07/21/2010 draft – do not cite or quote for npc study discussion only 11 national petroleum...

DRAFT – DO NOT CITE OR QUOTEFor NPC Study Discussion Only

107/21/2010 1

National Petroleum CouncilFuture Transportation Fuels StudyDemand Task Group Meeting - Houston

July 28, 2010

Website:http://ftf.npc.org/UserId: fuels10Password: ftfGo to: Demand Task Group/Task Group File Sharing


07/21/2010

Antitrust Reminders – NPC Studies

• Remember the Antitrust Guidelines, and don’t– Coordinate your companies’ plans, prices, outputs– Disclose your company’s non-public information– Use the study process to create competitive harm

• Check with counsel before you– Collect or discuss non-public data– Evaluate public data about future prices and costs– Discuss topics about whose legality you’re unsure

• Antitrust resources include: your lawyer, and– Mike Young (Anadarko) 832-636-7555– Doug Melin (Marathon) 419-421-3265– Jim Haynes (Chevron) 925-842-1298– Kenly Webster (NPC) 202-898-0780


307/21/2010

Agenda July 21, 2010

• 8-8:30 Welcome / Introductions / Antitrust• 8:30-10 Base case and model• 10-10:15 Break• 10:15-12 Demand framing questions (non-LDV)• 12-12:45 Lunch• 12:45-2 Imagining report drafting• 2-2:15 Break• 2:15-3 Division of work & building out teams• 3-3:30 Schedule and deliverables• 3:30-4 Wrap-up / parking lot issues


407/21/2010

Parking Lot Issues

• Will Vehicle team handle non-Light Duty Vehicles (LDVs)?• CAFEs – Demand incorporates in mkt shares, but where

do they come from after 2016? Technology Task Group?• Rail & air legacy fuel availability – is issue in questions?• Mode switching analytical framework – how do we handle

it? Special group?• Need to coordinate coal and bio-feedstock projections with

rail• How do we bring Dept of Defense into study?• Need light rail/mass transit team?


507/21/2010

Base Case Development Plan

• Review 2-3 key comprehensive studies• Decide on assumptions to be used in FTF base case• Insert assumptions in framework & evaluate results• Fine tune assumptions for consistency between calculated

results and results of key studies – Iterative process– Learning about tool

• Reflect sensitivity of results on a few select assumptions to generate a “cone” around the base case

Note – Forces us to identify key elements of FTF study and where the analytical tool will need to be augmented


607/21/2010

Types of Models

• Comprehensive energy system models (NEMS)–All energy types and energy consumers–Modular supply and demand subroutines

• Transportation Module contains nested subroutines to derive fuel demand by the different modes and vehicles

–Iterates according to specified rules to solve for market clearing prices and consistent volumes


707/21/2010

Types of Models (continued)

• Spreadsheet models–Partial energy market (i.e. transportation)–Useful for running scenarios

• Can calculate relative impact of various assumptions• Provides consistent treatment of variables out of focus

–Relatively transparent for user• Can work from assumptions to results or results to

assumptions

–Sacrifice some second order or “rebound” effects• Looking for how pathways compare, rather than scalar

findings


807/21/2010

• Developed for DOE Office of Energy Efficiency and Renewable Energy and maintained by Argonne National Laboratory

• Calibrated to the latest AEO reference case

• Measures energy and GHG emissions impacts of scenarios relative to a base case projection

• GHG coefficients represent full fuel cycle emissions and were developed using the GREET model

• Designed to provide quick turn around analyses of assumptions regarding increased fuel economy, advanced technology penetration, travel demand, and alternative fuel use for highway vehicles

Proposal to use VISION as integrating tool


907/21/2010

Fundamental Integrating Issue

Solving for consistent fuel offering mix and fuel demand mix

• Demand task group determines travel activity (VMT, tonmiles, seat miles, etc.)

• Supply task group determines fuel and vehicle offerings: timing, cost, availability, volumes

• Demand task group determines end user purchases of vehicles by fuel and technology type (market shares of new vehicle sales)

• Framework calculates fuel consumption by type

• Check for supply & demand volume consistency• Re-iterate if necessary


1007/21/2010

Fundamental Integrating Issue (continued)

• If fuel consumption is not consistent with supply volumes, then – Change relative fuel & vehicle costs and – Re-iterate consumer decision model and – Recalculate fuel mix calculation

• For convergence, supply must increase with price and demand decrease with price

• Reasons to re-iterate– A fuel is constrained such that demanded volume

exceeds supply– The volume demanded is below a minimum supply

required for production– A fuel required of supply has zero demand


1107/21/2010

VISION’s handling of non-light duty

• Truck– Key inputs to VISION are market shares of new vehicle sales, fuel

efficiencies, fuel prices– Fuel=VMTperVehByAge*TrkFltByAge / efficiency– Only 2 class size groups: 3-6 and 7&8 (SU & Comb)– Does not have natural gas fuel option (dsl, gasoline, dsl HEV)

