Fuel for thought
Based purely on economics and practicality, it used to be easy for a city or county fleet manager to pass on alternative fuels and stick with tried-and-true diesel truck engines. For example, a 2003 study by New York-based Inform found that new natural gas-powered refuse vehicles cost as much as $40,000 more than equivalent diesel-equipped models. The same study found that it costs $30,000 to $100,000 to convert a diesel-powered garbage truck to run on natural gas. Add a minimum of $300,000 to build a natural gas filling station (the scarcity of natural gas refueling sites almost demands a fleet build its own), and the attractiveness of switching to alternative fuels curdles.
So with diesel engine technology now poised to enter a new era of extremely tight emission rules in 2007 and 2010 — rules that are going to almost eliminate pollutants from diesel truck exhaust — it would seem at first glance that diesel’s domination in the commercial truck world is now assured, and the viability of alternative fuels is a dead issue. In fact, the opposite may be true, though not necessarily for every fleet operation.
“Our natural gas equipment is much more robust today, the engines have better electronic controls, and the prices for that technology are really coming down,” says Tommy Edwards, director of maintenance for Thousand Palms, Calif.-based SunLine Transit Agency. “In fact, the pricing is almost equal to what we’d have to pay for an equivalent diesel-powered vehicle equipped with the ‘clean diesel’ modifications that are required now.”
The additional technology necessary for diesel engines plus the need to operate on ultra-low sulfur diesel (ULSD) fuel is driving up the cost of owning and operating diesel-powered buses to almost the same level as SunLine’s compressed natural gas (CNG) vehicles. At the same time, higher production volumes of CNG-powered buses are reducing the cost for those units. In fact, to meet the stringent 2010 emission rules, SunLine only needs to use a blended fuel of 80 percent CNG with 20 percent hydrogen to reduce oxides of nitrogen (NOx) exhaust emissions. “That just requires us to add a new sensor and change some software on our buses — not add all the exhaust after-treatment systems diesel-powered buses are going to need,” Edwards says.
He also notes that “early adopters,” such as SunLine, which began switching to CNG for its buses in 1994, have not felt the fiscal impact of runaway diesel fuel prices, which spiked in 2000, 2004 and 2005, and reached a record national average of $2.25 per gallon in March. “Natural gas prices have gone up, for sure, but not nearly to the extent that diesel has,” Edwards says. “I know several transit agencies that are in real budget trouble now simply because diesel prices have increased so much.”
The cost of fuel
The debate facing city and county fleet managers over the next five years, then, shifts to the economics of fuel selection. “Starting in 2006, 80 percent of the on-highway diesel fuel must be ULSD with a sulfur content no greater than 15 parts per million (ppm) compared to the 500 ppm fuel used today,” says Richard Kolodzeij, president of the Washington-based Natural Gas Vehicle Coalition. “That fuel change alone is going to raise costs anywhere from 5 to 50 cents a gallon more on top of current diesel prices.”
The technology required to clean up diesel emissions already is adding cost, as heavy-duty engines increased in price from $3,000 to $5,000 after the last round of emission rule changes in 2002 and 2004. In 2007, diesel particulate filters, which can cost $6,500 to $10,000 per truck, will be required, according to tests by Commerce, Calif.-based Unified Western Grocers. The filters are needed to reduce the exhaust pollutants to the levels required in 2007, but the current $6,500 to $10,000 per filter cost may drop sharply as production volume increases, the company notes.
Fuel efficiency lost by switching to ULSD — which has a lower energy content than diesel — could result in a 1 percent drop in fuel economy and lower the thermal efficiency of diesel engines designed to reduce pollution. “Eight or nine years ago, the thermal efficiency of a heavy truck diesel engine was around 54 percent. Now, with the introduction of EGR [exhaust gas recirculation] and Caterpillar’s ACERT [advanced combustion emission reduction technology] systems, engine thermal efficiency is down to 40 percent,” says Jules Routbort, program manager for parasitic energy losses in the Department of Energy’s Office of Heavy Vehicle Technologies. “That all translates into reduced miles per gallon for heavy trucks.”
“So the base cost of operating a diesel truck is going up, and that’s before we look at the volatility of oil prices, which passed $55 a barrel this year,” Kolodzeij adds. “So is natural gas still a viable alternative to diesel? From an economic and clean air standpoint, I’d say it certainly is.”
Ease of use
On the other side of the debate, switching to an alternative fuel costs a significant amount of money up front because it requires completely different fueling systems for the vehicle and constructing a refueling station. Although natural gas engines are built on the production line, trucks must be modified off line, which significantly adds to their cost and can delay delivery, says Doug Weichman, director of the fleet management division for Palm Beach County, Fla.
“We got into CNG in the 1990s, but now that’s on the back burner for our fleet simply because the market is just not out there in enough volume,” he says. “When you’re talking about building 5,000 to 10,000 trucks outside of the production line to prep for natural gas, that gets real expensive, and it’s hard to absorb those costs, especially for a county fleet like ours.”
