Transportation fuel shift stuck in slow lane
Critics call for leadership from elected officials
Killing the internal-combustion engine could be as simple as pulling the trigger.
Except there is nobody holding the gun.
Every day, Canadians pump about 200 million litres or 80 Olympic-sized swimming pools worth of gasoline into their vehicles, says a report released by the Canadian Petroleum Products Institute released this week. With the movement of people and products demanding most of the world’s oil and the growth of China, India and other rapidly expanding developing markets pushing that demand ever higher, even the country’s main petroleum industry group knows the trend is not sustainable.
“Canada’s petroleum fuel providers acknowledge that the future transportation fuel mix will be much more diverse than it is today,” Peter Boag, CPPI president, said in the report.
Virtually all the pieces necessary for the global transportation industry to wean itself off its gasoline addiction — alternative technologies, industrial will, consumer desire — are in place. All that remains lacking, argues John Hofmeister, is someone at the top to marshal them forward.
“I think in 2030, if we stay on the course we are currently on, without much more obvious and planned government guidance, the roads will look very much like today,” the former president of Shell Oil Co. said on the sidelines of the Macdonald-laurier Institute’s Moving Canada Ahead conference in Toronto this week.
“I don’t think the shift in transportation fuels will come voluntarily [so] there needs to be, at a national level, a planned way forward that gives guidance to industry to enable markets to operate and if that guidance is not there, people will keep doing what they have always done, which is more of the same.”
rise of alternatives
Plug-in electric hybrid cars will be widely available in the next few years and all-electric vehicles powered by hydrogen fuel cells won’t be far behind. Together, experts say the new technologies will minimize oil demand for urban dwellers, who today account for the vast majority of petroleum fuel consumption.
While new models still cost more for consumers, who appear unswayed by the advantage of long-term fuel cost savings, prices will naturally fall as automakers scale up production. Mr. Hofmeister argues that “once people get a taste of what it is like to drive an electricity-driven vehicle they will never again want an internal-combustion vehicle.”
For long-distance driving and commercial trucking and services, natural gas has proven superior to petroleum in terms of supply, price and emissions. Montreal-based Robert Transport Inc., one of Canada’s largest for-hire trucking companies, recently purchased 180 liquefied natural-gas (LNG) trucks and about 40 are shipping goods between the company’s warehouses in Quebec and Southern Ontario, with a refuelling station at either end.
Expanding those two stations into a national infrastructure network of 200 or even 2,000 locations — still representing just a fraction of the all-petroleum refuelling stations scattered across Canada — represents the most significant barrier to more rapid and widespread adoption and one which industry insiders say can only be overcome through government intervention.
“We certainly hear from the automakers: infrastructure, infrastructure, infrastructure. [It] is really critical for them,” said Alicia Milner, president of the Ottawabased Canadian Natural Gas Vehicle Alliance.
“[Canada] invented this technology by building the first natural gas-powered bus in Hamilton, yet the downside to inventing a technology is all your early adopters remember the bad old days of the first generation.”
Calgary, as Canada’s energy capital, could set an example for other cities for how a natural gas-centric ecosystem might look, says Peter Wallis, chief executive of the Van Horne Institute, a University of Calgary-based transportation think-tank.
“We postulated a Calgary of the future which has all its city vehicles rely 100% on natural gas,” he said. “Natural gas will probably reach the point where it will be quickly replacing petroleum fuels.”
Once governments in countries such as Pakistan and Argentina worked out how building out refuelling stations and CNG/LNG cars should complement each other, adoption surged. After originally planning to have 120,000 natural-gas cars on the road by 2009, Pakistan now has more than 2.4 million petroleum-free vehicles — the largest concentration of Cng-fuelled automobiles in the world.
energy bank
It was that chicken-or-egg problem of whether to first build the cars or the supporting infrastructure that contributed to the ultimate failure of the first major electriccar initiative in California in the 1990s, Mr. Hofmeister said, noting a centralized, non-political authority could have broken the impasse between automakers and energy producers.
He thinks the problem, as seems to be the case with many of modern society’ sills, comes down to politics. Energy policies have long remained beholden to fouryear election cycles, Mr. Hofmeister said, with the recent rejection of the Keystone XL pipeline permit exemplifying what he calls “the politics of perversity.”
“A good transition plan needs to be 50 years long, so the only way to get politics out of energy is to create the kind of independent regulatory commission model that both Canada and the U.S. find useful in managing the monetary systems of the two countries,” Mr. Hofmeister said.
His “central bank for energy” would be governed by a mix of experts in finance, energy, research and the en- vironment to establish reasonable short-, medium- and longterm goals for this unprecedented transition in transport.
“The end-game is essentially the elimination of the internal-combustion engine as the power source of preference,” Mr. Hofmeister said. “That is probably in the third to fourth decade of the plan. I am not discouraged nor am I pessimistic because of these high [gas] prices, which will likely be followed by shortages and these shortages will lead to the gas lines we experienced in the 1970s.”
Recognizing the potential for a coming crunch, some governments have started setting goals and making investments. Ontario wants 5% of all its cars to be electric by 2020 and Quebec recently devoted $30-million to developing electric buses.
Meanwhile, a public charging network for plug-in electric vehicles is set to open in Montreal Friday.
Yet the infrastructure barrier remains. And “that is where we are not moving fast enough at all levels of government,” said Cherise Burda, Ontario Policy Director at The Pembina Institute. “The companies are ahead, they are in front now.”
Mr. Hofmeister, who left Shell in 2008 to establish a lobby group in Washington, D.C., called Citizens for Affordable Energy, is adamant the best way politicians can help facilitate the change is by passing legislation and allowing them to get out of the way.
Joe Oliver, Canada’s Minister of Natural Resources, told participants at the conference this week the time has indeed come “to make fundamental decisions about the direction our country should take.” However, i n response to a request for comment on Mr. Hofmeister’s proposal, Mr. Oliver said, “In the parliamentary system, an issue of such critical importance as energy policy is properly within the authority of elected officials.”
How authority granted for a five-year term can be used to launch a 50-year transition strategy remains an open question.