Future Fuel and Energy Utilization Systems

Future Fuel and Energy Utilization SystemsFuture Fuel and Energy Utilization Systems

Kevin L. Bruch

Assistant Director - Engine Research

Caterpillar Inc.

2Technology & Solutions DivisionCaterpillar Engine Research

Caterpillar: Non-confidential

20.523.5

30.25

36.3

41.5

0

5

10

15

20

25

30

35

40

45

2002 2003 2004 2005 2006

Reven

ue (

$B

)

Caterpillar Revenue Growth



3116/3126/C-7

(86 - 313 kW)

3200 Family

(93 - 336kW)

3300 Family

(63 - 300 kW)

C-9/C-11/C-13

(227 - 492 kW)

C-15/C18/3400

(186 - 1044 kW)

3500 Family

(507 - 2500 kW)

3600 Family

(1350 - 7200 kW)

M20

(1020 -

1710 kW)

M25

(1800 -

2700 kW)

M32

(2880 -

8000 kW)

M43

(5400 -

16200 kW)

800 Series

(39 - 60 kW)

1100 Series

(49 - 186 kW)

400 Series

(3.7 - 45 kW)4000 Series

(322 - 1886 kW)

Diesel Engines

®®


Caterpillar: Non-confidentialThis represents only a fraction of the engine

offerings Caterpillar produces

3300 Family

(30 - 165 kW)

3400 Family

(93 - 500 kW)

3500 Family

(500 - 2000 kW)

3600 Family

(1200 - 3850 kW)

2000 Series

(114 - 176 kW)

3000 Series

(152 - 251 kW)

4000 Series

(309 - 1000 kW)

G16CM34

(6100 kW)

Natural Gas Engines



(14.5 MW)

(9-11 MW)

(1 MW)

(5-8 MW)

(3-4 MW)(4-5 MW)

Turbine Engines



Engine Applications

2006 Caterpillar Engine Revenue by Application



Emissions & Energy are only some of the issues!

Technology for …



What is the Technology Strategy?

• What are the critical technologies for our future?

• What is the technology roadmap?

• What is the future of Petroleum?

• What about Hydrogen?

• When will Caterpillar equipment use fuel cells?

• When will CO2 become a product requirement?

• What about renewable energy?



What about Game Changers?

• Health effects, including Sound & Ergonomic requirements

• GHG regulations and Kyoto implementation

• Petroleum, as the primary energy source, replaced by:

– Coal, Tar Sands, Solar, Nuclear, Bio-Mass, Wind

• Breakthroughs in energy conversion and/or energy carrier:

– Photovoltaic, Fuel Cell, Thermoelectric, Hydrogen, Battery

• Recycling / Reuse requirements

• Dust Management requirements

• Internet / Wireless -- everywhere, free, unlimited bandwidth

• Policy shift from energy invulnerability to energy survivability



Energy Drivers for Our Future

• CO2

0

10

20

30

40

50

60

70

Dec-73 Dec-77 Nov-81 Nov-85 Nov-89 Nov-93 Nov-97 Nov-01 Nov-05

Time

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rs /

Ba

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efi

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r A

cq

uis

itio

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os

t o

f

Cru

de

Oil

, C

om

po

sit

e)

Reference: Energy Information Administration

• Price of Oil

• Security of Fuel /Energy Supply



0

10

20

30

40

50

60

70

Dec-73 Dec-77 Nov-81 Nov-85 Nov-89 Nov-93 Nov-97 Nov-01 Nov-05

Time

Do

lla

rs /

Ba

rre

l (R

efi

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r A

cq

uis

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os

t o

f

Cru

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Oil

, C

om

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Reference: Energy Information Administration

Oil Price (inflated $) vs. Time



A Path to U.S. Energy Security and Independence

Governors of 16 States, Dept. of Defense and Coal-to-Liquids (CTL)

experts unveiled an “American Energy Security” plan in August 2006,

that would eliminate US foreign imported oil dependence by 2030.



The Changing Perception of Greenhouse Gas

Growing public perception that climate change isa real issue.

Public perceptions drive political and legislative agendas.

