Abstract

Among the principal "customers" energy companies must please are the public officials charged with protecting the public health and the environment. The traditional dynamic between fuels companies and regulators has been characterized by incremental clean-up of traditional fuels, often in adversarial processes that drag on for years. This approach can sacrifice whole-system optimization, produce suboptimal results, and generate unnecessary costs. One example is the near-universal dichotomy between air quality and fuel efficiency regulations, making them often at odds with one another even within national jurisdictions.

Whole-system, life-cycle analysis could produce a very different technology path. Today's requirements of near-zero pollution together with drastic reductions in C O2 emissions make a host of other fuels look attractive. Some of the most efficient, clean technologies, such as near-zero emission hybrids and fuel cells, want similarly clean fuels, with hydrogen as the ideal end-point. At the same time, petroleum politics are causing many countries to look to natural gas as a feedstock for the transportation sector.

This paper will discuss the fuel requirements of the "public as customer", and look at clean, available alternative fuel technologies, especially gas-to-liquids, in this light.

Introduction

Oil and energy companies operate in a context driven first and foremost by market competition, but their other principal context is that of government regulation.

Government agencies charged with protecting the public good set standards for drilling, transporting, refining, and the ultimate distribution and use of energy. There are few aspects of the petroleum business that are not profoundly shaped by governmental regulations.

In defense of the public interest, government regulations have required unleaded fuels and tighter restrictions on vehicle emissions. At the same time, government regulations and programs are shaped by politics, which often support national or highly local goals, including for example pricesupports for petroleum aimed at protecting the local producer.

Energy company executives must try to divine the political forces of dozens of key governments as they build their business strategies. A march toward more stringent air pollution standards will force changes in fuel specifications. Increased pressure to reduce greenhouse gases will force process and feedstock changes. National security and price volatility concerns will continue to drive the promotion of alternatives to petroleum-based fuels. These and other concerns will strongly influence patterns of investment, choices of feedstock, refinery design, and indeed set the business course for entire companies.

BLOCK 3 - - FORUM 18 281 ALTERNATIVE FUELS FUELS AND TH

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