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For a number of years, the Detroit Advisory Panel (a group made up of representatives of the oil, additive and automotive industries) has held forums every other year to dialog on issues which are important to all members. The 36th Automotive/Petroleum Industry Forum, held in Dearborn, Mich., in April, explored Challenges and Opportunities in a Renewed Transportation Industry.

This latest forum included presentations by original equipment manufacturers, additive suppliers, oil companies and consulting/forecasting firms, as well as the federal government. Thought-provoking and timely, the presentations covered a range of subjects, from base stocks to transmission designs, and included forecasts by industry executives on vehicle sales and more importantly, the changing mix of vehicle power.

What emerges is not surprising, but is instructive as to what the future may hold. As usual, the drivers for emerging technologies are government regulations, particularly fuel economy and emissions.

Fuel economy has been a major driver for the OEMs since the early 1970s. The OPEC oil embargoes drove home the point that the United States is dependent on imported oil. Given that dependence, the more that can be done to reduce fuel consumption the better off well all be. Nothing makes the point clearer than the current oil spill in the Gulf of Mexico. At this writing, the latest estimates are that 50,000 (or maybe its 100,000) barrels of oil are escaping daily. At current crude oil prices ($75 a barrel) thats somewhere between $3.5 million and $7 million per day of crude oil being lost.

The first fuel economy regulations came in 1975 and mandated a Corporate Average Fuel Economy (CAFE) target of 27.5 miles per gallon to be achieved by 1985. At the same time, new emissions regulations were also introduced that actually worked against the CAFE mandate. In order to reduce emissions, less-than-optimum ignition is required, which hurts fuel economy. Nevertheless, the auto industry was able to meet the mandated average through a combination of improvements in combustion efficiency, weight reduction and engine design.

Now the federal government has passed new regulations that mandate more restrictive fuel economy requirements to be in place by 2016. The new mandated CAFE limits of 34.1 mpg as well as greenhouse gas limits of 155 grams per kilometer equate to about 35 mpg. The timeframe is very tight and the increase significant. OEMs are now faced with improving fuel economy as well as reducing emissions of carbon dioxide (CO2).

Logically (at least as far as the government is concerned) the next step is to introduce vehicles powered by something other than hydrocarbon fuels. As we all know, various forms of electric power are under active development. As the forum heard, here are some of the concepts being advanced:

HEV (hybrid electric vehicles). These are now a part of the commercial marketplace. They combine battery power and an internal combustion engine to provide performance similar to current vehicles, but with a fuel economy benefit due to the use of electric startup and battery use. The battery is charged by the vehicles operation.

PHEV (plug-in hybrid electric vehicles). This is the next generation of HEV, in which the batteries can be charged by a plug-in system. It will include more batteries and provide greater range with lower emissions.

BEV (battery-powered electric vehicles). These are electric powered solely by battery. While emissions and fuel economy improvements are maximized, there are concerns about cost and range.

Projections for the impact of electric vehicles vary widely. Two of the presenters at Aprils Open Forum – Barb Samardzich, vice president of power-train engineering at Ford, and Eric Fedewa, vice president, global powertrain forecasts, at CSM Worldwide – suggested that a mix of the three electric vehicle types could reach 25 percent of U.S. vehicles produced in 2020, or 4.6 million units based on a forecast production of 18 million vehicles. Samardzich sees similar rates of adoption in the EU and Japan, and 20 percent in China.

On the other hand, one major consulting firm (Deloitte) sees electric vehicles as only about 3 percent of the market by 2020 and based on production of 15 million vehicles.

My take on the history of automobile sales says that U.S. production of 18 million vehicles in one year is not likely, especially given the state of the economy now and moving forward in the United States. The many new government programs (health care, cap and trade, etc.) will have a major impact on disposable income as taxes to support these initiatives will necessarily go up.

A recent survey by Cars.com indicates that potential buyers are still wary of electric vehicles. Some of the concerns expressed included running out of power on the road, overall reliability, and not having sufficient range. Cost and available infrastructure were also cited as cautions by potential buyers. Age and gender are issues, too, with men and younger buyers saying they were more likely to buy an electric vehicle than women and older buyers.

