Fuel Consumption & the Transport Scenario

Transcription

1 Fuel Consumption & the Transport Scenario Amal S Kumarage Professor, Department of Civil Engineering, University of Moratuwa Environment Committee Sri Lanka Association for the Advancement of Science Seminar on Alternative Fuels for Transport in Sri Lanka 27 July 2006 SLAAS Auditorium, Colombo

2 Perspective of the Fuel Crisis The period of plentiful, low-cost petroleum is approaching an end. The reason is increasing demand and the peaking of oil production This represents a liquid fuels problem and therefore essential a transport problem and not an energy crisis. Without long-term strategic interventions the problem will be severe and long lasting. In every crisis, there are always opportunities for those that act decisively. Governments will have to take the initiative on a timely basis.

3 The Peaking of Oil Production Oil production peaking is not running out. But consumption is less than new reserves discovered. World oil demand is forecast to grow percent by To meet that demand, ever-larger volumes of oil will have to be discovered & produced. If large quantities of new oil are not discovered and brought into production somewhere in the world, then oil production will no longer satisfy growing demand.

4 Most forecasters believe that world oil production peaking might occur very soon (2006 to 2010). Countries/Regions which are supposed to have passed their peak production rate are North America, UK, Norway, Colombia, Argentina and Egypt. Until recently, OPEC assured the world that oil supply would continue to be plentiful, but that position is changing. But of the 42 oil producing countries 14, have reached or passed their peak production rates.

5 3% growth rate from 1993

6 China and India the unforeseen factor in consumption.. China, Southeast Asia, and India now with some 60% of the world population are getting motorized wheels. The number of motor vehicles in China has increased 10 fold in 20 years. But this will be still less than 2 cars per 100 people. This way below those of North American and European Countries where it is 50 to 70 per 100 people. When China and India reach per capita incomes of US$ 2500 (next years) world demand for fuel will require growth of around 4% increase in supply every year. However this will occur after the peak production and fuel to drive the economic growth beyond that will be constrained. At present conditions Sri lanka might reach this even after India and China.

7 Price Hikes early signs!! Continuously increasing prices show supply falling behind the demand. Is this only temporary did we not survive similar situations in 1973, Invasion of Kuwait etc. Is it then too early? What are the risks of ignoring early signs and relying on optimistic world oil production peaking projections?

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9 Impacts of higher Oil Prices.... For oil importing countries, higher oil prices reduce funds available to spend on other goods and services. Over longer periods higher prices will result in severe macroeconomic impacts. Higher oil prices result in increased costs for the production of goods and services, slow down economic growth and simultaneously increase inflation and unemployment with less available for social welfare. The risk to developing countries is higher due to their limited ability to speedily switch to alternative fuels.

10 Will Higher Prices curb demand..?? The demand for owning cars in heavily dependent on income. The long-run income elasticity of fuel demand is typically found to be in the range 1.1 to 1.3. The implication is that fuel prices must rise faster than the rate of income growth, even to stabilize consumption at existing levels.

11 The impact of fuel price on consumption in terms of price elasticities is: short-term around -0.3 and long-term between -0.6 and However, when viable transport and fuel alternatives are absent this may be much less. There is some evidence that in the long run there is a significant response to reduced consumption.

12 Sri Lanka Fuel Consumption Per capita Fuel Consumption (Litres) in Sri Lanka ( ) Per Capita Fuel Consu sumption (Litres) Present CIF + production costs is Rs 100 bn Year

13 Vehicle Ownership and per Capita Fuel Consumption vs Income (US$) Vehicle e Ownership (% of population) per Capita Vehicle Ownership (%) Fuel Consumption per Capita (litres) Expon. (Fuel Consumption per Capita (litres)) Linear (per Capita Vehicle Ownership (%)) Per Capita Fuel Consumption Litre es per Year ,000 Per Capita Income (US$) -

14 1,400 1,200 1,000 (1975=100) Index Per Capita Income (US$) 1975 = 100 Veh Ownership 1975 = Year Population 1975 =100

15 Evasive Action or Face the Crunch? Mitigation initiated prematurely would result in a relatively modest misallocation of resources. Failure to initiate timely mitigation with an appropriate lead-time is certain to result in very severe economic consequences.

16 Interventions to Reduce Fuel Consumption Reduce Requirement for Travel Encourage development of fuel efficient modes of transport Decrease reliance on petroleum fuels for transport

17 Reducing Requirement for Travel Centralized Commercial Development Congestion at peak hours Residential Area

18 Redeveloping Urban Areas Compact Cities Improved Public Transport Congestion is minimized As minimum need of Transportation Commercial Development at Suburban Centers Advantages: Commercial center * Reduced Congestion in Central Area * Integrated Urban Development * Planned Public Transport System * Minimum distance between Home & Office * Less Transport intensive * Less fuel use & pollution * Efficient and congenial Urban Environment Commercial Development at Suburban Centers

19 Develop Fuel Efficient Modes of Transport Car Ownership Vs Income 0.9 Car Ownership Rate C1 : High Growth C2: Moderate to High C3 : Low to Moderate C4 : Low C2 C4 C1 C3 Australia,, Canada, New Zealand, Belgium, Denmark, Finland, France, U.S.A. Germany,, Japan, Switzerland, Sweden Singaphore, Hong Kong SL ,850 10,850 15,850 20,850 25,850 30,850 35,850 Per Capita Income (US $)

20 Summary of Factor Determining Sustainable Vehicle Ownership Levels Population Density Populatio n Density (persons/h a) Roads (m/per son) Share of Public Transport Car Ownership Saturation (per 1000 p) Restrictions Low < 25 > 4 < 5% Little or no restriction on ownership Moderate % Some traffic and parking restrictions High > 75 < % Traffic and ownership restrictions

21 Light Rapid Transit (LRT/Tram)

22 Bus Priority Lanes

23 Bicycle Lanes

24 Reduce Dependence on Petroleum Fuels Fuel Alternatives must produce liquid fuels that can easily substitute for liquid fuels currently in widespread use, e.g. petrol, aviation fuel, diesel, etc. The end products should therefore be compatible with existing distribution systems and end-use equipment. Alternatives must be capable of liquid fuels savings or production on a massive scale ultimately millions to tens of millions of barrels per day worldwide.

25 Substitute fuel production technologies must be inherently energy efficient. The option must be environmentally clean by international standards. Is price alone adequate to encourage usage of alternatives? What is the scope of the developing countries in alternative fuel R&D?

26 Thank You