This is a talk I gave at the end of my first visiting professorship at Stanford in 2004. It gives a preview of Rocky Mountain Institute's Winning the Oil Endgame study, which was released in September 2004. http://www.oilendgame.com

1. Confidential preview
Jonathan Koomey of work in progress,
Stanford University strictly embargoed
JGKoomey@stanford.edu
to release on 20
Advisory Board Meeting,
Mineral Acquisition September 2004
Partners, Inc.
21 July 2004
Copyright © 2004 Rocky Mountain Institute. All rights reserved. Hypercar® is a registered trademark of Hypercar, Inc.

2. Introduction
◊ “Winning the oil endgame” report to be released in
September 2004
◊ Audience is business and military leaders
◊ Focus on 4 potential sources of oil displacement
 Efficiency
 Substitution of natural gas
 Substitution of biofuels
 Substitution of hydrogen

3. The U.S. oil problem
 Americans use 26%, produce 9%, and own 2-3% of
the world’s oil. So we can’t drill our way out
 Fungible in world market; issue is use, not imports
 The next barrel is cheaper abroad than at home
 Security is an issue at 70% import dependence, with
Saudi Arabia as the only swing producer
 Only three solutions in a market economy
 Protectionism
 Trade
 Substitution
 Three basic approaches to oil strategy
 Ostrich
 Drill and kill
 Innovate and revitalize – cheaper, safer, surer; our focus

4. Growth in U.S. oil use dominated by
light trucks & heavy vehicles
Transportation Petroleum Use by Mode (1970-2025)
22
20
Actual Projected
Millions of Barrels per Day
18
16 Air
14
Domestic ehi cles
12 Production
Marine
Hea vy V
10
8
6 Light Trucks
Off-road Rail
4
Cars
2
0
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025
Year
Source: Transportation Energy Data Book: Edition 23, DOE/ORNL-6970, October 2003,
and EIA Annual Energy Outlook 2004, January 2004 1

5. Three illustrative scenarios
More innovation→
technology→
More business leadership →
Conventional State of the Art
Wisdom (CW) (SOA)
policy↓
[State of the
Gridlock as Usual DRIFT
Shelf]
Coherent LET’S GET
MOBILIZATION
Engagement STARTED

6. The future is very flexible
U.S. oil consumption and net oil imports 1950–2025
30
Total Petroleum Use (AEO) Net Imports (AEO)
Total Petroleum Use (CW) Net Imports (CW)
Total Petroleum Use (SOA) Net Imports (SOA)
25
preliminary data;
transition dynamics
schematic; only efficiency
20
million barrels/day
shown, not alt. supply
15
10
5
0
1950 1960 1970 1980 1990
alt. supply exceeds this
2000 2010
{
2020
Year

7. To Win: Four Issues to Resolve
 Is there cost effective technology on the
horizon to radically improve end use
efficiency?
 What will it take for business to adopt these
innovations?
 What is the most effective role of government
to accelerate change?
 What will it cost, and where do we get the
money?

8. Ultralight-but-safe light vehicles open
a new and roughly free design space
1990–2004 comparison of absolute mpg vs.
incremental costs for new U.S. light vehicles
5000
4500 NRC High
Price increase (MSRP 2000$)
2001 Light
Trucks
2004 Prius
4000 (2004 actual to ~2007 goal)
NRC Low DeCicco & Ross 1995 Full Avg
3500 2001 Light Cars
NRC High
Trucks 2001 Cars 2004 RMI State of
3000 the Art average light
2004 RMI truck
Conventional 2002 ULSAB-AVC
NRC Low
Wisdom average hybrid (rough RMI
2500 2001 Cars
light truck estimate of initial
2000 Revolution w/AWD and more mature
hybrid powertrain cost)
2000 2004 RMI State
of the Art
DeCicco, An, & Ross average car
1500 2001 Mod & Adv Cars
2004 RMI Conventional
1000 Wisdom average car
1992 VX subcompact All vehicles shown in green are adjusted to
EIA's 2025 acceleration capability for that
500 class of vehicle (treating Revolution as a
2000 Revolution 2002 ULSAB-AVC small SUV). RMI's 2004 average vehicles are
w/AWD ICE for EIA's 2025 sales mix.
0
20 30 40 50 60 70 80 90
Absolute miles per U.S. gallon
(EPA adjusted, combined city/highway)

