5.30.2006

Department of Energy - DOE Secretary Promotes E85 Use in Indianapolis

US Secretary of Energy promoting E85 use at the Indy 500. Interesting. In the press release, which comes from the DOE RSS feed, mentions cellulosic ethanol as being of particular interest. Perfect, because cellulosic is multiple times better than ethanol made from corn. Better, more availabe feed stocks, more efficient processes, less pollution on a well-to-wheel cycle. Let's hear it for Samuel Bodman (the Secretary of Energy).

5.28.2006

VW to Drop Diesels from MY2007 Lineup in US Due to Emissions Requirements

From the Detroit Free Press comes some disheartening news from VW, maker of the vast majority of diesel passenger cars sold in the US. The models dropped are Jetta, Golf and Beetle, the three best performers in mileage available. Reasons cited are nitrogen oxide emissions which are the world's strongest in the US. Perhaps in the future these TDI models will return.

5.27.2006

Environmental and Energy Study Institute

Environmental and Energy Study Institute
From the EESI comes this article, "House Science Republicans Propose Plug-In Hybrid Legislation." Click the link above to go to the article.
Austin Energy, in the great city of Austin, TX, started this program in association with EESI and others. Their goal is to get 50 cities in the US to commit to purchasing a fleet of Flexible Fuel Plug-in Hybrid Electric Vehicles (PHEV) to spur demand from the automakers. The automakers say there is no market, Austin Energy and "almost a dozen cities, over 100 public power utilities, businesses and a host of national policy groups..." think otherwise. And apparently, so do House Science Republicans.
A PHEV is simply a hybrid car, like a Prius, with a larger battery pack that can be plugged in overnight. The initial 40-60 miles would be powered by the electric motor and battery, at which point the gas engine would kick in, operating as a regular hybrid motor. With the Flexible Fuel option, the gas motor can run on a blend of ethanol and gasoline up to 85%, or E85. The advantages are many, including low emissions, cheaper overnight electric rates (when wind power is plentiful), and reduced dependence on foriegn oil. It certainly seems like the best of both worlds. To learn more, go to www.plugingpartners.org .

New Fuel Company

Here's a great myth and facts article about biodiesel. Written by a producer in Dallas, TX, it gives a good rundown of the basic information that is out in the greater world. Click the title above to go to the article and their website.

5.26.2006

An update

In an update to an earlier post of 5-21-2006, New Holland has just accepted the use of B20 in all of its diesel equipment. The biodiesel must meet industry standards to qualify. See the Alternative Fuels Index for more.

Post 3: Chapter 4, Part II

Sustainability

The third pillar of alternative fuels promotion is sustainability. As described by the World Commission on Environment and Development report, Our Common Future, sustainability is, “…development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” Thus, this topic is perhaps the least concrete of the three pillars and the most open to interpretation.
One way to look at the problem of sustainability is in terms of the renewability of resources. Petroleum and its derivatives along with natural gas are almost certainly finite resources. If this sounds equivocal it’s because some would argue that as prices increase, new technologies will take advantage of previously uneconomical sources of oil which would then be profitable and plentiful. Colin Campbell, a peak oil promoter calls these people “flat earth economists.” This view may be valid and peak oil theorists may be completely wrong, but from where the world stands today, petroleum appears to be a finite resource (for more information on peak oil see Chapter 2).
Beyond peak oil, which shows a definite lack of sustainability in the gasoline and diesel industries, there are alternative fuels. CNG and LPG are non-renewable sources of energy because of their close association with petroleum. They can be promoted as a short-term solution, however, because their emissions are low relative to petroleum and there is still an abundance of domestic natural gas reserves. Hydrogen as a fuel source is remarkably available, it’s the most abundant element in the universe, but large problems still exist with the cost and availability that make best as a long term solution. Electricity does a great job of providing the advantages of alternative fuels up to the point it gets put in the car. Once in the car, current battery technologies limit the vehicle’s value due to low driving ranges, long refueling times, and incremental costs of $10,000 to $20,000. This leaves ethanol and biodiesel to consider, which have advantages and disadvantages of their own
In a report published in the Journal of the Air and Waste Management Association, Heather MacLean, et. al., performed a sustainability study for the production of four alternative fuels from plant materials: corn ethanol, cellulosic ethanol, woody ethanol, and soy biodiesel. Their study used two scenarios: near term partial sustainability that had petroleum inputs in farming and energy production, and long term “full” sustainability that used biofuels for agricultural and electricity inputs. Usage amounts were equivalent to replacing all the fuel consumed in the country by light-duty spark ignition engines, which at the time was roughly 120 billion gallons per year. Table 4.3 shows the results of the study.
According to the US Census Bureau, there are currently 1.94 billion acres of surface land in the US. Nearly 1.4 billion acres is rural land, of which 377 million acres is cropland, 32 million is held out of use by the Federal government (in the CRP), 120 million acres is pastureland, and 406 million acres is rangeland. Given these amounts, depending on ethanol in the near term would use all of the in-use cropland that exists, cellulosic and woody ethanol would use 60 and 80 percent respectively and biodiesel from soybeans would use more land than is available. The amount of land needed increases for the long-term view (although significantly less for cellulosic and woody ethanol), needing all the land in the US and a large piece of Canada for soybean growth. The amounts are based on yields of fuel per bushel or dry ton, and the per-acre yield of corn and soybean is significantly lower than the other ethanol feedstocks.

Table 4.3
Land Required for Sustainable use of Biofuels (Billions of Acres)
Fuel Near-term
Land use Long-term
Land use
Corn Ethanol 0.37 1.1
Cellulosic Ethanol 0.26 0.33
Woody Ethanol 0.30 0.37
Soy Biodiesel 1.5 2.6
Source: Adapted from Heather MacLean, et. al., “A Life-Cycle Comparison of Alternative Automobile Fuels," Journal of the Air and Waste Management Association, Vol. 50, Iss. 10 (October, 2000), p. 1769-1779.

This is an extreme view of the situation, although for 100 percent sustainability it is mostly accurate. The US wouldn’t have to displace all of its oil consumption with these fuels to maintain a sustainable environment and economy, however. Replacing only 50 percent of its oil consumption from a variety of fuels and technologies would go a long way to maintaining our economy while decreasing dependence on foreign oil and increasing air quality and environmental benefits.
Another aspect of sustainability is energy yield or net energy balance. All fuels take energy to create and deliver a certain amount of energy in return. Net energy balance refers to the difference between the amounts of energy it takes to produce a fuel compared to the amount of energy it provides. Calculations include all energy cycles that go into production:
• Agricultural cycle: tilling, fertilizing, producing fertilizer, irrigation, fuel consumption by equipment, labor energy, harvesting, etc.,
• Production cycle: transportation to the plant, energy to run the plant, grinding, fermenting, storage, waste water disposal, in some cases energy used to produce equipment, etc., and
• Transport cycle: to the various retail and/or storage facilities, and pumping it into the tank, etc.
In order for an alternative fuel to be “acceptable,” it should show a positive energy balance, producing more energy per gallon than what goes into it, or at least providing a better balance than gasoline or diesel. The two petroleum fuels have an energy ratio of 0.81 and 0.84 respectively, meaning more energy is used to produce them than they produce when burned. Comparatively, both ethanol and biodiesel have positive energy ratios of 1.34 and 3.2 respectively, showing a much higher energy yield.
Finding similar information for other fuels is difficult, however. Net energy balance studies appear to be based mostly on biofuels and exclude the other gaseous fuels and electricity. Some intuitive thinking might be useful to give a general idea of energy balances for some of the fuels. Propane is a gaseous fuel that is a byproduct of the natural gas and oil refining industry. One can figure that energy inputs related to these industries that account for activity through refining could also be attributed to propane, which would have some additional inputs for transportation, distribution, and storage. This information plus knowing that a gallon of propane contains 74 percent of the energy content of a gallon of gasoline, one can figure that the energy balance for this fuel won’t exceed gasoline by much, if at all.
In a study by GM of well-to-wheel energy outputs of various fuels, compressed natural gas was found to offer no energetic advantages to the use of gasoline when used in a dedicated CNG vehicle. Hydrogen in fuel cells was found to be energetically advantageous to gasoline and diesel fuels when produced from non-North American natural gas but inferior if produced from electrolysis. Electricity is difficult to intuit due to considerations of line loss, battery efficiencies, and production fuel mix all add to the net energy equation and are difficult to compile and calculate. A wild guess would be that it doesn’t offer substantial energetic benefits.
In the case of sustainability, technology is the key and must be depended on for the best sources of alternative fuels to come into widespread use. When the technology will come about, however, is difficult to know. If near-term peak oil estimates are correct, then time may be the biggest factor in the sustainability debate. If oil prices soar because production decreases, it will take time to fully develop unconventional sources of oil and to increase production of alternatives, which will most likely see a corresponding spike in demand and prices. If time is of the essence then, what is it that is keeping alternative fuels from widespread use? The next section will address these issues.

Obstacles

In spite of the much claimed benefits of alternative fuels, which for the most part have proven true, there is still a very small amount of consumption of these fuels. The three most common causes for this are 1) a low price for oil and therefore gasoline, 2) a lack of fueling infrastructure, and 3) high incremental costs associated with alternative fuel usage, whether on the vehicle side or the fuel side. The low price of oil was touched on in the section on Hubbert’s Peak in Chapter 2 and speculations beyond those are not in the scope of this paper (if they were I’d be in Chicago trading futures). This section will take a look at the other two issues in more detail.

Fueling infrastructure

Perhaps the main obstacle in the widespread use of alternative fuels is availability. Consumers aren’t going to use any fuel if it is not convenient for them to do so. Having to drive to the other side of town to fill your car from the one E85 pump in the city isn’t within the parameters of most consumers’ dedication quotient. The Alternative Fuels Data Center of the Department of Energy has an alternative fuels station locator on their website, which allows one to search for different fuels within a variable mileage range. Having conducted a quick search of the database centered on Austin, Texas (a city known for renewable energy and “green” attitudes), for stations within a 30, 100, and 400 mile radius of downtown; liberal distances for someone to drive just to fill their tank. Results are shown in Table 4.4.

Table 4.4
Alternative Fuel Stations Within Three Different Radii of Austin, Texas
Fuel Type Number within Radius (miles)
30a 100a 400a Nationalb
Electricity 0 0 3 574
CNG 1 2 67 800
LPG 22 124 715 3,113
Biodiesel 0 0 7 187
E85 0 0 4 209
Hydrogen 0 0 0 14a
Source: a Alternative Fuel Data Center, Alternative Fuel Station Locator. Online. Available: http://afdcmap.nrel.gov/locator/LocatePane.asp. Accessed: October 27, 2005, and b Alliance to Save Energy, The Drive To Efficient Transportation (May 2005), p. 35-42, except hydrogen.

