Peak Oil Futures

Peak Oil Futures: a possible transport scenario to 2030 and its consequences, using the “4see” model

By Simon Roberts, Arup (Foresight, Innovation and Incubation Group)

15th November 2011

For APPGOPO, Westminster

2

• “Peak oil” is a global problem..→

• ..but take a UK perspective

• How might the UK prepare?

• Apply Arup’s “4see” model (socio-economic and energy)

• Develop an example scenario (not a forecast) of possible feasible proactive steps to reduce oil dependency

Global oil demand for 1920-2008 with extrapolations to 2050.

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2010

Introduction

3

Challenge for the scenario

• Acceptable by society: - acknowledge driving behaviour

• Technically feasible: - scaleable over next 10 years

• Economically affordable: - not bankrupt UK economy

• Politically acceptable: - check side effects on economy

• Data sources: - use official statistics and other reputable sources

Scenario constraints

4

• Petroleum products (pet-prod) use in transport →

• Chart shows the main users: - vans (LGV) - trucks (HGV) * - aviation - cars *

• Total oil (petroleum products) use by UK, historical data →

Use in the UK of petroleum products

Total petroleum products consumed4,000

3,000

2,000

1,000

01990 2000 2010 2020 2030

PJ/y

4see model

Introduction to one part of the model

6

Cars

Cars

7

Cars: data for numbers of

Cars data

Size of car fleet32,000

24,000

16,000

8,000

01990 2000 2010 2020 2030

k

New cars per year3,200

2,400

1,600

800

01990 2000 2010 2020 2030

k ve

h/y

8

Cars: stocks-and-flows model

Cars stocks and flows


2,400

1,600

800

01990 2000 2010 2020 2030

k ve

h/y

Size of car fleet32,000

24,000

16,000

8,000

01990 2000 2010 2020 2030

k14.5 years

9

Cars: data for fuel use and distance travelled

Cars data

Total car km440,000

330,000

220,000

110,000

01990 2000 2010 2020 2030

M v

eh k

m/y

Pet-prod use by cars1,200

900

600

300

01990 2000 2010 2020 2030

PJ/y

10

Cars: process flows model

Cars process flows

Average car km per year20

15

10

5

01990 1998 2006 2014 2022 2030

k km

/(y*v

eh)

Average car fuel consumption0.004

0.003

0.002

0.001

01990 2000 2010 2020 2030

PJ/M

veh

km

11

Cars: full model, trended forward

Cars model

14.5 years


2,400

1,600

800

01990 2000 2010 2020 2030

k/y

12

Trucks

Trucks

13 Trucks model

Size of truck fleet600

450

300

150

01990 2000 2010 2020 2030

k

New trucks per year60

45

30

15

01990 1998 2006 2014 2022 2030

k ve

h/y

Average truck km per year80

60

40

20

01990 1998 2006 2014 2022 2030

k km

/(y*v

eh)

Average truck fuel consumption0.016

0.012

0.008

0.004

01990 2000 2010 2020 2030

PJ/M

veh

km

New trucks per year80

60

40

20

01990 2000 2010 2020 2030

k ve

h/y

Average truck km per year80

60

40

20

01990 2000 2010 2020 2030

k km

/(y*v

eh)

Average truck fuel consumption0.016

0.012

0.008

0.004

01990 2000 2010 2020 2030

PJ/M

veh

km

10.2 years

Trucks: stocks-and-flows and process flows model

Scenario

Developing the transport part

15

• Cumulative costs of measures to reduce use of petroleum products by transportation →

Business as usual (BAU)

• Total consumption of petroleum products used by all transportation →

Developing scenario I

Petroleum products for transport2,400

1,800

1,200

600

01990 2000 2010 2020 2030

PJ/y

£(1990) cost of measures16,000

12,000

8,000

4,000

01990 2000 2010 2020 2030

AM

£/y

16

• The upper estimate assumes 10% supply from first generation biofuels because biofuels will also be important to achieving the Fuel Quality Directive

• A significant proportion of UK biofuels are currently sourced abroad

• Difference between AEA’s upper and lower estimates in 2030 is 2,000 Ml/y (53 PJ/y)

• First generation technologies for biofuel: - bioethanol technologies use

sugar beet or wheat - biodiesel processes use rape seed

oil, palm oil or soy oil

"Analysis of Renewables Growth to 2020", AEA Techology, March 2010, July 2011

Bioliquids

17

• Bioliquids - Additional 53 PJ/y (2,000 Ml/y)

in 2030



1,800

1,200

600

01990 2000 2010 2020 2030

PJ/y


12,000

8,000

4,000

01990 2000 2010 2020 2030

AM

£/y

↓

18

• Cars energy efficiency - Lightweighting 10% - Low rolling resistance tyres 3% - Improved aerodynamics 3% - Direct injection and lean burn

11% - Variable valve actuation 6% - Downsizing engine capacity with - turbocharging or supercharging

12% - Dual clutch transmission 4% - Stop–start 3% - Stop–start with regenerative

braking 7% - Electric motor assist 7% - Reduced mechanical friction

components 4%

“By adopting a small selection of the most cost-effective technologies, 30 per cent efficiency savings could be achieved for the average new vehicle, relative to today’s equivalent model.”

