"It is no exaggeration to say that the majority of the world's population, many leaders of industry and many persons in important political positions DO NOT HAVE THE FAINTEST IDEA OF THE GRAVITY OF THE POWER PROBLEM with which we will all be faced by about the MIDDLE OF THE EIGHTIES and which will grow more dramatic in each succeeding year."
From a speech by Mr. E.R. Meyer, Chairman & Chief Executive
of Swiss Aluminium Ltd., on 23rd September, 1977, in Florence
to the Organisation of European Aluminium Smelters.
We have for some time been deeply concerned about the effects upon Australia and its people arising from the exhaustion of the country's known indigenous petroleum resources; the expected remaining life of known reserves; the possibilities of new discoveries; the cost of replacing domestic production by imports; the possibilities of conservation and of substitute alternatives and supplementary energies. For the purpose of examing this matter, we set up a special Committee whose names are appended to this report.
The magnitude of the problem which could develop over the next seven years is not difficult to define with reasonable accuracy:
- Total petroleum consumption today in Australia is about 90,000 tonnes per day, of which roughly half is used in transportation and the remainder in industry, domestic and commercial. Of the estimated 45,000 tonnes used daily in transportation approximately half is used in private vehicle operation.
- Australia produces 70 per cent of its petroleum requirements and imports the remainder. Unless additional and major discoveries are made, the position will be reversed in seven years and will continue to worsen dramatically thereafter until total import is necessary.
- By 1985 Australia's petroleum import bill will -- unless action is taken -- be some $2.5 billion on present day values -- equal to the total of the country's present overseas reserves.
The solution to the problem -- and there are many components in the answer -- is more difficult to evaluate partly because of the advanced technologies involved and partly because of the economic and social changes in life styles which will inevitably ensue.
What can at least be seen is that action must be taken NOW -- that in fact it is time to make not a stride but a giant step -- if Australia's future energy dilemma is to be diminished or solved. Included in that action must be a major and sustained educational programme which will embrace all levels of government, associations, corporations, schools and indeed through to the man in the street and to the housewife.
Three important papers are attached to this Report:
Appendix 1. Observations on the effect of possible conservation measures
Appendix 2. Alternative sources of energy
Appendix 3. Future Petroleum Supply/Demand.
The more detailed observations in this Report highlight the possible impact upon the life styles of people in this country of the dilemma arising from the exhaustion of Australia's indigenous petroleum resources.
In terms of conservation -- that is making what Australia has last longer -- the following is a suggested programme.
TRANSPORTATION:
Road Vehicles: |
|
Traffic: |
|
Fuels: |
|
Rail: |
|
INDUSTRY AND DOMESTIC:
Industry: |
|
General: |
|
Dealing with a number of these headings in greater, but nevertheless abbreviated detail:
IMPROVED ENGINE EFFICIENCY:
Well validated overseas development of the Direct Injection Stratified Charge (DISC) engine, indicates a 25% reduction in fuel consumption.
HYBRID VEHICLES:
Recent developments by the automotive industry indicate the possibility of long-distance vehicles of hybrid engine design becoming viable. The U.S. Department of Energy has allocated $35 million for further research. Present development indicates a one-tonne vehicle, petrol-electric, can achieve 55 mpg against similar vehicle's 25 mpg on petrol alone.
EMISSION CONTROL:
It is noted that some progress has been made already in deferment of further emission control rules. It is estimated that such controls add at least 10% to fuel consumption.
TOLLWAYS:
Peak-hour queueing at toll collection points such as the Harbour Bridge in Sydney resulting in lengthy idling periods is a major waste of fuel and cause of pollution. Elimination of toll collection is opposed by some groups, while others seek to increase the charge. It is recognised that removal of toll points must be a part of wider traffic flow planning to ensure that such removal does not merely shift the traffic block at peak times to other points.
CAR POOLING:
Presently this is specifically excluded in New South Wales and this would have to be exempted to achieve significant passenger-mile increase.
STAGGERED WORKING HOURS:
Flexitime in some Government departments has achieved desirable results in Canberra. A change in shopping hours, say from 10 am to 6 pm, would achieve major easing of public transport congestion.
FUELS -LPG:
Requires special storage facilities and equipment on vehicles and the safety problem probably limits the areas where it can be used. It is most suited for use in urban transport or large vehicle fleets. In the case of buses and trucks LPG can be used as a topping agent in diesel engines, having a particular benefit in reducing smoke emission under heavy load. In spark ignition engines the most satisfactory use is by means of "fleet vehicle engines" designed to make full use of the high compression capabilities of the fuel and for the necessary valve seats to ensure long life.
FUELS -LNG:
Has been demonstrated in the U.S. as a potential fleet vehicle fuel and is of greater significance in Australia with our relatively greater reserves.
CHEMICAL BLENDS:
These are essentially medium to long-range measures, but 10% to 15% extension of premium grade fuel can be achieved with either methanol or ethanol without modification to existing engines.
RAIL ELECTRIFICATION:
The electrical railway system should be extended and improved with examination of the usage of high voltage system and modification of existing diesel locomotives.
LPG CONVERSION:
Conversion of diesel locomotives to LPG operation is based on the fact that there is adequate fuel carrying capability to ensure a reasonable range on LPG and the number of units so converted can be controlled to match the market availability of LPG to its consumption. Conversion should be made at major overhauls.
INDUSTRY:
Wherever the scale of operations so justifies, the conversion to coal usage should be encouraged and particular attention paid to atmospheric pollution control and solid fuel ash disposal. For the large number of medium to small scale operations where the capital cost of conversion to coal usage is uneconomic, conversion to natural gas is suggested because of the smaller capital investment involved.
INSULATION:
Far greater attention should be paid to improved insulation methods in commercial, industrial and domestic buildings. Such attention is most readily achieved at the design stage, but significant benefits can be obtained by retro-fit.
The foregoing proposals are by no means exhaustive and we considered many other ideas and suggestions. In the field of substitute fuels it should perhaps be explained that no reference to uranium as a power source has been made. This important material was excluded because its development as a source of energy required a time span falling outside our examination of the energy problem developing and accelerating over the next seven years.
Much of the information contained in the technical papers embodied in this Report is already known to Government Departments but the information has been summarised in this Report in order to alert those who do not have ready access to such technical information to appreciate the gravity of the dilemma and the need for immediate action.
In the implementation of conservation programmes there may well be measures which will not be properly understood and indeed may be unpopular with the people and in this connection we may be able to offer our services in the role of interpreting to the people the rationale of Government measures relating to conservation.
H.R. BEARDSMORE,
May 1978.
PETROLEUM CONSUMPTION IN AUSTRALIA: OBSERVATIONS ON THE EFFECT OF POSSIBLE CONSERVATION MEASURES
ABSTRACT
Australia will import most of its petroleum requirements as indigenous petroleum supplies decline over the next 10 years. This may amount to an import bill of some $2500 million per year by about 1985 (in present values and at today's prices).
While we may be able to increase export earnings to offset this, it should be possible to reduce the import cost by around $600 million per year (in present values) by conservation.
Transportation and industry are the two major petroleum consuming sectors in Australia and are consequently the areas where greatest savings can be achieved. As substitute fuels become more widely used even greater reductions will occur in petroleum consumption.
Individuals, through consumer pressure on manufacturers, can promote the use of fuel conservation measures in the community. All levels of government, however, need to initiate conservation programmes, provide incentives and remove inhibiting aspects in existing legislative and administrative controls.
AUSTRALIA AND THE ENERGY CRISIS
Australia is well endowed with energy resources compared with many other industrialised nations. We export coal and will probably become a significant exporter of uranium and liquified natural gas.
Our reserves of petroleum are seriously limited, however, and the effect of this is dramatically shown in Figure 1, which compares expected consumption with expected supply from known indigenous reserves.