Within a 400 mile radius of Austin, Texas, an area that covers a good portion of the state as well as a large piece of Oklahoma and Louisiana, there are 796 alternative fueling stations. The vast majority are propane sites, mostly consist of non-automotive businesses like U-Haul rental stores, campgrounds, and residential propane distributors. Across the country, there are roughly 4,900 alternative fueling stations total, the great majority being propane, with the great majority of CNG and electric fueling sites in California. Compare that number to more than 10,900 gasoline and diesel fueling stations across the State of Texas and 180,000 across the nation, and the lack of infrastructure becomes apparent.
This is a simple exercise and none too accurate either as there are at least three biodiesel filling stations in the city limits of Austin that aren’t listed. It does however, match the general consensus that LPG and CNG have the widest spread fueling infrastructure and it goes to show the general dearth of available stations for the alternative fuels in general.
The availability of alternative fuels also depends on location. For instance, St. Paul, Minnesota has 31 E85 stations within a 30 mile radius, Los Angeles, California has 44 CNG stations in the same distance, and there are at least ten biodiesel stations within 30 miles of downtown Atlanta, Georgia. The different density of available alternative fuels is most likely explained by state incentive programs. In the case of Minnesota, the state offers a $0.13 per gallon incentive for the production of ethanol up to $1.95 million for each producer. The governor has also signed a law that requires, “within eight years that gasoline contain 20 percent ethanol (E20) unless ethanol already makes up one-fifth of gas sold in the state.” California is known to aggressively pursue both CNG and electricity.
Aside from what stations are located where, a major cause of the lack of infrastructure is the proverbial chicken-or-egg syndrome. Businesses aren’t willing to build costly infrastructure if there aren’t any vehicles to use it (a CNG refueling apparatus costs over $300,000). Consumers and businesses aren’t going to buy and use AFVs if there isn’t anywhere to fuel them. Alleviating this is the classic role of government in a socio-capitalist economy, and it’s the main purpose of the programs under the Clean Air Act of 1990 and the Energy Policy Act of 1992. The goal of those programs is to create a critical mass of AFVs in an area that creates infrastructure and familiarizes people with the products, causing a “spill-over” into the private economy.
Along with these programs, the Federal government offers direct tax incentives to purchasers of AFVs. The Electric Vehicle Tax credit gives EV buyers 10 percent the cost of the vehicle up to $2,000 in 2005. Under the Clean Fuel Vehicle Tax Deduction, purchasers of light-duty AFVs can receive a $1,000 tax credit, and purchasers of heavy-duty AFVs can receive up to $25,000 for vehicles over 26,000 pounds. Also, in an attempt to satisfy the chicken-and-egg dilemma, many states also have their own incentives for AFV purchases and for infrastructure installation. A few examples are listed below:
• Kansas offers tax credits of up to $40,000 for the conversion of a vehicle to an alternative fuel source based on gross vehicle weight and up to $160,000 for building a qualified alternative fuel filling station;
• Connecticut offer a Corporate Business Tax credit of up to 50 percent the costs of converting a vehicle to CNG, LNG, LPG, or electric and/or installing infrastructure equipment to provide fueling for the same;
• Virginia provides individuals and businesses 10 percent the allowable federal tax deduction for purchasing AFVs and infrastructure installments; and
• New York gives a tax credit for 50 percent the incremental costs of purchasing an electric vehicle, 60 percent for AFVs, and 50 percent the property value of refueling stations.
Even with the incentives, alternative fuels and alternative fuel vehicles aren’t a large part of the transportation sector, especially for light-duty vehicles. Part of this has to do with education. Prior to conducting this study, the author wasn’t aware of the incentives for purchasing AFVs other than for hybrid-electric vehicles and it is warranted that many others don’t know either until they talk to a salesman, if they ever do. A second problem that is discussed by Leiby and Rubin is the lack of a used AFV market. If people have to pay full price for AFVs, there will be fewer of these vehicles sold and thus less alternative fuels consumed. The final problem is cost, which is covered in the next section.
To interrupt with a positive note, biodiesel and similar products like Fischer-Tropsch diesel (made from natural gas or coal and not currently available) are excellent fuels for replacing conventional diesel that can be delivered using existing infrastructure and used by existing engines without modification. The recent availability of biodiesel has kept it low as a percentage of total alternative fuels purchased but starting in 2000, the first year it was measured by the EIA, it has seen a 536 percent increase in consumption through 2005, making it the fastest growing fuel measured. Given the amount of diesel engines used in transportation, biodiesel has perhaps the best chance of increasing alternative fuel usage in the US and is winning support from truck drivers and passenger car drivers alike.

Costs

Cost is the major driver of an economy. Careers have been built and Nobel Prizes won by economists who explained how prices affect consumer behavior. While there will always be early adopters for any technology, it isn’t until mass production brings down prices that the “mainstream” buyer will begin to consider new technologies, and alternative fuels and the vehicles that consume them are no exception.
The Clean Cities Alternative Fuel Price Report lists the average national price for conventional and alternative fuels for September, 2005. The prices are listed in Table 4.5.

Table 4.5
Average National Prices for Conventional and Alternative Fuels (Per Gallon or Gallon Equivalent)
Fuel Gasoline Diesel E85 CNG LPG B20 B99-100
Price $2.77 $2.81 $2.41 $2.12 $2.56 $2.91 $3.40
Source: DOE, EERE, Clean Cities Alternative Fuel Price Report (Washington DC: September 2005), p. 3.

The results show that apart from biodiesel, the alternative fuels are cheaper on average than regular gasoline or diesel. In pure economic terms, this means consumers should be switching from higher priced gasoline to lower priced alternatives but this is obviously not the case. Leiby and Rubin’s study compiled pricing information on how much lower alternative fuels need to be given their availability. What they found is that given a low availability of a fuel prices of alternative fuels would have to be significantly less than regular gasoline to induce consumers to use them, approximately $0.27 to $0.30. Given their results and that alternative fuels are available at less than five percent of stations nationwide (because many fueling stations are non-automotive or for private/government use only), it’s apparent prices would have to be less than the $0.41 average reduction that is seen now, or the price differential would have to last for a long period of time.
Both E85 and CNG fall within this price range but consumers still aren’t buying them in large quantities. Part of this has to do with availability another part has to do with costs. In the year 2004, there were 775,638 AFVs manufactured in the US of which 31 percent were light-duty automobiles and 68 percent were heavy-duty trucks, pickup trucks, and vans, the other 1 percent being buses and “other” vehicles. This number is actually down 100,000 to 150,000 from the last two years. Compare this to 11.6 million total vehicles manufactured in 2004, and it’s easy to see why few of these vehicles are purchased. Add to this that most of the AFVs manufactured are purchased for fleet use, and not by the average consumer, and the supply is even fewer.
Another aspect of this equation is that 93 percent of the vehicles offered are flexible fuel vehicles (FFV) that use either E85 or gasoline. The way to know if you own one of these vehicles is that there is a sticker under the gas flap that says it can be used with either fuel. Most consumers who have the vehicles don’t know that their vehicles can use E85. Even if they did, it is certain they would opt for using it. A study by the EPA, DOE and DOT showed that E85 use in FFVs accounted for only one percent of the fuel consumed, the other 99 percent was conventional gasoline.
Thus, there is a definite lack of availability of alternative fuel vehicles, which is certain to have a direct impact on the amount of alternative fuels purchased, and those AFVs that are most common rarely use the fuels available to them. But other than availability, there is also price to consider. Almost all AFVs are more expensive than their gasoline counterparts. The incremental price ranges from $230 for an ethanol vehicle with production over 100,000 units to about $6,000 extra for an all-electric vehicle with production of 25,000 units, with an average of about $2,500.
Most Americans, it is assumed, would be unwilling to pay an extra $2,500 for an AFV, especially when availability of the fuels is dubious. There also is a difficulty inherent in the fact that it is an automobile that people are purchasing. Large durable goods aren’t as easily tradable for new ones as soon as something better comes around. The high price and expected lifetime use of the purchase plays a large role in when and what is purchased. Gasoline prices have only been above the $2.00 mark since March of this year which gives only eight months to a year for people to feel the effects on their wallets. People who bought a car around this time aren’t likely to buy a new one for a couple more years.
The question is, “At what point does the price of gasoline make the incremental costs of an AFV and alternative fuel use more attractive than conventional automobiles?” Somewhere in the $2.00 range seems likely as there has been a steady decrease in demand for large SUVs in the last year coupled with an increase in demand for more fuel efficient vehicles like Toyota’s Prius, which has a three-month waiting list in some parts of the country. And that is ultimately what it comes down to, price and availability. Toyota may not be able to keep up with Prius production, but consumers know that they are being made as fast as possible. Do consumers know that CNG or LPG vehicles are available to the public? My guess would be no. As John Maples, et. al. state in their report, Alternative Fuels for U.S. Transportation, “Given the availability of large quantities of low-cost fossil fuels, powerful policies will be needed to induce massive transitions to low-carbon fuels such as hydrogen or renewables.”

Post 3: Chapter 4, Part I

“Advanced technology vehicles, such as hybrids, plug-in hybrids, and clean diesels, and alternative fuels like cellulosic ethanol and biodiesel…offer the uncompromised features of conventional vehicles while improving dramatically automobile fuel economy and reducing our dependence on oil. It should be national policy to foster early introduction on a significant scale of these vehicle technologies and non-petroleum transportation fuels…”
- R. James Woolsey, former Director, Central Intelligence,


Chapter 1. Costs, Benefits

Beneficial, or not so?

In the 1970s, oil policy shifted from supply-side measures to consumption based measures. After the oil shocks of the 1970s, the 1980s saw a shift in to an expansionist policy, whereby the military was seen as a primary measure for securing US oil interests in foreign nations. It wasn’t until the 1990s that this came to fruition, perhaps due to the end of the Cold War. It was also at this time that policies promoting the use of alternative fuels came about. The basis of these policies was to promote air quality, national security, and the sustainability of the resources that are the basis of the national economy and way of life, or in other terms three pillars of alternative fuels. But the question must be asked, “Are alternative fuels all that they are promoted to be?” This chapter will be a point-counterpoint discussion of the many aspects of alternative fuels and alternative fuel policies.

Low emissions

Tailpipe emissions from alternative fuels are almost across the board lower than those for petroleum fuels. Some fuels, such as electricity and the much touted hydrogen fuel cell, have no tailpipe emissions at all. This is why agencies like the EPA are promoting alternative fuel technologies, especially in urban areas where air pollution tends to be the worst. Other alternative fuels, like ethanol and biodiesel that are derived from plant sources, tend to have higher emissions relative to electricity but that are still lower than gasoline or diesel. In pure form or in blends, these two fuels offer lowered emissions with little or no difference in engine performance.
There is an inherent difficulty in comparing emissions tests across all the alternative fuels this paper wishes to cover. The first difficulty is with biodiesel. It is a relatively new phenomenon compared to other fuels, only making the EPAct list in 1998, and it doesn’t need a specialty engine, it can be used in a regular diesel. Another difficulty, there isn’t one study that has covered all six fuels this paper is most interested in, thus making comparisons obvious and easy.
Next, any combination of studies will focus on different emissions or give the results in different measurements, making comparison of the various fuel’s emissions difficult. There is also the problem of vehicles used to perform the study. If one researcher is using a Ford flexible fuel vehicle (it can use pure gasoline and/or a blend of gasoline and ethanol) and another is using a Honda dedicated vehicle, the results are highly likely to be different. To counter this problem, the focus of this section will be on percentage decrease or increase of emissions from alternative fuels versus conventional gasoline, or in the case of biodiesel, conventional diesel. Those results that are not able to be compared will be marked “not available.”
Table 4.1 shows alternative fuel tailpipe emissions as a percentage of gasoline tailpipe emissions with gasoline equaling 100. (For a brief explanation of the method used, we see that ethanol produces 96 percent the emissions of carbon dioxide (CO2) as gasoline and 150 percent the emissions of methane (CH4)) It can be seen from the data in the table that on average, tailpipe emissions of various pollutants are lower by 10 to 100 percent than those for gasoline, depending on the type of fuel. In some cases, however, emissions can be somewhat higher, as is the case with NOx emissions from biodiesel, or radically higher, as in the case with CH4 emissions from CNG (although it must be said that CNG is composed of 90 to 98 percent CH4, so having higher emissions in this category is not surprising).
Table 4.1
Comparison of Tailpipe Emissions: of Alternative Fuels to Gasoline by Percentage (Gasoline = 100)
Emission by
Fuel Type Oil
Use CO2 CH4 N2O GHGs VOC CO NOx PM10 SOx
Ethanol a 20.2 96 150 100 96.3 85 75 90 78.2 4.1
CNG a 0 83.7 1000 80 87.7 21.6 80 90 65.5 4.5
Electricity a 0 0 0 0 0 0 0 0 63.6 0
Biodiesel b 0 22 na na na 84.6 52 110 53 0
Propane c 0 na 20 na na 10.7 68 64.7 60 na
Hydrogen d 0 0 0 0 0 0 0 0 0 0
Sources: a GREET 1.6 Beta software from Argonne National Laboratory (see Appendix B). b NBB, Biodiesel as a Greenhouse Gas Reduction Option, and EPA, Comprehensive Analysis of Biodiesel Impacts on Exhaust Emissions. c Society of Automotive Engineers, Reactivity Comparison of Exhaust Emission from Heavy-Duty Engines Operation on Gasoline, Diesel and Alternative Fuels. d Maclean and Lave, Evaluating Fuel/Propulsion System Technologies for H2