Interim analytical report , October 2007

Car energy efficiency

19

• Bioliquids

• Energy efficiency of new cars - “by adopting a small selection of

the most cost-effective technologies”

- 30% improvement - £1,500 per vehicle (in 2007) - 50% of all new cars



1,800

1,200

600

01990 2000 2010 2020 2030

PJ/y


12,000

8,000

4,000

01990 2000 2010 2020 2030

AM

£/y

↓

↑

20

Trucks energy efficiency:

• Aerodynamically shaped trailers

• Aerodynamic fairings

• Spray reduction mud flaps

• Low rolling resistance tyres

• Single wide tyres

• Automatic tyre pressure adjustment

• Vehicle platooning

Ricardo report, March 2010

Truck energy efficiency

21

• Bioliquids

• Energy efficiency of new cars

• Energy efficiency of new trucks - 44% improvement - £16,300 per truck (in 2009) - 50% of all new trucks



1,800

1,200

600

01990 2000 2010 2020 2030

PJ/y


12,000

8,000

4,000

01990 2000 2010 2020 2030

AM

£/y

↓

↑

22

1999: Peugoet 106 electric with on-street charging point, opened by Kate Hoey MP 2004: 1kWp PV array on roof providing 2/3 of electricity for EV

Prius hybrid (2000) Vegetable oil filling diesel VW camper

Personal experience

23

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2010

Cars trips and fuel use

24 Opel/Vauxhall Ampera, range-extended EV

25

• Bioliquids


• Energy efficiency of new trucks

• Plug-in hybrid/ ranged-extended EV - range 35km corresponding to

57% of usage - but presume plugged in for only

2/3 of potential electric range - £6,500 per vehicle (in 2007)

from The King Review - 50% of new vehicles



1,800

1,200

600

01990 2000 2010 2020 2030

PJ/y


12,000

8,000

4,000

01990 2000 2010 2020 2030

AM

£/y

↓

↑

26

Natural & bio Gas Vehicle Association (NGVA)

27

• Bioliquids



• Plug-in hybrid/ranged-extended electric vehicle

• Compressed natural gas (CNG) on new cars - £5,000 per vehicle (in 2003) - 50% of new vehicles - convert 1,300 filling stations



1,800

1,200

600

01990 2000 2010 2020 2030

PJ/y


12,000

8,000

4,000

01990 2000 2010 2020 2030

AM

£/y

↓

↑

28

• Increased gas use… →

“2050 Pathways Analysis” DECC

• Onshore wind: - Level 1: 11 GW - Level 2: 20 GW - Level 3: 31 GW

• Offshore wind: - Level 1: 8 GW - Level 2: 46 GW - Level 3: 68 GW

• …offset by wind turbines →

Offset gas use by wind turbines

Total consumption of gas4,000

3,000

2,000

1,000

01990 2000 2010 2020 2030

PJ/y

Total consumption of gas4,000

3,000

2,000

1,000

01990 2000 2010 2020 2030

PJ/y

↑

29

• Bioliquids



• Plug-in hybrid/ranged-extended electric vehicle - With extra 9 GW onshore

• Compressed natural gas (CNG) on new cars - With extra 27 GW offshore



1,800

1,200

600

01990 2000 2010 2020 2030

PJ/y


12,000

8,000

4,000

01990 2000 2010 2020 2030

AM

£/y

↑

30

• Bioliquids

• Energy efficiency of new cars - 25% of new cars

• Energy efficiency of new trucks - 50% of new trucks

• Plug-in hybrid/ranged-extended electric vehicle - 25% of new cars - With extra 3.5 GW onshore

• Compressed natural gas (CNG) on new cars - 25% of new cars - With extra 17 GW offshore

Developing scenario II


1,800

1,200

600

01990 2000 2010 2020 2030

PJ/y


12,000

8,000

4,000

01990 2000 2010 2020 2030

AM

£/y

↓

↑

31

• Cost compared to GDP: - 0.76% →

• Does this low proportion mean the economy can “afford” the investment?

• What side effects across the economy might result from systemic interaction?