9. Critical Insight: Light weight before
aerodynamics and powertrain creates
68% of the light-vehicle fuel savings
Reduce mass first, because 2/3 to 3/4 of fuel use is mass-
related, and energy saved at the wheels saves ~7–8× in gasoline
Yet other studies ignore much
or all of effect from mass
956 461 reduction, focusing instead just
on hybridization!
105
111
279
Baseline Vehicle 51% Mass Reduced Power Hybridization Gallons Per Year
(2004 Audi AllRoad Reduction * From Better Used by Lightweight
2.7T) Gal/Y Integration, Aero, Hybrid Vehicles
Tires, Powertrain

10. Carbon fiber is strong but light
Fig. 14. The strength of ultralight carbon-fiber autobodies was illustrated in November 2003 in
Capetown when a Mercedes SLR McLaren was rammed by a VW Golf running a red light. The
SLR—a 1,768-kg hand-layup, 626-hp, 207-mph, 16-mpg, street-licensed Formula One supercar
priced at a half-million dollars—sustained only minor damage despite being hit on the driver’s-side
door (the photograph shows a carbon side panel popped off). The unfortunate steel Golf, roughly
one-fourth lighter than the SLR, had to be towed.

11. Modern materials = lighter, safer, &
bigger vehicles — AND less fuel-burn
Carbon composites absorb ~12× more
energy than steel (2× for Al) per kg
Energy-absorption ability, kJ/kg, best shape Lighter Materials:
250 = Safer
 Better head-on energy absorption:
 Light CC car at ~1/2 mass of
40 steel car
20
 CC-on-steel 3–5× safer than
same-mass steel-on-steel*
Steel Aluminum Carbon/
Thermoplastic = More efficient
Carbon composites (CC) absorb ~6× more  Less mass, less fuel
energy than steel per car*
Normalized energy-absorption for m = 1/2M and = Bigger
absorption by M of steel set to 100 kJ/car  More volume even at reduced mass
 Size is protective, mass is hostile
638
 So big-but-light provides protection
without hostility
100  U.S. policy shift toward penalizing
downweighting and rewarding
upweighting (except for the heaviest
M, Steel M, Carbon/ vehicles) is technically unsound and will
make U.S. cars unsellable abroad
thermoplastic
* Without momentum-change correction, factor would be ~638/100, but momentum difference reduces this

12. Heavy trucks use 19% of all US oil,
same technologies could save 65% at
33¢/gal diesel
$2.50
Cost of Saved Energy (2000$/Gal Diesel)
End:
$2.00 State of the Art Average 12.5 mpg,
CSE = $0.33/gal then ~16
mpg-
$1.50 EIA 2025 Post Tax Diesel Price (1.34/gal) equivalent
w/further
EIA 2025 Pre Tax Diesel Price (1.04/gal)
improve-
$1.00
Conventional Wisdom
ments
Average CSE = $0.13/gal
$0.50
$0.00
-$0.50
0.00 0.20 0.40 0.60 0.80 1.00 1.20
Diesel Fuel Saved (Mbbl/d) in 2025
Start: 6.2 mpg
(From EIA Reference Case by Fuel Adoption)
Main sources: MIT, ANL, industry tests

13. The future is already here: today’s
concept vehicle approaches will be
tomorrow’s mainstream …
Top-left, clockwise: Four carbon-fiber concept cars
 1991 GM 4-seat Ultralite (635 kg, Cd 0.192, 0–
60 mph in 7.3 s, 84 mpg [2.8 L/100 km],
gasoline ICE, not hybrid
 2002 Opel 2-seat Eco-Speedster Diesel hybrid
(660 kg, Cd 0.20, max. 155 mph [250 km/h], 94
mpg [2.5 L/100 km], below Euro 4 emissions.
 2004 Toyota Alessandro Volta, 3 seats abreast,
 CARS by-wire, 408-hp hybrid, 32 mpg, 0–60 mph in <4
s, top speed governed to 155 mph.
 2000 Hypercar Revolution show car of a
midsize SUV virtual design (857 kg, 5 seats, by-
wire, Cd 0.26, 0–60 mph in 8.2 s, 114 mpg-
equiv. [2.06 L/100 km-equiv.) w/ direct-hydrogen
fuel cell, ~68 mpg [3.5 L/100 km] with gasoline
hybrid).
Top-left, clockwise: Four high-efficiency Cl. 8 trucks
 TRUCKS  ~7.5-mpg Kenworth T2000.
 PACCAR concept tractor. Photo Copyright 2004
courtesy PACCAR Inc.
 Engineer’s rendering of a lightweight, highly
aerodynamic future tractor
 11.25-mpg tanker truck designed by Luigi
Colani, from
http://www.spitzer-silo.com/ colani/index.htm