Figure 1. Australia -- Oil Supply and Demand.
Note: The vertical lines at 1975 and 1986 have been superimposed by us on the Esso chart.
From 70% self-sufficiency in the 1973-76 period, Australia seems likely to be forced to 70% dependence on imported petroleum by 1986. At current world prices this could cost us some $2500 million per year, a sum roughly equal to our current total overseas reserves.
Whilst sufficient growth is expected to occur in Australia's exports to cover this import bill the impact for Australians will be the increase in local petroleum prices to import parity. This means, for example, an increase in retail petrol prices of at least 40% in today's values.
The supply situation for petroleum will be improved if altenative sources of liquid fuels become available, such as oil from coal, oil from shale and alcohol from crops. Also liquid fuels will be produced when natural gas reserves are tapped.
The demand situation for petroleum will be eased where other forms of energy can be substituted or energy wastage is reduced. The National Energy Advisory Committee (NEAC) has recently suggested that Australia's 1985 petroleum demand could be 15% lower if conservation measures were adopted. Such a reduction would represent an annual saving to the community of some $600 million (in present values).
How can such a saving be achieved? It is interesting to examine where petroleum is consumed in Australia. Figure 2 shows that the major targets for possible savings are the transportation and industrial sectors. Consumption of petroleum by commercial, domestic and power generation users is relatively insignificant in Australia, in contrast to Japan and Western Europe.
Figure 2. Pattern of Petroleum Consumption in Australia -- Total
TRANSPORTATION SECTOR.
As shown in Figure 2, the transportation sector represents over half of Australia's consumption of petroleum. This is broken down in Figure 3, to disclose the large share being consumed by cars and station wagons.
Figure 3. Pattern of Petroleum Consumption in Australia -- Transportation Sector
Significant savings appear possible in the road transport sector (i.e. cars, motor cycles, station wagons, buses, trucks, etc) which accounts for 81% of the transportation sector and 43% of Australia's total petroleum consumption. Of this road transport sector about three-quarters of the consumption is classified as "personal".
The increase in petrol price will tend to reduce personal consumption but overseas experience suggests that consumers are slow to respond to petrol price increases.
Reductions in fuel consumption can be achieved through vehicle design, reduction in the use of private cars, improved traffic management and better land use planning. There is, however, a need for governments, both State and Federal, to take legislative and administration initiatives that will induce petroleum conservation. Table 1 attached hereto reviews the question of initiating sources.
Unlike the USA, the Australian Government has not prescribed targets for a fleet average fuel consumption. In the USA this target is 8.6 litres per 100 km by 1985. Currently average fuel consumption for Australian cars is 12 litres per 100 km, thus if we are to match the targets set by the USA we need to improve our fuel economy in motor vehicles by some 30% in a period of 7 years. The setting of targets by the Federal or State Governments similar to those in the USA and Canada would promote more rapid inclusion of fuel saving features into Australian manufactured cars. These design modifications have the potential to improve the fuel economy in modern vehicles by the 30% suggested. Some of these modifications include:
- Vehicle shapes which reduce air resistance. This is particularly significant in open road conditions i.e. over 70 km/hr. Some 25% of engine output is consumed in overcoming air resistance and it is estimated over 30% of this resistance could be designed out.
- Reduction in vehicle weight. Will be achieved by manufacturing fewer large cars and utilizing light weight materials in their construction. These materials will include low alloy steel for structural members, magnesium and aluminium in engines, etc, and a wide range of plastics both in structural components and in impact areas.
- Improved engine performance. Increased compression ratios, under -- rather than over -- powered cars, and fuel injection systems will all contribute to more efficient petroleum use. Diesel engines can achieve compression ratios far greater than petrol engines and are consequently typically 50% more efficient. Numerous overseas vehicle manufacturers, particularly in Europe, have developed diesel engines suitable for private vehicles.
- More efficient transmission can be achieved by manual gearboxes which are able to match road speed and engine speed more precisely than automatic gearboxes. Similarly overdrive gears promote fuel efficiency as do the use of steel belted radial tyres.
While Government guidelines could encourage manufacturers to incorporate these fuel conservation features in new vehicles, individuals, by selecting fuel efficient vehicles can also influence manufacturers. Taxes on large cars and subsidies for small cars, similar to those proposed in President Carter's energy programme, would influence the consumer demand for small cars.
Reduction in the use of private vehicles, as previously noted, has not been sharply reduced by increases in petroleum prices where this has occurred overseas. Rationing of petrol or limiting vehicle access to the central business district (CBD) etc, are more direct and consequently more socially disruptive and it is for this reason regulatory controls on manufacturers have been more widely adopted overseas. Mass transit systems operate most efficiently in the densely populated corridors of our cities where they carry passengers at a fuel efficiency 2 or 4 times greater than the private vehicle currently can. Private vehicles, however, operate most efficiently under leisure motoring conditions with low congestion and high occupancy. Likely vehicle design modifications will increase the efficiencies of private vehicles for non-peak hour running and so highlight the advantageous role of mass transit as a means of fuel conservation and rapid travel for peak hour traffic.
Staggered working hours has the effect of spreading peak hours and may enable public transport to operate more efficiently, particularly if working hours were staggered by location permitting more equal patronage of outward and return journeys.
Car pooling to increase occupancy rates and reduce private vehicle usage can permit fuel savings at no capital cost. It is estimated that a doubling of occupancy rate in work trips in urban areas could reduce our total petroleum consumption by 1 to 2%. State Governments would need to make the necessary amendments to Traffic Acts to encourage this.
Fuel Consumption
Improving traffic flow by better traffic management is a further way petroleum consumption may be reduced. In open road conditions the maximum speed is the important factor although attempts to reduce road speeds are reported to have had limited success. Studies have shown fuel consumption in urban areas is closely correlated with average speed, number of stops and time spent queueing. Better traffic flow can be achieved by synchronizing traffic lights, lane changing, one way streets, etc. For example in Sydney at peak hour average speeds are low and more than 50% of the time car engines operate under idle or no load conditions. A 3 kph increase in the traffic speed in the most congested areas (i.e. the CBD and adjacent) would support an investment of some $30 million per year. Improvement in traffic flow is an ongoing activity, however, and at present improvements through better management are absorbed by increasing numbers of vehicles rather than more rapid vehicle movement.
In the long term land use planning must play a role in reducing the need to travel, particularly for work related trips. Appropriate planning to locate employment, education and recreation activities closer to residential areas would reduce the need to travel and could promote non-motorised transport. To achieve this State and Local Governments must make provision in both regional and local planning schemes to permit a wider range of land use activities.
Our supplies of petroleum can be conserved by substituting alternative fuels of which there are several available in Australia. As petrol prices increase, these alternative fuels will become more attractive to the consumer.
Liquified petroleum gas (LPG) is an unavoidable part of oil and natural gas streams. At present the majority of Australia's production is exported. Unlike liquified natural gas (LNG), LPG can be stored in comparatively light weight cylinders since it is liquified at relatively low pressures. It can be used as a complete or partial substitute for super or standard grade petrol in internal combustion engines at a conversion cost estimated in 1974 to be approximately $500 per vehicle. LPG can offer a number of advantages over petroleum. Cleaner combustion and a gaseous form of entry to the combustion chamber reduce engine wear and maintenance costs, and promote easier "cold starts". Conversely, LPG yields a heat output 20% lower than petrol on an equivalent volume basis. Gas cylinders occupy valuable space and require regular inspection.
Ethanol (ethyl alcohol) could be produced in Australia as a substitute fuel using agricultural crops such as grains, sugar and cassava. Methanol (methyl alcohol) can be produced from the methane present in natural gas or from coal. These alcohols, can be used as a complete or partial substitute for petroleum and have similar advantages to LPG from a pollution viewpoint. Substitution to 15% in alcohol/gasoline blends is being considered.
