Toyota's Number Two US Executive Talks About Oil Supply

John Birchard
December 26, 2004

Part of the keynote speech for the annual Washington, DC Auto Show last week was devoted to oil - a topic of great interest both within and outside the auto industry. Delivering the remarks was Don Esmond, Toyota's number two man in the United States.

In addition to commenting on such industry challenges as safety and air pollution, the Toyota executive offered observations on the world's oil supply - who is using it and how much remains to be used. He said a huge amount of it goes into the vehicles we drive. "There are three-quarters of a billion cars on the road world-wide. And the auto industry builds another 170,000 new ones each and every day. In some places, like right here in the Washington, D.C. metro area, it has an impact on the air we breathe and the roads we travel," he said.

The senior vice president and general manager of the Toyota Division of Toyota Motor Sales USA, Don Esmond, points out that the United States has the dubious distinction of being the world's leading consumer of petroleum products. "Today, the United States uses one-quarter of the world's oil. That's about three gallons per person per day - and consumption is on the rise," he said.

Not only is oil consumption on the rise here in the United States, but in China and India the rapid growth in oil consumption is already having an impact on world prices. And Mr. Esmond says oil industry observers warn that consumption rates are on track to increase by fifty percent over the next couple of decades. "Many experts, including those of the (U.S.) Department of Energy, claim that we have just 25 years until we reach what they call "Hubert's Peak," the moment when we have consumed half of the world's oil reserves. And the truth is, no one knows for sure how much oil is left," he said.

Toyota was the first automaker to introduce so-called "hybrid" technology in some of its cars - a combination of gasoline engine and electric motor designed to reduce fuel consumption and air pollution. Don Esmond says hybrids are gathering support. "The Sierra Club estimates that, if all vehicles in the United States used hybrid engines now, we'd save four million barrels of oil per day - and that's more oil than we import daily from the Persian Gulf," he said.

Mr. Esmond declares hydrogen the fuel of the future. It is an inexhaustible resource that is pollution-free and will drastically cut our dependence on petroleum. But the Toyota executive warns there are still many years of work and some difficult challenges to overcome before hydrogen fuel cells take over for the internal combustion engine. He notes that there are already some fuel cell vehicles running in California, but he says that is just a small beginning. "One company, one industry, one state can't do it alone. Solving these challenges will take all of us working very closely together with a united purpose," he said.

That's Don Esmond , senior vice president and general manager of the Toyota Division of Toyota Motor Sales USA, with some concerns but also some hope for the future of world petroleum demand.