These findings reinforce what advocates say about alternative fuels being good for the environment. This, however, is just tailpipe emissions. What most concerns policy analysts when quantifying emissions is the life-cycle or “well-to-wheel” aspect of alternatives. This approach involves looking at the whole cycle of production for alternative fuels, not just what comes out of the tailpipe. General Motors, in its well-to-wheel analysis report for North America, uses a three stage life-cycle that is fitting for the purposes of this paper:
1. The feedstock stage: involving recovery, processing, storage, and transportation,
2. The fuel-related stage: involving production, storage, transportation, and delivery
3. The vehicle stage: involving refueling and driving.
The life-cycle process therefore looks at all stages of a fuel’s life. In the life-cycle of biodiesel, one must consider the amount of land that goes to grow the feedstock, say soybeans, and the emissions from the tractors used to grow and harvest the soybeans, plus the fertilizer used, then the transport of the soybeans to the processing plant, each stage within the plant until the soybeans become biodiesel, then shipping to the retailer, filling emissions, and final use.
In the case of electric vehicles that have almost no tailpipe emissions, one needs consider where the electric is coming from. The essential question is, “What is the mix of sources that the electric is made from?” If the electric mix is produced mostly by coal, then the life-cycle of electricity will be much closer to gasoline than if the mix comes mostly from natural gas. If the electricity can be made 100 percent by renewable sources (a goal of some electric proponents) then the life-cycle will be very low, but not zero as one must consider the production inputs for wind turbines or solar panels. Table 4.2 shows a life-cycle comparison of emissions for the same fuels as Table 4.1.
Table 4.2
Life-Cycle Emissions Comparison: Alternative Fuels to Gasoline by Percentage (Gasoline = 100)
Emission by
Fuel Type Oil
Use CO2 CH4 N2O GHG VOC CO NOx PM10 SOx
Ethanol a 25.9 34.9 98.2 312 37.6 94.7 55.9 37.1 141 41.9
CNG a .6 17.5 345 38.6 19.6 10.2 46.2 7.8 10.3 4.3
Electric a 1.8 17.7 74.9 8.7 18 5.6 1.4 7.1 26.1 37.9
Biodiesel b na 21.5 100 na na na 65 135 62 92
Propane c na na na na 85.5 33 50 na na na
Hydrogen c na na na na 15.7 5 10 na na na
Source: a, GREET 1.6 Beta software from Argonne National Laboratory (see Appendix A), and b, USDA and DOE, Life Cycle Inventory of Biodiesel and Petroleum Diesel for Use in an Urban Bus, NREL/SR-580-24089 (Washington DC: 1998) and; C Laurie Michaelis, “The Abatement of Air Pollution from Motor Vehicles: the Role of Alternative Fuels,” Journal of Transportation Economics and Policy (January 1995), pp. 73,75.
(Ethanol, CNG, and electricity are going to give the most accurate comparisons because the results are from Argonne National Laboratory’s GREET modeling software and used the same input assumptions for electric and petroleum production [see Appendix A for a detailed table of the assumptions]. The other three fuels were assembled from different reports and are certain to use differing methods, testing equipment, and reporting measures. For the purposes of this paper, emissions from these three will be assumed to have been evaluated equally.)

What the results of the comparison show is that life-cycle analyses can have a marked difference on the amount of emissions produced compare to what come out at the tailpipe. Emissions for electricity are up across the range due to the average mix of energy production sources in the US relying heavily on coal. Even though emission are higher (meaning there are some), they are still significantly lower than emissions for gasoline, ranging from 1.4 percent the emissions of carbon monoxide (CO) to 75 percent the emissions of CH4. This makes electricity the clear winner in terms of emissions for use as an alternative fuel.
CNG also fared very well with no emissions rating above 50 percent those for gasoline except CH4 and less petroleum use than electricity. Looking at CH4 though, there is a 65 percent reduction in this emission over the life-cycle compared to tail pipe emission comparisons. This is likely due to an increase in CH4 release during the life-cycle of gasoline.
Ethanol showed mixed results in the life-cycle analysis. Around half the emissions tested showed an increase in the percentage comparison of this fuel to gasoline with one emission, nitrous oxide (N20), tripling and another, SOx, increasing tenfold. Other emissions have been decreased significantly, however, and it is unknowable with these results if the amount of emissions that are offset by the use of ethanol is larger than the increase. Petroleum usage for ethanol is much higher than the other fuels because the majority of its usage is in blends with gasoline, either at 85 percent ethanol to 15 percent gasoline (E85), or at 10 percent ethanol to 90 percent gasoline (gasohol).
As for the other fuels, there is too little data in the tables to make any justified comparisons. Therefore, discussion of these fuels will use life-cycle analysis, which is the true measure of any fuel’s environmental impact, and information from the literature.
Hydrogen, used in a fuel cell, is the second cleanest fuel as seen from the little available in the tables. This may, however, be based on what technologies will be available in the future. For now, the fuel cell is a very efficient means of using hydrogen as an alternative fuel and is currently in an “advanced development stage,” but the process for extracting hydrogen is very dirty. The process is energy intensive using current technologies and most of the energy comes from fossil fuels. If hydrogen were to be made from renewable sources only, like hydropower or wind, the life-cycle of hydrogen would be much cleaner; however, there isn’t the capacity in the US for to accomplish at this time. Thus, at current levels of technology the promise of reduced emissions from hydrogen is not a reality.
Finding propane emissions studies for anything other than buses and forklifts has proven difficult and these two vehicles don’t translate into the more prolific types of vehicles that might use this fuel source. A 1994 report by the Energy Information Administration compared life-cycle emissions among four common alternative fuels, one being propane. The study found propane to have 2 to 24 percent lower emissions for all five emissions studied, CO, NOx, N20, CH4, and CO2. It was also found to be the second best alternative among the fuels for emissions quality, CNG being the best with ethanol and methanol taking third and fourth.
Biodiesel is a newcomer in the world of alternative fuels and therefore hasn’t been studied as often in comparison to other fuels. The Energy Information Agency (EIA) didn’t start tracking its yearly consumption until 2000, when it made its debut at roughly 6.7 million gallons. Like all other alternative fuels, the verdict is still out on biodiesel’s potential to save the world. Most life-cycle studies of the fuel, however, take a favorable light, stating significant decreases in emissions like VOCs, CO2, and PM. The one exception is NOx, which has a ten percent increase over gasoline in when used in pure form, B100, lessening as the fuel is blended with conventional or low-sulfur diesel, a process that also reduces the benefits of the fuel for other emissions.
Thus, even when comparing alternative fuels to gasoline in a life-cycle approach, the fuels show a positive potential for reducing overall emissions. Some of the fuels perform better than others however, with the performance of certain fuels like ethanol questionable. Also, the fuels that perform best, like hydrogen and electricity, are the fuels that are least likely to be used in a significant amount in the near or even mid-term due to technological barriers.
Thus, in the short term, one can expect a moderate amount of air quality benefit from the use of alternative fuels with increasing benefits as time progresses. But how much benefit is received if alternative fuels are consumed in only minute proportions? The next section will look at this question.