Electric Cars
Electric cars are currently being developed both overseas and in Australia. The major limitation of electric vehicles is the restricted range permitted by battery capacity. Vehicles developed to date have largely utilised the lead acid battery which, although economical at low outputs is inefficient at high output and rapidly increases the weight of the vehicle. These limitations imposed by the lead acid battery have resulted in most vehicles developed to date being designed for use in the urban situation where a range of 70 km is adequate for normal daily requirements. The limitation in range is likely to permit the electric vehicle to become popular only as a service or delivery vehicle or to a very limited extent as a second vehicle in some households.
The sodium sulphur battery is capable of approximately five times the energy output per unit weight of the lead battery and may significantly extend the range of battery operated cars provided a safe method of enclosing the battery is developed since the sodium reacts vigorously with water and operation is at 350°C.
While electric vehicles are currently being developed, provision of charging points in urban areas and at homes and the cost of vehicles and battery replacements, the electric car is not considered likely to become widely used within the next 20 years. Other substitute fuels which may become of increasing significance include liquified natural gas and in the longer term the hydrogen fuelled internal combustion engine.
For several of these fuel types the technology is insufficiently developed, however, alternative fuels can be expected to increase in significance and may substitute for as much as 20% of our petroleum needs within 20 years.
INDUSTRIAL SECTOR
In Australia, primary and secondary industry represents about 41% of total petroleum consumption. In spite of this relatively high usage, recent studies have shown that consumption of energy by Australian industry is not effectively audited.
Obvious ways of reducing energy loss include heat insulation, elimination of steam and hot water losses, and minimising non-productive operation of equipment. In addition factories can be designed for better use of waste heat and better integration of operations (e.g. use of pass out steam from power stations for suitable industrial processes).
The demand for petroleum by industry can also be significantly reduced in steam generation by burning coal or natural gas wherever possible. Coal would be preferable because of the very large reserves in Australia and the high opportunity cost of natural gas (a valuable petrochemical feedstock).
For industries using largely low grade heat, ultimately solar energy, may contribute as a substitute energy source.
For direct heating situations petroleum can usually be replaced by natural gas, if available. A recent study suggests that in the short term some 12% substitution of petroleum by coal and natural gas could be achieved in Australian industry. These substitution levels are not as great as those predicted by some other industrialised nations largely because our industries are in general less dependent on petroleum. For example the largest demand for energy in the industrial sector is the steel industry which in Australia uses coal to satisfy 85% of its energy demand and oil 8%. By comparison the steel industry of other nations use lower proportions of coal -- UK 52%, Japan 70% and USA 74%.
If industries are to reduce their consumption of petroleum by conservation and substitution, they must firstly establish their energy use pattern by conducting an energy "audit". Many industries, particularly smaller enterprises, do not have the personnel to conduct such studies and government advisory services could assist in this. The involvement and enthusiasm of management in both large and small companies is required to effectively implement conservation programmes. Professional institutes have a considerable responsibility in communicating to management the potential savings available. Table 1 attached hereto shows possible actions that may contribute to reducing petroleum demand.
DOMESTIC AND COMMERCIAL SECTOR
This sector represents only 4% of Australia's petroleum consumption, the principal use being heating of buildings.
As in industry, savings are possible by heat insulation, avoidance of waste, and efficient use of heating equipment. Building design can have a significant effect on energy consumption. Studies undertaken by the Building Research Division of the CSIRO have shown that for a typical brick veneer home (in Victoria) of 130m2 with commercially available insulation materials installed in both walls and roof, savings of up to 50% can be achieved in the heating energy requirement. Improvements in building design and materials can be expected to increase these areas of potential savings.
In this domestic and commercial sector, petroleum can be replaced by natural gas for space heating and this is occurring in many Australian cities. Solar energy will increasingly provide an alternative for water heating in domestic and commercial installations but this will mainly impact on electric power consumption.
While this sector is not a major consumer of petroleum, reduction of heat losses and substitution (principally by natural gas) may enable us to halve the predicted petroleum demand for 1990 in this sector and thereby reduce by 2% our overall petroleum consumption. To implement these energy conservation measures in both commercial and domestic buildings will require encouragement from governments at all levels and a recognition by architects, builders and building operators that energy savings are achievable. Measures to accomplish this may include:
- Investment allowances or other financial incentives to encourage construction of thermally efficient buildings incorporating suitable materials and energy conserving devices.
- Alteration to building codes and regulations where necessary to permit improved efficiency of energy use in buildings.
- Publication of design procedures to assess energy consumption in buildings and manuals or training programmes be made available for building operators and maintenance staff.
POWER GENERATION
Power generation in Australia utilises only about 2% of our petroleum consumption. Almost all of the electricity is generated in coal fired power stations or hydroelectric schemes.
About one third of the petroleum used in power generation is diesel or similar light oils and is used in isolated locations. The rest is furnace oil used for support firing in coal burning power stations. In neither case can significant substitution or usage reduction be achieved in the short term, although there will be some wind power and solar power applications and in a few cases (e.g. Western Australia) oil fired electric power stations will be converted to burn coal.
In the longer term it makes sense to have part of our coal resources which are relatively large committed as feedstock for the manufacture of liquid fuels substituting for petroleum.
SUMMARY
The decline in our reserves of petroleum and the increased cost of imports clearly indicate the urgent need to institute conservation measures.
Only limited savings can be achieved in the commercial, domestic and power generation sectors because of the relatively small quantities of petroleum used in these areas. Nevertheless by reduction of waste and by substitution by other fuels savings of some 3% could be achieved in the relatively short term.
In industry it has been shown that substantial savings can be achieved by energy "house-keeping". Industry needs to audit its energy usage in order to achieve these savings. Principal substitute fuels for industry will be coal and natural gas, but solar energy may also contribute as a source of low level heat for some industrial processes. Substitution by these fuels could reduce petroleum consumption by 15% to 20%.
Transportation represents over half of our petroleum consumption and savings in the order of 10 to 15% could be achieved by improved vehicle design, reduced use of private vehicles and improved traffic management. Many of the conservation measures such as increased use of mass transit systems, car pooling and smaller cars, etc, involve relatively small capital and social costs. Substitute fuels are available and suitable for use in vehicles. Substitute fuels often involve substantial conversion costs and time to develop adequate distribution systems and outlets. With the rapid decrease in availability of cheap petroleum, substitute fuels can be expected to become increasingly economic.
While consumer pressures and the increase in petroleum prices will encourage conservation, there is a vital role for all levels of government to play if socially disruptive measures such as petrol rationing and limits on mobility are to be avoided. Possible initiatives are summarised in Table 1 and include a national programme on energy use and conservation with appropriate financial support for research and implementation. Suitable targets could be established for vehicle fuel consumption and advisory services instituted to assist industry in reducing energy loss. Taxation concessions such as investment allowances, etc, would stimulate both commercial and private investment in energy conservation and conversion equipment. Through investment in improved mass transit systems and traffic management, suitable planning and development schemes, and flexible building codes, state and local governments could promote the more efficient use of energy and reduce petroleum demand in the community.
Table 2 attached hereto summarises the possible (high and low estimates) reductions in 1985 petroleum consumption which could be achieved in the various sectors by conservation and substitution measures.
