4.1 – Transportation and Energy

Author: Dr. Jean-Paul Rodrigue

Transportation activities are significant energy consumers, providing mobility to passengers and freight, which accounts for about 25% of world energy use.

1. Energy

Human activities are dependent on the usage of several forms and sources of energy to perform work. The energy content (or energy density) of an energy source is the available energy per unit of weight or volume, but the challenge is to extract and use this energy effectively. Thus, the more energy consumed, the greater the amount of work realized, and it comes as no surprise that economic development is correlated with higher levels of energy consumption. There are four types of physical work related to human activities:

  • Modification of the environment. All the activities involved in making space suitable for human activities, like clearing land for agriculture, modifying the hydrography (irrigation), and establishing distribution infrastructures, as well as constructing and conditioning (temperature and light) enclosed structures.
  • Appropriation of resources. Involves the extraction of agricultural resources from the biomass and raw materials (minerals, oil, lumber, etc.) for human needs. It also includes the disposal of wastes, which are in an advanced industrial society very work-intensive to dispose of safely (e.g. collection, treatment, and disposal).
  • Processing resources. Concerns the modification of products from the biomass, of raw materials and of goods to manufacture according to economic needs. Since the industrial revolution, work related to processing resources was considerably mechanized, initially with simple machines, then assembly lines, and currently with automation.
  • Transfer. Energy is the potential that allows the mobility of passengers and freight from one location to another. It aims to attenuate the spatial inequalities in the location of resources by overcoming distance. The less energy costs per ton or passenger – kilometer, the less transfers are an economic burden. Overcoming space in a global economy requires a substantial amount of energy and has consequently been subject to massive economies of scale.

There are enormous reserves of energy able to meet the future needs of humanity. Unfortunately, one of the leading contemporary issues is that many of these reserves are not necessarily widely available at competitive costs, such as solar energy, or are unevenly distributed around the world, such as oil and wind energy. Still, the availability or the competitiveness of an energy source can improve with technological development. Even if some energy sources are extracted far from where they are consumed, the massification of transportation enables their mobility.

Through the history of energy use, the choice of an energy source depended on several utility factors that involved a transition in energy systems from solid, liquid, and eventually to gas sources. Since the industrial revolution, efforts have been made for work to be performed by machines, which considerably improved industrial productivity. The development of the steam engine and the generation and distribution of electric energy over considerable distances have also altered the spatial pattern of manufacturing industries by liberating production from a direct connection to a fixed power system. While in the earlier stages of the industrial revolution, factories located close to sources of energy (a waterfall or a coalfield) or raw materials, mass conveyances, and new energy sources (electricity) enabled much greater locational flexibility.

Industrial development places considerable demands on fossil fuels. At the turn of the 20th century, the invention and commercial development of the internal combustion engine, notably in transport equipment, made the efficient movement of passengers and freight possible and incited the development of a global trade network. With globalization, transportation accounts for a growing share of the total amount of energy spent on implementing, operating, and maintaining the international range and scope of human activities.

Energy consumption has a strong correlation with the level of development. Among developed countries, transportation now accounts for between 20 and 25% of consumed energy. The benefits conferred by additional mobility, notably in terms of better comparative advantages and access to resources, have so far compensated the growing amount of energy spent to support this expanded spatial system. At the beginning of the 21st century, the transition reached a stage where fossil fuels, such as petroleum, are dominant. Out of the world’s total power production, 87% is derived from fossil fuels.

2. Transportation and Energy Consumption

Transportation and energy can be seen from a cost-benefit perspective where giving momentum to a mass (passengers, vehicles, cargo, etc.) requires a proportional amount of energy. The matter is how effectively this energy is captured to practical use, which has a strong modal characteristic. The relationship between transport and energy is direct but subject to different interpretations since it concerns different transport modes, each having its utility and level of performance. There is often a compromise between speed and energy consumption related to the desired economic returns. Passengers and high-value goods can be transported by fast but energy-intensive modes since the time component of their mobility tend to have a high value, which conveys the willingness to use more energy. Economies of scale, mainly those achieved by maritime transportation, are linked to low energy consumption per unit of mass being transported, but at a slower speed. This fits relatively well freight transport imperatives, particularly for bulk. Comparatively, air freight has high energy consumption levels linked to high-speed services.

