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Energy efficiency comes at cost

Advances in fuel and engine technologies could improve vehicle efficiencies as much as 70 per cent by 2030, the World Energy Congress heard.

But energy giant Exxon Mobil Corporation said while energy companies continued to work on reducing greenhouse gas emissions, there were some big challenges in bringing clean energy products onto the market.

Exxon Mobile's fuels development and policy planning manager, Buford Lewis, told the renewable energy forum in Sydney that road transport vehicles would continue to depend primarily on petrol and diesel through to 2030 even as alternate fuels, such as bio-fuels, entered the market.

"Demand for petrol and diesel in Asia Pacific in 2030 is forecast to be over twice what it is today due to a rapidly expanding road transport fleet," Mr Lewis said.

At the same time demand in North America and Europe could possibly be lower than today because of improvements in fuel efficiency as a result of technology and consumer trends.

"Advances in fuel and engine technologies could drive up to a 70 per cent improvement in light duty vehicle efficiency by 2030," Mr Lewis said.

Some improvements in vehicle efficiency were already available to reduce greenhouse gas emissions with advanced technology promising even more benefits, he said.

But the forum was told the rate at which these new products were implemented was difficult to judge due to vagaries in consumer choice, vehicle turnover rate and costs.

"While technology improvements are expected to reduce the production cost of biofuels such as ethanol and biodiesel, most will generally remain expensive relative to petrol and diesel (and) their use in many markets will continue to rely on significant subsidies," Mr Lewis said.

Meanwhile, Shell Australia chairman Tim Warren said costs were also hindering the rate at which renewable energies and hydrogen were entering the broader energy market as countries sought to meet health and environment concerns.

"The advantages of renewables are well established, from an environmental point of view," Mr Warren said.

"(But) chief among the challenges is making renewables and hydrogen (energy) work commercially.

"Here we are in a Catch-22 situation - we need sufficient scale to make such technologies competitive, but we know that large numbers of customers will not use this technology unless it is already cost competitive."

Mr Warren said oil would play a declining role in the energy mix with gas bridging the gap between demand and supply until renewable technologies were available.

"The world could be consuming more gas than oil by 2025," he said.

"That would mean very large incremental growth providing two to three times more gas over the next 30 years than we have in the period since 1970."

© 2004 AAP

Editorial Notes: The article ends with an implicit admission of oil depletion, however whether or not natural gas can fill the gap in 2025 is questionable. A subscriber only Oil and Gas Journal article was published recently titled Multicyclic Hubbert model shows global conventional gas output peaking in 2019 -AF

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