“Daddy, when I grow up, should I become a petroleum engineer?”
As noted frequently in Platts monthly newsletter Energy Economist, the decarbonization of transport seems for many limited to the light passenger vehicle market. The general assumption is that battery density is insufficient for heavy-duty vehicles. The all-electric aeroplane, for example, has as much chance of getting off the ground as an ostrich.
This is important because expected growth in commercial transportation is forecast, by organizations like the International Energy Agency, to significantly outstrip declining oil demand in the Light-Duty Vehicle segment. This view was reiterated most recently by Neil Atkinson, head of the IEA’s Oil Industry and Market Division, at the Platts Crude Oil Summit in London May 10.
ExxonMobil takes a similar view, as outlined in The Outlook for Energy: A View to 2040. Commercial transportation growth more than offsets falling oil demand as a result of the penetration of hybrid and all-electric vehicles and improving fuel efficiency for diesel and gasoline engines.
In this world view, oil demand continues to grow out to 2040 and beyond. The oil industry, for its participants, investors, lenders and ratings agencies remains a growth industry.
However, even within the oil industry, this view is being challenged. Shell has suggested that peak oil demand could arrive as early as the late 2020s. At the Oil and Money conference in October last year, Statoil CEO Eldar Saetre forecast that oil demand could peak in the mid-2020s.
In these scenarios, oil is a sunset industry.
Related podcast featuring Energy Economist’s Ross McCracken: Is the global oil market chasing an ‘almost-mythical’ state?
The adoption of either a growth or contraction perspective will have a huge impact on business strategy. Statoil, for example, is simultaneously expanding oil production in the Barents Sea, but hedging its bets by pioneering floating wind turbines in the North Sea.
The perspective adopted by ratings agencies will affect borrowing costs and the ability to attract investment regardless of the outlook adopted by the individual company. More broadly, which narrative dominates will affect popular perceptions and thus the views of the bright young minds choosing degrees and entering the labor market.
Electricity and heavy-duty transport
The idea that electricity is incompatible with heavy duty transport is a nuanced one. Electricity’s applicability to certain forms of mass transport is well established in the form of rail, tram, bus and metros. But there is no certainty yet that electric cars will become the dominant form of light passenger transport, and even less that electrification will penetrate further into heavier duty transport.
Nonetheless, electric buses that operate free from electricity lines are already being produced in their thousands, primarily to address urban air pollution. In addition, John Deere unveiled at the end of 2016 an all-electric tractor concept, called SESAM — Sustainable Energy Supply for Agricultural Machinery. The prototype tractor was showcased at the SIMA 2017 show in Paris in February. More ambitious still was the announcement in May of an all-electric container feeder ship.
Low emission alternatives already exist for heavy duty transportation in the form of LNG and compressed natural gas in both shipping and trucking, while hydrogen is also being explored for heavy-duty trucks. However, both the SESAM and all-electric ship have another developmental feature in common that combustion technologies appear to lack — autonomy.
John Deere describes its tractor motor as “maintenance free,” which is almost certainly a stretch, but does reflect the electric engine’s few moving parts and reliability. The point is that the electric tractor requires little manual operation and can be operated remotely. The all-electric vision is thus closely tied to that of autonomous vehicles.
Similarly, the Yara Birkeland will be a double world first as it will be both all-electric and autonomous, sailing between three ports in southern Norway, within 12 nautical miles of the coast, an area completely covered by the Norwegian Coastal Administration’s Vehicle Tracking System at Brevik, although the ship will be monitored from three separate control centers.
For the tractor the weight of the battery pack is both a disadvantage in that more work has to be done to move it, but also an advantage in that it adds traction. For the Yara Birkeland, the absence of humans conveys a huge bonus — the absence of decks for human activity, recreation, catering and accommodation. This frees up a large amount of space that can be used for the battery packs and cargo.
What both certainly need is large batteries, and, in the case of the Yara Birkeland — to the delight of any would-be lithium or cobalt miner — an absolute whopper.
John Deere’s SESAM replaces a typical tractor diesel engine with a battery pack that produces 130 kW of continuous power, with a speed range of between 3 and 50 kph. It has a maximum output of 400 hp, with high torque at low speeds, and is, of course, zero emission. The autonomous concept has a further renewables tie-in — the idea of remote solar-powered recharging stations on large farms.
The tractor has two electric motors, one powering the drive train and the other the power off-take shaft, which allows the use of auxiliary tools and devices. The two motors combine to deliver full power. Charging the battery takes three hours and delivers four operating hours in typical mixed-mode operations, or a range of 34 miles (54.7 km), according to the company.
The Yara Birkeland is an altogether more ambitious affair. It will have an overall length of 70 meters and a beam of 15 meters. Its battery pack will deliver 3.5-4.0 MWh, and the ship will travel at a service speed of 6 knots and have a cargo capacity of 100-150 TEUs. TEU means 20-foot equivalent unit and refers to cargo containers.
John Deere’s all-electric tractor is a prototype and the number of prototype vehicles unveiled at car and agricultural shows that never make it to production is legion. However, the Yara Birkeland, which will unload with electric cranes and equipment and feature an automatic mooring system, is expected to be delivered from the yard in second-half 2018, undergo remote control tests in 2019 and be fully autonomous by 2020.