The year 2000 has brought sweltering heat, little rain, and skyrocketing gas prices to the southeastern portion of the United States of America. Intense temperatures and lack of rainfall have increased awareness and fear of global warming. Society began to realize that global warming is happening right now and cannot be ignored. At the fuel pumps drivers found themselves digging deeper into their pockets to fill their vehicles with gasoline. The whole of the USA experienced a hike in gas prices and every country dependant on OPEC for oil began paying exorbitant amounts for fuel. Both the increasing dependence on the OPEC cartel for petroleum and the immediate global warming phenomenon encourage finding an alternative to gasoline-powered automobiles. While many civilians may only now recognize the need for petroleum alternatives, government officials and environmentalists across the globe have been working over 20 years to locate viable options. The United States government in recent years has passed legislation concerning air pollution and supporting alternative fuels. In 1990 amendments to the Clean Air Act (CAA) heightened standards on automobile emissions. Two years later the Energy Policy Act of 1992 (EPACT) required the U.S. Secretary of Energy to determine “the technical and economic feasibility of replacing 10 percent of projected motor fuel consumption with non-petroleum alternative fuels by the year 2000 and 30 percent by 2010” (USGAO, 1996, p. 7). Thus, the pattern emerges that replacing gasoline in automobiles links directly to environmental gains and economic costs. By examining the advantages and disadvantages of various alternative fuels, the economic effect for manufacturers, and results of other countries using alternative-fueled vehicles one may assess likely options for fuel in the United States transportation sector. The future, if it follows projections, has many obstacles to overcome in replacing gasoline automobiles.
Many options exist for replacing
petroleum as a transportation fuel.
However, research must focus on the most realistic choices. The first successor of gasoline will come
from alternatives already in use. This
includes liquefied petroleum gas (LPG), compressed natural gas (CNG), liquefied
natural gas (LNG), and varying forms of methanol and ethanol. Electricity and fuel cell technology present
other substitutes, however they have not reached the higher stages of
development required to be considered as real choices in the next few
years. To assess the above
alternatives, one must first know how they improve upon gasoline technology.
Liquefied petroleum gas leads in
number of vehicles operated in the United States. It consists of a “mixture of petroleum and natural gases that
become liquid under pressure or at reduced temperatures” (USGAO, 1990,
p.14). The principle LPGs, propane and
butane, mainly come from natural gas processing and crude oil refining. Most information about the air quality
implications of LPG stems from the industry itself, yet the information remains
consistent across the board. Liquefied
petroleum gas vehicle emissions produce half the hydrocarbon of gas vehicles,
have lower ozone formation potential, and produce substantially less amounts of
carbon monoxide than gasoline (p. 8, 14).
Disadvantages of LPG vehicles includes reduced driving range, refueling
inconveniences, decreased cargo space because of specialized fuel tanks, and an
increase in cost of approximately $1000.
Compressed natural gas offers a second option for consideration in replacing gasoline. It contains methane and small amounts of other gases. Small quantities have been used for automotive fuel since the late 1800s, held back because the technology never caught on due to lack of storage and compression facilities (ibid. p.16). Advantages of CNG include cutting hydrocarbon emissions 50 to 90 percent and carbon monoxide emissions by the same amount. Additionally, benzene and other toxic pollutants may be reduced. More nitrogen oxides (an ozone component), reduction in driving range and refueling difficulties, and large, heavy fuel tanks offer a few of the downsides to CNG. Also, CNG increases costs because it requires a new distribution system and adds $2000 to the price of a new vehicle (p.9).
Refrigerating natural gas at –260 degrees Fahrenheit it becomes a third possibility for replacing gasoline. Liquefied natural gas has high energy density compared to other alternative fuel options. It produces significantly less particulate matter, carbon monoxide, nitrogen compounds, and hydrocarbons, all of which are listed as problematic in the 1990 Clean Air Act. Fueling stations and times are similar to that of gasoline and thus would not cause trouble in transition. Also, the U.S. Department of Energy reports that with existing technology the U.S. has enough natural gas for at least 65 years, with almost 90 percent produced in the United States and most of the remaining 10 percent coming from Canada. However, estimates range from $3000-$5000 to convert vehicles to use LNG, and new vehicles cost $3500-$7000 more than gasoline vehicles. Yet with mass production and a decrease in federal taxes in 1997, the DOE estimates a reduction to only $800 more than comparable gasoline vehicles (www.ch-iv.com/lng/lngfact.htm) (www.ngvc.org/qa.html#trans).
