October 9, 2012

There’s More Oil in Detroit than Saudi Arabia

Jim Harris
Magazine Article

Transportation accounts for 29 percent of US and 26 percent of Canada’s Greenhouse Gas (GHG) emissions. It also accounts for 70 per cent of oil consumed in North America is used for transportation.

On average the US consumes about 367 million gallons (1,389 million litres) of gas a day, driving 8 billion miles (13 billion kilometres) per day while in Canada we consume 264 million litres daily.

In the US, passenger cars, SUVs, pickup trucks and minivans account for 59 per cent of transportation GHG emissions while freight trucks represent 19 per cent and commercial aircraft (both domestic and international) account for 12 per cent.

Canadians drive more than 300 billion kilometres (186 billion miles), each driving on average 16,000 km per year.

All in all, it is billions of barrels per year. And what’s the potential for savings? Huge!

First off, if every car in North America got the same fuel efficiency as Jim’s Toyota Prius, there’d be no need for oil imports into North America. And there’d be no need to drill in the Gulf of Mexico or to drill in the Arctic.

In other words, the billions of dollars that the US sends to Middle Eastern countries to import is a choice. By choosing not to regulate for higher fuel efficiency standards, the US voluntarily sends billions of dollars to foreign countries every year and unnecessarily exposes itself to environmental, economic and political risk. Roughly half the US oil consumption is from imports.

This has led Amory Lovins to state that there’s more oil in Detroit than in Saudi Arabia. There’s actually no oil in Detroit, but the reluctance of auto executives to pursue higher fuel efficiency standards, imposes billions of dollars of cost on North American companies and car owners.

What can companies do?

Taxis drive 10 times the distance of a normal car a year, so converting a taxi from a Ford Crown Victoria to a Toyota Prius has a payback of less than two years in fuel savings. Vancouver’s largest taxi company, Yellow Cabs, saves $3 million a year in fuel with its hybrid fleet.

Canadians put an average of 16,000 kms a year on a car. Logically, high-use cars — taxis, and those used by sales reps, repair people, and long-distance commuters — should be the most efficient vehicles possible. If cars are company owned, simply ensure that they’re an efficient model. Or ensure that only efficient cars are available for high-use functions.

Similarly, if the company re-imburses employees for the use of their cars, the CRA standard is 53¢ a kilometre, a policy paying a premium for using high-efficiency vehicle — such as a Toyota Prius, Smart Car, Nissan LEAF, Mitsubishi i-MiEVm, Honda Civic Hybrid, Honda Insight — might seem counter intuitive, but it would help shift employees into more efficient vehicles. When oil rises to the $225 a barrel — as former CIBC Chief Economist Jeff Rubin predicts it will — companies that have incented employees to shift to high efficiency vehicles will reap significant financial benefits for their leadership.

Long-Haul Trucking —the average long-haul truck in North America is only loaded to 50 per cent capacity! Empty backhauls or deadhead miles are the largest contributor to fuel waste. Some experts suggest that load optimization software and freight matching web-based systems could cut deadheading by 90 per cent. In Canada, Sustainable Development Technology Canada (SDTC) notes that empty backhauling results in one in every three trucks on Canadian highways being empty and more than half are not fully loaded.

Auxiliary Power Units (APUs) — allow the cab to be heated or cooled while the driver sleeps without having to keep the truck idling. This can save up to eight per cent of fuel use for long-haul trucks.

Low Resistance Tires & Proper Inflation — can cut fuel use by up to 4-8 per cent.

Hybrid Chilling — can save 10 per cent of fuel use.

Aerodynamic Design — of the tractor and trailers, side-skirts on the trailer and rear fairing can reduce fuel consumption by up to five per cent according to the EPA, but according to the Rocky Mountain Institute, futuristic design could save up to 10 per cent.

Altogether these strategies can reduce the fuel consumption by more than 50 per cent in the North American trucking fleet. And each 1 per cent increase in efficiency reduces diesel use by 245 million gallons (927 million litres) a year!

So the available savings are significant. Which contributes to our thesis for this blog — that sustainability can save business.

Original Article

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