Mix & match
As elected officials craft environmental policies that aim to reduce emissions and limit local governments’ carbon footprints, many are mandating the use of alternative fuels in fleet vehicles. For fleet managers, that political pressure can make already complicated decisions about fuel purchases even trickier. “In the last few years, political pressure to move in this direction has dramatically increased,” says Curtis Rhodes, fleet manager for Surrey, British Columbia, Canada. “Even with the absence of cost benefits, in recent years we have experienced a growing expectation from the public that municipalities engage in more ‘environmentally friendly’ practices.”
Those environmentally friendly choices, however, must be balanced with budgetary concerns. The costs of using alternative fuels can be as high or higher than traditional fuels, so fleet managers have to communicate that information to help officials make informed policy decisions. Once the policies are made, fleet managers then have to strike the best balance between environmental and financial choices for their fleets.
The organic fuels
Many city and county fleets have incorporated biodiesel into their fuel supplies in a variety of mixtures because it lowers emissions of particulate matter. The alternative fuel has proven fairly easy to use, and fleet managers can adjust the blend of the biodiesel they use from 100 percent (B100) to a mix of 5 percent biodiesel and 95 percent regular diesel (B5), depending on their goals and budgets. “Surrey’s fleet is mostly comprised of diesel-powered equipment, so the vast majority of fuel consumed by our fleet is biodiesel,” Rhodes says. “Accordingly, we have one main diesel tank located on site at our operations facility, which is mixed with B5,” Rhodes says.
The Snohomish County, Wash., Public Works Department relies on B20 biodiesel for 70 percent of the fuel powering its diesel fleet — approximately 420,000 gallons of diesel mixed with 84,000 gallons biodiesel annually. “We have been using biodiesel since 2006 because it requires no infrastructure change and reduces greenhouse gasses,” says Allen Mitchell, fleet manager. “We intend to use B20 in the total diesel fleet as soon as fuel supplies are available.”
Salem, Ore., fleet managers began using B20 a few years ago but have begun to see a change in fuel costs. “At the time we adopted B20, biodiesel was less expensive than petro-diesel, so we were actually saving money,” says Don Thomson, Salem’s fleet and warehouse superintendent.
However, that is not the case now as the price for biodiesel has settled to about even with regular diesel, according to the U.S. Department of Energy’s July 2008 Clean Cities Alternative Fuel Price Report. The nationwide average per gallon price for regular diesel was $4.71, B100 was $4.88, and B20 was $4.66. “Although the price of conventional fuels continues to escalate, the cost of alternative fuels does also,” says Pete Scarafiotti, fleet services department director for Mesa, Ariz. “In the case of B100, it is now over $5 per gallon, making a decision to move from B20 not cost effective.”
With the rising price of biodiesel, Port of Seattle fleet managers have adjusted their biodiesel blend to control costs. “We’d been using B99 since June 2006, reducing to B50 in the winter months,” says Mary Ann Lobdell, compliance and fleet manager at the port. “We recently switched to B20, however, due to increased costs of biodiesel.”
To try to reduce costs and reduce its carbon footprint even more, Snohomish County has been working with local farmers and other partners since 2005 toward a “seed-to-tank” vision of growing sufficient volumes of biodiesel to power its diesel fleet. The county has given economic development grants to farmers to get the local fuel seed crop industry off the ground. County officials estimate it will take 1,000 acres of fuel seed to provide sufficient fuel to power the county fleet at current crop yields.
The county received a $344,000 federal grant and a $500,000 Washington State Energy Freedom Fund grant to help build a dryer and crusher for bringing local grain, including fuel seed crops, to market. A dedication ceremony was held Sept. 23 to open the dryer facility. “The local crops are harvested, the oilseed is dried and crushed to extract the oil, and the oil is transported to a nearby refinery to become biodiesel,” Mitchell says. “Then the county’s fuel supplier uses the biodiesel to supply the county.”
The cost equation
The cost of alternative fuel vehicle technology and refueling systems is one of the tougher issues facing city and county fleet managers. The cost of compressed natural gas (CNG) is not too bad, Scarafiotti says, but the cost of building and supporting the refueling infrastructure, and the electrical power required to operate that infrastructure, bring CNG’s cost per therm to near the cost of gasoline. “Though we were able to locate a grant to purchase CNG-powered solid waste trucks, the grant did not even cover the cost of the CNG equipment,” he says.
Rhodes also finds natural gas problematic because of a lack of support from vehicle manufacturers. “While we operate 20 natural gas powered vehicles, our number of natural gas-powered equipment is limited due to the difficulty in obtaining parts or service,” he says.
Mesa avoids those problems by using hybrid vehicles that run on conventional fuels or biodiesel. “We currently have three hybrid [Toyota] Prius sedans and are purchasing a number of hybrid Chevrolet Malibu cars,” Scarafiotti says. “We are looking at the Kenworth [medium-duty truck] hybrid platform also. We are very interested in the two-mode hybrid system since it has the capability to assist the [internal combustion engine] ICE through the full range of operation. Although the hybrid design has a higher capital cost, we believe that the operational cost will be less over the life of the vehicle.”
To get the most out of hybrids, though, they must be used appropriately to maximize their fuel savings. In urban, stop-and-go traffic environments, the electric engine shoulders most of the burden of vehicle propulsion. Highway operation, by contrast, relies on a hybrid’s gasoline or diesel motor almost exclusively. “We have recently added three Ford Escape [sport utility vehicle] hybrids to our fleet,” Rhodes says. “But based on our previous experience, and based on current fuel costs, we’ve concluded that the cost benefits of utilizing hybrid vehicles is realized only when they are placed into those business service areas where there is significant amount of mileage annually to offset the price difference from using gasoline.”
Port of Seattle officials also consider how hybrids will be used to determine whether they will be cost-effective. “At what price point do hybrids and AFVs [alternative fuel vehicles] become a more cost-effective fleet vehicle for our operation? That is a case-by-case decision,” Lobdell says.
Working with problems
Fleet managers also must consider any potential operational problems with alternative fuels. Oregon has mandated E-10, a fuel blend of 10 percent ethanol and 90 percent gasoline, for all unleaded fuel sold in the state, but some fleet managers are not impressed with its performance. “Of the two alternative fuels our city is using, we are less enthusiastic about E-10,” Thomson says. “We’ve had one major phase separation incident at our central fueling facility. We’re also not impressed with the mileage penalty compared to regular unleaded gasoline, and the extremely low tolerance of ethanol-blended gasoline for water requires more intensive and, therefore, more expensive fuel system management.”
As prices for regular gasoline and diesel continue to increase, and concern about emissions and dependence on foreign oil grows, interest in alternative fuel vehicles and alternative fuel use will only grow. “The higher the cost of fossil fuel, the more cost-effective hybrids and AFVs using alternative fuels are,” Mitchell says. “Also, diesel vehicles use less fuel than comparably sized gasoline vehicles, so we have increased the number of diesel-powered pickups and vans, and they use B20 to help clean the air. That’s the simplest calculation of all.”
— Sean Kilcarr is senior editor for Fleet Owner, American City & County’s sister publication.