The fuel of Indianapolis racing cars, methanol, also exists an alternative
to gasoline. This clear, colorless
liquid comes primarily from natural gas.
Two forms of methanol, M85, 85 percent methanol and 15 percent gasoline,
and M100, 100 percent methanol have been evaluated by the Environmental
Protection Agency. According to the
EPA, M85 emits 20 to 40 percent less ozone-forming compounds than gasoline
vehicles. Automobiles tested with M100
have 75 to 90 percent less ozone-forming emissions (USGAO, 1990, p.10). Though
disagreement exists between the EPA and the automobile industry as to some of
the emissions of methanol vehicles, most agree methanol fuel vehicles eliminate
benzene and other toxic emissions.
Disadvantages associated with methanol are increase in formaldehyde
emissions, significant costs for new production and distribution systems, a
reduction in driving range, and difficulty starting in cold temperatures (p.
9).
Ethanol, the liquid alcohol fuel produced from corn and other
agriculture products like sugar cane, provides another possible alternative
fuel. Though usually found in mixtures,
it may be used in pure form. The
primary gains in using ethanol are reduced hydrocarbon, toxic, and carbon
dioxide emission (ibid. p.8).
Additionally, costs associated with producing ethanol vehicles give
reasonable comparison to gasoline vehicles.
To produce an ethanol vehicle requires only about $300 more dollars than
a gasoline vehicle, a marginal cost in the grand scheme of automobile
prices. However, even with vehicle
production costs down, without tax modifications the price per gallon of
ethanol goes well beyond what consumers would pay for gasoline. Other weaknesses for pure ethanol include
increased acetaldehyde emissions and possible health risks if ingested by
infants (p.13).
A modification to methanol and ethanol fuels, called oxygenated fuels,
consist of a mixture of traditional gasoline and additives. The two most widely used forms of oxygenated
fuels are gasohol, a 10 percent ethanol and 90 percent gasoline mixture and a
gasoline/methanol blend which contains no more than 5 percent methanol (ibid.
p.17). (Two other possible blends using
Methyl Tertiary Butyl Ether (MTBE) and Ethyl Tertiary Butyl Ether have limited
usage and availability to the commercial market.) Incentives to use these blends include an estimated 12 to 20
percent reduction in carbon monoxide emissions and increased octane
levels. Conversely, gasoline blends
increase volatile organic compound emissions, form toxic chemicals when
oxidized, and raise gasoline costs.
They may also increase nitrogen oxide emissions and contribute to fuel
system problems (p. 17).
The previous fuel alternatives all attempt to lower harmful
emissions. Yet the capabilities exist
to create zero-emission vehicles (ZEVs).
These include electric vehicles and fuel cell vehicles, which turn
hydrogen and fuel and oxygen into electricity.
With zero emissions, the advantages of electric vehicles, which can run
on various types of batteries, are numerous.
However, most electric vehicles fail to match the maximum speeds of
traditional vehicles and can only go approximately 200 miles before needing to
recharge their batteries (www.energy.ca.gov/education/AFVs/electric.html). Similarly, there are evident advantages for
fuel cell technology in automobiles.
However, they suffer the same problems as electric vehicles and at the
current time are far too costly to affect the market. Fuel cells likely hold the future of automobiles, however the
research is in its early stages and automobiles are still in prototype form
(www.energy.ca.gov/education/AFVs/fuelcells.html).
Just as cost presents an enormous problem for fuel cell technology, it
also poses threats to many of the alternative fuels discussed above. Each fuel introduces different costs to
consumers above the cost of gasoline vehicles.
Automobile manufacturers, too, have cost concerns to address when
creating and alternative-fueled vehicle (AFV).
To further assess the feasibility of AFVs one must consider the
implications and incentives to the supply side of the automobile industry.
Possible incentives for automobile
manufacturers include subsidizing the building of AFVs and other purely
monetary accompaniments. However, such
bonuses would only result from new legislations and policies. A study conducted by Jonathan Rubin and Paul
Leiby examines how producing AFVs may prove profitable for manufacturers under
existing laws in the United States.
