May 1, 2019
Whenever we think about what the future of transportation energy might be, we must consider the influence of the oil market. Recent events serve only to amplify the role oil will have on transportation for the foreseeable future – consider Venezuela, Iran, OPEC and Russia. The availability and price of oil will impact the adoption rates of alternative fuels and powertrains. They have in the past, and they will in the future. It is with this backdrop, that we prepare to descend on Dallas for FUELS2019.
I am at heart a punk rock fan – and The Clash had such an influence on the music scene. While this is not my favorite Clash song, the reference to the oil-rich Middle East seems appropriate for this article:
Now the king told the boogie men
You have to let that raga drop
The oil down the desert way
Has been shakin’ to the top
What is in store for attendees at FUELS2019? In typical Transportation Energy Institute fashion, we are planning a 30,000-foot view of the transportation energy market and a free fall deep dive into the factors that will shape its future. From oil and refined product markets to the future of internal combustion engines and freight transport to electric vehicle infrastructure to sustainable urban planning – there will be little left on the table as it relates to this market.
And, just as the Sheik did not want them to “Rock the Casbah,” OPEC is working to establish a price basket that will provide them necessary revenue, but which consequently encourages the rise of alternatives. It is a fascinating balance in the market. It makes me think of a young Princess Leia in 1977 who told Grand Moff Tarkin, “The more you tighten your grip, Tarkin, the more star systems will slip through your fingers.”
By order of the prophet
We ban that boogie sound
Degenerate the faithful
With that crazy Casbah sound
But the Bedouin they brought out
The electric camel drum
The local guitar picker
Got his guitar picking thumb
As soon as the Shareef
Had cleared the square
They began to wail
Here is a quick overview of what we are going to dive into at FUELS2019:
Crude Oil and Refined Product Markets
As mentioned above, perhaps one of the most influential factors affecting the future of the transportation energy market will be the price of crude oil and refined products. Transportation Energy Institute consumer research has demonstrated that consumers are more than twice as likely to consider an alternative fuel vehicle when retail petroleum prices are high; but when prices drop, so does their interest. How the oil markets evolve over the next several decades will affect the adoption rates of alternative vehicles, including electrified powertrains.
FUELS2019 will include two sessions focused on this – one looking at the crude oil and refined product markets in general, featuring Denton Cinquegrana from OPIS and Horace Hobbs from Phillips 66, and another looking specifically at geopolitical risks to energy market with former CIA officer Scott Modell of the Rapidan Energy Group.
For years, the focus of those seeking to reduce the U.S. reliance on petroleum products and to usher in a market that is more sustainable has been to increase the use of biofuels like ethanol and biodiesel. And their efforts have been quite successful. Since 2008, the year after the Renewable Fuel Standard was expanded by Congress, the consumption of these products has increased more than 500% for biodiesel and nearly 50% for ethanol.
FUELS2019 will feature two sessions focused on biofuels. The first will take a global look at what is happening in the market. Dr. Tristan Brown with Syracuse University will preview work he is doing for the Transportation Energy Institute on the biomass-based diesel market (both biodiesel and renewable diesel) and Mario Lopez with Argus Media will review the global market dynamics pervasive in the ethanol industry. Then, we will proceed with a panel discussion including representatives from Growth Energy, the National Biodiesel Board, AFPM, the Coalition for Renewable Natural Gas and retailer Kum & Go to talk about the future of biofuels, from a policy and a street operating perspective.
Internal Combustion Engines
Refined products and biofuels are used to power internal combustion engines. Regardless of how quickly electrified powertrains enter the market and gain market share, the role of the internal combustion engine will remain critical to achieving efficiency gains and emissions reductions for decades to come. Just look at the last four years – combustion engines represent 98.8% of all light duty vehicles sold in the U.S.
Dr. John Farrell with the National Renewable Energy Laboratory has been working in this space for years and recently lead the Department of Energy’s Co-Optimization of Fuels and Engines Initiative. He will lead a discussion about advancements in the world of combustion engines that will enable vehicle manufacturers to continue achieving improvements even while efforts are made to improve electrified powertrains. He will also raise the prospect of using e-fuels to power these engines in the future, which if successful could deliver near zero emission vehicles without the need for further electrification.