National Security

The benefits of alternative fuels in terms of security are based on a simple equation. Given that improving national security requires reducing the amount of oil that is imported into our nation from foreign sources, there is a direct, negative, one-to-one, relationship of alternative fuels to petroleum. That is, for every gallon of an alternative fuel that is burned in a vehicle’s gas tank, there is one less gallon of imported petroleum. In its most simplistic terms, this equation is true; however, not all fuels are created equal.
Taking the energy production of one gallon of gasoline and one gallon of diesel as a baseline number for comparison (117,000 and 129,000 btu average respectively), most alternative fuels are found to have a deficiency of power. Compared to diesel, biodiesel has roughly 90 percent the amount of power in one gallon (118,500 btu). Compared to gasoline, ethanol has about 70 percent the power (80,000 btu), CNG holds only 25 percent the power (35,000 btu in gge), and propane holds about 75 percent the power (84,000 btu). What this means is that more alternative fuel will be needed to make up the imbalance of energy output per gallon.
At present rates, alternative fuels make up only three percent of transportation consumption. In a study for the Oak Ridge National Laboratory conducted in 2000, Paul Leiby and Jonathan Rubin have projected several scenarios of alternative fuel growth based on different factors. Their best case projection is for 25 percent replacement of petroleum by 2010, based on three assumptions: no transitional barriers, gasoline prices remaining high, and low prices for propane. Everyone is aware, at this moment, that the second assumption is true, with the average price for gasoline at about $2.60 per gallon , and it seems it will stay that way for some time.
The National Propane Gas Association expects average propane prices for 2005 to rise by 29 percent over 2004 to $1.80 per gallon nationwide with regional prices as high as $2.27 per gallon. Another rise is expected in the average price to $2.07 per gallon in the year 2006. In the year 2000, the time of the study, average prices were around $1.10 per gallon. Therefore, it appears that assumption number three is fallacious.
As for the first assumption, there would be no transitional barriers, “if [alternative] vehicles and fuels were produced at large scale costs, all motor fuels were widely available at retail locations, and the limited diversity of AFV models were not an issue.” Now, five years after the report and five years from the end of their projections, this isn’t anywhere near a reality and it’s not certain that the author’s believed it would be. This is merely a best case scenario that hasn’t happened. Had it occurred, however, it would most likely be enough to displace all the oil we import from Saudi Arabia and perhaps Venezuela , which would increase our national security and decrease Saudi Arabia’s economic and political pull in the US.
Leiby and Rubin’s worst case scenario shows usage of alternative fuels at .5 percent total fuel consumption and only one percent market penetration for AFVs in 2010 due to transitional barriers, regardless of the price of oil or tax incentives. The transitional barriers can be overcome by new policy, however, and it appears that in the last few years there has been at least some policy reaction, e.g. EPAct 2005. It is clear that we have surpassed their 2010 projection already, with about three percent of fuel consumption coming from alternatives, and it is also clear that consumption is a long way from attaining their best case scenario.
The Energy Information Agency’s, Energy Outlook 2005, projects fuel usage to the year 2025 based on factors such as GDP growth, vehicle miles traveled, oil prices, and changes in policy and technology. Their projection for the year 2025 is that alternative fuels will comprise 2.2 percent of the transportation fuel market (including gas, diesel, jet fuel and alternatives) compared to their figure of 1.7 percent in 2003. Thus, the likelihood that alternative fuels will be able to displace significant amounts of petroleum seems minimal at best.
Another interesting item involving security and alternative fuels is that the two most used and widely available fuels, propane and CNG, are from non-renewable sources. Propane is a co-product of natural gas and oil, and natural gas comes either from the well or as a by product of oil production. Those who promote near-term “peak oil” conditions tend to believe the peak for natural gas production isn’t more than 15 to 30 years later. Currently, natural gas reserves in the US account for about three percent of world total; whereas the Middle East is positioned over roughly 40 percent of world reserves and Russia holds another 28 percent. The list of top twenty countries holding reserves, accounting for 89.3 percent of the supply, reads like a laundry list of nation’s that the US doesn’t want to business with, or conversely, don’t want to do business with the US government.
But what about other alternative fuels and their chances of displacing oil? Methanol, it appears has been dropped from consideration. In 2000, an NHTSA report listed only two methanol refueling stations in the nation and Federal use dropped to zero gallons in 2004. Electricity is still very promising, but battery technology until very recently has restricted the usability of these vehicles, necessitating short distance trips with long charge time; it therefore still seems a distant possibility. But new technology, like lithium-ion batteries, just now coming into wider production with a plant in Austin, Texas, and a brand new plant in Milwaukee, Wisconsin, hold promise of increased usability of these vehicles perhaps bringing them more into the mainstream. Hydrogen for use in fuel cells still is a distant possibility, although intriguing. At current technology, production of hydrogen consumes far more fossil energy than the fuel delivers.
That leaves ethanol and biodiesel, two fuels which make excellent choices for different reasons but still have their specific constraints. Biodiesel’s newness, combined with lack of light-duty diesel engine availability restricts its ability to displace petroleum. On the positive side, it needs no new infrastructure nor does it need engine modification for model year 1992 and beyond, making it very promising indeed. Ethanol made from corn has a slight, positive energy balance making it less likely to displace large amount of oil. Cellulosic ethanol (from plant materials like switchgrass and kudzu) is very promising, however, producing roughly seven gallons output for every one unit of petroleum input. It is believed by the EIA that technologies will be sufficient by the mid-2010s to begin producing this type of ethanol.
Hybrid-electric vehicles (HEV) are also promising. While not considered alternative by definition, they are essentially a “blend” of electricity and petroleum, like B20 or E85. Due to current prices for gasoline, HEVs are becoming a very popular option, with many manufacturers introducing new models of varying body types just this year. Add to this the possibility of a plug-in hybrid option, and fuel economies could easily reach well above the 100 mile per gallon mark. With fuel economies as high as double their gasoline-only counterparts (with increased horsepower as well) and the possibility of the plug-in option, this technology appears the best near term, and perhaps long term means of reducing transportation’s consumption of fuel and thereby increasing national security.

5.21.2006

DieselNet

The Canadian firm Ecopoint has created the site, Dieselnet.com, "To keep those involved in diesel engine regulation, production, and consumption up to date on the latest trends...The site is a resource for practical knowledge for resolving diesel emission-related problems and developing cleaner diesel technologies." Check it out.

Interesting News from the health desk

From Environmental Health Perspectives comes an article praising California (always the leader in alt.tech) for tougher legislation to reduce air pollution. One method described is using B20 in tractors that manage the fields. Unfortunately, New Holland and John Deere only recommend (and therefore will only cover you for) using 2-5% biodiesel blends. Obviously, the greater the biodiesel use, the greater the benefit to the environment, save for NOx, a problem that is still being worked on. On the brighter side, in 2005, John Deere started shipping its tractors with a B2 blend in the tank. Significant!

The real point of this post, and another reason to promote alt.fuels, is this quote from the article, "A 1989 report by the California Air Resources Board noted that grapes, cotton, oranges, lemons, and beans grown in 1985 levels of air pollution lost 16-29% in yield and size as a direct result of smog." Not too many agricultural areas suffer from smog like SoCal, the geographical focus of this piece, but for those that do...

A sample of AFI's fuel tables

--Didn't turn out as I wanted but you get the idea.-- Steve

The Alternative Fuel Index produces tables of national prices for the most available alternative fuels. Below is an example. It is the most recent biodiesel table. If you want a subscription to the Index, either a free sample or paid for, click here.

AFI’s Biodiesel Index

Location B100 B20 B2 #2 Diesel
Albany, NY $3.1694 $2.3464 $2.1613 $2.1407
Manchester, NH $3.1153 $2.3622 $2.1927 $2.1739
Albuquerque, NM $3.4150 $2.4347 $2.2141 $2.1896
Miami, FL $3.5000 $2.3926 $2.1434 $2.1157
Atlanta, GA $3.5000 $2.3661 $2.1109 $2.0826
Minneapolis, MN $3.5132 $2.4478 $2.2081 $2.1815
Baltimore, MD $3.4525 $2.3781 $2.1364 $2.1095
Nashville, TN $3.3980 $2.3967 $2.1714 $2.1464
Billings, MT $3.4100 $2.5478 $2.3539 $2.3323
New Orleans, LA $3.4000 $2.3321 $2.0918 $2.0651
Birmingham, AL $3.4500 $2.3499 $2.1024 $2.0749
Newark/NYC, NJ $3.1553 $2.3303 $2.1447 $2.1241
Boise, ID $3.4300 $2.7881 $2.6436 $2.6276
Oklahoma City, OK $3.4500 $2.3805 $2.1398 $2.1131
Boston, MA $3.0700 $2.3637 $2.2048 $2.1871
Omaha, NE $3.4150 $2.3840 $2.1521 $2.1263
Burlington, VT $3.5000 $2.4842 $2.2556 $2.2302
Philadelphia, PA $3.4565 $2.3878 $2.1473 $2.1206
Charleston, WV $3.4081 $2.4111 $2.1868 $2.1619
Phoenix, AZ $3.3775 $2.5217 $2.3291 $2.3077
Cheyenne, WY $3.3300 $2.5299 $2.3499 $2.3299
Pittsburgh, PA $3.4013 $2.3819 $2.1526 $2.1271
Chicago, IL $3.2774 $2.3378 $2.1264 $2.1029
Portland, ME $3.0400 $2.3492 $2.1938 $2.1765
Columbia, SC $3.4485 $2.3582 $2.1129 $2.0856
Portland, OR $3.4217 $2.6430 $2.4678 $2.4483
Columbus, OH $3.3710 $2.3676 $2.1418 $2.1167
Providence, RI $3.5000 $2.4288 $2.1878 $2.1610
Dallas, TX $3.4500 $2.3714 $2.1288 $2.1018
Raleigh, NC $3.4565 $2.3584 $2.1114 $2.0839
Denver, CO $3.3800 $2.5085 $2.3124 $2.2906
Richmond, VA $3.4525 $2.3590 $2.1129 $2.0856
Des Moines, IA $3.4191 $2.3878 $2.1558 $2.1300
Salt Lake City, UT $3.3933 $2.7149 $2.5623 $2.5453
Detroit, MI $3.4237 $2.3669 $2.1291 $2.1027
San Francisco, CA $3.3317 $2.4851 $2.2947 $2.2735
Dover, DE $3.5000 $2.4102 $2.1650 $2.1378
Seattle, WA $3.3717 $2.6099 $2.4385 $2.4195
Honolulu, HI $2.4000
Sioux Falls, SD $3.4500 $2.3992 $2.1628 $2.1365
Houston, TX $3.4500 $2.3604 $2.1152 $2.0880
St. Louis, MO $3.4500 $2.3843 $2.1445 $2.1179
Indianapolis, IN $3.3439 $2.3617 $2.1408 $2.1162
Witchita, KS $3.4205 $2.3766 $2.1417 $2.1156
Jackson, MS $3.4500 $2.3666 $2.1228 $2.0957
U.S. Average: $3.3740 $2.4238 $2.2057 $2.1814
Jacksonville, FL $3.5000 $2.3886 $2.1385 $2.1107
Kansas City, MO $3.4500 $2.3866 $2.1474 $2.1208
Halifax, NS* $1.8272 $2.1076 $2.1707 $2.1777
Las Vegas, NV $3.3917 $2.5366 $2.3442 $2.3228
Montreal, QC $3.2141 $2.4143 $2.2343 $2.2143
Little Rock, AR $3.4000 $2.3620 $2.1285 $2.1025
Ottawa, ON $3.4559 $2.4923 $2.2755 $2.2514
Los Angeles, CA $3.3725 $2.4879 $2.2888 $2.2667
Sudbury, ON $3.4559 $2.4764 $2.2560 $2.2315
Louisville, KY $3.3669 $2.3879 $2.1676 $2.1431
Toronto, ON $3.4030 $2.4658 $2.2549 $2.2315
Madison, WI $3.4500 $2.4394 $2.2121 $2.1868
Canada Average: $3.3822 $2.4622 $2.2552 $2.2322

Prices do not include taxes and may be net of certain subsidies. Blended prices may be higher due to additional transportation and blending. Prices are in U.S. dollars per gallon derived from sources deemed reliable. B100 price for ASTM-spec fuel except as noted by *.

Coal gasification in the Keystone State

From the Alternative Fuels Index:

"The nation's first coal gasification/liquefaction plant is proposed for construction in Schuylkill County, where the plant will use waste coal to produce 40 million gallons of clean-burning diesel fuel each year. The state worked with private industry to ensure a long-term, viable market for the plant by creating a fuel consortium that will purchase nearly all of the offtake. Pennsylvania will lock in its supply for some 10 years at prices well below current market values."

Coal gasification has been around for years. Used by the Nazis in Germany to maintain their military apparatus and in South Africa during apartheid embargoes, it is generally only economical for countries that have no other choice. Of course, research continues and test facilities exist (two or three actual facilities exist in SA and SW Pacific area) and it appears Pennsylvania will open one shortly. Now, the US has absolutely no lack of coal and I'm sure waste coal is plentiful as well. I haven't studied this fuel much but if we can reduce coal waste and limit dependence on foriegn oil, it will be a double whammy. Coal removal is still very damaging to the environment, however, making this choice a bit less exciting than others.

5.15.2006

Chapter 2 Alternative Fuels Policy

“I asked Vice President George Bush to launch a thorough investigation of alternative energy and see what he could find -- not pie-in-the-sky demonstration projects but real-world possibilities and realistic options that would help keep our air clean and our nation less dependent on foreign oil.”