The transportation market has a broad spectrum of energy consumption which are particularly impacted by three issues:

  • The price level and volatility of energy sources which are dependent on the processes used in their production. Stable energy sources are preferred as they enable long term investments in transportation assets. Volatile energy prices are not contingent on investments in transport technology.
  • Technological and technical changes in the level of energy performance of transport modes and terminals. An important goal is thus to improve this energy performance since it is linked with direct economic benefits for both operators (lower operating costs) and users (lower rates).
  • Environmental externalities related to the use of specific modes and energy sources and the goal to reduce them.

A trend that emerged since the 1950s concerns the growing share of transportation in the world’s total oil consumption; transportation accounts for approximately 29% of world energy demand and about 61.5% of all the oil used each year. The impacts of transport on energy consumption are diverse, including on activities that are necessary for the provision of transport infrastructures and facilities:

  • Vehicle manufacture, maintenance, and disposal. The energy spent on manufacturing and recycling vehicles is a direct function of vehicle complexity, the material used, fleet size, and vehicle life cycle.
  • Vehicle operation. Mainly involves energy used to provide momentum to vehicles, namely as fuels, as well as for intermodal operations. The fuel markets for transportation activities are well developed.
  • Infrastructure construction and maintenance. The building of roads, railways, bridges, tunnels, terminals, ports, and airports and the provision of lighting and signaling equipment require a substantial amount of energy. They have a direct relationship with vehicle operations since extensive networks are associated with large amounts of traffic.
  • Management of transport operations. The expenses involved in planning, developing, and managing transport infrastructures and operations require time, capital, and skill that must be included in the total energy consumed by the transport sector. This is particularly the case for public transit.
  • Energy production and trade. The processes of exploring, extracting, refining, and distributing fuels or generating and transmitting energy also require power sources. The transformation of 100 units of primary energy in the form of crude oil produces only 85 units of energy in the form of gasoline. Any changes in transport energy demands influence the pattern and flows of the world’s energy markets.

Energy consumption has substantial modal variations:

  • Land transportation accounts for the vast majority of energy consumption. Road transportation alone is consuming, on average, 85% of the total energy used by the transport sector in developed economies. This trend is not uniform within the land transportation sector itself, as road transportation is almost the sole mode responsible for additional energy demands over the last 25 years. Despite a falling market share, rail transport, on the basis of 1 kg of oil equivalent, remains four times more efficient for passenger and twice as efficient for freight movement as road transport. Rail transport accounts for 6% of global transport energy demand.
  • Maritime transportation accounts for 90% of cross-border world trade, as measured by volume. The nature of water transport and its economies of scale make it the most energy-efficient mode since it uses only 7% of all the energy consumed by transport activities, a figure way below its contribution to the mobility of goods. Still, since fuel consumption is an important input in maritime shipping, which is related to ship design (hydrodynamics), utilization level, operational speed, idle time (waiting at ports), and even weather conditions. For terminal operations, figures vary, but a container terminal usually has 70% of its energy consumption provided by fossil fuels (e.g. yard equipment) and 30% by electricity (e.g. portainers).
  • Air transportation plays an integral part in the globalization of transportation networks. The aviation industry accounts for 8% of the energy consumed by transportation. Air transport has high energy consumption levels, linked to high speeds. Fuel is the second most significant cost for the air transport industry accounting for 13-20% of total expenses. Technological innovations, such as more efficient engines and better aerodynamics, have led to a continuous improvement of the energy efficiency of each new generation of aircraft.

