Some Perspectives on Fuels UCLA January 15, 2009The Perfect Storm… Energy Security • Little domestic supply • Unrest in producing regions Demand Trends • Consumption outpacing discovery • China & India Supply Trends • Nationalization of reserves • High oil prices • Peak production Environmental • Carbon emissions • Drilling/mining Where will we find a significant, renewable, domestic source of transportation fuels?In the Future…. We will get most of our transportation fuels from: A) Electric cars B) Hydrogen C) Conventional oil and gas D) Biofuels E) Hot air from UCLA professorsArenʼt “Clean Electrons” The Answer?… CSP Photovoltaic Wind Geothermal Nuclear? Clean Coal? Solar currently 0.01%; Wind currently 0.75% of US grid. More electrons means more coalWhere Does A Barrel Of Oil Go? Only ~44% of a barrel is used to produce gasoline Only 48% of gasoline use is passenger cars (21% of the barrel) Of that 21%, how much can be replaced with “electrons”?Hybrids – YES! All Electric – Unlikely! Range: 40 miles (electric only) Internal Combustion Engine – Yes! 4 cylinder – 1.0 liter Increased mpg – Yes Still needs liquid fuel? - absolutely Crash test performance? Range? Heater? Air conditioner? Stuck in traffic? DVD player? We can significantly increase fuel efficiency, but we cannot do away with fuel 2010 202?Can PHEVʼs Replace Oil? Light Duty Fleet Oil Use - Impact of PHEVs on Consumption02468101214162000 2005 2010 2015 2020 2025 2030YearOil Consumption (MPBD)2005 AEO Base CasePHEV ScenarioAssumptions: 2010 new car sales are 100% hybrids; 2020 new cars are 50% PHEVMeanwhile… Global demand growth for low cost, internal combustion transportation is likely to outpace increases in fuel efficiencyIn the Future…. We will get most of our transportation fuels from: A) Electric cars B) Hydrogen C) Conventional oil and gas D) Biofuels E) Hot air from UCLA professorsSome Thoughts on Hydrogen… § Most abundant element in the universe… § Is hydrogen an energy source or an energy carrier? § How is hydrogen made today? § How might it be made tomorrow? § Storage, transport, utilization? § Cost, cost, cost…What about Biofuels? Alternative Fuel Mandates Energy Independence and Security Act of 2007 36B gallons by 2022 Quick Facts: • Biofuels already made up 10% of U.S. fuel supply • Biofuels use ~15% of the U.S. corn supply • 80% of U.S. corn is for animal feed • Ethanol has a higher octane rating than gasolineThe Biggest Drawback of Biofuels is: A) They cause food prices to rise B) They will starve the poor C) They threaten the worldʼs forests D) They canʼt scale E) They cause childhood obesityWith plausible technology developments, biofuels could supply some 30% of global demand… To realize that goal, so-called advanced biofuels must be developed from dedicated energy crops, separately and distinctly from food. Steven E. Koonin Chief Scientist, BP The Opportunity for BiofuelsBasic Carbohydrate Biochemistry Cellulases Hemicellulases Cellulose (cell walls) C5/C6 fermentation/ distillation Biofuels Hemicellulose (cell walls) Starch (corn grain) amylase / glucoamylase Biofuels C6 fermentation/ distillation Sucrose (sugarcane) Hydrolysis / C6 fermentation / distillation BiofuelsNot all sources are the same Source: Biofuels Joint Roadmap, June 2006, DOE; data derived from Brinkman et al. 2005 How much fossil energy is required to produce transportation fuel?In the Future…. We will get most of our transportation fuels from: A) Electric cars B) Hydrogen C) Conventional oil and gas D) Biofuels E) Hot air from UCLA professorsItʼs the OIL, not the Ethanol US Corn Prices Oct. 07 to Oct. 0822.533.544.555.566.57Oct-07Nov-07Dec-07Jan-08Feb-08Mar-08Apr-08May-08Jun-08Jul-08Aug-08Sep-08Oct-08Price per BushelSources: NYMEX, USDA, RFA Volume of US ethanol production400,000500,000600,000700,000800,000900,000Oct-07Dec-07Feb-08Apr-08Jun-08Aug-08Oct-081,000 of US gallonsHigher commodity prices (like corn) are driven by OIL prices, not ethanol production volumes!Why Do Corn Prices Track Oil? Crude Oil Price (NYMEX) January 2007 to October 2008 Corn Price (CBOT) January 2007 to October 2008 Corn Starch Ethanol Gasoline OilThe Biggest Drawback of Biofuels is: A) They cause food prices to rise B) They will starve the poor C) They threaten the worldʼs forests D) They canʼt scale E) They cause childhood obesityAgriculture is NOT Static… Open-Pollinated Double Cross Biotechnology Single-Cross Hybrids Average U.S. Corn Yields Bushels/Acre Hybrid genetics & biotechnology have driven a five-fold increase in average U.S. corn yields since 1940. Data Source: USDANot Enough Food in the World? § Clinically obese (>30%) outnumber malnourished by 2:1 margin (1.6B to 0.8B) § Only 60% of global corn acres are hybrid varieties § Less than 50% of global rice acres are hybrid varieties § Increased yield is the answer for both food and fuel crops Incentives, innovation and technology can make it more sustainableIs Food Too Expensive? Source: USDA Economic Research Service U.S. Food Expenses Percent of Household Income Home Total AwayThe Real “Crime Against Humanity” Corn Yield Trends (Bushel Per Acre) 1990 2000 2005 World Average 59 70 75 USA 113 137 149 Argentina 60 93 109 China 74 78 80 Brazil 33 47 54 India 23 29 31 Sub-Saharan Africa 22 24 25 Source: Monsanto/Doane ForecastAre We Running Out of Food? Yield is the answer: Germplasm, Agronomy, Crop Protection, Fertilizer…Farming 0%20%40%60%80%100%120%Maize Wheat Rice CottonDo we have a shortage of crop land? Or a shortage of agricultural technology? Source: UN FAO STAT database Crop Yields as a Function of Top 10% Producers Top 10% Producers Average Yield Kg/Ha Global Average Yield As a Function of Top 10% In all cases… Less than 50%A Tale Of One Malawi Farmer… 2005 – Non-hybrid varieties from saved seed 2006 - $70 of hybrid seed and fertilizer 2007 – Chose hybrids, not saved seed FAO STAT: Malawi maize yields average 1,200 kg/hectare vs. over 8,000 for USAFarm Productivity and Poverty Poverty is caused by mainly by poor governance… § Land title § Access to credit § Infrastructure § Warfare § Education