Peter Voser, Straits Times 15 Oct 09;
WHILE we cannot predict the future, it is clear that mobility is a growth market. Between now and 2050, one billion new vehicles will come onto the world's roads, mostly in Asia, more than doubling today's total.
So there will be room and need for all kinds of vehicles and fuels to power them. With more competition between the various fuel types, consumers will have more choice.
Today if you ask a 10-year-old what his or her first car will be, the chances are the response will be: 'An electric one.'
It does not matter whether that first car will actually be electric: More than one road leads to Rome. More important is the underlying aspiration: to own a car that uses less energy, saves money and is fun to drive. And since today's young people are tomorrow's customers, companies need to embrace their aspirations.
Petrol and diesel will remain popular, thanks to their convenience and efforts to make them cleaner. Increasingly, they will be sold with biofuels blended into them. There will be a growing role for alternatives, ranging from biofuels to hydrogen, electricity and natural gas.
Within that mosaic, electric mobility is the talk of the global village. That is not surprising. At Shell, we believe that the number of cars with batteries is set to grow. But they will not all be the same.
Most consumers will continue to make pragmatic choices about which car to buy based on cost and convenience, which is why hybrids are likely to out-compete full electric cars for some time to come. Hybrids combine electric's low-emission for shorter distances with liquid fuels' long range and swift refills.
Indeed, pure electric cars must overcome several hurdles before they can compete with hybrids: the journey range of batteries needs to go up; quick, convenient recharging or replacing of batteries must be made possible; and electricity grids must be expanded to handle more power.
Resource scarcity may also pose a challenge. Take lithium, a crucial component of the lithium-ion batteries that will power tomorrow's electric cars. It can be easily produced in large quantities in only a few places on Earth.
And current production methods put pressure on the environment. Making a big shift to electric vehicles would require an expansion in the world's capacity to mine and recycle lithium, and its ability to do it sustainably and responsibly.
Perhaps the most important thing is how we will generate the electricity. By themselves, wind and solar will not be sufficient to power large-scale electric mobility, at least not for the foreseeable future.
In the coming years, like it or not, most electric vehicles will rely to a large extent on conventional coal-fired power, which is responsible for the fastest growth in greenhouse gas emissions. That is not what people have in mind when they think about their electric cars.
If electric mobility is to fulfil our hopes, we will have to find ways to reduce emissions from coal. One way of doing this is to capture emissions from power stations and store them underground, using carbon capture and storage technology. This promising but expensive technology would get a tremendous boost if the United Nations Climate Change Conference in Copenhagen in December expressed support for it.
Another way to quickly and cheaply reduce emissions from coal-fired power is to burn natural gas instead. On average, a natural gas-fired power plant emits half the carbon dioxide of a coal-burning plant to produce the same amount of electricity.
Natural gas-fired power stations can also be switched on and off with relative ease, making them ideal allies of the intermittent power generated by wind turbines and solar panels.
All this helps to explain why natural gas is an increasingly important part of Shell's portfolio. Last year, we produced enough natural gas to supply more than 190 million homes with electricity. By 2012, half of Shell's production will be natural gas.
A decade hence, when the 10-year-old has grown into a young adult, he or she may indeed drive a hybrid electric car that runs on a combination of liquid fuels and electrons. If we make the right choices today, the electricity powering the car will come from cleaner sources.
The writer is chief executive officer of Royal Dutch Shell. This article appeared first in The Financial Times.
