Copyright 1999 Federal Document Clearing House, Inc.
Federal Document Clearing House Congressional Testimony
October 05, 1999
SECTION: CAPITOL HILL HEARING TESTIMONY
LENGTH: 5334 words
HEADLINE:
TESTIMONY October 05, 1999 JOHN W. HOLMES EXXON CORPORATION
HOUSE SCIENCE ENERGY AND ENVIRONMENT FUTURE FUELS AND PETROLEUM
SUPPLIES
BODY:
Written statement of John W. Holmes
Exxon Corporation Corporate Planning, Energy Division Manager on behalf of The
American Petroleum Institute before the Subcommittee on Energy and Environment
of the Committee on Science U.S. House of Representatives October 5, 1999 Thank
you Mr. Chairman and other Members of the Subcommittee for the invitation to
appear before you today. I am testifying on behalf of the American Petroleum
Institute. As you are aware, there have been some exciting breakthroughs in fuel
cell technology for automotive applications over the last few years. This
emerging technology holds the promise for significant fuel economy improvement
and minimal regulated emissions versus today's internal combustion engines. As
such, automakers are racing to develop this new technology for the future
generation of vehicles. Although market entry is still some years away, the
lead-time for technical readiness necessitates the choice of fuel within the
next year or two. The choice of fuel for these new vehicles is a very important
decision. Making the right choice is important not only for the automotive and
energy industries but even more so for consumers. We cannot afford a misstep in
fuel choice since it could easily block the introduction of this promising
technology. My remarks will focus on the issues confronting us on fuel selection
with a particular emphasis on the leading contenders -- methanol and
gasoline. MAJOR FACTORS INFLUENCING THE AUTO INDUSTRY In
developing new vehicle power trains, the automakers have been strongly
influenced by three major drivers: air quality, fuel economy and increasing
consumer demand for larger, more powerful vehicles. Prior to 1970, power, size
and comfort were the main selling points for autos. However, rising public
concern over air quality added another factor, vehicle emissions. The oil and
auto industries responded by developing unleaded gasoline and
emissions control technologies such as the catalytic converter. Over the years,
there has been a continued push to develop lower emissions technology including
reformulated gasoline, exhaust gas recycle and fuel injection.
As a result, over the past several decades, U.S. new vehicle emissions have
dropped by more than a factor of 10 versus pre-control levels. This trend is
expected to continue with the introduction of Tier-11 emissions regulations.
Further improvements in engine technology and lower sulfur
gasoline will be required to meet these more stringent regulations. Not
all the new technology introductions have been commercially successful. Battery
powered electric vehicles have had limited sales due to their high cost, limited
range and lack of recharging infrastructure. Alternative fuel vehicles have also
penetrated the market more slowly than expected because other fuels, such as
reformulated gasoline, are less expensive and more widely
available. Those unsuccessful attempts tell us that new vehicle technologies
must be competitive in cost and performance if they are to be accepted by
consumers. Also, new fuels must be widely available and convenient to use if
they are to be successful in the market. Fuel economy has been the second
factor. The increase in gasoline prices in the early 1970's and
security of supply concerns ushered in new corporate fuel economy standards. As
a result, U.S. new car fuel economy doubled by the mid-'80's. Recently, the
drive for improved fuel economy has resurfaced with the joint industry /
government Partnership for a New Generation Vehicles program. The third factor,
which runs counter to the efficiency objective, is consumer demand for larger,
more powerful vehicles. In the U.S., demand for pickups, vans and sport utility
vehicles has grown from less than 20% in the early 70's to nearly half of total
light duty vehicle sales today. The oil and auto industries are continuing their
efforts to develop technologies that provide enhanced fuel economy along with
improved vehicle emissions. Lightweight materials, improved fuel injection
technologies, advanced computer controls, variable valve timing and continuously
variable transmissions will continue to enhance the performance of the internal
combustion engine. In addition, radically different power train designs are
beginning to emerge. EMERGING VEHICLE TECHNOLOGIES Several new power train
developments offer the potential for improved fuel economy and emissions.