Rubin and Leiby cite corporate average fuel efficiency (CAFE) standards
as problematic for individual manufacturers.
The standards call for an average fuel efficiency among a manufacturer’s
new vehicle fleet. If they do not meet
these standards, manufacturers incur fines based on how far below the miles per
gallon standard they fall. In contrast,
if manufacturers exceed the standards they earn credits that can roll over for
three years.
Rubin and Leiby postulate that by manufacturing AFVs automobile
companies can earn significant credit and decrease concerns for other vehicles
meeting the standard. Total fines
incurred since 1985 range from $15, 565,000 to $48, 449,000 with the highest
years being 1989 and 1990 (Rubin and Leiby, p. 592). By dividing AFVs into dedicated fuel vehicles and flexible fuel
vehicles (which can run on either alternative fuels or traditional gasoline),
Rubin and Leiby assert that credits of $1100 and $550 per vehicle respectively
may be earned. Comparing these credits
with incremental costs of manufacturing AFVs on a medium to large-scale production
range yields profit on four of eight types of AFVs examined. Alcohol dedicated AFVs prove most profitable
because they incur incremental costs of only $223 per vehicle for large-scale
production. After adjusting for actual
fines paid over a 10 year period and averaging the credits for AFV production,
Rubin and Leiby calculate values of “$638-$319 for dedicated and flexible fuel
vehicles respectively” (p. 596).
To determine if CAFE credits will affect production Rubin and Leiby put
their projections into a case simulator, which takes into account fuel
suppliers, vehicle producers, and consumer behavior among other variables. Their results show that through 2010 AFV
sales are projected to be only about 1% of new vehicle purchases (ibid.
p. 597). Furthermore, many of the
flexible fuel vehicles sold will use gasoline instead of alcohol, thus
displacing little gasoline. Even
changing variables such as altering standards and presenting a case of “no
barriers” to AFVs provides discouraging results. Thus, Rubin and Leiby conclude, “current CAFE credits induce some
AFV production, but not enough to really get the ball rolling” (p. 598). In other words, the CAFE credits earned by
AFVs will have little to no effect in manufacturer production because the market
will not buy the alternative-fueled vehicle.
Rubin and Leiby’s study provide
estimations of a future with uncertain variables. Another way to assess feasibility of AFVs is by looking at
countries that have already implemented programs for AFVs. Brazil, Canada, and New Zealand comprise
some countries available to observe for past actions involving AFVs.
Brazil, Canada, and New Zealand all
have organized alternative fuel programs in operation (Rezendes, p. 2). In 1975 the Brazilian government began a
program that uses corn to produce ethanol.
Thirty percent of “Brazil’s passenger vehicles were manufactured to
operate only on ethanol” (p. 3). To aid
AFVs Brazilian government offered loans or favorable loan terms for conversion
to alternative fuels and reduced taxes on ethanol to consumers. Government also took responsibility for
providing adequate fueling facilities and keeping gasoline prices higher than
ethanol (p. 2). Additionally, they
provided subsidies to manufacturers for alternative fuel production and
distribution. In 1981 the Canadian government implemented their plan for
installing AFVs. They provided grants
to consumers who converted their vehicles to operate on propane as well as
natural gas. Other incentives consist
of tax reductions on alternative fuels and grants from the industry to
consumers for conversion. The New
Zealand government began in 1979 to encourage natural gas and propane use in
order to decrease dependence on imported oil.
Government support materialized as grants and loans for vehicle
conversion to consumers, grants or tax breaks for fueling facilities, and
subsidies for alternative fuel production and distribution to the industry (p.
16).
All countries indicated that
government backing and a commitment to the alternative fuel system proved
essential for consumers. Saving money,
having convenient fueling, and reliability of the vehicle ranked as the top
three concerns of consumers. In Canada,
92 percent of consumers polled said, “saving money on fuel was the major reason
they converted their vehicles” (ibid. p. 5). When governmental policies
or events occurred which caused consumers to question the quality of vehicles
or endanger convenience, the number of conversions in every country to the
alternative fuel declined. For
instance, when an ethanol shortage occurred in Brazil sales of ethanol powered
vehicles dropped from 50 to less than 5 percent of all new car sales within one
year (p. 6). In New Zealand, when
incentives declined, so did public faith in AFVs and the number of conversions
(p. 7).