14. It pays to be bold: although CW efficiency
technologies can save 26% of oil use cheaply
($8/bbl), State of the Art eff. technologies can
save ≥50% of 2025 oil for only~$12/bbl
$50 Conventional Wisdom
(Avg. CSE = $8/bbl)
Cost of Saved Energy (2000 $/bbl)
State of the Art
$30 (Avg. CSE = $12/bbl)
EIA 2025 Crude Oil Price
$10
0 5 10 15
-$10
25% of 2025 50% of 2025
Baseline Use Baseline Use
-$30
-$50
-$70
Oil Saved by Full Deployment in 2025 (Mbbl/d)
 Results hypothetically assuming full deployment in 2025

15. New biofuels technologies could provide
3.7 Mbbl/d cheaper than oil without
subsidies
Biofuels Substitution Supply Curve
(Net Mbbl/d)
$90
$80
2000 $/bbl at Biofuel Refinery Gate
CW Net Mbbl/d SOA Net Mbbl/d
$70
$60
$50
$40
$30
$26/bbl
$20
$10
$0
0.00 1.00 2.00 3.00 4.00 5.00
Biofuel Supply (Net Mbbl/d)
+ 1 Mbbl/d in biomaterials

16. 2025 demand-supply integration
Crude Oil Equivalent Supply & Demand, 2025
$30.00
25.49 8.52
Demand on Supply (Mbbl/d)
$25.00
$20.00
16.97 4.71
$15.00
1.28
8.62
$10.00
$5.00
2.36
$0.00
EIA 2025 SOA & Net 2025 Biofuels Natural Gas Domestic Oil Imports
Demand Coherent Demand
Mobilization
“Imports” includes oil, product, or biofuel imports
H2 just from leftover saved US gas exceeds the US 2025 oil output
shown.

17. What will it take for business to
adopt these innovations?
 Consumer demand
 Consistent and coherent government policies
 Capital
 Management leadership

18. Key issues that must be solved to
accelerate technology adoption
 Create an advanced-materials industrial cluster
 Dramatically accelerate capital stock turnover
 Shift customers’ choice to superefficient vehicles
while enhancing customers’ freedom of choice and
increasing consumer & producer surpluses
 Capitalize retooling/new plants to make efficient
vehicles (hard to do with OEM balance sheets)
 For all vehicles, marginal investment ~$90b
 For light vehicles, new technologies can lower investment risk
› Capital intensity ÷2–4, plant scale ÷2–6

19. 5 ways Government can help
1) Stimulate Demand
 Feebates
 Military and Govt. fleet procurement
 Create new markets through leasing to low income
2) Build vibrant 21st Century industries by sharing
research and development risk
 Military R&D should finance advanced materials
3) Lower Risk of Investment for new manufacturing
plants through loan guarantees and/or tax credits
4) Support Development of domestic energy supply
infrastructure
5) Remove barriers to efficiency through coherent
policies and elimination of perverse incentives

20. How the strategy could unfold
35
Civil Society
30
Oil Companies
25
New Sales New Sales
Reach 15% Reach 50%
Mbbl/d
20
Automotive
Manufacturers
15
Feebates Platinum RFS Retooling
Policy Enacted Carrot Enacted Loan US
10
Awarded Guarantees Oil
Demand
Military & 5
Government
0
2005 2010 2015 2020 2025

21. Conclusions
◊ Large reservoirs of potential oil savings
appear to be cost effective from society’s
perspective
◊ The transition will likely be led by business,
but some policy changes are also needed
◊ If we don’t change our direction, we’ll end up
where we’re headed!

22. “We are the people we have been waiting for”
Coming 20 September 2004 at
www.oilendgame.org