- President Ronald Reagan, at the signing of the Alternative Motor Fuels Act of 1988

Chapter 2. Alternative Fuels Policy

The 1970s was a time of transition for our country. Domestic production was at peak capacity and the country was increasingly dependent on foreign sources of oil to make up for deficiencies in supply. The early days of oil policy sought controls to regulate internal production and stabilize internal prices. From perhaps WWII on, policies were aimed at internal production to stabilize world oil prices. After the Arab Oil Embargo of 1973, however, policies became focused on reducing internal consumption due to the exigencies of external forces. The country went from independence from world oil, to partnership, to dependence in a few short decades.
It is the legacy of the 1970s that is still affecting us today as we are ever more dependent on foreign oil. New policies for reducing consumption are passed every year, one of the more recent being the extension of daylight savings time for another month for the purposes of saving energy. But other means of reducing consumption are used as well. One that is catching a lot of attention is the use of alternative fuels for transportation. Currently, about 43 percent of the oil in the US is used by consumer cars and light trucks. Commercial transport uses another 25 percent for trucks, ships, and airplanes. That’s 68 percent of oil usage being burned up by transportation with transportation being about 99 percent dependent on oil. At present consumption of 20 million barrels per day , it’s a lot of oil, making the advancement of alternative fuels for this sector vital given the probable rise in costs associated with declining reserves.
But another legacy of the 1970s is the environmental movement which spawned the EPA under Nixon and the Department of Energy during Carter’s administration. Both of these agencies could benefit from the growth in usage in alternative fuels and have been promoting policy on that subject. Add the two with the Department of Transportation and there is a trinity of forces at work that have been promoting alternative fuels and that could benefit from alternative fuel programs. This chapter will explore the some of the major policies that these three agencies have created since the 1970s that either directly involve alternative fuels or lend alternative fuels a helping hand.

EPA, the Environment, and Alternative Fuels

Under President Nixon’s Reorganization Plan No. 3, the Environmental Protection Agency was created for the purpose of condensing environmental functions that were spread over multiple departments to ensure more efficient application of government policies under section 901(a) of US Code Title 5. The agency had a mandate to:
• Establish and enforce environmental protection measures as deemed necessary by the nation,
• Conduct research on the affects of pollution, ways to control it, gathering a database of information, and using it to affect current policy,
• Assist others in abatement of pollution, and
• Assist the President by developing and recommending new policy for the protection of the environment.
One of the first events in the infancy of the agency, and perhaps one of the most important pieces of environmental legislation ever, was the passing of the Clean Air Act of 1970 (CAA). This section will focus on this legislation and its amendments because the EPA’s focus regarding the use of alternative fuels is as a means of reducing air pollution.

Clean Air Act

The Clean Air Act was passed in 1970, and while there was little talk of alternative fuels at the time there were provisions that lead to a greater desirability for alternative fuels in the future. Of course, the main point of the act is to reduce emissions of harmful substances into the air including greenhouse gases and volatile organic compounds (VOC) and other harmful gases that impair the health of the populace.
Automobiles are a major source of these types of pollutants, emitting hydrocarbons, carbon monoxide (CO), particulate matter (PM), and nitrogen oxides (NOx) as a byproduct of the imperfect combustion of gasoline. Carbon dioxide (CO2) is another harmful emission and while it isn’t necessarily detrimental to health (it’s considered a product of “perfect” combustion), it is a greenhouse gas which causes other problems such as global warming. In fact, roughly 60 percent of all greenhouse gases are emitted by automobiles, around 50 percent of VOCs, NOx, and other hazardous emission, and nearly 90 percent of CO in urban areas.
Alternative fuels such as ethanol, biodiesel, hydrogen, and electricity are almost across the board cleaner than petroleum fuels or have no tailpipe emissions at all. Thus, it would seem that if the EPA wanted to reduce the amount of these compounds in the air, pursuing alternative fuel programs and policy would be an excellent way to accomplish the task. The Clean Air Act Amendment of 1990 (CAAA) has done just this by recognizing, “that changes in fuels as well as in vehicle technology must play a role in reducing air pollution from motor vehicles.” Although the act did not mandate the use of alternative fuels, it set the stage for increasing awareness of conventional fuel deficiencies and established programs that had in mind the promotion of alternative fuel usage.
The EPA has created programs based on a piece of legislation included in the CAAA; the National Ambient Air Quality Standards (NAAQS). It is the EPA’s duty to set standards for six “criteria” pollutants for the protection of the public health and the public welfare (crops, buildings, animals, etc.). The emissions covered under the NAAQS are: carbon monoxide, lead, nitrogen dioxide, two levels of particulate matter, ozone, and sulfur oxides. For each emission, there is an average time that a municipality or region must be in compliance with the standard set. For instance, CO has a nine parts per million (ppm) standard that is averaged over eight hours, not to be exceeded more than once a year and for nitrogen dioxide, there is a .053 ppm standard averaged annually.
One program based on the NAAQS is the Clean Fuel Vehicle Fleet Program which mandates a specific percentage of alternative fuel vehicles (AFV) to be purchased each year and applies to individually owned fleets of 10 or more vehicles that have a central fueling point. The target was for 22 cities in ozone and carbon monoxide level, non-attainment areas to commence the program in 1998 , with additions for NOx in 2001. The new vehicles needed to meet new CAAA tailpipe standards of 0.075 grams per mile (gpm) for hydrocarbons, 3.4gpm for carbon monoxide, and 0.2 gram per mile for nitrogen oxides. While some of the technologies promoted involve alternative fuels as this paper defines the term, most vehicles sold meet standards for “EPA unleaded” gasoline and “CARB (California Air Resources Board) phase II gasoline” which are cleaner-burning, petroleum-derived fuels.
Another program to come out of the CAAA (not directly, however) that promotes alternative fuel usage is Clean School Bus USA. Clean School Bus USA is a program to decrease the health risks associated with diesel exhaust that US children are exposed to every day on the way to and from school. School buses travel 4 billion miles every year and 24 million children spend an average of an hour-and-a-half on the bus every day. If those buses are anything like bus 59 of the Hannibal School District in New York State around the mid-1980s, the amount of diesel fumes and exhaust the children are exposed to it substantially high.
What the program does is offer grant money for projects to either reduce idle times, upgrade existing buses with better emissions control or in order to use alternative fuels, and/or replacing old buses with modern, more efficient buses. In 2004, the EPA funded 20 projects with $5 million affecting a projected 5,000 buses. Some of the projects include:
• an upgrade of 67 buses in Littleton School District, Colorado, to use a blend of 20 percent biodiesel – 80 percent petroleum diesel (B20),
• replacing seven 15 year old buses in Southern California with new buses run on compressed natural gas (CNG),
• providing a 73 bus fleet with “Ultra Low B20” (biodiesel and ultra low sulfur diesel) in Warwick, Rhode Island, and
• three other programs that also introduced a blend of biodiesel.
An interesting note about this program is that in the 2003 project year, any fuel upgrades were made with ultra low sulfur diesel (ULSD), a petroleum product - except Utah which replaced 10 old buses with CNG buses - with some projects making the fuel available in the region for the first time. The year 2004, however, saw the introduction of biodiesel (for an analysis of biodiesel see Chapter 6), which was used in 5 of the 10 programs with low sulfur diesel used in 5 or 6 others. If the program could do the same for biodiesel in subsequent years as it did for the ULSD in 2003, it could promote the fuel as an excellent, renewable alternative around the nation.
A section of the CAAA that doesn’t have a direct affect on alternative fuels, but could indirectly increase their usage is the new sulfur emissions standards for diesel fuel. This is the requirement for ultra low sulfur diesel, seen in use in the Clean School Bus USA program, that will be in effect starting June 1, 2006. The regulation states that all diesel fuel produced will be required to have a maximum sulfur content of 15 parts per million (ppm) and its use is required in all 2007 and later model year heavy-duty vehicles. This requirement is a reduction from the previous level of 500 ppm. According to the Energy Information Agency, the purpose of this measure is to “reduce emissions of nitrogen oxides (NOx) and particulate matter (PM) from heavy-duty highway engines and vehicles that use diesel fuel.” NOx contributes to ground level ozone and is considered a carcinogen at high levels and PM contributes to asthma and the degradation of buildings and public works.
Low sulfur content decreases the cetane rating of diesel fuel. Cetane is a chemical compound in diesel similar to octane in gasoline that makes the fuel more combustible. The low sulfur rating required for diesel production in 2006 means producers have to find a way to increase the cetane rating. Most have developed new additives to do this but a simple solution, which solves multiple problems, could be using a biodiesel blend. Biodiesel has a high cetane rating and no sulfur content, making it an excellent supplement for diesel fuel; blending it with diesel in any proportion will increase cetane and reduce sulfur emissions and petroleum consumption.
This is a bit pie-in-the-sky, admittedly. There is little known about the long term effects of biodiesel on engines and many manufacturers aren’t willing warrantee engines beyond a 20 percent blend. There are other concerns with the ability of producers to supply the fuel. If there were a national program of mandatory blended diesel, there would most likely not be enough production to supply the needs of industry. “Rome wasn’t built in a day,” as the saying goes. Recently passed legislation, however, mandates the use of increased amounts of biodiesel for purposes of national security. Blending biodiesel with regular diesel to improve cetane ratings, which works even at low percentages, is an excellent way to increase its use.

Emissions Trading

Another possible way to create incentive for the use of alternative fuels is through the agency’s market based allowance trading system, sometimes referred to as “emissions trading.” The EPA uses a “cap and trade” system, the basics of which follow. A cap or limit is placed on total emissions less than what is historically known to occur. This causes reductions immediately. The emissions are then broken into allowances; say one allowance for every ton of permitted pollutant, which are then allotted to polluters in specific amounts. It is then up to the polluter to choose the best way to reduce emissions for their business.
If Business A produces fewer emissions than the allowed limit, they can sell their excess allowances on the open market, thus providing cash incentive to pollute less. Conversely, if Business B calculates the cost of reducing emissions to be higher than the purchase price of allowances on the market, they can surpass the emission limit and buy allowances to compensate. Through all this, accurate recording of produced emissions is essential. At the end of the year, all businesses must have equal allowances and emissions. The result is that as the economy grows the emissions limit remains the same and businesses have to make their processes cleaner as the allowances are reduced over time.
A similar system was used in the mid-1980s to reduce lead levels in gasoline. The EPA set new standards for lead of .01 grams per leaded gallon and figured the reduction would save $36 billion nationwide and cost industry $2 billion. Instead of using a command-and-control method of reduction, where the agency sets a standard and a method and industry must comply, the EPA chose a flexible lead trading program to phase in reductions over a 5 year period, 1982-1987.
The program was a success, finishing as scheduled at the end of 1987 and without the usual costly lawsuits by industry. The EPA estimates that the refinery industry saved $65 million by trading and the banking program reduced costs another $200 million. The program also provided a rapid decrease in lead levels (its intended goal) and similar declines have been seen by other programs that focus on reducing emissions of sulfur dioxide and nitrogen oxides
This type of program can be used to promote alternative fuels on the basis of reducing undesirable emissions. One suggestion is to offer a trading program for fleet operators who use cleaner cars than what is required by law. Another program could incorporate trading allowances for producers of alternative fuels like biodiesel and ethanol which would have the duel benefit of reducing the cost of these fuels to the consumer and increasing production. The program could apply to producers of regular diesel and gasoline who blend their products with these alternates as well, which would expand the program greatly. A final possibility is credit trading for manufacturers who produce more dedicated alternative fuel vehicles, in which hybrid vehicles could be included.
But the promise of low emissions from alternative fuels may not be all that it is touted to be. Two aspects that may prove alternative fuels unnecessary in terms of air quality are life-cycle analyses of the fuels and improvements in fuel and engine technologies that could meet tougher EPA standards in a few years. Life cycle analysis of the different fuels will be discussed in Chapter 4, so it won’t be discussed in length here save to say that well-to-wheel comparisons of alternative fuels to gasoline or diesel don’t always prove them cleaner for all pollutants. Next, if improvements in technology can meet the standards set in the Clean Air Act of 1990, current programs promoting the use of alternative fuels will remain a fringe activity unless the cost savings are substantial. This does not counter the need for continued exploration of new and better alternative fuels, however, because the goal of decreasing US dependence on foreign sources of oil still exists.