TABLE 1: POSSIBLE INITIATIVES TO FOSTER THE
CONSERVATION AND SUBSTITUTION OF PETROLEUM PRODUCTS
| INITIATIVES REQUIRED | PRINCIPAL INTTIATORS |
| Establishment of a national energy policy which will state strategies for energy use and conservation and promote and support an investment to achieve such strategies. | Federal Government |
| Offer incentives (and maybe use penalties) to encourage investment of all sections of the community in energy efficient equipment or in modifications necessary to utilise petroleum substitutes. | Federal Government |
| To keep as many options open as possible, establish technical programmes to develop and improve technology for substitute fuels, etc. | Federal/State Governments and Industry |
| Establishment of fuel economy standards for vehicles and review of the timetable for reducing permissible exhaust emission levels and the impact these may have on petroleum consumption. | Federal/State Governments and Professional and Industrial Associations |
| Vehicle fleets could support fuel conservation by increasing the percentage of smaller vehicles, etc, and lead the way in establishing fuel economy consciousness. | Federal/State/Local Government Private Enterprise |
| Establishment of advisory service to industry to assist in auditing energy use and implementing programmes to reduce petroleum consumption. | Federal/State Governments |
| Increase investment in mass transit systems where appropriate to improve service and increase patronage and amend legislation to encourage car pooling. | State Government |
| Improve traffic management in urban areas to reduce inefficient peak-hour travel. | State/Local Government |
| Amend planning schemes and building codes, etc, so they are sufficiently flexible to permit a suitable blend of land uses and innovations in building materials and design to be applied. Publication of manuals and guidelines for engineers, planners, architects, etc, to highlight the potential savings currently available. | State/Local Governments Professional Institutes and Societies |
| Use consumer pressure to influence manufacturers by recommending and promoting goods which are fuel efficient and/or which utilise substitute fuels. | Consumer and Like Organisations |
TABLE 2: AUSTRALIAN PETROLEUM USAGE POSSIBLE REDUCTIONS
| SECTOR + | PERCENTAGE OF EXPECTED PETROLEUM USAGE IN 1985 | LIKELY SUBSTITUTE ENERGY SOURCES | ||||||
| CONSERVATION | SUBSTITUTION | |||||||
| Low | High | Low | High | Pre-1985 | Post 1985 | |||
| Transportation | 10 | 15 | * | 5 | Alcohols LPG | Alcohols LPG Electricity LNG Hydrogen | ||
| Industrial | 5 | 10 | 15 | 20 | Coal Nat. Gas | Coal Electricity Solar | ||
| Commercial/Domestic | * | 2 | * | 2 | Nat. Gas Electricity Solar | Electricity Solar Wind | ||
| Power Generation | * | 1 | * | 1 | Coal | Coal Nuclear Solar | ||
* Of minor significance
+ Present usage pattern (See Fig 2) is: Transportation 53%, Industrial 41%, Comm/Dom 4%, Power Gen 2%
ALTERNATIVE SOURCES OF ENERGY
SUMMARY
In reviewing the position in regard to Australia's Energy needs, liquid fuel is critical in regard to transport, one of the country's most important services.
Crude Petroleum reserves are small by world standards and, unless exploration locates significant deposits, can be expected to give reduced production in the late '80s.
In reviewing the transport options, sight must never be lost of the value of petroleum as a chemical feedstock. Its value as a molecule may greatly exceed its convenience as a transport fuel.
Lead times for the various options can be decisive in the run-down situation in which we find ourselves.
Refinery operations are being constantly updated to give optimum yield within the VFR (vehicle, fuel, refinery) system as limited by environmental requirements.
Natural L.P.G. requires change of vehicle power plant and could be mobilised into urban fleets, say, over five years using special "fleet" vehicles fitted with pressure storage and specially designed cylinder leads.
Technology is well established for methanol production and lead times of 5-7 years after decision date are likely if petroleum residuals or natural gas is used. Coal would require longer to develop extraction infrastructure.
Ethanol requires a massive agricultural complex in addition to fermentation and distillation capacity. Technology is available but infrastructure and agricultural expansion seem to indicate some 10 years as necessary for a significant contribution.
Compressed gases are not attractive in view of their low fuel:weight ratio and should be regarded as an emergency energy source.
The use of electric power is well established for transport. The problem of applying it to road vehicles is the energy storage system. Considerable work has been done in developing alternative batteries but to date all leave the vehicle with restricted range. Battery change seems the only feasible means of application to business vehicles and battery charge meters in the case of commuter vehicles.
The fuel cell, when developed, will still be a light liquid fuel application hopefully with higher efficiency than the internal combustion engine.
Coal conversion technology is immediately available using the Fischer-Tropsch route as at SASOL. Semi-production demonstration plants are in operation in U.S.A. using the hydrogenation route and significant work is in hand evaluating Australian coals for the purpose. Long lead times are required to develop supply for significant contribution by either route.
Flash pyrolysis of power house feed would require an increase of 25% in coal input and yield up to 15% of crude requirements of refineries.
Lead times of 7-10, 10-15 and 5-7 years are likely for three alternatives quoted for coal conversion, viz: SASOL, hydrogenation and pyrolysis.
Wholesale coal conversion would reduce the virtually infinite reserves to something like a century with economically producible coals.
Shale kerogens are extensive, but largely in isolated areas. Effective technology has yet to be developed for processing Australian shales.
The attached chart indicates the order of magnitude of the impact of the various alternative energy sources mentioned, together with the impact of application of known design variations of the vehicle engine and transmission system.
ACKNOWLEDGEMENT
Acknowledgement is made to the considerable resource to data published in the report of the Task Force on Energy of the Institution of Engineers, Australia -- Towards an Energy Policy for Australia, 1977.
REFINERY CRUDE INPUT -- Bbl /DAY
LEGEND
The accompanying chart depicts the impact of the various alternatives discussed in the paper and the following explanation is given of the various terms involved.
| RON | RESEARCH OCTANE NUMBER is derived from the comparison of the anti-knock performance of the fuel in THE RESEARCH ENGINE compared with blends of standard reference fuel ISO-Octane (Octane number 100) and N-Heptane (Octane number 0). The two research octane numbers quoted are current overseas and differ from the Australian values which are premium grade 98, standard grade 89. The overseas values used have been quoted because relative data was available for them and similar effects would be expected with the Australian premium grade of 98 Octane number. |
| LPG | LIQUEFIED PETROLEUM GAS LPG C3H8 refers to the grade of propane LPG obtain in stabilising crude or scrubbed from natural gas and distinct from refinery LPG which contains significantly large percentages of the unsaturated compound propylene C3H6 which has a very much lower RON rating than C3H8. |
| CH3OH | METHANOL prepared synthetically from natural gas or other hydrocarbons. Heavy residual petroleum fuels can be readily used in the synthesis. |
| C2H5OH | ETHANOL may be prepared synthetically, but is usually prepared by fermentation of sugars and starches from renewable crop sources. Can also be prepared from timber after severe hydrolysis prior to fermentation. |
| LPG + - OH'S | Refers to the combined effects of maximum use of both METHANOL and ETHANOL and NATURAL LPG with engines retuned to suit particular fuel or blend of fuels being used. |
| HYBRID | Refers to a vehicle fitted for a petrol-driven generator operating in parallel with a bank of storage batteries supplying an electric motor drive to the car's transmission system. |
| DISC - ENGINE | DIRECT INJECTION STRATIFIED CHARGE This is a recent overseas development in which a very lean mixture is provided by normal carburation and at the time of firing a direct injection of fuel adjacent to the spark plug gives a local mixture sufficiently rich to be ignited by the spark which in turn acts as an ignitor for the very lean mix in the remainder of the charge. This was developed initially as an attempt to achieve reduced exhaust emission, but has the added advantage of higher engine efficiency. |
| ∞ GEAR BOX | The infinitely variable gear box is a mechanical device aimed at achieving an optimum matching of engine power road speed. The device was used on a British bomber during World War II but fell into discard with the development of variable pitch airscrews. |
TRANSPORT -- Alternative Energy Sources
The basic problem faced by Australia is the depletion of our indigenous supplies of crude petroleum and the maintenance of the transport function of the nation. Other applications of liquid fuel can be satisfactorily met from either natural gas or coal. Choice depends on the scale and location of the particular fuel user. In the case of chemical feedstock, the choice may be decided on the needs of the particular chemical being produced.