Further distinctions in the energy consumption of transport can be made between the mobility of passengers and freight:

  • Passenger transportation accounts for 50 to 60% of the energy consumption derived from transportation activities. The private car is the dominant mode but has a poor energetic performance, although this performance has seen substantial improvements since the 1970s, mainly due to growing energy prices and regulations. Only 12 to 30% of the fuel used by a car provides momentum, depending on the type of vehicle. There is a close relationship between rising income, automobile ownership, and distance traveled by vehicles. The United States has one of the highest levels of car ownership in the world with one car for every two people. Another trend has been the increasing rise in ownership of minivans, sport utility vehicles, and light-duty trucks for personal use and the corresponding decline in fuel economy. However, Fuel consumption is impacted by diminishing returns, implying that higher levels of fuel efficiency involve declining marginal gains in fuel consumption. Also, the growth of vehicles-miles traveled is correlated with changes in energy prices, underlining an elasticity.
  • Freight transportation accounts for 40 to 50% of energy consumption derived from transportation activities. Energy consumption is dominated by road transportation, which can account for 80% of domestic consumption. Rail and maritime shipping, the two most energy-efficient modes, have more marginal consumption levels. Coastal and inland waterways also provide an energy-efficient method of transporting passengers and cargoes. Because of these energy advantages, short sea shipping is being considered as a transport alternative and part of national transport policies of countries having an extensive coastline. The rationale for favoring coastal and inland navigation is based on lower energy consumption rates and the overall lower externalities of water transportation.

3. Petroleum: The Transport Fuel

Almost all transportation modes depend on variations of the internal combustion engine, with the two most salient technologies being the diesel engine and the gas turbine, since they are the linchpin of globalization. While ship and truck engines are adaptations of the diesel engine, jet engines are an adaptation of the gas turbine. Transportation is almost entirely reliant (91.6%) upon petroleum products, except for railways using electrical power. While the use of petroleum for other economic sectors, such as industrial and electricity generation, has remained relatively stable, the growth in oil demand is mainly attributed to the growth in transportation demand. Still, the share of oil used in the transportation sector is steadily declining with the introduction of alternative sources such as electric cars. What varies is the type and the quality of petroleum-derived fuel being used. While maritime transportation relies on low-quality bunker fuel, air transportation requires Jet-A, a specialized fuel with additives. Road transportation is highly fragmented, with 85% of the automobiles depending on gasoline, while 90% of the trucks rely on diesel.

It is worth having a closer look at the chemical combustion principle of hydrocarbons. For the majority of internal combustion engines, gasoline (C8H18; four strokes Otto-cycle engines) serves as fuel, but other sources like methane (CH4; gas turbines), diesel (mostly trucks), bunker fuel (for ships), and kerosene (turbofans of jet planes) are used. For the complete and perfect combustion of gasoline, the following chemical reaction is achieved:

  • (2) C8H18 + (25) O2 = (16) CO2 + (18) H2O + energy

Gasoline produces around 46,000 Btu per kilogram combusted, which requires from 16 to 24 kg of air. The energy released by combustion causes a rise in the temperature of the products of combustion. Several factors and conditions influence the level of combustion in an internal combustion engine to provide momentum and keep efficient operating conditions. The temperature attained depends on the rate of release and dissipation of the energy and the number of combustion products. Air is the most available source of oxygen, but because air also contains vast quantities of nitrogen, nitrogen becomes the principal constituent of the products of combustion. The rate of combustion may be increased by finely dividing the fuel to increase its surface area and hence its rate of reaction and by mixing it with the air to provide the necessary amount of oxygen to the fuel.

If all internal combustion engines worked according to the above equation, emissions and thus local environmental impacts of transportation would be negligible (except for carbon dioxide emissions). The problem is that combustion in internal combustion engines is imperfect and incomplete for two reasons:

  • First, the fuel and the oxidizer are not pure, causing imperfect combustion. Although the refining process provides a “clean” fuel, gasoline is known to have impurities such as sulfur (0.1 to 5%), sometimes lead (anti-knock agent being phased out), and other hydrocarbons (like benzene and butadiene). In comparison, air is composed of 78% nitrogen and 21% oxygen. Thus, other chemical components are part of the combustion process.
  • Second, in part because of the first reason and in part because of the technology of the engine, incomplete combustion emits other residuals. Combustion in an engine occurs at an average rate of 25 times per second, leaving limited time for a complete combustion process. Besides carbon dioxide and water, a typical internal combustion engine will produce carbon monoxide (CO), hydrocarbons (benzene, formaldehyde, butadiene, and acetaldehyde), volatile organic compounds (VOC), sulfur dioxide (SO2), particulates, and nitrogen oxides (NOx). These combustion products are the primary pollutants emitted in the environment by transportation.