Improvements to the internal combustion engine via direct injection, variable
valve timing, and stratified charge could improve the efficiency of the internal
combustion engine by 15-40%. Hybrids take advantage of the best of two power
sources: an electric motor and an internal combustion engine. Motive power comes
from the engine, the electric motor, or both, with a controller determining the
ratio. The hybrid's engine also recharges the battery, which eliminates the
limited range problem of electric vehicles. These vehicles are now being
introduced in the market and offer the potential for 40-90% improvement in
efficiency while at the same time significantly reducing emissions. The rapid
reduction in fuel cell stack costs and progress in onboard reforming of liquid
fuels offer the potential for fuel cell vehicles to become competitive with
internal combustion engines. Fuel cells offer the possibility of high
performance with near zero regulated vehicle emissions and up to two times the
fuel economy of today's vehicles. The first fuel cell vehicles could be in
dealer showrooms by 2005, but will there be broad consumer acceptance of these
new vehicles? At this time, it's still unclear which, if any, of these
advancements will be accepted by the consumer. Ultimately, the winner must not
only show benefits over today's vehicles, but also over the competing emerging
technologies that will be coming into the market over the next decade. Along
with cost and performance, the consumer's decision will also depend on the broad
availability, price and other characteristics of the fuel needed for the
vehicle. From a fuel perspective, the advanced internal combustion engines and
hybrid electric vehicles can run on conventional gasoline and
diesel fuels. The introduction of fuel cells, however, could require a
completely new type of fuel. Gasoline and methanol are the
leading candidates to power fuel cell engines in private autos. The following
sections examine the merits of these two fuels in terms of economics, emissions
and environment. FUEL CELL VEHICLE DESIGN Depending on the choice of the fuel,
the design of the vehicle can be quite different, with each design having
advantages and disadvantages. The most important vehicle difference between
methanol and gasoline is in the design of the reformer, the
device that converts the fuel to hydrogen on-board the vehicle. Steam reforming
is the leading design for conversion of methanol in a fuel cell vehicle.
Methanol's unique chemical structure allows it to produce hydrogen at relatively
low temperatures. In its simplest form, the methanol steam reformer offers the
potential for the lowest cost and smallest-sized engine, although some of the
methanol system's disadvantages could result in the need for additional
complexity and product development. One issue with the methanol system is
vehicle startup time. Steam reforming requires heat for the reaction to occur,
and this heat must be generated prior to beginning steady operation, resulting
in rather long startup times without utilizing some other energy source to start
up the vehicle. In addition, the methanol system is not designed to handle
contaminants or additives, which may be needed for safety and health reasons.
The gasoline fuel processor is slightly more complex than the
methanol processor. It operates at a higher temperature, although still
significantly lower than today's engines, so heat integration is important to
achieve the desired vehicle efficiencies. The gasoline system
does have a number of advantages, however. It is inherently more flexible than
the low temperature methanol reformer, allowing the processing of multiple fuels
using the same system. Gasoline, jet fuel, LPG, natural gas and
ethanol have all been successfully demonstrated in this system. The
gasoline processor is also more tolerant of contaminants or
additives contained in the fuel. Lastly, due to the higher energy density of
gasoline, the gasoline system offers the potential for up to
twice the vehicle range of the methanol system. Although both fuel cell designs
have made significant progress, they must still overcome a number of technical
hurdles before they are ready for consumers. Along with the issues described
above, each design must also reach a competitive level of cost, reliability, and
size. It is still too early to assess which of these vehicle designs - or an
alternative - will emerge as the leader. GASOLINE AND METHANOL
PRODUCTION AND DISTRIBUTION A major advantage for a gasoline
based fuel is that it can utilize the current established production and
distribution infrastructure, which provides significant benefits in fuel
availability, investment costs, and the potential penetration rate of fuel cell
vehicles. Worldwide, more than 500 refineries produce about 1.3 billion gallons
of gasoline and diesel fuel each day. The United States alone
has more than 80,000 miles of product pipelines and about 190,000 service
stations supplying gasoline to consumers. A
gasoline based fuel for fuel cell vehicles would likely be
produced from a blend of streams that are currently readily available.