Cost of measures compared to GDP

Measures cost as proportion of GDP0.02

0.015

0.01

0.005

01990 2000 2010 2020 2030

↑

GDP

Another part of the 4see model

33 Supply and Use Tables for deriving GDP

34

Output Expenditure ↓ ↓

GDP from production by three larger economic sectors (2008)

35

GDP(output) GDP(expenditure) ↓ ↓ ↓


36

Sector dependency (intermediate consumption) ↓


37

Destination of final demand ↓


38

Investment maintains and grows assets ↓


39

Sector inputs: fuels, electricity, jobs ↓

Inputs to the economy

40

One sector alone: service sector

Service sector

41

Economic sector: stocks-and-flows, process flows

Service sector stocks-and-flows and process flows

42

Measures increase investment proportion of GDP

GDP expenditure components over time

↓

Side effects of measures

Systemic consequences suggested by the 4see model

44 Unemployment

45

Unemployment

• Increased by 0.4 percentage points →

• 150,000 more unemployed

• Results from differing jobs intensity of goods and services

Growth

• Annual growth peaked at 4% in the past →

• Scenario here has growth of about 1.8% →

Economic growth and unemployment

Growth of GDP per year0.04

0.03

0.02

0.01

01990 2000 2010 2020 2030

per y

Unemployment rate (%)12

9

6

3

01990 2000 2010 2020 2030

perc

ent

↑

46

• Oil refineries - historical constant capacity - so constant demand for crude - and constant output

• Therefore, - as less petroleum products are

used, - more petroleum products exported

• Trade in fuel: derive price from actual trading costs (from the “Pink Book”) →

• Reference price to basket of 27 economies using REER (Real Equivalent Exchange Rate)

Trading price of fuels with respect to a basket of currencies

Crude oil price12

9

6

3

01990 2000 2010 2020 2030

FM£/

PJ

Petroleum products price12

9

6

3

01990 2000 2010 2020 2030

FM£/

PJ

47

• Imports of goods (less fuel) increased (lower level on chart of net exports) →

• Cost increase of M£4,000/y (at 1990 prices)

• Imports of fuel decreased (higher level on chart of net exports) →

• Cost reduction by M£6,000/y (at 1990 prices)

Changes in trade

Fuel net exports14,000

0

-14,000

-28,000

-42,0001990 2000 2010 2020 2030

EM£/

y

Goods (less fuel) net exports0

-30,000

-60,000

-90,000

-120,0001990 2002 2014 2026

EM£/

y↓

↑

48

• Effect on CO2 emissions compared to BAU (reference case)

• Reduction by 40 MtCO2/y in 2030 →

• Implementation of low-carbon measures for other parts of economy not considered in this scenario

CO2 emissions

Total CO2 emissions600

450

300

150

01990 2000 2010 2020 2030

MtC

O2/

y

↓

Final comments

50

Generation:

• Biomass electricity

• Bioenergy boilers

• Solar thermal hot water

• PV (photovoltaics)

• CCS (carbon capture and sequestration)

• CSP (concentrator solar power) electricity transmitted from North Africa

Consumption:

• Efficiency in workspace, warehouse and retail

• Aviation efficiencies

• Passiv haus new housing

• Double glazing

• Loft insulation

• Cavity wall insulation

• Solid wall insulation

• Heat pumps

• LED lighting

Other measures in the 4see model

51

• GDP analysis blind to ownership within economy

• If full cost of measures were put onto use of petroleum products then..

• ..about 20p per litre (at current prices) →

Possible payment system

Measures cost per litre of fuel0.4

0.3

0.2

0.1

01990 2000 2010 2020 2030

£cur

r/litr

e

↑

52

• 1,300 CNG refuelling stations

• 3.5GW increase in onshore and 17GW in offshore wind

• Unemployment up 150,000

• Fuel imports down M£1,100/y (1990£)

• Goods imports up M£600/y (1990£)

• CO2 emissions reduction 40MtCO2/y

• Cost 0.7% GDP as 20p/litre on fuel

• Petroleum products 22% reduction in 2030: - 2% from biofuels - 3% from efficiency of cars - 4% from efficiency of trucks - 3% from plug-in hybrid or range-

extended EV - 9% from CNG fuelled

Scenario II


1,800

1,200

600

01990 2000 2010 2020 2030

PJ/y

↓

53

Observations from applying the 4see model to reduce petroleum products use by transportation

• Main pet-prod users: cars, HGVs, LGVs, aviation • Note trends in vehicle ownership and driving behaviour • Apply a combination of technology and fuels • The 4see model can calculate marginal costs to the economy • A shift from final consumption (of GDP) to investment might

increase unemployment • Comparing changes in value of imported fuel to imported goods

could show a benefit • This scenario is a starting point for examing the system

interactions and sensitivies of these issues

Conclusions

www.driversofchange.com

peakoiltaskforce.net

Simon Roberts

[email protected]

55 Supply Table

Supply Table

56 Use Table

Use Table

57 Factor incomes

Factor incomes

58 Final demand

Final demand

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