In addition to the imperfect and incomplete combustion of hydrocarbons, three major factors influence the rate of combustion and thus emissions of pollutants, which are the characteristics of the vehicle (where technological improvements can play a role), driving characteristics (where planning and regulation can play a role), and atmospheric conditions. The internal combustion engine converts less than a third of the energy they consume into momentum, primarily due to friction. For electric motors, this figure is above 80%.

4. Transportation and Alternative Fuels

The energy source with the lowest cost is usually preferred. The dominance of petroleum-derived fuels results from the relative simplicity with which they can be stored and used in internal combustion engines. Other fossil fuels (natural gas, propane, and methanol) can be used as transportation fuels as well but require a more complicated storage system. The main issue concerning the large-scale uses of alternative vehicle fuels is the significant capital investments required in distribution facilities compared with conventional fuels. Another issue is that in terms of energy density, these alternative fuels have lower efficiency than gasoline and thus require a greater volume of onboard storage to cover the equivalent distance as gasoline-propelled vehicles if performance is kept constant.

Alternative fuels in the form of non-crude oil resources are drawing considerable attention as a result of the non-renewable character of fossil fuels and the need to reduce emissions of harmful pollutants. The most prevalent alternatives being considered are:

  • Biofuels such as ethanol, methanol, and biodiesel can be produced from the fermentation of food crops (sugar cane, corn, cereals; often called first-generation biofuels) or biomass (such as wood and grasses; called second-generation biofuels). Their production, however, requires large harvesting areas that may compete with other types of land use. This limit is related to the capacity of plants to absorb solar energy and transform it through photosynthesis. This low productivity of the biomass does not meet the energy needs of the transportation sector. Besides, the production of ethanol is an energy-intensive process. Biodiesel can also be obtained from a variety of crops. The choice of biomass fuel will largely depend on the sustainability and energy efficiency of the production process.
  • Natural gas is a more efficient and environmentally sustainable fuel for the transportation sector, namely its compressed form. Although natural gas was used as a transportation fuel since the early 20th century, its use remained marginal until the late 20th century. It is better fitted for large fleets of vehicles that travel extensively, such as public transit buses or delivery trucks. As of 2015, natural gas accounted for 4% of transportation fuel use, a share that is expected to double by 2025.
  • Hydrogen is often mentioned as the energy source of the future. The steps in using hydrogen as a transportation fuel consist of producing hydrogen by electrolysis of water or by extracting it from hydrocarbons (there are other methods as well). Then, compressing or converting hydrogen into liquid form and storing it onboard a vehicle. Finally, using a fuel cell to generate electricity on demand from the hydrogen to propel a motor vehicle. Hydrogen fuel cells are more energy-efficient than gasoline and generate near-zero pollutants. But hydrogen suffers from several problems, particularly since a lot of energy can be wasted in its production, transfer, and storage. Hydrogen manufacturing requires electricity production. Besides, storing hydrogen requires low temperature/high-pressure storage tanks, adding weight and volume to a vehicle. This suggests that liquid hydrogen fuel would be a better alternative for ship and aircraft propulsion.
  • Electricity is being considered as an alternative to petroleum fuels as an energy source. A pure battery electric vehicle is considered a more efficient alternative to a vehicle propelled by hydrogen fuel. There is no need to convert energy into electricity since the electricity stored in the battery can power the electric motor. Besides, an all-electric car is easier and cheaper to manufacture than a comparable fuel-cell vehicle. The main barriers to the development of electric vehicles are the lack of storage systems capable of providing driving ranges and speed similar to those of conventional vehicles. The low energy capacity of batteries makes the electric car less competitive than internal combustion engines using gasoline. The current technological level of electric cars has a range of around 430 kilometers, which is steadily increasing. As technology improves, the energy and cost-effectiveness of batteries are getting better. For instance, between 2010 and 2015, the cost of lithium-ion batteries fell by 65%. Electric vehicles are eminently suitable for urban transportation for both passenger and freight because of the lower ranges involved.
  • Hybrid vehicles consisting of a propulsion system using an internal combustion engine supplemented by an electric motor and batteries, which provides opportunities combining the efficiency of electricity with the long driving range of an internal combustion engine. A hybrid vehicle still uses liquid fuel as the primary source of energy, but the engine provides the power to drive the vehicle or is used to charge the battery via a generator. Alternatively, the propulsion can be provided by the electricity generated by the battery. When the battery is discharged, the engine starts automatically without intervention from the driver. The generator can also be fed by using the braking energy to recharge the battery. Such a propulsion design significantly contributes to overall fuel efficiency, particularly in urban areas where a vehicle accelerates and brakes frequently. The successful development and commercialization of hybrid vehicles appear in the medium term the most sustainable option to conventional gasoline engine powered vehicles.