Perc

en

t o

f th

e U

.S. P

ub

lic w

ho

believe C

lim

ate

Ch

an

ge

86%

2006



Climate and Energy Initiatives

Business and NGO Partnership

•13 initial members in the Partnership

•Recommending national legislation to “slow,

stop and reverse the growth of greenhouse

gas emissions”

“Legislation Design Principles”

•Account for global dimensions of climate

change

•Recognize the importance of technology

•Be environmentally effective

•Create economic opportunity and advantage

•Be fair

•Encourage early action

United States Climate Action Partnership (USCAP)

0

20

40

60

80

100

120

5 Yrs 10 Yrs 15 Yrs 2050

GHG Emission Target Recommendation

% o

f T

od

ay

’s G

HG



The Energy Technologies Institute ETI

•Public/PrivatePartnership in UK

•10 Year, $10M /Year / CompanyR&D Commitment

•Matching $$ fromUK Dept. of Tradeand Industry

•Targeting 10companies in ETI




United Kingdom Energy Technologies Institute (ETI)

Large Scale Energy Supply Technology - Improve efficiency of power generation anddevelop sustainable approaches to emission reduction technology from existing fossil fuelplants

Energy Security of Supply – develop a mix of energy technologies to increase securityand diversity of supply

End Use Efficiency / Demand Management – increase the efficiency of energy onthe demand side

Transport – develop sustainable transport fuels and transport management technologies

Small Scale Energy Supply Technology – develop new and emerging distributedenergy supply options using small scale technology that utilize a local energy source

Support Infrastructures – sustainable energy supply and infrastructure

Alleviating Energy Poverty – develop proven and sustainable energy solutions that canbe deployed locally

ETI ThemesETI Themes




O&O Costs

Em

issi

ons

Technolo

gy

GHG and High Fuel Costsare Changing our Engine Research Drivers

The New Trend?:Emissions => CO2 (“Well to Wheels” Fuel Efficiency)O&O Cost => Cost driven more by Fuel Efficiency

Fuel Choices and Efficiency

CO

2 (

“W

ell

to

Wh

ee

ls” F

ue

l E

ffic

ien

cy

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40% Liquid Fuel, 62% Imported, 68% transportation, 20% efficient, 80% lost energy



39%

29%

32%

21%

36%

43%



Energy/CO2 Scenarios

Caterpillar’s products must align with the futureenergy/CO2 strategies and policies.

Energy’s future depends on outside pressures…

ConsumerCO2 Views

National Security

NGO’s andEnvironmental Community

Shareholders’Expectations

Energy PricesTechnology



2020 Energy Scenario 1 - No Basic Change

“US DOE says CO2 injection couldquadruple oil reserves” Reuters, Friday, March 3, 2006

Continued oil field development:• A “dry well” only removes 35% of available petroleum• Oil reserves have been 30 years for the past 50 years• Long term oil prices at $50 to $60 per barrel• Ultra clean fuel processing• CO2 concerns stabilize

Petroleum supplemented with:• Coal• Tar Sands & Oil Shale• Natural Gas



2020 Energy Scenario 2 - Shift to Coal

Continued developments for• Clean coal power• Carbon sequestration• Hydrogen from coal

“… U. S. will sponsor a $1 Bil,10-year demo project tocreate the world's first coal-based, zero-emissionselectricity and hydrogenpower plant…” President George W. Bush

February 27, 2003

“Carbon sequestration is theultimate solution to stabilizingglobal carbon emissions.” DOE – Office of Fossil Energy

Vision 21 - The Ultimate Power Plant Concept

“Virtually all projections show coalcontinuing to supply around half of thenation's electricity for the next 20years” DOE – Office of Fossil Energy

Coal Supplies last 250 years or more



2020 Energy Scenario 3 - Natural Gas

“More than 90 percent of the power plants to be built in the next 20years will likely be fueled by natural gas.”

DOE - http://www.energy.gov/engine/content.do?BT_CODE=ELECTRICPOWER

“Annual U.S. natural gas consumption is projected to rise from 22.1trillion cubic feet (Tcf) in 2004 to 30.7 Tcf in 2025.”

