This U.S. Lab Could Help Saudis Boost Crude Demand

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By Irina Slav 

While all eyes are on its upcoming IPO with investment banks scrambling for the role of coordinator, Saudi Aramco, it appears, is quietly investing in efficiency improvement technologies for internal combustion engines, the company’s Chief Technology Officer, Ahmad Al Khowaiter, told CNBC this week.

Aramco doesn’t seem overly concerned about electric cars, perhaps with good reason. Despite all the optimistic forecasts about EV adoption amid a string of government plans to phase out all internal combustion engine vehicles in the coming decades, over the medium term at least, ICE engine vehicles will continue to greatly outnumber EVs — even the optimistic forecasts agree on that point.

So, why not support better efficiency for these ICE vehicles and slow down the advent of the electric cars? “Electric vehicles have a role to play, but we believe the most effective means to bring down emissions is to actually improve the efficiency of the internal combustion engine,” the CTO told CNBC.

The company now has a research facility in Michigan that is working on ways to improve the efficiency of gasoline engines. Earlier this week, this company unveiled the result of a partnership on fuel efficiency with a California-based engine developer, Achates power. At the North American International Auto Show in Detroit, the world’s largest oil company in terms of reserves showcased a Ford F-150 pickup truck fitted with an all-new Achates gasoline compression ignition engine.

The gasoline compression ignition technology is the focus of Aramco’s efforts in engine efficiency. The Ford F-150 should have fuel efficiency of 37 mpg, compared with federal regulations requiring an average of 33 mpg by 2025. Aramco and Achates will test the truck to see if it does achieve this level of efficiency, and if it does, they say it will be a major breakthrough for ICE vehicles.

Aramco is not alone in the quest for more efficient gasoline engines. This week Mazda said that advancements in combustion engine efficiency will rein in demand for electric vehicles. The Japanese carmaker argues that EVs can actually be worse for the environment than ICE vehicles, depending on the source of the electricity that charges their batteries.

Mazda estimated that a gasoline-powered Mazda 2 emitted about 9 percent less CO2 than its electric version, which spewed an average 162 g/km. That was if the electric Mazda 2 was powered with electricity produced at a coal-fired plant.

Aramco’s CTO would probably be pleased to hear — if he hasn’t already — what Mazda’s technical research center head has to say about electric vehicles. “As long as conventional vehicles truly comply with regulations, electric cars won’t be needed to solve environmental issues,” Mitsuo Hitomi said in a Bloomberg interview. But what’s more, he added, if EVs are to take over the market, this would necessitate a substantial increase in power-generation capacity. This capacity would need to come from clean sources, in keeping with the green agenda, so the electricity produced by it will be more expensive.

“Think about these negative consequences for consumers when you have more electric cars,” Hitomi told Bloomberg. “I personally don’t think the age for electric vehicles will ever come.” Chances are he is not alone in thinking that; and betting on engine efficiency could be the smart strategy for the next couple of decades.

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