2006 Midyear Report: The Future of Fuel

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They are known as fossil fuels, but some think diesel and gasoline are themselves becoming fossils and relics of a bygone era. Rumors of their demise are misleading, but it’s fair to say that interest in alternatives to petroleum-based fuels is growing. This year’s CCJ Midyear Report is an in-depth look at the lifeblood of trucking: How it’s changing in the near term, and what will be powering trucks in the decades to come.

FOSSIL FUEL
Trucks will, no doubt, be running primarily on diesel and gasoline for years to come. But rising and volatile prices, regulatory pressure on emissions, and fear – of dependence on foreign oil, and even of running out of oil altogether – recently have sparked interest in new fuels and technologies. Government and private-sector researchers are rushing to identify and prove alternatives to petroleum-based fuels and engines.

In CCJ’s Midyear Report that follows, we explore the future of fuel for fleet operators. We look at changes in diesel, such as the new requirement for ultra-low-sulfur diesel and increasingly attractive biodiesel blends. And we address some important questions:

  • Are we running out of oil?
  • What drives diesel prices?
  • What might replace diesel and gasoline one day?

Diesel is far from dead, but it has become a commodity to cherish rather than take for granted. Formulation changes, selective use of alternatives and fuel economy improvements will preserve this precious resource.
-Avery Vise


THE HALFWAY POINT
Is global oil production downhill from here?

It may have happened sometime last year. A barrel of oil filled in Venezuela, Nigeria or Saudi Arabia symbolized something few people would have thought about back when a barrel of oil cost a mere $20.

In oil circles, it’s called Hubbert’s Peak. For laypeople, call it the halfway point in global oil production. If it happened, that barrel means half of all the oil on Earth already has been reclaimed.

The good news is that this scenario may not have happened yet. It may not happen for 10, 50 or even 100 years. All geologists really agree on is that it will happen –
and most are banking that it will happen sooner than later.

One of those who says it’s already happened is Kenneth Deffeyes, a retired Princeton professor and geologist. Deffeyes says that barrel probably was filled at the end of last year.

“The peak of world oil production happened at the end of 2005, and in 30 years, crude oil production will be down to about half of its present level.”

Deffeyes’ predictions are based on the methods of a well-known Shell geologist named M. King Hubbert, who predicted (correctly) in 1956 that U.S. oil production would reach its peak in 1970. Hubbert was decried widely for this prediction in both government circles and in the oil industry. (Shell, in fact, begged him 50 years ago not to announce his findings.)

Just like Hubbert, Deffeyes has plenty of detractors. The U.S. Department of Energy doesn’t believe him. That department’s Energy Information Administration scoffed at such predictions in its 2004 report “Long-Term World Oil Supply Scenarios: The Future is Neither as Bleak or Rosy as Some Assert.”

“A multitude of analysts