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State of Alternative Fuels in Fleet Industry

May 2014, Work Truck - Feature

by Lauren Fletcher - Also by this author

Ethanol usage has led the pack year over year, with acceptance more than doubling since 2007. Total fuel consumed is measured in gasoline-gallon equivalents (GGE).
Ethanol usage has led the pack year over year, with acceptance more than doubling since 2007. Total fuel consumed is measured in gasoline-gallon equivalents (GGE).

Whether you have a fleet of 500 vehicles or five, reports, research, and the touted results from utilizing alternative-fueled vehicles has probably made its way onto a fleet manager’s radar in some form or another. Here is an overview of the current state of alternative fuels and their status in the fleet industry:

Producing Biodiesel

Biodiesel’s physical properties are similar to those of petroleum diesel, but is a cleaner-burning alternative. Using biodiesel in place of petroleum diesel, especially in older vehicles, can reduce emissions, according to the Alternative Fuels Data Center (AFDC).

Biodiesel blends are being used by a wide variety of industries, including fleets and general consumers, because the fuel offers an easy, low-cost option to instantly  “green” their fleets, according to Jennifer Weaver, OEM outreach & education specialist for the National Biodiesel Board (NBB). The NBB is a national trade association representing America’s first advanced biofuel.

“Because biodiesel blends can be used in any diesel engine without modification, fleets don’t have to make heavy investments in new vehicles, equipment, or fueling infrastructure, like they do with some other alternative-fuel options,” Weaver said. “This provides users with an overall low total cost of ownership with a biodiesel-powered fleet.”

Biodiesel is defined by the U.S. Environmental Protection Agency (EPA) as an advanced biofuel, meaning it is a renewable fuel with lifecycle greenhouse gas emissions (GHG) that are at least 50-percent less than diesel fuel emissions, according to the NBB.

Biodiesel has traditionally enjoyed its strongest use in the medium- and heavy-duty truck market, as well as the agriculture equipment market. According to the NBB, some of the key industries and market segments using biodiesel include utility companies; government and municipal fleets; package, food, and beverage delivery fleets; construction; agriculture and farming operations; underground mining; over-the-road trucking; and fleets operating in environmentally sensitive areas.

“The industry is also seeing strong growth in the use of biodiesel blends in light-duty passenger vehicles,” Weaver noted. “With 44 new clean diesel car, truck, and SUV models available now in the U.S., and more than 58 diesel models expected in North America by 2017, consumers now have more options than ever before for using clean, renewable biodiesel blends in their diesel vehicles.”

Biodiesel blends can be used in any diesel vehicle or engine, according to manufacturer recommendations. Biodiesel blends up to B-20 (20-percent biodiesel blended with 80-percent petroleum diesel) serve as a drop-in replacement for diesel fuel and, according to the NBB, operate seamlessly compared to diesel — offering the same kind of fuel economy, power, and performance of traditional diesel fuel.

“All major OEMs selling diesel equipment in the U.S. support the use of at least B-5 biodiesel blends, provided they are made with biodiesel meeting the industry’s strict quality standards specified by the American Society of Testing Materials (ASTM) D6751,” Weaver said. “In addition, more than 78 percent of U.S. manufacturers support B-20 or higher biodiesel blends in at least some of their equipment, and nearly 90 percent of the medium- and heavy-duty truck markets support B-20.”

Currently, biodiesel and biodiesel blends are available across the U.S. from approximately 2,000 public locations, including retailers, distributors, and truck stops. A mobile app from the NBB, “Biodiesel Now,” is a station locator application.

In existence for nearly 20 years, the biodiesel industry first started to really take off in 2005 when biodiesel production reached a high of 250 million gallons, according to Weaver. In 2013, the biodiesel industry reached a new production record of  1.8 billion gallons.

“The biodiesel industry vision is to replace 5 percent (or 1.88 billion gallons) of petroleum diesel use with biodiesel by 2015, and replace 10 percent (4 billion gallons) of petroleum diesel use with biodiesel by 2022,” Weaver added.

Cleaner Diesel Options

Diesel has a high energy content, according to the Diesel Technology Forum, a national, non-profit organization dedicated to raising awareness on diesel engines, fuel, and technology.

Virtually every mode of transportation — including medium- and heavy-duty trucks, passenger vehicles, buses, even rail, ships, and airplanes — can be powered by diesel. In addition, diesel provides the power for agricultural, construction, and mining equipment.

“More than 90 percent of all medium- and heavy-duty trucks are powered by diesel engines due to its fuel efficiency, power, and reliability,” according to Allen Schaeffer, executive director of the Diesel Technology Forum. “More than 80 percent of the freight in the U.S. and 90 percent of the world’s freight is moved by diesel power.”

While diesel has been considered a mainstream fuel for commercial vehicles and off-road machines and equipment since the 1950s, only in the past few years has it been viewed as a serious and competitive alternative to gasoline for passenger cars. According to Schaeffer, this has been due to new federal requirements for carbon dioxide emissions and fuel-efficiency standards.

“Today’s 44 vehicle choices are expected to increase to more than 60 in two years, with diesel engine options available in every class of vehicle,” according to Schaeffer. According to the U.S. Department of Energy (DOE) and others, diesels are likely to account for up to 10 percent of new vehicle sales by 2020. Today’s 22 vehicle choices is expected to more than double in two years, with diesel engine options available in every class of vehicle,” according to Schaeffer. 

Schaeffer continued, “Because diesel fuel pumps are available at more than half of all existing service stations, access to diesel fuel is not an issue, particularly when the superior range performance of the vehicles is taken into consideration.”