The diffusion of non-fossil fuels in the transportation sector has serious limitations. While the price of oil has increased over time, it has been subject to significant fluctuations. The comparative costs of alternative energy sources to fossil fuels are higher in the transportation sector than in other types of economic activities. This suggests higher competitive advantages for the industrial, household, commercial, electricity, and heat sectors to shift away from oil and to rely on solar, wind, or hydro-power. Transportation fuels based on renewable energy sources might not be competitive with petroleum fuels unless significant price increases as well as substantial technological improvements.

5. Transportation and Peak Oil Use

The extent to which conventional non-renewable fossil fuels will continue to be the primary resources for nearly all transportation fuels is subject to debate. But the gap between demand and supply, once considerable, is narrowing, an effect compounded by the peaking of global oil production. The steady surge in demand from developing economies, particularly China and India, requires additional outputs. This raises concerns about the capacity of major oil producers to meet this rising world demand. The producers are not running out of oil, but the existing reservoirs may not be capable of producing on a daily basis the increasing volumes of oil that the world requires. Reservoirs do not exist as underground lakes from which oil can easily be extracted. There are geological limits to the output of existing fields. This suggests that additional reserves need to be found to compensate for the declining production of existing fields. Reserves additions may not be enough to offset this growing demand, but technological improvements allowed to tap bitumen and oil shale reserves. However, extracting such reserves necessitates much energy and water. The production of 1 barrel of bitumen requires burning 10-20% of the energy content of the resulting crude oil in the form of natural gas.

Others argue that the history of the oil industry is marked by cycles of shortages and surplus. The rising price of oil will render cost-effective oil recovery in difficult areas. Deepwater drilling, extraction from tar sands, and oil shale should increase the supply of oil that can be recovered and extracted from the surface. But there is a limit to the capacity of technological innovation to find and extract more oil around the world, and the related risks can be very high. Adding oil extraction, distribution, and refinery capacity is a slow, complex, capital intensive, and highly regulated endeavor. Carbon sequestration in the form of CO2 capture and storage, if technically and economically viable, could enhance the recovery of oil from conventional wells and prolong the life of partially depleted oil fields well into the next century.

High fuel prices usually stimulate the development of alternatives, but automotive fuel oil demand is relatively inelastic. Higher prices result in very marginal changes in demand for fuel. The equivalent of $100 per barrel was considered a threshold that would limit demand for automotive fuel and lead to a decline in passenger and freight-km. Evidence suggests that higher oil prices had a limited impact on the average annual growth rate of world motorization. The analysis of the evolution of the use of fossil fuels suggests that in a market economy, the introduction of alternative fuels is leading to an increase in the global consumption of both fossil and alternative fuels and not to the substitution of crude oil by alternative fuels. This suggests that in the initial phase of an energy transition cycle, the introduction of a new source of energy complements the existing supply until the new source of energy becomes price competitive to be an alternative. The presence of renewable and non-renewable types of fuels stimulates the energy market with the concomitant result of increasing greenhouse gas emissions. The production of alternative fuels adds up to the existing fossil fuels and does not replace them.