• Rail, Marine, Air not in VISION, but can probably create additional sheets from NEMS calculations

• Rail & Marine in NEMS– Estimates tonmile from IP projections by major industries– Estimates fuel efficiency on technology and fuel costs

• Air in NEMS– Estimates passenger and freight demand from GDP, disposable

income, merchandise exports and air travel & fuel costs – Fuel efficiency is based on share of fleet that is narrow body, wide

body and regional jets


1207/21/2010

Framing Questions

Objective is to group questions and focus scope• Which questions would be addressed in base case

discussion?• Which questions are open issues affecting sector? (Pretty

certain estimates exist)• Which are proposed/future looking? Estimates will be

based on expert opinion or policy driven

• Which are fuels and efficiency related, activity related, infrastructure related or operations related?

• Which are tied to another mode?

EconomicsEnvironment

Security


1307/21/2010

Report structure straw man

• Travel demand – VMT, tonmiles, revenue seats…– Discussion of drivers – such as population, income, IP, freight– Historical growth rates– Discuss any events or trends that have had a marked impact on growth

rate of demand

• Infrastructure – (have to include if mode switching is scenario)– Discuss historical level of investment – Investment needs – framed against current state, expected growth, etc.– Need to choose some measure that relates activity to investment– Discuss operational or system efficiencies

• Vehicle and fuel efficiency– Functional characteristics and timing of options to come from supply– Discuss key aspects of purchase decision– Discuss operational and system efficiencies – APUs, operator training,…

For discussion

purposes only


1407/21/2010

Consider the following for next week’s meeting

• Do framing questions fit into these categories?• Will this help standardize discussion across modes?• Will this lead us to right information to discuss

– Mode switching– Scenarios

• Will it lead to the right information for model inputs?


1507/21/2010

Division of work & Building out teams

Who do we need to tap to answer these questions?

Consider industry partners, NGOs, Labs, Universities?

Truck:

Rail:

Air:


1607/21/2010

Schedule for Non-LDV Activities

• Build teams 9/1/10• Base case analysis of assumptions 9/1/10• Base case empirical preliminary estimates (need to

augment VISION) 9/15/10• Research 11/1/10• First draft of base case and qualitative discussion of issues

12/1/10• Scenarios definition and discussion of results Jan-Mar

2011 (Will need fuel costs from supply teams)

Proposed


1707/21/2010

Demand Task Group

Name AffiliationShort, Deanne CaterpillarConti, John EIAHoltberg, Paul EIAMaples, John EIAChase, Nicolas EIASultemeier, Chris Wal-martFretheim, Elizabeth Wal-martDan Gross Wal-martHarris, Bruce Wal-martJackson, Mitch FedExGray, John Association of American RailroadsHardesty, Frank Association of American RailroadsCostello, Bob American Trucking AssociationsMoskowitz, Rich American Trucking AssociationsSturtz, Robert UnitedHeimlich, John Air Transport AssociationYoung, Nancy Air Transport AssociationRypinsky, Arthur DOTSankey, Paul Deutsche BankClark, David Deutsche BankLovaas, Deron National Resources Defense CouncilHwang, Roland National Resources Defense CouncilChase, Brian ChevronMullinger, Ralph MarathonYuskiewicz, Vince Exxon/MobilBrinkman, Norman GMLeister, MikeOliver, AndyCapuano, Linda


1807/21/2010

Summary of August 28th Houston Meeting

• Demand Task Group held meeting with non-passenger representatives– Reviewed how VISION handles non-light duty vehicles– Reviewed framing questions of Truck, Rail & Air

• Identified issues as basecase, likely to happen, scenario long term• Proposed leadership for three subgroups• Proposed Rail, Air & Marine subgroups in DTG would have vehicle

responsibility• Truck vehicle responsibility would reside with S&ITG

– Mode switching issues will affect VMT of each subgroup and will be addressed by representatives of subgroups working together

– Set time line for deliverables

• Passenger team – Customer choice critical to determining alternative fuel effectiveness– Mode switching requires Mass Transit team– Passenger VMT will be swing actor in scenarios with fixed outcome


1907/21/2010

• Need to work with experts and vehicle team to determine which characteristics we will build model on

• Need to understand investment required to provide passengers choices

• Need to understand investment or business decisions to provide shippers choices

• Spreadsheet model will work, but need to be clear that we are holding non-transportation fuel demand exogenous


2007/21/2010

Who owns Engine/Vehicles?

FEEDSTOCK / RAW

MATERIALS

FEEDSTOCKDISTRIBUTION

CONVERSION / MANUFACTURING

PRODUCTDISTRIBUTION

Engine/Vehicle Subgroup

Auto

Truck

Rail

Water

Air

MOBILITY NEEDS

INFRA-STRUCTURE

OPERATIONS

VMT

SUPPLY DEMAND

07/21/2010 draft – do not cite or quote for npc study discussion only 11 national petroleum...

Documents