Alternative-fueled vehicles already exist in the United States. The total as of 1998 was approximately
403,000 AFVs. Liquefied petroleum gas
vehicles hold the largest share of AFVs with 279,000. However, their percentage of AFVs in the U.S. has declined since
1992. Compressed natural gas vehicles
will likely increase the most of any AFV in absolute number and by the end of
1998 accounted for over 85,000 vehicles.
The third largest percentage of the American market, at 5 percent of all
AFVs is methanol vehicles, both M85 and M100.
Ethanol vehicles numbered around 11,000 in 1998 while liquefied natural
gas and electric vehicles hold marginal percentages of AFVs. Zero-efficiency vehicles are also being
considered by state legislators in California and other states and have already
been implemented in New York. To help
start AFV use in the United States, President Clinton signed Executive Order
13031 in 1996 which called for each Federal agency to comply with EPACT
requirements and have 75 percent of all newly acquired vehicles be AFVs by 1999
(USOCNEAF, pp. 9-17). However, this is
only the beginning of steps that must be taken by the U.S. government in order
to fully establish AFVs in the American market. It must follow the example and learn lessons from countries such
as Brazil, Canada, and New Zealand and offer incentives to both consumers and
manufacturers for converting and buying AFVs.
The problem still exists, though, as to which form of alternative fuel
presents the best substitute for gasoline.
Currently no form of alternative fuel seems poised to make a significant
impact on the U.S. gasoline market.
Liquefied petroleum vehicles, though comprising the largest percentage
of AFVs in the U.S., are giving way to other AFVs like compressed natural gas
and methanol. However, at the present
time too many problems plague these forms for any of them to emerge as a
predominant choice over gasoline. The
most hope for gasoline alternative stems from research into electric cars and
fuel-cell technology, both of which produce zero emissions. Unfortunately, at the present time not
enough research has been conducted to make the cost of either option practical
and automobiles remain in prototype form.
Over the next decade zero-emission vehicles will significantly improve
and offer a better choice for alternatives to gasoline.
For electric and fuel-cell technologies, as well as for alternative
fuels, to prove feasible they must meet consumer requirements and
expectations. Cost, of course, remains
the most important factor. Even if
prices equal or compare to gasoline vehicles, other costs such as refueling and
locating convenient fueling stations still persist. Without a means to refuel cars easily and cheaply, consumers will
not purchase an AFV. A factor almost
equal to cost is performance of the vehicle.
Consumers must have adequate driving range, acceleration, and overall
quality. Gasoline powered vehicles
provide hefty standards which as of yet cannot be equaled by AFVs. Therefore, no option is currently
feasible. As the market grows for AFVs,
costs will decrease, and quality will improve with time. However, in order to provide motivation for
both these advancements, the market must be informed and have incentives to
change. Government subsidies, grants
and loans will prove essential in establishing AFVs but will not suffice on
their own. Aggressive marketing,
advertising, and campaigning are also needed.
Finally, to pave the way for individual ownership, both government and
private fleets must lead the way as President Clinton demonstrated by signing
Executive Order 13031. The tradition of
oil in the United States and across the globe runs deep. Without hard-line techniques to draw
consumers to AFVs, gasoline vehicles will always prevail. The United States cannot presume to act
alone in this matter. Global warming is
a worldwide phenomenon and while specifics of alternative vehicles must relate
to the needs of a location’s drivers, the problem of replacing gasoline with something
lies in the hands of every country.
Only by working with other nations and observing their results with AFVs
can the United States and the world create a feasible option to replace
gasoline powered vehicles.
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using alternative motor fuels:
statement of
Victor S. Rezendes, Director, Energy Issues, Resources, Community, and Economic
Development Division, before the Subcommittee on Government Operations, House
of Representatives.”
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and P. Leiby. “An analysis of
alternative fuel credit provisions of US
automotive
fuel economy standards.” Energy
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www.ch-iv.com/lng/lngfact.htm
www.energy.ca.gov/education/AFVs.html