For Weichman, there’s also an ease-of-use issue. Staying with lower-emission diesels, despite the higher costs of the fuel and emission control technology, does not require additional refueling infrastructure investments or maintenance shop changes to safely manage the different properties of an alternative fuel.
“We have to look at the cost of the tanks to hold CNG, the cost of the vehicle’s internal fuel system and the cost of a filling station,” he says. “Also, for us, the price of diesel and CNG are pretty close in our area as we are exempted from paying federal taxes on our diesel fuel as a county fleet. So we don’t really make up the difference in fuel cost savings by switching away from diesel.”
However, Weichman believes biodiesel — a diesel-style fuel made from organic matter — has potential as an alternative fuel. “The one big advantage is we don’t have to change either the refueling infrastructure or the internal fuel systems on the vehicle,” he says. “With biodiesel, you just put it in the tank and go. It’s not perfect but it’s easier to use.”
All things considered
The real deciding factor, then, on what fuel city and county fleet managers choose to use in the future is going to depend on the particulars of their operations. Fleets that stay local and get refueled from a central location day after day, such as transit and school buses, might find alternative fuels, such as natural gas, to be a better option than diesel. However, fleets with trucks operating in remote areas might need to stick with diesel, as it still commands the longest range and greatest energy efficiency.
“The realities are that in terms of refueling infrastructure, service intervals, cost of fuel and range of fuel, diesel is still the optimum choice,” says Allen Schaeffer, executive director for the Frederick, Md.-based Diesel Forum. “However, there are plenty of niche markets where alternative fuels can play a major role.”
Niches include transit and school buses, refuse vehicles, airport shuttles, urban delivery trucks and other fleets where vehicles leave and return each day from a central location. “And then there is the future potential of diesel, such as making diesel fuel from GTL [gas-to-liquid] technology — that’s a way for diesel power to step beyond the petroleum-based limits it faces today,” Schaeffer says.
GTL experiments already under way for heavy trucks include capturing and refining landfill gas into either liquefied natural gas or a pure liquid fuel. Allentown, Pa.-based Mack Trucks, for example, has helped evaluate using landfill methane gas in trucks. It is working with Cleveland-based Acrion Technologies, Houston-based Waste Management, Allentown, Pa.-based Air Products & Chemicals, and Garfield Heights, Ohio-based Chart Industries, as well as the Rutgers University/State of New Jersey EcoComplex, Burlington County, N.J., Resource Recovery Center and the U.S. Department of Energy’s Brookhaven National Laboratory to develop a way to generate truck fuel from landfill gas.
“These waste gases are mainly methane and carbon dioxide, and they’re a troublesome air quality issue for landfill operators,” says Bruce Smackey, director of the pilot project for Mack. “It’s possible to purify and separate the waste gases into useful methane and carbon dioxide. Our effort is aimed at determining whether the purified methane can be made into fuel that could power trucks hauling refuse to the landfill in the first place.”
For SunLine’s Edwards, however, the choice to switch to an alternative fuel already has been made, and it is a choice that has served his agency’s needs well over the last decade and is projected to continue for at least the next 10 years. “In fact, we’re having all of our liquid fuel storage tanks removed this month, so there is really no going back to liquid fuels, such as diesel or gasoline, for us,” he says. “But we made that decision because the switch to alternative fuels made good business sense and will continue to make good business sense in the future.”
Sean Kilcarr is senior editor at American City & County’s sister publication, Fleet Owner.
Oil supply tops concerns
Concern about oil supplies and the increased cost and efficiency of diesel engines were the most pressing issues reported by attendees at the Clean Heavy-Duty Vehicle Conference held in La Quinta, Calif., Feb. 22-24, 2005. Conference co-host Pasadena, Calif.-based WestStart-CALSTART surveyed attendees and found that they expect major changes in the transportation fuels market. By 2020, for example, survey respondents expect diesel to lose up to 35 percent of the new heavy-duty vehicle market to other fuels and technologies, including hybrids, natural gas, hydrogen and diesel alternatives.
The survey found that attendees expect:
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By 2020, traditional diesel fuel to drop to roughly 65 percent of the heavy-duty fuels marketplace, and that diesel alternatives, such as biodiesel and gas-to-liquids, could expand to nearly 20 percent of the diesel market, with natural gas projected to grow to 11 percent of the fuel marketplace. Hybrid vehicles are projected to grow to 18 percent of the new vehicle market.
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Oil supplies and costs to be the top challenge to heavy-duty vehicles over the next 15 years, followed by fine particulates until 2015, when greenhouse gas emissions emerge as the second biggest concern.
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Oil supply challenges will have a significant or very significant impact on U.S. businesses by 2015.
The findings represent the opinions of 125 truck and engine manufacturers, component suppliers, regulators, fleet operators, fuel providers, environmental and research organizations and military personnel. However, the results are weighted toward the opinions of truck and engine manufacturers and component suppliers, who made up 39 percent of the final survey respondents, with fleet operators making up an additional 12 percent.
A slide presentation of the survey results is available on the Web at www.calstart.org. To order a complete survey report and a CD of conference proceedings for $75 plus $6 shipping and handling, visit www.calstart.org or call (626) 744-5600.