Researchers have demonstrated a reformer that can run on conventional
gasoline. In addition, a gasoline for fuel
cells could offer better performance and be produced at lower cost because many
of today's conventional gasoline's more expensive ingredients
would not be required. Octane, for example, is important in today's internal
combustion engines, but is not needed for fuel cell vehicles. Likewise,
expensive oxygenates that are now blended in reformulated
gasoline would not be needed in a fuel cell fuel.
Sulfur is likely the most important fuel quality issue, since
sulfur can inhibit the performance of the system. Low
sulfur blend components are available in small quantities
today. Naphtha is a common refinery stream that is an inexpensive alternative to
conventional gasoline. Although its octane is too low for
today's internal combustion engines, naphtha is ideal for fuel cells and could
be supplied to retail stations with the existing gasoline
infrastructure. In addition, liquid hydrocarbons derived from natural gas
production also make excellent fuels and provide fuel flexibility from an
additional resource base. By contrast, current methanol production is very low,
amounting to only 1% of today's road fuel demand. Due to methanol's corrosivity
and its affinity for water, it cannot be readily distributed in today's fuel
infrastructure. As a result, a costly investment for new production and
distribution infrastructure would be required for methanol fuel cell vehicles if
they are to gain significant market penetration. In order to produce and
distribute the energy equivalent of just 10% of today's U.S. demand for road
transportation fuels, industry would need to risk about $30-46 billion in
capital investment to duplicate an already existing gasoline
infrastructure. Methanol prices have also historically been higher than
gasoline on an energy equivalent basis. Over the past ten years
methanol wholesale prices have averaged about 60% higher than
gasoline on this basis. The use of methanol would also increase
our reliance on imports of finished products versus gasoline.
In order to take advantage of low cost natural gas, the majority of new methanol
plants would likely be constructed and operated outside of the United States,
where natural gas costs can be significantly less than in the U.S. SAFETY,
HEALTH, AND ENVIRONMENT From a safety, health, and environmental perspective,
methanol and gasoline have both advantages and disadvantages.
Methanol has been used as a chemical feedstock for a long time, and the chemical
industry has shown that, with the right precautions, it can be handled safely.
Using it as a transportation fuel, however, extends the responsibility of safe
handling to the general public, and issues regarding fire safety, toxicity,
spills and ground water contamination must be adequately addressed to ensure the
safe handling of methanol in this extended environment. Methanol has a lower
risk of open fire than does gasoline and burns with a less
intense flame. However, in a closed space, such as a retail storage tank or a
vehicle fuel tank, methanol can pose a greater fire risk. Another risk of
methanol is that it burns with a nearly invisible flame. Before methanol can be
used as a transportation fuel, a luminosity additive may be required. However,
available luminosity additives won't reform in the low- temperature methanol
steam reformers now used in fuel cell vehicles. To handle additives in the fuel,
methanol fuel cell vehicles would require either higher temperature reformers or
other modifications that would add to the vehicle's complexity. Methanol is more
acutely toxic than gasoline, so extensive precautions must be
taken to avoid the risk of accidental ingestion. Methanol carries an additional
risk because it is odorless, colorless and tasteless. Additives will likely be
needed to give methanol a distinctive color, taste, and smell. However, such
additives, like the one needed to give methanol a visible flame, would impact
the reformer's performance and cost. While a large spill of either crude oil or
methanol will have a severe and immediate environmental impact, recovery from a
methanol spill should be more rapid. Methanol dissolves in water and evaporates
or biodegrades quickly, so the concentration of methanol following a spill will
typically be low enough for recovery to begin soon after the spill, resulting in
substantial recovery within a few months of the spill. Little information is
available about methanol's potential for groundwater contamination. Methanol
biodegrades fairly rapidly, and low concentrations do not appear to have
long-term health effects. On the other hand, methanol is completely miscible
with water, which means it has the potential for faster dispersion into the
water table. And because it is odorless, tasteless, and colorless, no simple way
exists for an individual to detect groundwater methanol in the event of a large
spill into an aquifer. Further study is needed to determine how consumers will
react to the safety and potential groundwater contamination issues surrounding
methanol. As with any new fuel, the potential for unexpected public reaction,
such as has been exhibited with the introduction of MTBE into
gasoline, needs to be fully considered. WELL-TO-WHEELS
EFFICIENCY AND EMISSIONS Effective utilization of fuels not only requires a
highly efficient vehicle, but also an efficient fuel production process. In
other words, analyses that only measure vehicle efficiency are incomplete. The
comparison of various fuels needs to extend from the initial production /
manufacture, through the logistics system, and finally, on-board the vehicle
("well-to-wheels"). Considering the many steps involved, turning crude oil into
transportation fuels is a remarkably efficient process.
