Fossil fuels may dominate sector through 2040

Source: Julia Pyper, E&E reporter • Posted: Tuesday, May 13, 2014

LONG BEACH, Calif. — There are a growing number of ways to power cars and trucks with low-carbon fuels, such as electricity, hydrogen and advanced biofuels. But according to experts at an alternative fuel summit here last week, fossil fuels are likely to dominate the transportation sector well into the future.

Dennis Slagle, executive vice president of truck sales and marketing for Volvo Group in the Americas, highlighted in his keynote speech at the Alternative Clean Transportation Expo the unparalleled performance and accessibility of diesel. The trucking industry has also invested billions of dollars in making drastic reductions in harmful nitrogen oxide and particulate emissions, he added.”Diesel will remain a predominant fuel for heavy-duty vehicles in the near and medium term,” said Slagle.

Bringing alternatives into the transportation sector is key to bringing down global greenhouse gas emissions. All transportation modes combined represent about a quarter of global greenhouse gas emissions, but as economies grow, increased demand for freight and personal transport could make transportation the greatest human-related contributor to climate change (ClimateWire, April 10).

According to Tahmid Mizan, senior technology adviser at Exxon Mobil Corp., the multinational energy producer projects that oil will remain the “fuel of choice” for the transportation sector through 2040. While low-carbon alternatives will become more widely adopted, 90 percent of energy use in transportation will come from oil products over the next 25 years, he said.

Natural gas, which produces approximately 30 percent less greenhouse gas emissions than gasoline and diesel, will be the second most widely used transportation fuel by 2040, according to Exxon. Coal will assume third place.

Natural gas finds a larger niche

The sudden abundance of American-produced natural gas ensures that prices will remain stable and affordable for decades to come, making it an attractive alternative to oil, said Amy Farrell, vice president of market development at America’s Natural Gas Alliance, at last week’s summit.

The availability of cheap natural gas also helps make other alternative fuels more viable, she said. Propane has seen a large boost in supply due to an increase in natural gas drilling. So, too, have hydrogen and dimethyl ether — two fuels derived from natural gas.

Natural gas in the electricity sector also helps to reduce the life-cycle emissions of electric vehicles as well as the emissions associated with producing biofuels, she said.

Today, natural gas is making its way into every segment of the transportation sector, including rail, marine, and light- and heavy-duty vehicles. For instance, the grocery store chain Kroger Co. announced last week the purchase of 40 natural gas heavy-duty trucks to replace a fleet of 40 diesel trucks in Portland, Ore.

In lighter-duty vehicles, Ford Motor Co. recently announced that the state of Oklahoma has ordered 256 Ford F-150 pickup trucks prepared to run on compressed natural gas, and that the city of Dallas has ordered 65 of the trucks for its fleet. General Motors Co. also recently revealed pricing on its bi-fuel Chevrolet Impala that can run on both CNG and gasoline.

Natural gas is typically viewed as an ideal fuel for the heavy-duty sector, where large vehicles can easily accommodate the necessary large fuel tanks. But the advent of the “shale gas revolution” has light-duty automakers increasing their natural gas vehicle offerings, too, said Mike Jones, general manager of GM’s fleet and commercial operations.

“I think we’ve always said there’s really no silver bullet, so we need to be prepared for a number of areas, and we think CNG certainly has legs,” he said. “There’s quite a supply that’s out there, obviously, and it looks to us like a long-term play.”

Range anxiety thwarts EV rentals

Fleets are likely to be the first to adopt alternative fuels and clean technologies en masse to meet corporate sustainability goals and reduce operating costs. In so doing, they are also likely to have a significant impact on reducing greenhouse gas emissions from the transportation sector.

In certain situations, all alternatives — natural gas, propane, biofuels, plug-in hybrids and battery electric vehicles — make financial sense, said Joe Stergios, sales manager of Enterprise Fleet Management. But in some cases, they simply don’t make sense, or at least don’t make sense right now.

For instance, with the exception of the Tesla Model S, Enterprise car rental has struggled to rent out its plug-in vehicles, due to customers’ range anxiety. “It is sort of a money sucker right now,” said Stergios of the company’s 1,300 EV fleet.

“We’re not here to make the market,” he added. “We’re here to accommodate the customers and whatever technology they’re comfortable with.”

According to Ryan Schuchard, climate and energy associate director at the nonprofit Business for Social Responsibility (BSR), without accelerated transition to low-carbon fuels, the carbon-heavy fuel mix in the United States will remain unchanged for the next 20 years.

A recent BSR report found that major hurdles to clean fuel adoption include a lack of corporate sustainability standards to steer purchasing decisions, an unstable investment climate and the fact that low-carbon fuels don’t yet exist at scale. The good news is that some of the biggest fleet owners, including Wal-Mart Stores Inc., PepsiCo Inc. and Coca-Cola Co., have made commitments to reducing their carbon footprints, said Schuchard.

“They’re trying to develop measured approaches to making the investments that looking globally, across fuels will make the greatest greenhouse gas impact for the least cost in a way that’s scalable,” he said. “I think these big operators are in a pretty good place to do that.

“They’re experimenting and piloting,” he added. “So it might not look like they have a significant alternative fuel share versus their diesel vehicles or total fuel use, but behind the scenes, I think they’re doing a lot to get the systems in place.”