Diesel

Biofuel technologies: an overview?

This data-file provides an overview of the 3.5Mbpd global biofuels industry, across its main components: corn ethanol, sugarcane ethanol, vegetable oils, palm oil, waste oils (renewable diesel), cellulosic biomass, algal biofuels, biogas and landfill gas.

For each biofuel technology, we describe the production process, advantages and drawbacks; plus we quantify the market size, typical costs, CO2 intensities and yields per acre.

While biofuels can be lower carbon than fossil fuels, they are not zero-carbon, hence continued progress is needed to improve both their economics and their process-efficiencies.

Our long-term estimate is that the total biofuels market could reach 20Mboed (chart below), however this would require another 100M acres of land and oil prices would need to rise to $125/bbl to justify this switch.

The data-file also contains an overview of sustainable aviation fuels, summarizing the opportunity set, then estimating the costs and CO2 intensities of different options.

Heavy truck costs: diesel, gas, electric or hydrogen?

Heavy truck costs are estimated at $0.14 per ton-kilometer, for a truck typically carrying 15 tons of load and traversing over 150,000 miles per annum. Today these trucks consume 10Mbpd of diesel and their costs absorb 4% of post-tax incomes. Electric trucks would be 20-50% more costly, and hydrogen trucks would be 45-75% more, which is inflationary.

Heavy trucks, aka Class 8 trucks, consume 10Mbpd of oil, covering 1trn miles per year, moving substantively everything in global supply chains. Each truck typically carries around 15 tons of cargo, covering up to 1,000 miles per day, with a range of about 2,000-miles between fueling.

Heavy truck costs are estimated at $0.14 per ton-kilometer, for a typical vehicle, in the base case economics captured in this data-file. This is in the US. Additional fuel taxes apply in Europe.

Half of the costs of trucking comprises the labor costs of a driver, which accrue per hour or per year, and thus the ultimate per kilometer costs of truck transport depend on the amount of ground that can be covered. This is why utilization is crucial.

A standard diesel truck fills up 2 x 150-gallon tanks, imparting 2,000 miles of range, in about 5-minutes. A challenge for electric trucks, hydrogen trucks and other non-standard truck fuels is that fueling (or charging) may take materially longer (45-minutes for a hydrogen fuelling, up to 4-hours for a battery charging). Especially if a detour or a wait is needed to access scarce charging infrastructure.

Trucking costs and CO2 intensities of truck freight are compared in the data-file for diesel trucks, LPG trucks, CNG trucks, LNG trucks, electric trucks and hydrogen trucks (chart below).

Total trucking cost and CO2 emissions for different fuel types.

Electric trucks with 4-6 ton batteries, and 700-1,000km ranges, likely cost $110-170k more (i.e., 2x) than a typical diesel truck up-front. Fuel economy is 2x higher. Nevertheless, adding the costs of dedicated vehicle charging stations, the total energy costs can end up similar for both, especially in the US, where fuel taxes are lower.

Hydrogen trucks have been proposed for longer ranges, which could have fuel economies between diesel trucks and electric trucks. The key challenge is the high up-front costs of these fuel-cell vehicles, plus high cost of green hydrogen, which we estimate to be 2.5x higher than diesel trucks. We have also written on other challenges of hydrogen trucks.

Overall, the total costs of electric trucks are around 20% higher in Europe and 50% higher in the US; while the total costs of hydrogen trucks would be around 45% higher in Europe and 75% higher in the US. This is material. The look-through costs of trucking goods to meet the consumption needs of the average developed world citizen run to about $1,000 per person per year, or 4% of average post-tax incomes. 20-75% re-inflation eats up 1-3% of average incomes.

LNG trucks can be close to competitive. On an energy-equivalent basis, $3/mcf gas is 4x more economical than $3/gal diesel. However, the advantages are offset by higher vehicle costs, operational costs and logistical costs for LNG fueling stations. Mild environmental positives of gas are also offset by mild operational challenges.

This data-file compares different trucking fuels — diesel, CNG, LNG, LPG, electric trucks and Hydrogen — across 35 variables. Most important are the economics, which are fully modelled, in the 2020s in the US, in the 2020s in Europe and incorporating deflation in the 2040s.

Biofuel, green diesel, renewable diesel: where’s the IP?

This data-file tracks 5,000 patents filed into biofuels: by geography, by company and particularly in 2017-20. The pace of research activity into “biofuels” and “biodiesel” seems to have halved since 2014, suggesting industry interest is waning.

As usual, China has come to dominate the recent patent literature, accounting for 60% of recent filings. Out of the ‘Top 25’ patents filed into biofuels from 2017-20, 15 are Chinese companies.

Ranked by recent patent filings, technology leaders include Sinopec, BASF, Arkema, Neste, TOTAL, ExxonMobil and DuPont. It is interesting that some well known companies (e.g., Ryze) did not appear to have filed many patents recently. Full details on the patent trends and filings are in the data-file.

Our 3 key conclusions are spelled out in the green diesel article sent out to our distribution list.

Aerial Vehicles: Which Ones Fly?

We have compiled a database of over 100 companies, which have already flown c40 aerial vehicles (aka “flying cars”) and the number should rise to c60 by 2021.

The data substantiates our conclusion that aerial vehicles will gain credibility in the 2020s, the way electric vehicles did in the 2010s. Our latest updated in early-2020 shows strong progress was made in 2019 (chart below).