As the economy grows, so too will our reliance on freight transportation. There are very few consumer goods available for purchase that are not delivered by some sort of commercial vehicle and this market is vital to the overall equation affecting emissions and efficiency. The forecast provided to the Transportation Energy Institute by Navigant Research projects there will be 1.5 million more medium and heavy-duty vehicles on road in 2025 than there were in 2016. And while diesel is most likely to remain the overwhelmingly dominant fuel for the commercial sector, there are great strides being made to diversify the options available.
We will hear from Mike Casteel of UPS about their global diversification strategy and how it has affected their operations. And we will welcome a panel to discuss the future of the freight industry with the American Trucking Associations, advancements in diesel propulsion from the Diesel Technology Forum, opportunities for natural gas engines from NGV America and the potential for hydrogen fuel cell technology to revolutionize the commercial freight market from Toyota.
Electric Vehicles and Infrastructure
I deliver more than 40 presentations a year and the overwhelming question I get wherever I go is, “What is the future of electric vehicles?” It is a huge question with many moving parts – what are sales trends, what impact will this have on the fleet, what type of recharging infrastructure might be required, can the grid withstand the increased demand, how long will batteries survive and what happens when they are no longer useful, what is the future of battery capabilities? With a 75% increase in electric and plug in hybrid sales last year, these are critical questions to explore.
The Transportation Energy Institute has a report coming out this summer looking at the infrastructure issues surrounding a growing EV market. At FUELS2019, we are dedicating a super-panel discussion to all things electrified. Our research lead, Philip Sheehy with ICF, will share the results of the work he has done for us; Deepesh Nayanar will explain why petroleum dispenser manufacturer Gilbarco has entered the EV charger business; Erika Myers with the Smart Electric Power Alliance will explain the role of utilities and how they are evolving to support the market; and Dr. John Warner with American Battery Solutions will answer our questions about the performance of EV battery packs.
Sustainable Cities and New Mobility
But at the end of the day, what is ultimately at stake? People will travel from point A to point B regardless of what happens with transportation energy, so what’s the big deal? There are societal impacts associated with transportation – from air quality to congestion to urban sustainability to quality of life. The United States is projected to increase its population by nearly 100 million by 2060 and the vast majority of residents live and will live in urban areas. The issues these communities face are serious and transportation has a major role to play in solving them.
So, we are bringing together a panel to explore the various issues facing our communities. Lori Clark with the Dallas-Fort Worth Clean Cities program will share with us what the clean cities initiative is seeking to achieve and how it is proceeding; Lauren Mattern with Nelson Nygaard will talk about different ways to benefit communities while they grow through innovative design of new builds; Avery Ash with INRIX will share their work in tracking consumer travel patterns and explore the idea of autonomous travel; and Michael Burh with Filld will discuss how new mobility services might obtain the energy they need within an urban environment.
And while oil prices are influential, it is possible that the confluence of factors affecting where people live and how they get around could amass with such compelling force that the market will convert any way. Shareef tried to stop the music, but in the end even his own soldiers converted:
The king called up his jet fighters
He said you better earn your pay
Drop your bombs between the minarets
Down the Casbah way
As soon as the Shareef was
Chauffeured outta there
The jet pilots tuned to
The cockpit radio blare
As soon as the Shareef was
Out of their hair
The jet pilots wailed
Retail – The Final Link
Regardless how people get around and what energy they will use to do so, the final link between the industry and the consumer is the retailer. Genevieve Comtois, Shell Retail North America’s Head of E-Mobility, will join us to discuss their vision of the future of retail and share why one of the world’s largest oil companies is investing in diversified transportation energy services, including EV charging. And a panel of retailers from the Transportation Energy Institute Board of Advisors will sit down to discuss what they learned during FUELS2019 and how it might ultimately affect the fuel retailing industry. This type of perspective, where the rubber meets the road, is essential to figuring out a path forward.
I am excited about FUELS2019 because we are going to explore through interactive discussions so many of the factors that will ultimately influence how to move around in the future. This is a fascinating time to be engaged in this market – I look forward to learning from our presenters and learning from the more than 150 professionals who will be joining us. See you in Dallas – where I know many of you will be Rocking the Casbah late into the nights!
The Shareef don’t like it
Rockin’ the Casbah
Rock the Casbah
The Shareef don’t like it
Rockin’ the Casbah
Rock the Casbah