Gasoline engines will not go away. Certainly, hybrid electric and plug-in hybrids have traditional gasoline-fueled engines. In addition, many automobiles will continue with strictly gasoline-powered engines. The future for these powerplants will be reduced size but with greater power output per liter. That will be accomplished through the use of turbo and supercharging as well as advanced fuel injection with leaner fuel mixes, more ethanol (or other suitable biofuel) and advanced engine design.

Clean diesel engines are another option in the mix to achieve lower emissions and better fuel economy. Engine designs that further improve fuel economy, along with emissions controls, will make for a very attractive package to many. The Cars.com survey showed that there was less general knowledge about clean diesel than electric, and concerns were expressed about fuel cost. Potentially, resistance to diesel power would be less than that for electric – whether HEV, PHEV or BEV.

Transmission design is also on track for some major improvements. In Januarys column (ATFs Face a Changing Market), I highlighted the dual clutch transmission, which allows for a greater portion of the power to be transmitted to the wheels without loss. That will add to the overall fuel economy of future vehicles. New automatic transmission creations, including more gears or continuously variable transmissions (CVT), will also incrementally improve fuel economy.

All of these developments are focused on front-wheel-drive vehicles which include the gearbox within the transmission. However, there will continue to be a market for rear-wheel-drive vehicles (primarily light trucks and SUVs) which require gear oils. Axle design doesnt seem to be a fertile field for new developments, as most axle design work was done years ago. That doesnt mean there wont be anything, but I suspect that it will be more along the lines of fine-tuning what we already know.

All of the above is groundwork for the future related to lubricants. So what is our industry looking for in the next generation of engine oils, transmission fluids and gear oils?

As far as engine oils are concerned, it sounds like more of the same. The critical issues for the OEMs are fuel economy and durability. How they see these things occurring is interesting, as Aprils forum heard.

Samardzich stated that Ford will be recommending 10,000-mile oil change intervals for its 2011 model year vehicles. It also wants to see engine oils that will handle higher temperatures and heavier loads. It wants lower-ash oils and higher viscosity indices. Ford also wants a global engine oil specification. (Perhaps like GMs Dexos program?)

Infineums Jofran Pastor believes that fuel economy will have to become part of the fluid requirements throughout the vehicle. He also stressed the need for long oil life, higher fuel economy, engine durability and emissions systems compatibility. These requirements will make for expensive testing and development programs that will require a great deal of early engagement between engine manufacturers and lubricant formulators, as well as significant co-development efforts by both.

Rob Shama of Afton Chemical took a different approach to the subject, and used the forum to discuss the need for increasing market acceptance of new engine oils. He emphasized the need to make it clear what engine oils do and how they benefit the consumer. He discussed labeling and value concepts as well.

For transmission fluids, the name of the game is friction durability, which means maintaining the same level of friction reduction over the life of the fluid and transmission. Lower viscosity is important as it reduces overall friction in the transmission, which saves fuel. There is also a need for more research into the components of the transmission and the transmission fluid to optimize friction reduction.

In gear oils as well, the push is for lower viscosity products to reduce fuel consumption. This approach was promoted in the 1980s when the market moved to SAE 80W-90 and SAE 80W-140 gear oils, as opposed to the straight SAE 90 and 140 grades which had dominated the market for years before. SAE 75W-90 came along just a bit later and increased the fuel saving benefit, although with caveats about potential loss of gear durability. Today we continue to pursue the goal of improved efficiency in the rear axle although its pretty efficient now.

So the bottom line of the latest Automotive/Petroleum Industry Forum is that big changes in power sources, and the continued push for energy efficiency and emissions reductions, will result in yet more pressure on transportation lubricants. Engine oils will still be a major player as internal combustion engines will continue to dominate. Transmission lubricants will need to be lighter and tougher, and gear oils will try to squeeze the last drops of fuel efficiency out of the gearboxes (both transmission and rear axle).

It sounds a lot like the prognosis from the 1970s. I guess that the adage about what goes around comes around is alive and well.

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