The database categorizes the top vehicle concepts by type, company, year-founded, company-size, company-geography, backers, fuel-type, speed, range, take-off weight, payload, year of first prototype, target commercial delivery date, fuel economy and required battery weights.

Some vehicle concepts are extremely impressive and credible; but a few may find it more challenging to meet the ranges they have promised at current battery densities…

Carbon Costs of IMO 2020?

CO2 intensity of oil refineries could rise by 20% due to IMO 2020 regulations, according to the estimates in this data-file, if a refinery chooses to convert all its high-sulphur fuel oil into low-sulphur diesel.

The drivers are an extra stage of cracking, plus higher-temperature hydrocracking and hydrotreating, which will also have the knock-on consequence of increasing hydrogen demands.

Higher CO2 intensity conflicts with the industry’s aim of lowering its net emissions, and a 20% increase would effectively undo 30-years of prior efficiency gains in the refining industry.

Distribution Costs: Ships, Trucks, Trains and Delivery Vans?

Distribution Costs and CO2 for Consumers

This data-file breaks down the financial and carbon costs associated with a typical US consumer’s purchasing habits. It covers container-ships, trucks, rail freight, cars and last-mile delivery vans; based on the ton-miles associated with each vehicle and its fuel economy.

We estimate the distribution chain for the typical US consumer costs 1.5bbls of fuel, 600kg of CO2 and $1,000 per annum.

The costs will increase 20-40% in the next decade, as the share of online retail doubles to c20%. New technologies are needed in last-mile delivery, such as drones.

Please download the model to for a full breakdown of the data, and its sensitivity to oil prices, consumption patterns, international trade and exciting new delivery technologies.

Power Trains? Electric, diesel or hydrogen

Powering Trains Electric Diesel or Hydrogen

This data-file compares diesel trains, electric trains and hydrogen trains, according to their energy consumption, carbon emissions and fuel costs. The data are presented apples-to-apples, per passenger mile, based on worked examples. Seven train routes are compared on 20 metrics overall.

Travelling by train should be 2-15x more fuel-efficient, and 3-20x less carbon intensive than travelling by car.

Electric trains are most efficient and cost-effective. The drawback is that electrifying tracks can cost c$1.4M/km. Nevertheless, we are most positive on the electrification opportunity around railways, particularly using next-generation combustion technologies.

The world’s first hydrogen trains launched in Germany in September-2018. To be cost-competitive with entry-level diesel trains requires c$12/kg hydrogen, $6/gallon diesel and a $50/ton carbon price.

Relative costs and economics can be compared by varying inputs in the file.

Aerial Vehicles Re-Shape Transportation Costs?

This model calculates the costs per passenger-kilometer for transportation, based on mileage, load factors, fuel prices (oil and electricity), fuel-economy, vehicle costs and maintenance costs.

Ground level vehicles are assessed using data from around the industry, on gasoline, electric, owned and taxi vehicles.

Aerial vehicles could compete with taxis as early as 2025. By the 2030s, their costs can be 60% below the level of car ownership.

This model shows all of our input assumptions and calculations.

Vehicles: fuel economy and energy efficiency?

Vehicle fuel economy and energy efficiency are quantified in this data-file, looking across different transportation types: cars, trucks, buses, hybrids, electric vehicles (EVs), hydrogen cars, planes, trains, helicopters, plus other smaller vehicles such as bicycles, scooters, motor-cycles and simply ‘walking’.

Our numbers are built up for each category, in kWh-per-mile, miles-per-gallon, energy efficiency percentages and ultimate CO2 intensity per mile of travel. In turn, these numbers are built up from physics calculations, enthalpy calculations and technical disclosures of underlying companies.

A good rule of thumb is that a passenger car achieves 20-40mpg and 15-20% efficiency, depending on its size; a bus or truck achieves 5-10 vehicle miles per gallon, but this is equivalent to up to 50-250 passenger-equivalent miles per gallon, because of a higher load factor; and likewise a plane might achieve 0.2-0.5 vehicle miles per gallon, translating into 50-70 passenger miles per gallon, when you think of a plane as just a flying bus.

Electrification generally offers a c4x gain in vehicle fuel economy and energy efficiency, especially for ground-level vehicles, increasing efficiency from c15-20% on conventional oil-powered vehicles to c60-80% on electric vehicles. Hybrids and hydrogen also yield modest efficiency improvements.

Smaller vehicles are surprisingly exciting. This is just physics, but a bicycle achieves an effective fuel economy of 1,000 miles per gallon-equivalent, which is about 8x better than an electric vehicle, and even 3x better than walking (note here). Moreover, an emerging class of electric transportation technologies is fast, convenient and yet achieve 4-120x efficiency gains per passenger mile (note here).

Further data dis-aggregating the CO2 intensity per mile of electric vehicles versus ICE cars, depending on how they are powered, is linked here.

Our Top Technologies for IMO 2020

So far we have reviewed 450 patents in the downstream oil and gas industry (ex-chemicals). A rare few prompted an excited thought — “that could be useful when IMO 2020 comes around”. Hence, this data-file summarises the top 25+ proprietary technologies we have seen to capitalise on the opportunity. They are summarised and “scored” by company.

We will also provide you with updates of this file, as we continue reviewing patents and technical papers.

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