Gasoline based fuels retain about 85% of the energy originally
contained in the crude oil. Methanol manufacturing consumes considerably more
energy than it takes to produce gasoline or other hydrocarbon
fuels. Process limitations hold the efficiency of manufacture and distribution
of natural gas based methanol to roughly 63%. The production of methanol from
coal is even less efficient, at roughly 54%. Today's mid-sized passenger cars
are about 18% energy efficient. Factoring in the energy it takes to manufacture
the fuel results in a 'Well-to-wheel" efficiency for today's internal combustion
engine of about 15%. Advances in internal combustion engine technology (e.g.,
direct injection) could increase the efficiency to 20%. In a
gasoline-powered hybrid or fuel cell design, a vehicle's
efficiency could double. This would increase the "well- to-wheel" efficiency to
more than 30%. As noted above, the production of methanol is inherently less
efficient than gasoline. Thus, despite the increased vehicle
efficiency of a methanol fuel cell system, the resultant "well- to-wheel"
efficiency would be only 23% - substantially lower than either
gasoline hybrids or gasoline fuel cell
vehicles. If methanol is produced from coal, the overall efficiency drops below
that which can be achieved with advanced internal combustion technologies. The
global issue of carbon dioxide emissions should also be considered on a well-to-
wheels basis. This would include the amount of C02 released during extraction,
production and delivery of the fuel. Overall, both gasoline
hybrids/fuel cells and methanol (from natural gas) based fuel cells offer the
potential for a factor of two reduction in C02 emissions versus today's internal
combustion engines. KEY CONSIDERATIONS A review of the fuel choices for fuel
cell vehicles highlights several important points to consider in the development
of this new promising vehicle technology: Fuel cell vehicles are only one of a
number of emerging vehicle technologies, and they must compete with these other
technologies on both performance and price. Comparisons should be made not only
with today's vehicles, but also with those likely to be available in the future.
Due to the impact fuel choice has on vehicle design, capital costs and consumer
acceptance, it is vitally important that vehicle and fuel implications be
considered jointly. Generally, fuels that are most directly suited to the fuel
cell are the most difficult and costly to produce and distribute. As experience
with the electric car has shown, the consumer must be satisfied that the
combination of fuel and vehicle meets the full range of needs. As with any new
fuel, the safety, health and environmental considerations need to be carefully
assessed. The use of methanol as a transportation fuel extends the
responsibility of safe handling from experienced industrial operators to the
general public. Methanol's impact on groundwater contamination and the potential
for accidental ingestion must be better understood. Preventive measures would
need to be developed and instituted to minimize any health and environmental
concerns prior to widespread use. Taxation should be fuel neutral. Allowing
industry to respond to societal needs on a level playing field, without
preferential taxation, has historically resulted in a greater diversity of
options, and ultimately, the most cost-effective solution. Both the
gasoline and methanol fuel cell vehicles should be more fully
developed prior to making a commercial decision on fuel choice. The choice of
fuel could have profound implications on consumer acceptance, vehicle sales, and
capital requirements. A misstep in fuel choice could result in an unsuccessful
introduction of a promising technology that has significant societal benefits.
While both gasoline and methanol engines should be further
developed, the ability to utilize the existing infrastructure provides a major
advantage for gasoline. A fuel like methanol that requires a
new production/distribution infrastructure must show significant incentives over
alternatives that can utilize the existing infrastructure. Lastly, fuel
comparisons should be made on a "well-to-wheels" basis. A fact often overlooked
is that the production of fuels from petroleum is a highly energy efficient
process, and other fuels, which may offer some benefits on the vehicle, have
lower inherent efficiencies in their production.
LOAD-DATE: October 6, 1999 
