Fuelling the economy

In the newspaper last week, the Chinese oil company Petrochina valued at more than US $ 1,000 billion (one trillion) is, in terms of market capitalization, the biggest company of the world. It’s bigger than Exxon and General Electric together.

In the last 20 years combustion engines have not changed all that much. Back in the 1980’s the figures for fuel efficiency were roughly 28% for petrol and some 32% for diesel. This means that out of every drop of fuel only around 30% is actually used to move the vehicle, the rest is literally turned into hot air. The technology to squeeze more out of an engine has been around for a long time, we are talking 1940’s and 1950’s. Back in those days turbo charged engines were already used to beef up performance. Aircraft technology with even more gadgetry led the way. It was in 1981 that I learned that we had the technology to up efficiency by some 250%. This was possible with ceramic component that allow engines to run at very high temperatures. At the time I wondered why car makers didn’t jump on this and the government didn’t stimulate this technology. Sure, it was more expensive and yes this was cutting edge and needed to mature but still … why wasn’t it used ? With an oil crisis in 1973 and a growing concern for the environment, why was there no real push to improve fuel efficiency when the technology had already arrived?

We move up a few years and we find ourselves in the second Gulf War (2003). Now again the discussion on oil interests and oil dependency is big news. I remember a documentary on hydrogen fuel. At that time hydrogen technology was (already) feasible and safe. What does hydrogen technology do in terms of fuel efficiency? If you factor in all components, efficiency can go up by as much as 200% and … there is a bonus, it’s clean! So what’s keeping everybody? It will do miracles for oil consumption, oil dependency is substantially reduced plus we are talking real progress in the reduction of CO2 and (other) pollutants. Experts did the math. It was calculated that the world wide introduction of a hydrogen infrastructure would cost as much, or should I say as little, as one month of war in Iraq (at that time). Come on, are you serious? The money to finance one month of war will help us, the “us” part could or should be in capitals, shake off the oil dependency. And if that is not enough, we will throw in a “stop pollution” ticket for free! Hello! What are we missing, or what am I missing?

We are now in 2007. I read in the newspaper that Air Products has a hydrogen facility in Rotterdam which at this point in time is capable of producing sufficient hydrogen to power some 400.000 cars. Better still, part of the infrastructure is already in place. But what’s actually being done? There is one hydrogen (gas) station in the Netherlands right now. There are only a hand full of (test) vehicles that run on this stuff. In the USA it’s a little bit better, there are some 25 hydrogen stations. In California they aim at 170 stations in 2010. Wow, that’s what I call progress. What’s the deal?

How much tax do we actually pay on our fuel? In Holland more than 60% of the cost of the fuel you pump at a gas station is tax. What does our government do with this money? One third goes to mobility. The rest … ? That’s a different story.

I read in the newspaper about a new successful deal. After Germany Holland is Russia’s second largest trading partner which involves … let me guess … mainly fuel.

It is no mystery: oil makes the world go around. It’s economics 101, it’s about business interests, the balance of power. But how does this equate with environmental ambitions? Does it equate? I am probably over simplifying the “problem”.

If we know that the energy demand from China and India alone is expected to increase with some 7.5% per year. Plus we know that production cannot keep up. It is not due to a lack of reserves, the problem is the capacity to pump, ship and process oil. The result: prices are on the rise. We have now reached US $ 100 per barrel. How is this going to turn out? According top economist Fatih Birol we will probably be looking at prices of some US $ 159 per barrel in 2030. I think … Fatih is an optimist!

We are getting older but not much wiser. We, they, us, everybody goes to war to protect our precious oil supply. But why? Really?

So what’s the solution:

Government enforced introduction of hydrogen: a 10 year plan, starting today. Oil companies and car manufacturers have to commit to full compliance within this timeframe. Within a 5 year period the number of hydrogen gas stations, or traditional gas stations that have hydrogen capabilities, has to be such that 50% of the total number of vehicles on the road can fuel hydrogen. Car manufacturers have to commit to the production of fuel cell technology. For a 10 year period a margin ceiling is to be enforced to make sure prices do not get out of control. The government commits to subsidizing (cost neutral) hydrogen driven cars at the expense of traditional fuel systems.

You can’t make an omelet without breaking an egg. Start cooking! Get with the program.