The main concern is the amount of oil that can be pumped to the surface on a daily basis, especially where major oil fields have reached peak capacity. Under such circumstances, oil prices are bound to rise in the medium to long term, sending significant price signals to the transport market. How the transport system responds and adapts to higher energy prices is obviously subject to much debate and interpretation in terms of the scale and timing of the transition. The following potential consequences can be noted:

  • Road. As far as the automobile is concerned, higher oil prices could trigger changes taking place in several phases. Initially, commuters would simply absorb the higher costs either by cutting on their discretionary spending. Depending on their level of productivity, many economies could show remarkable resilience. The next phase would see changes in commuting patterns (e.g. ridesharing, carpooling), attempts to use public transit, rapid adoption of vehicles with high gasoline efficiency, and a search for other transport alternatives. The existing spatial structure could also start to show signs of stress as the unsustainability of car-dependent areas become more apparent. There is already evidence that peak car mobility may have been reached in the United States. As high commuting costs and the inflationary effects of high oil prices on the economy become apparent many would no longer be able to afford to live in a suburban setting. Cities could start to implode. The trucking industry would behave in a similar way, first by lowering their profits and their operating expenses (e.g. scheduling, achieve full truckload), but at some point, higher prices will be passed on to their customers.
  • Rail. This mode is set to benefit substantially from higher energy prices as it is the most energy-efficient land transportation mode. Rail is about three times more energy-efficient than trucking. The level of substitution for passengers and freight remains uncertain and will depend on the current market share and level of service they offer. In North America, passenger rail has limited potential while in Europe, and Pacific Asia passenger rail already assumes a significant market share. For rail freight, North American freight distribution has an advantage since rail account for a dominant share of tons-km. At the same time, this figure is less significant for other regions of the world, mainly due to the distances involved and the fragmentation of the system. In many cases, there could be a push towards the electrification of strategic long-distance corridors and the development of more efficient cargo handling facilities. Thus, growing energy prices are likely to affect long-distance rail transportation differently depending on the geographical setting and the conditions of the existing system.
  • Air. This mode could be significantly impaired, both for passengers and freight. Air transportation is a highly competitive industry, and the profit margins are low. Fuels account for about 40% of the operating expenses of an air carrier, but because most of the other costs are fixed, any variations in energy prices are reflected directly on airfares. A long term increase in energy prices, reflected in jet fuel, is likely to impact discretionary air travel (mainly tourism), but air freight, due to its high value, may be less impacted. Technological developments are helping to maintain the competitiveness of air transportation with more fuel-efficient planes.
  • Maritime. This mode is likely to be relatively unaffected as it is the most energy-efficient, but fuel is an important component of a ship’s operating costs. The response of maritime shippers over higher energy prices tends to be lowering speed (slow steaming), which may have impacts on port call scheduling. In the long run, higher energy prices may indirectly impact maritime transportation by lowering demand for long-distance cargo movements and incite port calls at ports having the most direct and efficient hinterland connections. In addition, this context may favor the development of short coastal and fluvial services where possible.

Higher energy prices can trigger notable changes in usage, modes, networks, and supply chain management. From a macro perspective, and since transportation is a very complex system, assessing the outcome of higher energy prices remains hazardous. What appears very likely is a strong rationalization, a shift towards more energy-efficient modes, as well as a higher level of integration between modes to create multiplying effects in energy efficiency. As higher transport costs play in, namely for containers, many manufacturing activities will reconsider the locations of production facilities to sites closer to markets (near-sourcing). While cheap and efficient transport systems favored globalization, the new relationships between transport and energy are likely to restructure the global structure of production and distribution towards regionalization. This process is also favored by less acute differences in labor costs and a push towards automation.

An emerging trend involves decarbonizing transport with the goal of making transportation systems carbon neutral. Achieving such an outcome requires measures that have been advocated for decades, such as low carbon fuels, vehicle and equipment efficiency, and modal shift. It remains unclear if carbon-neutral transportation is achievable in the medium term since it involves capital-intensive energy transitions. Urban transportation with a shorter lifespan of vehicles and a reliance on public transit has a better potential to become carbon neutral. Modes such as maritime shipping have a much lower potential, mainly for technical reasons, as ship engines are massive. This level of power cannot be readily provided by technology other than the internal combustion engine.

Related Topics


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