportation system. Instead of replacing a petroleum-fueled, internal combustion-powered system with one based entirely on hydrogen or biomass or fuel cells, we should identify the best two or three or four combinations of fuel and vehicle. And we should begin to switch to these new technologies immediately. As we have shown, even a radical change will take time to have a noticeable effect.

Fortunately, there are already several vehicle and fuel technologies available that can help us. Plug-in hybrid electric vehicles, for one, combine the best of both electric vehicles and hybrid technologies. Like electric vehicles, plug-in hybrids can be fueled with electricity generated from domestic sources and produce fewer CO₂ emissions than conventional spark-ignition vehicles do, because of their improved mileage. Like any hybrid, the plug-in variety can run on liquid fuel for acceptable driving range. Because of the reduced fuel
consumption, it may be possible to provide the fuel entirely from domestic sources in the future.

But to ensure that the transition to plug-in hybrids or to some other technology happens rapidly, policy changes must be made. We need a stiff tax on carbon fuels to encourage efficiency, and we need CAFE standards tough enough to prod manufacturers into selling diesel, hybrid, and plug-in hybrid vehicles. Federal programs could spur the development of vehicles with a greater reliance on electric drive and the commercialization of coal- and biomass-based diesel fuel.

There is also a need for immediate research into a number of other related technologies that will be needed in the coming decades. Most importantly, we need to develop processes to produce ethanol from cellulosic material at a reasonable cost and investigate photochemical and high-temperature solar thermal reactions that can produce fuels, including hydrogen. We need to improve the performance of electrical storage in batteries or ultracapacitors. And we must develop technologies that can capture and store carbon dioxide. It's vital that these technologies are available within a generation, when they will be needed to augment or replace parts of the new transportation system we've outlined.

President Bush's ultimate goal of increased energy security is laudable, but the proposals that he calls ambitious don't go far enough. The suggestions we have presented have a better chance to provide us not only with increased energy security, but also, eventually, with energy independence, and they may help reduce the long-term threat to the nation from climate change. We believe this new system will work—and will do so in a way that should not be disruptive. Indeed, doing nothing—allowing the nation's fuel supply and vehicle fleet to remain unchanged right up to the moment when petroleum production begins to decline—would be a catastrophe, one that could be avoided if we were to take action now.

This article is based largely on a paper by West and Kreith in the Journal of Energy Resource Technology (Vol. 128, Sept. 2006, pages 236-243).

Frank Kreith is professor emeritus of mechanical engineering and Ron West is professor emeritus of chemical engineering, both at the University of Colorado in Boulder. The authors have been investigating questions regarding future energy supply for the past six years.