In the national interest, the use of liquid fuel in stationary equipment should be minimised and fuel users should be encouraged to change to a plentiful indigneous fuel whenever new equipment is being specified and to convert existing equipment wherever this is practicable.
For transport, the only satisfactory fuel is one which will be readily stored and handled in the ordinary course of trade; which will be stable in storage; have a high carrying capacity and be capable of meeting a wide range of power demands in the vehicle on the road.
Currently, road transport is virtually restricted to either automotive distillate in high use vehicles or petrol in intermittent use vehicles. These are materials with very specific properties and engines have been designed to make optimum use of their properties.
In view of the limited known crude petroleum reserves, alternative sources of energy for transport must be sought and it is first necessary to establish options available for this purpose. These are:
- To balance the VFR SYSTEM (vehicle, fuel and refinery operation) in such a fashion as to maximise the use of the barrel of crude for transport.
- The use of Natural LPG.
- Blending with Methyl fuel, Methanol or Ethanol.
- The use of compressed gases.
- Electrical.
- Coal Conversion.
- Shale Kerogens.
Not only is petroleum an energy source, but it must always be borne in mind that being hydrocarbon it is a chemical and it is possible that the value of the substance as a molecule may greatly exceed its convenience as a transport fuel.
REFINING OPERATIONS
Indications are that the motor spirit produced in Australia is probably approaching the optimum from the point of view of vehicle kilometres per litre. The matter of converting the greatest proportion of the barrel of crude to transport fuel does leave some area for improvement and refineries are gearing up for this purpose as the proportion of imported crude increases.
It is not possible to view the refinery in isolation from vehicle design and from emission standards. It may be that there will have to be some revision of the emission standards and one basis which has merit would be to base the approval of engine design on the quantity of pollutant emitted, rather than on concentration.
Thus a vehicle with a 1000 cc engine may be approved with no special emission control equipment, because of the small total quantity of exhaust gases which it generates, whereas a five litre vehicle may be forced to fit a full range of control equipment in order to reduce its emission of pollutants to the same quantity in grams or milligrams per hour.
This notably affects hydrocarbon and CO in the case of petrol vehicles. The diesel engine is much less susceptible in the matter of CO, but has a problem of aldehyde and soot emission. The latter being very visible makes maintenance and control of the diesel engine much more likely than the petrol engine where all the pollutants are invisible to the naked eye. Again there is the question of lead emission from petrol engines and this has an impact in the refinery as well as in the design of the motor. Special valve seats may be required in the event of a completely lead-free fuel. Both classes of engine have NOX emission (nitrogen oxides) as a problem.
LIQUEFIED PETROLEUM GAS - L.P.G.
In the preparation of crude petroleum, a large proportion of L.P.G. is prepared automatically. Similarly in Natural Gas a considerable amount of L.P.G. is present which can be separated from the dry gas without much difficulty. Currently some 1,000,000 tonnes is exported each year.
This material is admirably suited to urban fleet transport use. It has the drawback of requiring pressure vessel storage and low relative density so giving limited vehicle range but ample for urban work. It can be used at higher compression ratios than the normal motor vehicle -- up to 11:1 -- because of its high octane number of 120. Refinery L.P.G. does not have such a good rating because of the presence of olefines. Butane is also not as good but can be used satisfactorily in existing vehicle engines. Cost of conversion of an existing petrol vehicle to L.P.G. is quite high, in the order of $500. However, if initially fitted, as a fleet vehicle, the cost would be very little different from that of the standard petrol vehicle.
A significant benefit from the use of LPG is the low pollution resulting. Being a pressure storage situation there is no after evaporation, no crankcase dilution, much lower CO emission from exhaust gases and lower NOX and SO2 emission. These are of great benefit in the urban environment.
If used in diesel engines the substitution cannot be complete. However, use of LPG supplement reduces considerably the problem of smoke emission under heavy load.
From this it can be seen that maximum use should be made of primary LPG as a transport fuel, if necessary, with a tax incentive.
Refinery LPG could be used if propylene is removed and used for polymer gasoline and polypropylene plastic.
L.P.G. is produced as a joint product in liquefaction of natural gas. Export of N.W. Shelf natural gas approved at present at 51% of reserves gives opportunity for L.P.G. extraction on the total reserve and liquefaction of the portion exported. If this is done some 4,500 mill. tonnes of L.P.G. could be recovered or 2,300 mill. tonnes if only the export gas is processed. This latter is equivalent to 2,500 mill. tonnes of motor spirit.
Current export of L.P.G. of 1 mill. tonnes/year represents some 6% of total transport fuel or 10% motor spirit usage. A further 50,000 tonnes per year could be extracted from the natural gas used in Sydney and Adelaide, but would require processing plants in the two centres because of transport problems from the Centre.
METHANOL
Another extender for petroleum in transport vehicles is methanol. This can be prepared from a variety of feedstocks, from natural gas to coal.
The basic process consists of gasifying the fuel to a mixture of hydrogen and carbon monoxide and feeding the syngas at high pressure to a catalyst where reaction takes place. The product is a mixture of alcohols but essentially methanol. With minimum after processing the result is methyl fuel. With careful separation, the chemical, methanol, can be prepared.
Production units range up to 2,000 tonnes per day (80,000 bbl.). This is obviously commensurate with oil refinery magnitude. Methanol has been used as a single fuel but its properties are not such as to render it suitable for handling in our climate. Its boiling point is only 62°C compared with petrol which has a wide boiling range from 30°-200°C. Furthermore it is poisonous and results in blindness or death, if imbibed under the mistaken idea of its being "alcohol" -- but gasoline is also highly toxic.
Its application is therefore as an extender of petrol. The aromatic content of the petrol determines the miscibility of methanol in the mixture. Thus premium grade with high aromatics, (25-30%), is completely miscible while standard grade with 10-12% aromatics will only accept 15-18% methanol.
There is a further aspect to be kept in mind, viz: water tolerance. Too high a water content can lead to phase separation as water builds up in the tank due to absorption. Of course, once this occurs satisfactory operation of the motor cannot be restored until the methanol-rich aqueous layer has been removed from the system. This is important at temperatures around freezing.
Bearing in mind these limitations, it is practicable to formulate methanol blends which have distinct advantages as well as extending the vehicle fuel base by 10% with reduced lead content to give the same vehicle performance as on premium petrol without any readjustment between fuels. The advantages include cooler running and lower NOX and possible CO emission.
Greater proportions of methanol in motor spirit require special tuning of the carburetter and spark. If 30% methanol can be handled without problems of water separation, a lead-free motor spirit would be feasible. However, there would be a drop in specific fuel consumption -- km/litre, as the heating value of methanol, being only half that of petrol, has reduced the heating value of the motor spirit more than the gain in thermal efficiency resulting from the use of methanol.
The cost of pure methanol is quite high, but it is claimed that methyl fuel will have a similar cost to petroleum product on a heat content basis, being of a lower grade and hence lower cost than pure methanol.
Investment cost of methanol plant varies considerably depending on the feedstock, natural gas being cheapest and coal being the dearest. This, of course, raises the question of priority of application of natural gas deposits and the energy efficiency, in the order of 60%, of converting methane to methanol.
ETHANOL AS AN AUTOMOTIVE FUEL
Ethanol, the chemical name for Ethyl Alcohol, has been used as an extender for motor spirit in the past and is a possible future blend stock for current design automobile engines, up to 10% and possibly 15%, by volume.
Although its heat content per gallon is only approximately two-thirds that of gasoline, it does have advantages in its high octane rating. Up to 15% in the blend, ethanol causes no significant loss in engine performance because of the greater efficiency of combustion of setting the lower heat content. Retuning of the engine is not compulsory and one may change from gasoline to ethanol blends and back without alteration to the engine.