Department of Energy

The Department of Energy (DOE) is a major player in the alternative fuels world. Born out of the oil shocks of the 1970s, the DOE was established on October 1, 1977, to consolidate the major energy related functions of the federal government such as, “long-term, high-risk research and development of energy technology, federal power marketing, energy conservation, the nuclear weapons program, energy regulatory programs, and a central energy data collection and analysis program.” Through the ensuing years emphasis of the Department has changed to focus on nuclear weapons technology in the 1980s, clean up from the 1980s weapons programs in the 1990s (due to the end of the cold war), and energy conservation and security in the 2000s.
This section will focus on energy conservation and security based on the DOE’s mission and strategic goal for energy; “To protect our national and economic security by promoting a diverse supply and delivery of reliable, affordable, and environmentally sound energy.”

The Energy Policy Act of 1992 and the Office of Energy Efficiency and Renewable Energy

The Energy Policy Act of 1992 (EPAct) was passed for the specific purpose of decreasing the United States’ dependence on foreign sources of oil and to promote conservation of those limited resources. Titles III and V of the code specifically mandate the exploration and use of alternative fuels. One of the programs to come out of this legislation is the fleet vehicle requirement to use alternative fuels, similar to the EPA’s program. The DOE’s program is administered by the Office of Energy Efficiency and Renewable Energy (EERE) and has four main areas: federal fleet requirements, state and alternative fuel provider rule, private and local government fleet rule, and the alternative fuel designation authority.
The EPAct’s federal fleet requirements necessitate 75 percent of all new light-duty vehicle (LDV, less than 8,500 lb. gross vehicle weight) purchases as of fiscal year 2000, to be alternative fuel vehicles (AFVs). The program was phased in through the mid-1990s, starting with 25 percent of vehicles in 1996, requiring more each subsequent year, and only applies to “covered” fleets. A covered fleet is one that has 20 vehicles or more, is or can be centrally fueled, belongs to a federal entity, and operates in a metropolitan statistical area (MSA) or Consolidated MSA (CMSA) with a population over 250,000 in the 1980 Census (updated later to include the 1990 Census).
In April, 2000, Executive Order 13149 was added to this stating that by 2005, agencies must reduce overall consumption of petroleum fuels by 20 percent compared to 1999 levels. Many options for obtaining this were offered, including using more alternative fuels, driving fewer miles, or substituting cars for light trucks, but it was made clear that the President expected the majority of this offset to be made by increasing use of alternative fuels and improving average fuel economy of vehicles.
Each year, as part of the policy, agencies are required to report their compliance with these rules. For fiscal year 2004, the latest report available, the federal government did an excellent job of complying with the vehicle acquisition rules, surpassing the 75 percent goal by over 900 vehicles, or about 80 percent acquisition. The majority of these vehicles, 94 percent, were flexible fuel vehicles (FFV) that run on both gasoline and E85, a blend of 85 percent ethanol and gasoline. The rest were dedicated AFVs that used CNG, propane, or electricity.
As this report is not for FY 2005, the year agencies must comply with the 20 percent reduction in use of petroleum gasoline, one can’t say that they have failed. However, regarding the data on petroleum consumption for the four previous years, it appears that the goal won’t be met. Only 2 of 19 agencies met the side goal of using over 50 percent alternative fuels in their AFVs. Alternative fuel use is up across the board, however (except electricity with an 82 percent drop and methanol, a 100 percent drop), with an increase over FY 2003 of 44 percent. This increase translated into a 2.9 percent decrease in petroleum use over the same period with total alternative fuel usage around 4.4 million gasoline gallon equivalents (gge) and petroleum with 277.9 million gges. Sounds good on paper but total consumption of petroleum in FY 1999 was 279.6 million gges, making FY 2004’s consumption just 0.6 percent lower than FY1999. It’s highly unlikely that the 2005 goal, a reduction of another 54 million gges, is going to be met under these conditions. Most agencies sight difficulties of infrastructure as the reason for noncompliance, which is a common problem that is discussed in Chapter 4.
The State and Alternative Fuel Provider Rule applies the same regulation to states and providers of alternative fuels. The rules are a little looser for these two entities, however, applying only to those fleets that have 50 or more LDVs and operate 20 of them in a covered MSA/CMSA. Thus, if a state aggregates its vehicles and has more than 50 in use at any time but doesn’t operate 20 or more in a designated MSA/CMSA, it need not comply with the alternative fleet regulation. Such states might include North and South Dakota and Wyoming. The same applies for alternative fuel providers, which consist of businesses involved in any phase of alternative fuel production, import, sale, or delivery, wholesalers and retailers of electricity, and producers and/or importers petroleum who derive 30 percent or more of their revenues from alternative fuels (sounds like lobbyists got on that one). The DOE offers a credit trading program for compliance with this rule.
The DOE was also vested with the power to apply this regulation to private and local government fleets if it deemed, “that the fleet mandate is "necessary" to achieve the replacement fuel goals contained in Section 502(b)(2) of EPAct (42 U.S.C. 13252).” In 2004, the agency ruled that implementing such a plan wouldn’t advance the goals of reducing petroleum consumption and therefore hasn’t enacted this policy. Section 301(2) of EPAct outlines the types of fuel that qualify as alternative and invests the DOE with the power to add or eliminate fuel from the list as it sees fit. To be added to the list a fuel must meet three criteria: 1) it must be substantially non-petroleum, 2) it must yield substantial security benefits, and 3) it must offer substantial environmental benefits.
A final program born out of the EPAct involving a partnership between the DOE and the GSA is the AFV USER program. The purpose of AFV USER is to broaden the infrastructure of alternative fuel refueling sites for both public and government use and markedly increase the use of alternative fuels across the state. To accomplish this, the agencies will concentrate AFVs in the fleets of six cities: Albuquerque, NM; Denver, CO; Space Center, FL; Minneapolis/St. Paul, MN; Salt Lake City, UT; and San Francisco, CA.
At the end of July, 2005, the US Congress passed a new Energy Policy Act of 2005 that furthers the involvement of the DOE in alternative fuels. EPAct 2005 extends many of the programs above to the year 2010 and adds provisions for further exploration of electric hybrid gasoline vehicles and diesel vehicles that can operate on ethanol or biodiesel. It also institutes the Renewable Fuels Standard (RFS), which mandates increased production of alternative fuels by 100 percent, rising incrementally over the next six years. By 2012, production of these alternative fuels is to reach 7.5 billion gallons per year.
Tax credit incentives are given to manufacturers of ethanol and biodiesel of $0.10 per gallon for the first 15 million gallons for plants that produce less than 60 million gallons of fuel offers other incentives to increase production to 1 billion gallons by 2015. Volumetric excise tax credits for biofuels were extended through the year 2008 and a (up to) $30,000 infrastructure income tax credit was created for the installation of E85 and B20 fueling property that is applicable to trades, businesses, and individuals.
The act increases the research and exploration of biodiesel and other biomass products, it creates a renewable fuel credit trading system, and it advances hydrogen technology through research projects on inexpensive renewable hydrogen and infrastructure, and the establishment of an ethanol from sugarcane project to be carried out in the sugarcane producing states. It remains to be seen what new and interesting programs and results develop out of this legislation.

Clean Cites Program

Also under the aegis of the Department of Energy and formed out of the legislation of the EPAct is the Cleans Cities Program (CCP). Started in 1993, the CCP exists to promote programs and partnerships on a local level to decrease petroleum usage and thus, promote the national security of the US. In order to accomplish its mission the CCP,
provides a framework for coalitions to focus and coordinate the activities of alternative fuel and alternative fuel vehicle (AFV), idle reduction technology, blended fuel, hybrid vehicles fuel economy and other petroleum reduction proponents. It also provides a forum to develop partnerships, investigate opportunities for joint projects, leverage resources, and collaborate on public policy.
Clean Cities is a voluntary, community based program that includes 88 municipalities and coalitions around the country. The program is responsible for reducing consumption of petroleum by 180 million gallons (4.29 million barrels) per year and reduces emission by 31,800 metric tons annually, all from promoting the use of alternative fuels (idle reduction, fuel blends, and hybrids and fuel economy programs were added in 2004).
Some of the types of programs that are currently being offered through the Clean Cities Program in the State of Texas are:
• In partnership with the Texas Railroad Commission, Central Texas Clean Cities is offering grants for conversion of commercial lawn equipment to propane,
• Houston-Galveston Clean Cities is administering Congestion Mitigation and Air Quality grants to government and private business for 75 percent of incremental costs for clean fuel purchases or conversions,
• Dallas-Fort Worth Clean Cities, in partnership with the North Central Texas Council of Governments is administering a Clean Vehicle Loaner program that leases AFVs and loans them to regional public fleets for a test period of a few weeks. This program offers fleet operators a chance to learn about AFVs and decide how to implement their use without having to commit to the expense of purchasing them,
• A renewable energy project at the El Paso airport that uses alternative fuels, solar energy, and fuel cells to power transportation units, and
• Southeast Texas Clean Cities, through partnerships with multiple municipalities and private companies, has accommodated the purchase of around 50 dedicated propane vehicles and established multiple private CNG fueling stations with plans to open more for public access.
While there are many possibilities of what a Clean Cities program do to promote their mission, it’s notable that they not only work with Department of Energy programs, but also with State, local, and private entities to accomplish a broader federally defined policy goal. It’s also interesting to see the programs take advantage of another federal agency’s legislation, the Department of Transportation’s SAFETEA-LU.
DOT
The Department of Transportation’s main policy vehicle is the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU), which became Public Law 109-59 in August of this year. It is a continuation and upgrade of the Transportation Equity Act for the 21st Century (TEA-21, formerly ISTEA) which authorized the Federal transportation programs for highways, highway safety, and transit. Under this legislation exists the main policy for the promotion of alternative fuels in the DOT, the Congestion Mitigation and Air Quality Improvement Program (CMAQ).