Looking at the current state of the diesel fuel industry in the U.S., slightly more than 50 percent of all gasoline stations offer diesel fuel, and the number is steadily increasing.

“ExxonMobil, the world’s largest publicly traded international oil and gas company, predicts diesel will surpass gasoline as the No. 1 global transportation fuel by 2020, with diesel demand accounting for 70 percent of the growth for all transportation fuels through 2040,” according to Schaeffer. “Natural gas will remain only a small share of the global transportation fuel mix, at 4 percent by 2040, up from today’s 1 percent.”

Looking toward the future, Schaeffer said, “Diversification of fuels and technologies is in our future. But, one thing is clear. Virtually every U.S. and international energy and transportation agency has said that diesel will remain the overwhelming transportation energy source beyond 2050.”

Electrifying an Industry

Electricity can be used to power all-electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs). Using electricity to power vehicles can have significant energy security and emissions benefits, according to the AFDC.

A variety of industries, such as delivery, utility, and public sector fleets, have embraced vehicle electrification to reduce oil consumption and costs as well as meet sustainability goals.

In addition to the variety of industries turning to electric vehicles, a wider variety of vehicle options are becoming available. From the traditional passenger vehicles, such as the Nissan LEAF and Toyota Prius Plug-in, electric vehicles are now available up to Class 7 medium-duty trucks.

“By and large, the predominant application for electrification has been the passenger car. There are currently 14 sedans and compact electric vehicle models on the market in the U.S., with more to come,” said Ben Prochazka, director of strategic initiatives for the Electrification Coalition. “Over time, we expect to see electric SUVs, such as the Tesla Model X, as battery technology improves and costs decline.”

The Electrification Coalition is a not-for-profit group of business leaders committed to promoting policies and actions to facilitate the deployment of electric vehicles on a mass scale. The Coalition has examined a few fleets that are successfully electrifying their vehicles.

One example is the City of Houston, which estimates that its 27 Nissan LEAF EVs will save approximately $110,000 per year vs. using an internal combustion engine.

Additionally, the Pacific Gas & Electric (PG&E) fleet operates more than 40 EVs, including electric work site bucket trucks.

“As bucket trucks can idle several hours per day, traditional, combustion-engine bucket trucks can consume as much or more gasoline idling than when they are actually being driven,” according to Prochazka.

By electrifying PG&E’s bucket trucks, the company saved more than $700,000 on fuel in 2011 alone. An additional benefit PG&E has found is that the battery technology in electric bucket trucks provides a quieter atmosphere that reduces noise-related disturbances and enables workers to communicate better with one another.

“There is a strong economic case for incorporating electric vehicles into public and commercial fleets,” according to Prochazka. “Over time, we expect to see more industries reaping the benefits of vehicle electrification.”

Looking at infrastructure, most EVs (80-90 percent) are still being charged at the driver’s home, according to Prochazka, who noted that one of the great values of vehicle electrification is the ease of accessing the vehicle’s fuel: electricity.

“Although public charging is used less than charging at home, there is still a considerable need to increase public charging infrastructure for EVs,” Prochazka noted.

According to the charging station locator, PlugShare, there are more than 20,000 public charging stations in the United States (as of press time). These range from low voltage 120v (Level 1) charging stations that will provide about three miles of range per hour, to 220v (Level 2) charging stations that will provide six hours of range per hour, up to DC Fast Chargers that will add 60 miles of range in the same time.

“Charging station costs are declining with increased production. Likewise, the cost to install this infrastructure is coming down as more cities become familiar with the technology. A Level 1 charging station typically entails plugging it into an average home outlet, which incurs no additional cost unless a circuit is required for the electrical panel in order to increase capacity. Level 2 charging stations range in cost from $500-$3,500 and may require extensive installation costs depending on the site. While DC Fast Chargers vary from $16,000 to $50,000 depending on the amperage and intelligence of the station. Charging station costs are expected to continue to decline over the coming years,” according to Prochazka.

The charging infrastructure industry is growing and evolving with the continued success of the electric vehicle market. In the future, the charging technology could change in both form and function. For instance, inductive (or wireless) charging may take hold as a popular method for providing electricity to vehicles. This would significantly increase charging convenience; however, the efficiency of the technology must first improve and costs must decline for greater adoption.

Looking at the cost to “fuel” an electric vehicle, Prochazka noted that, compared to gasoline-powered vehicles, EVs have the benefit of a low-cost fuel.

“Electric vehicles cost, on average, 3 cents per mile to drive, whereas gasoline-powered vehicles cost 12 cents per mile. Another benefit is that electricity prices are more predictable and less volatile than gasoline prices. Whereas gasoline prices can fluctuate with unpredictable world events, electricity prices are expected to remain relatively stable in years to come,” Prochazka said.

Electric vehicles are not new to the market, and the recent resurgence, which dates back to late 2010, has done well in the U.S.

“Electric vehicle sales have far outpaced hybrid vehicle sales with twice as many EVs sold in the first years on the market compared to hybrids,” Prochazka said. “More than 180,000 plug-in electric vehicles (PEVs) have now been sold in the U.S. And, with more models arriving every year, we expect this market to grow considerably.”

What does the future have in store for electric vehicles? Navigant Consulting forecasts that 3 percent of global vehicle sales will be PEVs in 2020, with a 32 percent compounded annual growth rate from 2012-2020. Additionally, PricewaterhouseCoopers’ Autofacts projects that PEVs will be 2.3 percent of global and 2.8 percent of U.S. auto sales by 2019.

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