Currently the cost of ethanol is about double that of gasoline, in both cases before taxation. Accordingly, any programme for ethanol extension of automotive fuel would depend either on considerations of national sufficiency, or on further significant rises in the price of crude oil. Ethanol's big attraction lies in its being a renewable source of energy and is, in effect, a bio-conversion of solar energy to liquid fuel.
Production from by-product molasses is an old industry in Australia, but present production is only about 80,000 tonnes per annum. To supply 10% of Australia's estimated motor spirit requirements in 1985 would require two million tonnes of ethanol, approximately 25 times the present production capacity. About half Australia's production of molasses is presently being used.
In addition to sugar cane, other crops are suitable. Cassava (tapioca) is the most promising, but wood wastes, or even special forests, can be used for the purpose. Cost of ethanol from wood or wood waste is in the order of twice that from sugar or cassava. In view of the renewable source, considerable interest is being shown in the potential of ethanol and Brazil has embarked on a strong government incentive scheme.
Any source, whether it be sugar cane, cassava or timber, requires major agricultural operation and it has been estimated that some 10 years' development time would be required and an investment of the order of $2 billion, measured in 1977 prices, would be required. Current cost of ethanol from molasses is about 30 cents per litre. Estimated cost from cassava is 35 cents per litre, compared with motor spirit based on imported crude at about 16 cents per litre.
The second important feature is the availability of land of suitable quality. Sugar crops require best quality agricultural land and rainfall conditions and some half million hectares would be required to produce the 1985 figure of two million tonnes. 850,000 hectares would be required to produce the quantity needed from cassava, but the land quality could be much lower. Eucalypt forests would require even greater areas of land and with the slow growth of timber this would be an annual clearing and re-forestation requirement rather than a total land use. The total area required would depend on the life cycle of the timber chosen, but this is not likely to be less than 20 years, so some 20 million hectares would be required.
Other aspects involved would be the need to ensure that the ethanol would, in fact, be used when it became available, otherwise investment on such a scale could not be contemplated. If the present price differential continues between ethanol and petroleum products, price subsidies may also be necessary. In addition, governmental support, both Federal and State, would be necessary during the longer development period.
COMPRESSED GAS
The quantities in Australia of natural gas in terms of energy are reported to be comparatively large (31 E.J. approximately). Although the demand for natural gas will be strong, some of the domestic uses such as heating could be replaced by solar energy, and it may be desirable to divert some gas to transport, at least as a transitional energy source. With an average energy content of about 39 megajoules per cubic metre, one standard "bottle" weighing 46 kgms would contain about the equivalent of 7½ ls of petrol. Hydrogen is even worse with equivalence of only 2½ litres.
This would add a considerable burden of weight to the small car but may be acceptable for other classes of vehicle. Further study of the potential use of compressed natural gas in transport is desirable.
ELECTRIC POWER
The use of electricity to power transport has been well established for more than 50 years. The main uses have been for urban transport in the form of tramways, trolley buses and suburban rail services. Many of these have been displaced in recent years by oil fuelled buses and by increased use of the private car. Battery operated vehicles using lead acid batteries have also been in use on a small scale for a long time.
Some construction plant, such as excavators, have been powered by electricity where mobility has been restricted.
The advantages of electrically operated vehicles are long life, low maintenance costs and absence of noise and pollution at the vehicle location. Pollution will generally increase at the electricity generating location. The main quoted disadvantage has been the restriction of mobility.
So far, the energy level per unit of mobile weight for batteries cannot compete with the gas turbine and internal combustion engine in terms of efficiency, and is a constraint on the range of operation of battery powered vehicles.
The lead acid battery, although economical at low power outputs, is so inefficient at high outputs, and so heavy, that its use is not likely to extend. On the other hand, research into other types of battery has been active.
The sodium sulphur battery has about five times the energy output for a given weight as the lead acid battery but is very expensive. Because it operates at 350°C and because sodium reacts vigorously with water, it is said to be too dangerous for road vehicles. It may be possible so to protect the battery that its use would become acceptable on the road. Safer types of battery such as the Zinc Air Battery have not yet proven to be technically feasible.
In the battery the electrodes are "consumed" while the electrolyte remains. The reverse system, the fuel cell, is also a possible solution. In this system the electrolyte conveys the fuel while the electrodes remain. This has the advantage that fuel can be carried in some form of tank and fed to the cell. Hydrogen is a suitable fuel but electrode life is short. Further research into the fuel cell is necessary before it can be shown to be technically feasible, at least for transport use.
It has been suggested (Ref. 4) that batteries could be charged using "off peak" power from existing power stations. It is argued that because the capacity factor of generating plant is 45 per cent it would be possible to use the balance of generating capacity (55 per cent) for battery charging or for the production of hydrogen. However, not all the installed plant is thermally fuelled. About 30 per cent is hydro and its capacity factor cannot be increased due to the lack of fuel (i.e. water). Further, not all of the remaining plant would be available. The sum of forced and planned outages may be as high as 25 per cent and 100 per cent use of the off peak time is impossible due to marketing difficulties. The average use of off peak power would be possible for only about 8 hours a day. For these and other reasons, the available proportion of off peak energy may not be significant and would certainly be less than 10 per cent of present installed capacity.
Research into battery cars is taking place at Flinders University (South Australia) and at the Tasmanian College of Advanced Education. Many improvements are in development and it appears that it will be possible to obtain a range of about 50 miles both in urban and open road conditions using lead acid batteries. The battery operated vehicle offers many attractive advantages over the internal combustion vehicle. There are possibilities of very low mechanical maintenance, complete absence of gears, regenerative braking and non dependence on petroleum fuel with energy supply for storage in every home, office and plant. In addition, there would be a great reduction in noise and an almost complete absence of pollution in urban areas, but increased pollution at the generating locations.
Because of the limited range, battery powered passenger vehicles are unlikely to be accepted as other than a "second" vehicle by most households. The potential voluntary substitution of electric power for liquid fuel consumption is therefore small, probably representing no more than 20 per cent of urban car travel, or a substitute for 5 per cent of total liquid fuel consumption.
HYBRID VEHICLES -- As an intermediate stage and as a means of improving the range of electric vehicles, considerable work has been done overseas on the hybrid vehicle. In this, a common arrangement is to have a small petrol engine driving an alternator at approximately constant speed and full load, charging a bank of batteries and operating while the vehicle is in motion as a parallel generator/battery supply to an electric motor supplying the car's transmission system. Although not in commercial production, demonstration vehicles have been operated and show approximately twice the miles per gallon of an ordinary petrol vehicle, despite the additional weight necessary in the battery bank. A petrol engine operating under these conditions can be tuned to optimum performance with regards, not only to mechanical performance, but also to minimising pollutant emissions.
COAL CONVERSION
Production of methanol from coal has been mentioned, however, synthetic petrol can be produced using different catalysts. The Fischer Tropsch Syntheses are the only commercial systems currently available and being operated in Sasolburg, South Africa.
Considerable work has been done on hydrogenation processes but to date none is on the commercial scale, although several large scale pilot plants are in operation for collection of design data on which to base commercial scale designs, processing in the order of 20,000-30,000 tons per day.
The third source of liquid fuel from coal is pyrolysis. The scheme is to carbonise, possibly in fluidised bed, the fuel normally used in power generation en route to the boiler furnace. Some 30% of the coal is "volatile matter" and a potential source of liquid products. The essential feature of liquid fuel is its much higher H/C ratio than in solid fuels and the virtual absence of oxygen compounds.
