Oil consumption peaks for world's No. 3 consumer

"Only the USA and China consume more oil than California," observes Jim Boyd, vice chairman of the California Energy Commission. With oil prices soaring, California must reduce its dependency on oil to sustain prosperity and achieve energy security.

As 38 million Californians deploy a range of solutions to reducing oil usage, the world will learn valuable lessons. In 2006, California consumption of gasoline peaked, even though population continues on the path of doubling over a 30 year period.

In California, more people are driving fewer miles; importantly, fewer solo miles. More efficient vehicles are being used, often benefiting from hybrid-electric drive systems. As an alternative to oil, there is a growing use of biofuel, natural gas, hydrogen, and renewable electricity.

Solutions to the state's, the nation's, and world's transportation needs were presented at the WestStart-CALSTART Clean Heavy Vehicle Conference 2008.

Many of the solutions were discussed by managers of large fleets. These people can save millions with improvements that passenger vehicle drivers often ignore, such as low-rolling resistance tires. Fleet managers can also install the infrastructure for their fleets; such as fast-charge stations, hydrogen fueling, and specific biofuel blends.

Fleets often pilot new technology years prior to commercialization. Large prototypes are later miniaturized for passenger vehicles. All successful fleets continually improve efficiency. In the transportation lifecycle, 80 percent of all energy is lost, estimates Lawrence Livermore National Laboratories.

John Boesel, President of WestStart-CALSTART, observed that linked trips, public transit, hybrids, and improved mileage vehicles are all factors in peak oil demand in California. Boesel is in a good position to observe future transportation trends. His organization facilitates bringing together fleet managers, vehicle and fuel producers, researchers, and top government officials.

Boesel discussed a number of reasons to be optimistic when we talked over lunch. Investment in clean tech and clean transportation is exploding. New lightweight materials are allowing vehicles to travel further with less fuel. There is ongoing innovation in materials. Hybrid-electric drive systems allow heavy mechanical components to be replaced with lighter ones. Engines are being made more efficient. Heavy vehicles that formerly burned fuel during the 40 percent of the time that they idle, now idle off. Major corporations and venture capital backed start-ups are creating next-generation biofuels and synthetic fuels.

WestStart-CALSTART encourages public policy makers to set performance standards and not attempt to pick technology winners. Government is also critical in early funding of new fuels and efficient vehicles. "There are many paths to the future," noted Boesel.

Biofuels will play a major role in reducing California's oil dependency. By law, California AB 2076 requires 20 percent alternative fuels use in 2020 and 30 percent alternative fuels use in 2030. The bulk of alt fuels are likely to be biofuel. By law, 40 percent of that biofuel must be produced in California by 2020 and 75 percent by 2050. This creates a challenge and an opportunity. California is the nation's leading agricultural state. Droughts and reduced snow accumulation are creating water scarcity for farmers. Corn ethanol and soy biodiesel generate tremendous greenhouse gases in their lifecycle of production and consumption.

New low-carbon fuels are being developed including next-generation biofuels. In pilot production, gasoline and diesel are being made from synthetic fuels.

To keep California's $1.5 trillion annual economy from running out of gas, the state is investing $200 million per year in clean transportation for the next 7.5 years. AB118 is the law that makes this possible. It was sponsored by Assembly Speaker Fabian Núñez and signed into law by Governor Arnold Schwarzenegger. The money is funded with vehicle fees.

CEC will fund $120 million per year for the commercialization of alternative fuels and efficient vehicle technologies. The California Air Resources Board will fund $80 million per year for enhanced fleet modernization and an air quality improvement program.

All these initiatives promise to create millions of jobs for a state that continues to grow. Despite a state budget crisis, no one is trying to remove AB118's $200 million annual investment in the future.

With intermodal transportation solutions, integrated freight movement, light materials, hybrid-electric drive systems, efficient vehicles, and new fuels, California is leading the way to control its own destiny without being dependent on foreign oil.

John Addison publishes the Clean Fleet Report.