Congestion Mitigation and Air Quality Improvement Program

The CMAQ program was created in 1991 as part of the Intermodal Surface Transportation Efficiency Act (ISTEA) as a means of helping attain the new air quality and emissions standards created under the Clean Air Act of 1990. Reauthorized in 1998, and once again in 2005, the act has distributed over $15 billion in the grants for projects in National Ambient Air Quality Standards (NAAQS) non-attainment areas. While initially focusing on other means of emissions reduction like diesel engine retrofits, alternative fuels have been growing in importance in the program as the years have passed. There is one provision in SAFETEA-LU that allows seven Midwest states to use CMAQ funds for the direct purchase of alternative fuels.
The program works by distributing CMAQ funding to all states that have non-attainment areas according to a formula developed by the DOT which weights population and level of non-attainment. Those states without non-attainment areas still receive some funding. The money goes to the state and cannot be spent on projects that are mandated and funded by other legislation. The state then disburses it according to their State Implementation Plan (SIP), the strategic plan for improving air quality, usually delegating authority of spending to Metropolitan Planning Organizations.
Alternative fuels didn’t utilize the CMAQ funds often until the introduction of TEA-21 in 1998. Prior to that year, for alternative fuels to be funded, they needed to be part of the SIP and many states didn’t include alternative fuels in their provisions. After the new legislation, alternative fuels were allowed to be funded regardless of whether the state saw them as a strategic part of their air quality plans. Add to this the majority of TEA-21 changes addressing alternative fuels, a clear sign of growing importance, and an increase in funding for the program, and the CMAQ legislation became the major source of funds for alternative fuel projects by public-private partnerships in the country.
The Environmental and Energy Study Institute (EESI) started a database in 2001 of all the CMAQ funded programs, with a specific desire to discover how many projects were related to alternative fuels. The Institute found it a very difficult task because information wasn’t being kept in a standard form, with different amounts of funding being reported by different agencies, and other parts of information lacking altogether. They managed to compile a list of projects which provided information about alternative fuel projects, although they believe there was about 20 percent underreporting.
The EESI found that through the years 1992 to 2002, only about $200 million had been spent on alternative fuel projects, compared to spending of about $1 billion per year. This is in part due to difficulties of obtaining funding under the old rules, which show up as in the data with an average of 19 alternative fuel projects started for the years 1992 to 1997, compared to an average of 48 projects started for the years 1998 to 2002. The data showed that the money was spread over 327 projects, 71 percent of which were for vehicle purchases, generally buses. 220 projects involved the use of CNG with the majority of the rest split between propane, electricity, and liquefied natural gas (LNG) and the great majority of projects were in the public sector (buses, government fleets, etc.).
While this may seem like an insignificant accomplishment, the Transportation Research Board (TRB), a unit of the National Academies, produced a report that was strongly in favor of renewing the CMAQ program for SAFETEA-LU. The main reasons cited were qualitative, although there were aspects of the CMAQ projects that were found to be quantitatively superior to other options, generally involving emissions reductions instead of behavior modification. But what the TRB saw as strengths in the program was the flexibility it offered to localities to come up with innovative strategies for addressing strict air quality standards catered to their needs and a continued source of funding for these projects which isn’t available from traditional sources.
As time passes there will most likely be more alternative fuel based projects implemented under the CMAQ program. Only recently have the Clean Cities coalitions produced a guidebook for local stakeholders that outlines the steps for creating a CMAQ viable project and getting it funded. As the Clean Cities programs mature, they are major coordinators in the public-private projects that generally get funded by the CMAQ program; they will become able to tailor the projects that are needed in their area to fit DOE criteria for grants. Hopefully, an increasing percentage of these grants will go to alternative fuels. As the TRB paper states, there is evidence that emissions reduction projects are more effective at improving air quality, and part of reducing emissions involves the use of alternative fuels.
In light of all the projects, grants, programs, and energy that are going into promoting alternative fuels, how can one be certain that they are worth all the trouble? The next chapter will address alternative fuels in general, assessing their advantages and disadvantages as a whole, and will also explore issues related to need and economic value.

The H-Prize

That's right folks! Just like the X-Prize, the US Congress has passed a bill allocating funds for the H-Prize. H being hydrogen. From the Alternative Fuels Index, "By an overwhelming vote of 416 to 6, the House of Representatives Wednesday passed H.R. 5143, the H-Prize Act of 2006. The legislation, introduced by Research Subcommittee Chairman Bob Inglis (R-SC), would establish a national prize competition to encourage the development of breakthrough technologies that would enable a hydrogen economy." And this by a Republican.
But really, this is and should be a bipartisan issue because the technology, which is being touted mainly for vehicles at the moment, is capable of being used in almost every aspect of our daily lives. From powering office buildings, to cars, to wrist watches hydrogen in fuels cells can radically alter our lives by providing clean, safe energy. Way cool, way cool.
Also check out Methane fuel cells

5.13.2006

The big list of alt.fuel.orgs

From the AFDC comes a list of alternative fuel associations that is about as comprehensive as it gets. Obviously, these are national, international, and state organizations so you'll have to search for orgs. in your local areas. Happy hunting.

5.10.2006

Marketplace: Oil market making Washington crazy

Marketplace: Oil market making Washington crazy
I'm on a roll I guess. This segment from Marketplace from today sums things up nicely. We need a little intelligence in our policy beyond oil, war, and the military. These are 1950s-60s policy goals, weapons, take your pick. The 1990s saw an emergence of intelligence in policy and new growth. Then the Bush backlash came and it's the 1950s again except everyone is even more conservative, to the point of cutting off their own arms (see: What's the matter with Kansas...). To make things short, 2008.

Marketplace: US automakers want end to hybrid credits

Marketplace: US automakers want end to hybrid credits
Heard this last night on Marketplace. You can click the link and read the text of the segment. It appears that US car companies don't want "handouts" like the oil biz gets. Bully for them. Unfortunately, they aren't hand outs to the auto biz (which could actually use free money from Uncle Sam. I mean, who can't?) they are cash incentives to consumer citizens to attempt to redirect their consumption habits. This is a time honored policy solution, redirecting citizen actions, and one of the more difficult ones to pull off. People want their Coke, not Pepsi, afterall.
Fortunately, this one seems to be working thanks to high oil prices, the siren's call to buying alternative fuels and vehicles. It seems, however, that the Big 3 automakers don't want that to happen because...well, because as always they are behind the times and Asia is kicking their collective butts.
The only thing the automaker's lobbying will produce is more expensive cars and cars that guzzle gas, like SUVs. We all want more of those right? Because GM has massive capital put into manufacturing those and you wouldn't want to lose your money because you lack a vision of the future (because your eyes are focused on the bottom line of the spreadsheet), would you? Would you?
This isn't saying everyone else is perfect but let's call a spade a spade and promote intelligence over greed.

Chapter 1: Petroleum Part 2

I realize this is posting in reverse order. Don't know what to do about it and I'm not going to worry about it. Suggestions are welcome, however.

Petroleum Analyzed

Petroleum is the “King of Fuels” and is that by which all other alternatives are judged. It is difficult to speak of petroleum fuels in the same manner as alternatives because the language of alternatives is how they compare, better or worse, to petroleum. Regardless, this section will provide the same analysis for petroleum fuels, gasoline and diesel, that Chapters 5 through 10 provide for the alternatives. In this pursuit, this section will look at the general advantages and disadvantages of petroleum, its emissions, its ability to support national security, sustainability factors, its economic impact, and future potential.

General Advantages

Petroleum, whether in the form of gasoline or diesel, has the advantage of being available everywhere in the nation. Over 180,000 fueling stations are available to fill a vehicle’s tank with a petroleum product and the remotest locations are likely to have a gas station. It is this widespread availability that makes oil such a preferred commodity. Comparatively, alternative fuels have nowhere near the availability. Propane, the most widely available alternative fuel offers only 3,300 refueling locations country-wide. Combine this with the prevalence of gasoline and diesel powered vehicles, some 200 million of which drive the streets and highways of the US, and it is obvious why 97 percent of transportation fuels are made from petroleum.
Petroleum is also an integral part of our everyday lives. It is used in a variety of ways other than a transportation fuel. This is because it is a simple compound that has been studied and experimented on for over 100 years. It is used to make plastics, lubricants, fabrics, medications, and detergents, and provides energy to homes as a part of electricity generation and as propane, which is a major fuel used for heating and cooking in rural areas.

General Disadvantages

There aren’t many general disadvantages of petroleum fuels. Most of the disadvantages are well known and will be discussed in subsequent sections leaving this section bare. The fuel is dirty, it endangers our national and economic security, it isn’t sustainable, and it has a strangle hold on our economy.
Grade for Advantages and Disadvantages: C

Emissions

Emissions from gasoline and diesel are better than most people would think but still poor. The 1980s saw the first improvement in gasoline when lead removal was required. Since then, gasoline has been improved five times and is able to meet the EPA’s National Ambient Air Quality Standards in most instances. It was originally thought that the standards would only be met by alternative fuels but additives and reformulation combined with engine improvements have managed to keep emissions low.
Recent legislation is doing the same for diesel fuel. One of the major pollutants in diesel is sulfur, an ozone forming agent and contributor to smog and health problems. In the not too distant past, diesel had sulfur content of 500 parts per million (ppm) or higher but starting in 2006, the fuel will be kept to a maximum of 15 ppm making it much cleaner. Past legislation has also caused reductions in particulate matter emissions that cause asthma and contribute to global warming.
But beyond the improvements made in petroleum fuels, air quality standards in most urban centers are still poor, often not attaining at least one of the many standards the EPA enforces. This may be a failure of petroleum fuels or a failure of EPA regulations or both, but is most often attributed to the increase in vehicles on the road and vehicle miles traveled. More vehicles are driving the roads than ever, some 200 million, and people are living further away from city centers in what has come to be known as “ex-urbia,” with commutes as long as 2.5 hours. It is a simple equation: increased numbers of vehicles in an area plus increased drive times equals increased emissions. Petroleum fuels, which are cleaner than ever but still dirtier than alternatives, can’t make up the difference in the increased emissions and the nation’s urban areas prove it.
Grade for Emissions: C-

National Security

Petroleum contributes nothing to national security. It is actually the reason why national security is such a prime motivator behind the development of alternative fuels and is the ceiling of acceptance for any fuel. The nation currently imports about 60 percent of the oil it consumes. Transportation uses about 60 percent of this supply and is 97 percent dependent on it. Therefore, any fluctuation in oil supplies is felt directly by industry and consumers in the transportation sector.
The main reason for the US economic and military involvement in the Middle East is oil. The Middle East is a volatile region which has been known to be “unfriendly” to US economic and national interests. Other nations that are important contributors to the US oil supply, such as Venezuela and Nigeria, are also considered volatile nations that could disrupt supplies and thus place the US economy in danger. It is because of reasons such as these that the nation is pursuing alternative fuels policy.
Grade for National Security: F

