Big Oil’s Electric Shock
By Dr. Gary Kendall, Executive Director at SustainAbility / June 10th, 2010
A great indicator that disruptive innovations are nearing the all-important tipping point is when powerful incumbents start peddling nonsense masquerading as facts, to sow doubt about the viability of the emerging technology or business model. There’s nothing particularly sinister about this. By scrambling to erect roadblocks to new market entrants that threaten their hegemony, oligopolies are only doing what comes naturally to an organism under attack by an existential threat. And if your job is to find, extract, refine, distribute and sell liquid fuels, then electric cars certainly qualify.
I’m thoroughly heartened when I read statements from Big Oil about the “many barriers” that must be overcome before electrons can make a significant dent in a mobility sector dominated by petroleum. Heartened because as recently as two years ago I would have been hard pressed to find any commentary at all from the oil majors about transport electrification. Back then, the tune was all about the prospects for second generation biofuels and the supposed holy grail that is hydrogen. But today, barely an eyebrow is raised when senior executives from the likes of ExxonMobil or Shell claim that electric cars hold genuine future promise, but not before we decarbonise the power supply. In other words: “You EV guys are very well meaning – and we wish you well – but until the world stops burning coal, allow motor manufacturers to continue tinkering with incremental efficiency gains while we drill, baby, spill!”.
The decarbonised grid storyline is becoming the new conventional wisdom. And like much conventional wisdom, when examined closely it turns out to be patent nonsense, though on the surface it appears reasonable. We begin to understand why it is flawed when we examine what I call the Four Truths that we can hold to be self-evident. They hold whenever we elect to set fire to carbon-based fuels in order to benefit from motorised kilometres:
(1) Large is better than small
- Megawatt (MW) scale plants are able to run hotter, therefore more efficiently, than the kilowatt (kW) scale engines that power motor cars. This truth has its roots firmly in the basic laws of thermodynamics, which are not subject to revision.
(2) Constant load is better than variable load
- Combustion facilities have an optimal operating efficiency that is achievable more or less continuously in a power plant. In vehicles, the engine speed is seldom constant, as it is dictated by the variable driving conditions.
(3) Stationary is better than mobile
- In practical terms it is far easier to manage, collect, and process combustion emissions from stationary plants than from mobile vehicle tailpipes.
(4) Few is better than many
- The greater the number of emissions sources, the harder it becomes to do anything about them.
Notice that truths (1) and (2) relate to energy efficiency, while (3) and (4) are all about emissions control – this is why (1) and (4) are not merely different ways of expressing the same point. And what should we conclude from these truths? It is better to burn fuel – be it coal, crude oil, natural gas, or biomass – in hundreds of large, stationary power plants running at constant speed rather than millions of small, mobile internal combustion engines running variably. Put differently, all else being equal electricity beats liquid fuels on energy efficiency and emissions control.
The real killer for Big Oil is that for years we’ve been led to believe that petroleum was too valuable to turn into electricity. It’s true only if your core business is shackled to the liquid transport fuel paradigm. From an energy efficiency, energy security and environmental perspective, crude oil is far too valuable to waste in automobiles. The same goes for coal, natural gas, and biomass. Biofuels – the tenuous lifeline of the liquid fuel company – break against the rocks here. Far better to convert the biomass into heat and electricity to displace dirty coal.
So back to the conventional wisdom. Let’s imagine a world in which 100% of our primary energy comes from fossil fuels. Electric mobility wins, hands down. But of course, we don’t live in such a world. The world we live in has a steadily decarbonising electricity supply, while oil majors are forced to exploit ever-more exotic and energy-intensive forms of black gold. They’ll have a helluva job making diesel or gasoline from wind turbines and solar panels.