Fuel Mass Ratio
Total - HHydrogen/Carbon
Available - HGasoline 0.17 0.17 Arabian Crude Oil 0.15 0.145 Brown Coal (Dry) 0.07 0.015 Bituminous Coals
Oaklands
Singleton
Millmeran
Galilee
0.09
0.105
0.10
0.10
0.08
0.10
0.095
0.09Pyrolysis (U.S.A) 0.09 0.08 (coal at 0.055) Syncrude (Hydrogenated) 0.125 0.12 In addition to its low hydrogen ratio, brown coal has a high oxygen content which is the reason for its very low available hydrogen shown above.
Pyrolysis systems are represented by the C.O.E.D. which has been developed to the pilot plant stage operating at 36 tons/day. The product is of such a quality that mild hydrogenation is needed for use as a refinery feedstock.
General expected performance is as follows:
PYROLYSIS SYSTEM
Coal type and rank; High volatile bituminous Oil yields; 1 bbl/ton on total; ( >4 on incremental)** aromatic, high C/H ratio Gas yield; Small, mainly methane, but could be increased at expense of char Thermal Efficiency; 65-70% to light products, on incremental coal Plant Size; 30,000 bbl/day for 2000 MW station Plant Cost level; $250 MM, i.e. $8000 per daily bbl Product cost, coal at $15/ton $18/bbl Status; Extensive l½ ton/hr. pilot planting reported in detail Australian applicability; With power plant in Hunter Valley and S.E. Queensland. HYDROGENATION processes are essentially variants or developments from the Bergius process operated in Europe in the '30s and largely supplied the German war machine in World War II.
The state of development is summarised as follows:
HYDROGENATION
COAL TYPE - High vitrinite, plus exinite, low ash; low to medium rank are preferred.
- Higher rank requires less hydrogen.OIL YIELD - < 3 bbl/ton; aromatic high C/H ratio GAS YIELD - Small, use for hydrogen THERMAL EFFICIENCY - < 60-65% to light products PLANT SIZE - 30,000-100,000 bbl/day (10,000-30,000 ton coal)
- (3,000-7,000 for commercial demonstration units)CAPITAL COST LEVEL - >$10,000 per daily barrel PRODUCT COST - (black coal at $15/ton) $20-$30 per bbl* STATUS - Extensive pilot planting, several processes the first of three commercial demonstration plants under construction, major contractors could offer a plant now. AUSTRALIAN APPLICABILITY - Victorian brown coal; Hunter Valley and S.E. Queensland (Darling Downs) very suitable. * Published professional estimates show $10 to $12 per bbl, but current industry assessment is at the higher level.
The cost of hydrogen generated from the coal and which is used in the further process to derive the product oil, represents some 50 per cent of the cost of the ultimate product oil and the system must be therefore highly selective as to the type of coal which can be used. Vitrinite is the constituent that is most volatile in coal and is used to identify coal type. The carbon content of Vitrinite is used to describe the coal ranking. When these two items are plotted against each other it becomes very clear how extremely limited are the coals from our total coal reserves, which are really best suited to conversion to oil. With this in mind consideration should be given to dedicating the appropriate coal reserves now for conversion to oil at a later date.
The scale of operation needed for present day peacetime conditions is larger by an order of magnitude (i.e. ten times greater) than previously operated and this will involve significant commissioning problems
High pressure hydrogen-pyrolysis has also been proposed and the Coalcon process is under negotiation for the construction of a demonstration plant of 100 ton per day capacity. It is intermediate betweeen the pyrolysis and hydrogenation processes with claimed yields of light crude of 1½ barrels per ton. It yields about half the heating value of the coal feed as high methane gas. Little detail has been published on this process.
SYNTHESIS is the process wherein the coal is first gasified and then purified prior to entering the synthesis stage of the Fischer-Tropsch process. As mentioned earlier this is the only process currently operating on the commercial scale in the world. The SASOL plant is currently being extended to some 30,000 bbl/day. The process produces a wide spectrum of products all of which must find application to ensure economical operation.
Two types of unit are in use. One using the fixed bed catalyst produces motor spirit of low octane rating but at the same time produces acceptable diesel fuel. The fluidised bed unit produces motor spirit similar in properties to petroleum based products.
The large proportion of gas generated makes access to a large complex essential for the thermal efficiency and economics of the process.
The Lurgi fixed bed gasifier is the only unit currently operating in the process train. However, several developments are in hand in Europe and America aimed at handling fine coal and slurries. These should result in significantly lowering costs quoted in the following summary:
SYNTHESIS SYSTEM
COAL - Any material except strongly coking coals, high volatile coal is advantageous OIL YIELD - < 1¼ bbl/ton -- gives high quality products but gasoline has a low "knock" rating. GAS YIELD - 10%, much higher possible THERMAL EFFICIENCY - < 50% if by-products and gas are cycled. PLANT SIZE - SASOL II at 30,000 bbl/day COST LEVEL - >$1500 MM; $60,000/daily barrel* PRODUCT COST - coal at $10, >$30 per bbl * +. STATUS - Well proved commercial AUSTRALIAN APPLICATION - Is a promising future method for production of gas and oil (in-situ gasification may reduce costs)* To gain perspective, if it were decided to produce the same amount of syncrude -- the term used to describe the refinery feedstock from coal conversion -- as the 1976 actual production of crude petroleum in Australia, the following coal usage would result.
System Yield/tonne Coal
M tonnePyrolysis * 1 bbl
4 bbl245
61Synthesis 1¼ bbl 196 Hydrogenation 1½ bbl
2½ bbl163
98* Plant capacity must be sized on the total coal throughput on which the yield is 1 bbl/tonne. However, if all the fuel for a power house were carbonised the coal requirements are increased by a third and yield on incremental coal is 4 bbl/tonne.
Stated another way, the excess of crude required to the year 2000 over and above presently known petroleum reserves amounts to:
6,200 mill bbl @ 1½% exponential increase
or 12,700 mill bbl (@) 5%If these quantities were produced for black coal, present reserves of 20,000 M-tonnes would be depleted by the following amounts:
System Coal Usage M-tonnes (1½% Exp.)
Growth(5% Exp.)
GrowthPyrolysis 6,200 (31%) 12,700 (63%) Synthesis 4,950 (25%) 10,200 (51%) Hydrogenation
@ 1½ bbl
@ 2½ bbl
4,150 (21%)
2,500 (12½%)
8,500 (42½%)
5,100 (25½%)Usage for other purposes is estimated at some 1300 M-tonnes and export of approximately the same amount.
Thus, pyrolysis would be patently unable to handle the quantity needed because of the absence of a user for the char.
However, there is a good case for processing all the feed to central power generating stations thereby contributing some 1000 million bbl of syncrude or about a sixth of crude requirements over the period if the plant were ready to operate immediately.
OIL SHALE
Kerogens in oil shale are a large potential source of liquid fuels.
Deposits considerably exceed the known crude petroleum deposits, but are largely located in remote areas.
They present the same problems of scale of operation as does coal conversion. Oil yield is in the vicinity of ½-1 bbl/tonne and to supply the current crude production of 350,000-400,000 bbl/day would require some 400,000-500,000 tonnes of shale per day.
Refinery practice would also require modification to accommodate the different composition of the kerogen crude.
Both of these developments would take some years to put into effect and in any case depend on the availability and price of crude petroleum. Economics currently are not favourable, but do not appear any less favourable than coal conversion.
Technology still requires development for processing Australian shales, so once again the question of lead time intrudes.
This is the nub of the whole question of alternative energy sources for transport fuels.
Of all the alternatives only L.P.G. is currently available in significant quantities and then only if export contracts are abrogated.
Technology is current for L.P.G. extraction from natural gas, for methanol and ethanol production.
Lead times for L.P.G. and methanol would be some 3-4 years after committing the project, without major labour and weather holdups. Ethanol is the only renewable source and would require significant crop development as well as personnel and other infrastructure deployment.