DOE - http://www.fossil.energy.gov/programs/oilgas/publications/lng/LNG_080505.pdf

Methane Hydrate – “Worldwide estimates of the natural gas potential of methane hydrate approach 400,000,000 Tcf vs. 5,500 Tcf of proven gas reserves.” DOE - http://www.fe.doe.gov/programs/oilgas/hydrates/index.html



2020 Energy Scenario 4 - Nuclear

2005 Energy Bill includes provisions for 6 new nuclear power plants.

“Only nuclear powerplants can generatemassive amounts ofelectricity withoutemitting an ounce of airpollution or greenhousegases.” President George W. Bush

August 8th, 2005

Currently 103 reactors in U.S.;400 needed to meet U.S. energyneeds.



2020 Energy Scenario 5 - Renewable

Bio-diesel, Biomass to liquids:

1 billion dry tons of biomass coulddisplace 30% of US oil use. Supply“potential exceeds 1.3 bil. dry tonsper year.” U.S. Dept. of Ag. & U.S. Dept of Energy,

Feb. 2005

“U.S. ethanol consumption has aCAGR of 28% over last four years” American Coalition for Ethanol, August 2005

Solar photovoltaic U.S. market has aCAGR of 30% over last 7 years and“may reach 10-15 GW … by 2015” (a40% CAGR through 2015). Energy

Information Administration, Nov. 2005 and the “SolarAmerica initiative” June, 2006

“Wind turbines now generate over 17GW, currently the world’s fastestgrowing source of energy.”

Woodard, C. 2001. “Wind Turbines Sprout from Europe toUS,” Christian Science Monitor 93(75):7.



Energy System View (the matrix multiplies!)

• Energy Systems – Source, Transport,Carriers, and Compact Power

Energy SourceFossilRenewableNuclearEtc.

Energy StorageBatteriesHydrogenRefined fuelsEtc.

Energy ConversionEnginesMotorsFuel cellsEtc.

Energy DistributionPower LinesPipelineTankersEtc.



Smart sites/systems forminimizing energy usage



…Energy Storage - ElectricVehicles

Electric Vehicles

(from local generation)

Energy Storage - ElectricVehicles

Renewable H2

CCS @ ElectricityGeneration Plant feeding…

Gen 2 BioFuels

Gen 2 BioFuels - Designedfor Desired Combustion

Local xTL (Gas, Coal)

Waste Heat RecoveryWaste Heat RecoveryWaste Heat Recovery

Energy Storage - HybridsGen 1 BioFuels

Gen 1 BioFuelsAlternative PetroleumProduction

Energy Storage - Hybrids

Energy ConversionEfficiency



CO2Supply SecurityPrice of Oil

Mobile/Transport Technology Matrix for Energy Drivers

Tim

e



Optimized IC Diesel Engine –ACERT® Technology and Beyond

(Diesel Bridging Strategy – Emissions and Efficiency)

ULSDiesel, Gen 1 Biodiesel – soybean & rapeseed

(Improved Conventional Fuels to Lower Emissions/Carbon)

Hybrid and Electric Vehicles

(Effective Technology to Address Climate Change)2010

-20

xTLiquid – Gas Coal BioMass - Gen 2

(Alternative Fuels for Energy Survivability)2010

-25

2005

-10

Mobile Energy Outlook

>202

0

Renewable Hydrogen Economy

(if Zero Carbon Liquid “Fuel” Required)



Optimized IC Diesel & Natural Gas Engine plus Flex Fuel

(Bridging Strategy – Emissions, Efficiency & Heat Recovery)

2010

-20

xTG – Coal BioMass - Gen 2 SynGas

(Alternative Fuels for Energy Survivability)

2005

-10

Stationary Energy Outlook

>202

0

Renewable Hydrogen Economy

(if Zero Carbon Liquid “Fuel” Required)

Renewables (Wind,PV) plus GenSet support

(Effective Technology to Address Climate Change)



Summary

Energy policies are only one of many challenges to the coming energyrevolution.

Caterpillar is positioning for many future energy developments /scenarios.

High Energy Efficient System technology is of utmost near termimportance.

Energy Storage (Battery) Systems and Carbon Capture and Storagetechnology may hold the key to many solutions.

The role of Renewables will grow in both transport and stationary powermarkets.

New Fuels will be brought into play for Energy Security.

Government/industry/university collaboration will become more criticalto focus policy and technology.

Documents

Future Fuel and Energy Utilization Systems