Sustainability

Sustainability is based on two principles. The first is the ability of the fuel to be produced over time and the second is the net energy balance, or energy inputs ÷ energy outputs. Considering the first definition of sustainability, there is much media attention on the possibility that world oil production could be decreasing in the near future. The stories all center on Hubbert’s peak, when world oil production reaches its apex and begins to decline. The following will discuss this phenomenon.
Hubbert’s Peak
If oil and gas are finite products then the amount of these substances being used in the world today can’t be sustainable. The US itself uses 20 million barrels of oil per day which accounts for one quarter of world usage. Japan is the next largest user and accounts for 5 million barrels per day. The faster the oil is used, the closer the end of supply approaches. But it isn’t when the last drop is extracted that is the main worry. It is the half-way point, or peak, that is most worrisome because once peak oil production is attained, oil will become an increasingly expensive commodity and thus less attainable for future generations. This subsection of sustainability will take a slight detour to discuss the possibilities of peak oil, a hot topic in the press these days.
The argument for peak oil is based on the work of a preeminent oil geologist who worked for the Shell corporation in the mid-twentieth century, M. King Hubbert. In 1956, Mr. Hubbert created an equation that predicted that US oil production in the lower 48 states (this is before offshore drilling and the discovery of the North Slope in Alaska) would reach its peak by the early 1970s, which became known as Hubbert’s Peak. In 1970, Hubbert’s prediction was proven true as consensus among all parties was that US oil production had peaked.
Of course, at the time of Hubbert’s prediction he was scoffed at by most people in the industry. As early as 1890, predictions of oil depletion within the next decade or two were common and never came to fruition. In this case, the difference was that instead of simply looking at known reserves divided by current production (the R/P ratio), Hubbert based his predictions on data that included previous production, known reserves, and future potential.
He first used a biological idea of population growth to explain oil discovery. The idea was that like population, when resources are plentiful, new discoveries will grow at a compound rate. As oil is a finite resource, the more that is discovered means the less there is to discover and the rate of growth begins to level off and then decline. Hubbert found that knowing where the decline started, one could predict when all available oil would be discovered because it matched a Gaussian, bell-shaped curve. While this was a best guess at the time because he only had production data to the mid-1950s, we now know his guess was accurate. Using the previous two pieces of information, he next discovered that oil production matched discovery with a lag time of three or four decades. Because oil discovery peaked in the 1930s , he predicted oil production would peak in the early 1970s.
Kenneth Deffeyes, a long-time associate of Hubbert’s and author of Hubbert’s Peak, remembers hearing a confirmation of Hubbert’s prediction when, in the spring of 1971, the Texas Railroad Commission (TRC), “…announced a 100% allowable for next month.” According to Deffeyes, the TRC at the time was the United State’s personal Saudi Arabia. Its function was to match supply to demand by controlling oil production in the state of Texas (similar to Saudi Arabia’s position in OPEC) thus mitigating any fluctuations in the market price for oil. If the price of a barrel of oil went up, the TRC would increase the allowance for production, increasing supply and thus, lowering price. The fact that the TRC opened production to 100% proved to Deffeyes that production limits had been reached. This was confirmed later when in 1973, the US was at the mercy of OPEC’s oil embargo because it was at full production. Thus, having Hubbert’s theory proven true, it wasn’t long before people started applying the same principles to world oil production. This is what most concerns us today, as we are in a time of increasing demand due to booming economies in China and India, as well as experiencing unprecedented demand in the West.
What, exactly, have people found when they calculated the peak of world oil production? “It depends,” is probably the best answer that can be given. Just like global warming, there is controversy over when Hubbert’s Peak will arrive, if indeed, it will arrive at all. Predictions of the peak span a timescale from somewhere between yesterday, to the year 2040, to never. For instance, Deffeyes predicts the peak to occur around 2004-2006. Colin Campbell, a former exploration geologist and fellow at the Association for the Study of Peak Oil, predicts 2010. John Edwards, of the University of Colorado, Boulder, an ex-oil geologist and self-proclaimed optimist predicts a peak around 2020. The US Geological Survey, on the other hand, predicts a peak of 2035 or beyond (based on estimates in the US Geological Survey World Petroleum Assessment, 2000). Most predictions, however, cluster around a peak at the end of the first decade of the 21st Century, which is rapidly approaching.
Even the oil companies are in on the act. In its advertising and PR campaigns Big Oil is admitting that petroleum is a finite commodity. Exxon-Mobil released a report, “The Outlook for Energy: A 2030 View,” predicting non-OPEC oil production to peak in five years. Chevron, a major US oil corporation, started the website - willyoujoinus.org - to educate people on energy problems and enlist the public’s help in the form of discussion boards. Their copy reads, “One thing is sure, the era of easy oil is over.” And, “Many of the world’s oil and gas fields are maturing. And new energy discoveries are mainly occurring in places where resources are difficult to extract—physically, technically, economically, and politically.” While these statements don’t go so far as to say the peak is here, they do point directly at short-term supply constraints.
From whence, then, comes controversy? It stems from different parties using different data from which to base their predictions. The data that differs most often is oil reserves and our ability to extract them. Oil companies and governments use a probability scale when predicting available reserves. Generally, there is a P90 value and a P10 value given for each field. The P90 value is the low end or conservative estimate and the P10 is the liberal estimate. As an example, the Oseburg oil field in Norway had a 90 percent chance of producing 700 million barrels (P90 = 700 Mbl) and a 10 percent chance of producing 2,500 million barrels (P10 = 2,500 Mbl). Thus, there is a large discrepancy between the two figures which can easily account for large differences in the peak oil year prediction. This is the case in the USGS predictions which place total historical reserves at 2.8 trillion barrels when most other organizations place the figure at 2 to 2.1 trillion barrels, a discrepancy that matches all the oil under the Middle East…ever.
But this isn’t the only problem. Reserve estimates tend to be based on political and economic factors as much as physical factors. In the mid-1980s half the OPEC nations increased their reserve estimates by up to 200 percent shortly after the organization changed its rules to include reserves in production quotas . In 1997, 59 countries reported the same level of reserves as they did in 1996, an improbability given the likelihood reserves remain level after oil has been extracted. Also, an increase in reserves is likely to lead to an increase in an oil company’s stock price (satisfying its shareholders) or a nation’s ability to obtain loans.
All of these scenarios point to a time in the near future when the world will have reached peak oil production. It’s important to remember, however, a few things about Hubbert’s Peak. First, the reaching peak doesn’t mean that the world is going to run out of oil. What it means is that the supply of easy, cheap, conventional oil is decreasing at a time of increasing global demand. This will increase the price per barrel, which will then make viable unconventional oil sources like the tar sands in Alberta, Canada. A high price of oil also means people will pay more at the pump. Sustained, high gasoline prices will change the way consumers purchase cars, with people favoring lighter, more efficient vehicles that get better gas mileage. This was the case in the late 1970s to mid-1980s, and is the case today, apparently, as Toyota’s Prius hybrid vehicle can’t be kept in stock. High gasoline prices will also have the affect of increasing demand for alternative fuels, which tend to be higher priced.
Another note of importance is that production isn’t declining yet. It fluctuates from year to year given market constraints but every year there is more production than the year previous. It is the rate of increase (think back to your calculus) that is currently diminishing, however, meaning that at some point, the rate of demand is likely to outstrip the rate of production. Thus, we are approaching the top of our bell curve which means as new production is constrained and demand continues to grow, shortages will ensue.
This is relatively good news for alternative fuel producers and environmentalists, but what about repercussions on the economy. An Associated Press news release of October 18, 2005, “Inflation Soars on Surge in Energy Prices,” stated that inflation was on the rise due to recent hurricanes disrupting oil supplies and refineries. If this temporary rise in oil and gas prices is having an immediate effect on prices across the board, one can imagine what the scenario might be after the world reaches peak production.
Peak oil may not raise prices of petroleum for the US, however. If oil prices do increase, causing core inflation to rise, the Federal Reserve will increase interest rates, which will have the effect of increasing the value of the US Dollar on world markets. The increase in dollar value could offset the increase in oil price to the point that relative to the US, oil is roughly equally priced as before. Relative to the rest of the world, though, oil is more expensive. This poses the question, then, of, “Who gets the oil?” If it’s still cheap in the US, Americans will consume at the same quantities as before and it will be the smaller, poorer nations that lose out on their share.
There are many detractors to the peak oil theory, however, and both sides are constantly shooting holes in the arguments of the other side. Some of those arguments are given above and others are available in the news media and scholarly journals and thus, won’t be discussed here. For the sake of advancing the work, the tenets of this paper will rest on peak oil occurring sometime in the next 20 years.
Whether the world runs out of oil or not, the fact is that more can’t be made. Petroleum is made by geological forces over geological time periods and is consumed in “real time,” orders of magnitude faster than it was made. Once it is gone, it will be gone forever, as far as humans are concerned, proving oil a failure in the first tenet of sustainability. The other tenet of sustainability is net energy balance. Many alternative fuels are decried in the media because they use more energy to produce than they put out. This fact is rarely true and there is rarely mention of petroleum’s net energy value. What is the net energy balance of gasoline and diesel? Are they offering more energy than they consume in production? The answer is a resounding “No.”
According to one study, diesel fuel has a net energy balance of 0.83 percent. That is, diesel consumes 17 percent more energy to produce than it gives off during engine combustion. The Minnesota Department of Agriculture’s website corroborates this evidence, stating a 0.84 percent energy yield for diesel. Engine efficiency affects this percentage but as the federal government refuses to increase CAFE standards for heavy duty vehicles (majority users of diesel), it is an accurate measure.
Gasoline also suffers from a negative energy balance. The Minnesota website states a .81 percent energy yield for gasoline, lower than that of diesel, which has higher energy content per gallon. Thus, the two fuels, which comprise 97 percent of transportation fuels in the US, are net energy losers. This means that the energy consumption of transportation is actually higher than statistics report because it takes 15 to 20 percent more energy to produce a gallon of petroleum fuel than what is derived from it.
Grade for Sustainability: D

Economic Impact

There is no doubt that the economic impact of petroleum is huge; without it, there would be no economy. It is a fundamental part of Western life and it is a key need for growth in newly industrialized nations. The US currently consumes 20 million barrels (840 million gallons) of oil per day and is expected to consume 28 million barrels per day by 2025. As an example, the following is a story that shows how prevalent petroleum is in our daily lives.
A person is at a local protest against importation and use of oil. The rally is over so they get in their car to drive home, which has plastics made from petroleum and synthetic rubber used in tires, hoses, and seals, not to mention engine and bearing lubricants. The tank is low so they drive to the local station to fill their vehicle with gasoline on a road made of asphalt (about 5 percent petroleum). They call home on their cell phone (plastics), to have the barbecue heated up (propane, 50 percent from oil), because they picked up some pork chops on the way home (refrigerator coolant from oil). Once home, the person walks inside (powered in part by petroleum), across the carpet, (synthetic fibers made of petroleum) and into the bathroom to take their medication (also made from petroleum).
This is a brief description of the more obvious roles petroleum plays in modern life but demonstrates just how pervasive its use is. While it is excellent that so much can be derived from petroleum, the fact that the nation is almost completely dependent on oil for an inexpensive and robust economy is a negative. It’s the equivalent of having all your eggs in one basket.
Grade for Economic Impact: B

Future Potential

Petroleum could be said to have a bright future or no future at all. Oil is, and is going to be, a major part of the world economy for a long time into the future. So many nations are dependent upon the free flow of petroleum that to disrupt its supply, or to prematurely force an inadequate substitute, would spell doom for their economies. While petroleum use for transportation and electricity generation is seen as a negative application of the technology, many uses of the fuel are positive.
Products like plastics provide Third World nations with an inexpensive and durable means to carry and store water. Fertilizers that maximize field crop potential, and pharmaceuticals that prolong people’s lives are also made from petroleum. One author encountered imagined a time when his grandchildren would say, “You had all that oil and you just burned it?” Thus, while petroleum plays the part of the villain in modern industrialized societies, there are still many benefits that it provides, the least of which is inexpensive transportation.
But oil is, and always will be, a finite commodity. Only the most enthusiastic economists believe that petroleum supplies will last for hundreds of years. In the mean time, it will be important to find ways to decrease consumption to; 1) slowly wean the economies of the world off petroleum dependency and 2) provide long-term access to petroleum for those uses that provide the greatest societal value. After all, using oil to create major-multiple explosions that are 25 percent efficient is caveman technology from where humanity stands today.
Grade for Future Potential: B-

Final Grade for Petroleum: C-