AUSTRALIAN INDIGENOUS FUEL RESOURCES
FUTURE PETROLEUM SUPPLY/DEMAND
SITUATION
Domestic Production
Esso-B.H.P. have recently announced upgraded reserve figures for the Bass St. fields, as a result of further drilling, the re-evaluation of reservoir conditions and import parity prices for an increasing portion of production. The revised figures, which lift total reserves and remaining recoverable reserves by 15.0% and 23.9% respectively, have important implications for Australia's future rate of indigenous crude production. The higher oil prices, as per the Government's guidelines, also seem likely to release reserves in previously uneconomic Bass Strait fields, notably Cobia and West Kingfish, which together are estimated to contain 300 mm.bbls. However, these have been excluded from the projections of domestic crude production.
These factors, together with a lessening of the rate of decline in production from Australia's other major producing area, Barrow Island, because of the secondary recovery techniques possible under higher well-head prices, will move the peak in Australia crude production several years more into the future than before. Thus, the decline in domestic production should commence around about 1982/83 rather than 1979/80 as previously anticipated. The projected figures are largely Esso-B.H.P. estimates modified by the recent pricing and reserve information.
CONSUMPTION
Total consumption of petroleum products in Australia grew at an average rate of 3.6% between 1969 and 1976, despite two years of static demand in 1975 and 1976. For the five years prior to 1975, the growth rate averaged 5.2%
The rate of growth in world wide petroleum consumption has slowed significantly since the 1974/5 recession and more importantly, the quadrupling of world oil prices by OPEC. A number of reliable sources are now suggesting 3.5% p.a. or thereabouts as a likely future rate of growth in world petroleum consumption. Australia seems likely to slightly better this rate, both because of its lower oil prices relative to most of the industrialised world and the greater portion of petroleum consumption related to transportation. A rate of 4.0% p.a. has been used as a likely future growth rate for Australian oil consumption. This ties in quite well with a number of estimates from knowledgeable sources including Esso, the Royal Commission on Petroleum and the Melbourne Institute of Applied Economic and Social Research.
PETROLEUM PRICES
With the advent of large scale crude production from Alaska and the North Sea, together with the leisurely pace of world economic recovery, OPEC countries have experienced difficulties in lifting their production rates from the reduced levels that prevailed during the recession. However, despite the much publicised current world surplus of petroleum products, this phase is not expected to persist more than one or two years. After this time, the major new non-OPEC sources of supply will be nearing peak production levels and further expansion in demand will have to be satisfied from largely OPEC sources. Thus, it can be expected that OPEC will again attempt to maximise petroleum prices, subject to economic considerations, and attempt to not only keep up with rates of inflation but also achieve real growth in oil prices. If done at a modest pace, this will inhibit excessive usage of liquid hydrocarbons in the Western industrialised countries, lessen the rate of depletion of OPEC's in-ground reserves and enable higher real growth in the economies and standards of living of OPEC member countries. For the purposes of this compilation, real growth in oil prices is assumed to average 4% p.a.
Australian crude oil will be priced according to the recently formulated Government guidelines until 1980/81. Full import parity should be achieved by around 1985. The Government's pricing policy allows the first six mm.bbls p.a. or a proportion of total production from each producing field to be sold at import parity prices. The proportion saleable at import parity increases from 10% in 1977/8, to 20% in 1978/9, 35% in 1979/80 and 50% in 1980/81. At that date, the policy will be reviewed. For this study, it has been assumed that parity prices will be achieved by 1985 via a 10% p.a. increase in the import parity portion of production in 1981/82 and 1982/83 and 15% p.a. increases in 1983/84 and 1984/85.
Based on the above inputs, a weighted average price of Australian indigenous crude has been formulated and thence a somewhat simplistic value for average retail petrol prices derived, purely as an indication of the type of price the man in the street may be paying during the period examined. The derived retail petrol prices assumes no real growth in Government excise, transport or refining costs and so on.
OTHER SUPPORTIVE INFORMATION
The production, consumption and pricing projections derived for the period 1977-1990 are based on the subject matter discussed above as well as a number of simplifying assumptions. The more important of these include:
All monetary values are in 1977 dollars. Inflation is not built into the projections.
It is assumed that no major oil discoveries are made and developed within the period under review. Current uneconomic fields in Bass Strait, are also excluded from production estimates because of the uncertainties connected with them, particularly as to reserves and timing of development.
Australia currently exports a significant portion of its petroleum production, particularly LPG and, as in the past, these exported hydrocarbons are replaced in the domestic market by an equal amount of imported products (over and above that required to satisfy the domestic petroleum deficit) generally in a more useful form or a more convenient location market wise. Thus, petroleum exports do not have a net effect on the consumption/production/import equations derived and have therefore been ignored.
It is assumed that on a world wide basis, sufficient crude will be available to consumers to meet their needs and that a runaway pricing situation will not occur as a result of a continuing shortage of petroleum products at some stage. This basically implies a willingness by OPEC producers to gradually lift their production rates in line with world demand, with compensation for the ever-increasing rate of depletion of their reserves via the 4% p.a. real growth in crude prices.
The figures derived, particularly for petroleum consumption, are obviously artificial in terms of their consistent growth rates. They essentially are no more than indicators of likely supply, demand and price levels at any future point in time and as in the past, economic conditions and a wide range of other parameters will produce fluctuations around the trendlines represented by the calculated values.
Consumption figures are based on an approximate continuation of current trends. In other words, historical rates of consumption modified by recent changes in long term economic thought, current consumption trends and the likely effect of higher prices, have been used. Dramatic changes in Government policy, prices or other factors, could significantly alter consumption trends, reducing rates of growth well below the reduced rates already used in this study.
However, pending evidence of the potential success of any such measures, and given that the supply/demand figures are intended as a guide to the probable future situation given a continuance of current trends, no allowance has been made for more extreme measures.
The $US/$A exchange rate is assumed to be constant at $US1.10/$A for the duration of the period.
AUSTRALIAN PETROLEUM SUPPLY/
DEMAND/PRICE PROJECTIONS
| 1976 | 1977 | 1978 | 1979 | 1980 | 1981 | 1982 | 1983 | 1984 | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | ||
| Consumption | BBL's { | 219 | 228 | 237 | 246 | 256 | 266 | 277 | 288 | 300 | 312 | 324 | 337 | 351 | 365 | 379 |
| Indigenous Prod. | 153 | 161 | 161 | 160 | 160 | 159 | 158 | 153 | 131 | 113 | 95 | 91 | 80 | 66 | 63 | |
| Imports | 66 | 67 | 76 | 86 | 96 | 107 | 119 | 135 | 169 | 199 | 229 | 246 | 271 | 299 | 316 | |
| % of Total Consumption | 30.0 | 29.4 | 32.1 | 35.0 | 37.5 | 40.2 | 43.0 | 46.9 | 56.3 | 63.8 | 70.7 | 73.0 | 77.2 | 81.9 | 83.4 | |
| World Oil Price $US/bbl | 11.51 | 12.69 | 13.20 | 13.73 | 14.27 | 14.85 | 15.44 | 16.06 | 16.70 | 17.37 | 18.06 | 18.78 | 19.54 | 20.32 | 21.13 | |
| Cost of Imports $Am | 691 | 773 | 912 | 1074 | 1245 | 1445 | 1670 | 1971 | 2565 | 3143 | 3760 | 4200 | 4814 | 5524 | 6070 | |
| Weighted Average Price of Crude in Aust. $A/bbl (incl. Govt. Levy) | 6.18 | 7.04 | 8.38 | 9.67 | 11.07 | 11.72 | 12.67 | 14.05 | 15.11 | 16.40 | 16.91 | 17.52 | 18.14 | 18.78 | 19.49 | |
| Approximate Retail Petrol Price ¢/ litre | 15 | 18 | 21 | 24 | 28 | 29 | 32 | 35 | 38 | 41 | 42 | 44 | 45 | 47 | 49 | |
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