1. Global Trends in Transport Fuels and the implications for Australian policy Russell Caplan Chairman, Shell Companies in Australia Bureau for Transport and Regional Economics Colloquium Canberra, 15 June 2006

2. Global trends 1. Continuing use of conventional fuels 2. Cleaner transport fuels 3. Fuel and engine efficiency 4. Price pressures 5. Refinery location & capacity 6. Self-sufficiency vs economic growth

3. World energy demand 1971-2030 IEA 2004 (reference case) billion tonnes oil equivalent other renewables hydro nuclear biomass & waste coal gas oil

4. Demand for Oil to 2030 From Akmal and Riwoe (2005), per AIP submission to the Inquiry into Future Oil Supply and Alternative Transport Fuels (2006)

5. 0 50 100 150 200 250 300 200020202040206020802100 Heavy Oil Diesel / Gasoline Electricity Gas Hydrogen Data source ： WEC; with modification Synthetic fuel and biofuels Liquid Fuels Gaseous Fuels Energy Demand （ x10 18 J ） Forecast global automotive fuel demand to 2100

6. Global trends 1. Continuing use of conventional fuels 2. Cleaner transport fuels –Clean fuels - unleaded, lower sulphur –Synthetic fuels – GtL, CtL –Biofuels 3. Fuel and engine efficiency 4. Price pressures 5. Refinery location & capacity 6. Self-sufficiency vs economic growth

7.  Identical products from gas, coal and biomass  Range of feedstock options Synthetic Fuels Continuum Natural Gas Biomass Fischer-Tropsch process Identical Products GT L Synga s BTL CTL Coa l Shell Gasificatio n Process Shell Coal Gasification Process Gasifier

8. Biofuels Bio-Gasoline 4% Bio-Diesel 3% XTL Diesel 4% 0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000 20052010201520202025 KBPD Shell Global Road Transport Fuel Volume Base Case Diesel 45% Gasoline 44% Conventional gasoline and diesel = 89% Bio-fuels: ~ 7 % CO 2 reduction from bio- fuel: ~ 3 MT 2005 ~ 17 MT 2025 Source: IEA, PX, DXF

9. Global trends 1. Continuing use of conventional fuels 2. Cleaner transport fuels 3. Fuel and engine efficiency –Smaller cars, hybrids –More diesel –More efficient engine technology –Driver education 4. Price pressures 5. Refinery location & capacity 6. Self-sufficiency vs economic growth

10. Global trends 1. Continuing use of conventional fuels 2. Cleaner transport fuels 3. Fuel and engine efficiency 4. Price pressures –Demand side factors –Supply side factors 5. Refinery location & capacity 6. Self-sufficiency vs economic growth

11. Global trends 1. Continuing use of conventional fuels 2. Cleaner transport fuels 3. Fuel and engine efficiency 4. Price pressures 5. Refinery location & capacity –Construction of mega-refineries –Located in Asia or Middle East –Rising finished product imports into Australia 6. Self-sufficiency vs economic growth

12. Asian Refining 0 100 200 300 400 500 600 700 800 900 1,000 Refinery Capacity, thousands of barrels per day Australian Refineries

13. Global trends 1. Continuing use of conventional fuels 2. Cleaner transport fuels 3. Fuel and engine efficiency 4. Price pressures 5. Refinery location & capacity 6. Self-sufficiency vs economic growth

14. Determining a vision for transport fuels in 2050 Should we have a long term transport energy vision? What fuels are present in the vision? Where do our fuels come from? What is the interplay between transport fuels and generation fuels? What environmental footprint will the fuels of the future have? What do we need to do today to set ourselves up to achieve the vision?