Alternative Vehicle Fuels
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Facing the long term effects of global warming and the shorter term consequences of extensive reliance on foreign oil supplies, U.S. automakers, researchers, environmentalists, and policy makers shared a common goal in the development of alternatives to the transportation sector's basis in gasoline and diesel fuels. Alternative fuels—including liquefied petroleum gas (LPG), methanol, ethanol, compressed natural gas (CNG), hydrogen, biomass (plant or animal waste), and mixtures of these with regular gasoline—gained increasing favor due to test results demonstrating their significantly more benign effects on the ozone layer and their reduction of pollutant emissions. But mass commercialization was another issue.
According to information released by the Energy Information Administration (EIA) in August 2006, approximately 890,281 alternative fuel vehicles (AFVs) cruised U.S. roads in 2005, an increase from 518,919 in 2002. The majority of these vehicles (885,341) were non-dedicated or hybrid AFVs. Vehicles capable of burning 85 percent ethanol comprised the largest AFV category (743,948), followed by hybrid gasoline-electric vehicles (139,595); compressed natural gas (3,304); electric (2,281); and liquefied petroleum gas (700). The number of vehicles powered by E85 is especially noteworthy, considering that only 12,788 such cars were on the road in 1998 and 82,477 in 2002. By vehicle type, the EIA indicated that there were 305,454 alternative fuel vehicle SUVs in 2005, followed by pickup trucks (278,096); automobiles (294,665); vans and minivans (8,055); buses (1,753); medium- and heavy-duty trucks (216); and other vehicle types (2,042).
The extensive resources, in terms of private investment and public policy, required to maintain the stability of the U.S. oil supply create an enormous incentive for the introduction of viable alternative fuel technologies on a mass level. Political factors, including skyrocketing concern—particularly following the terrorist attacks of 11 September 2001, and the U.S. military involvements in an unstable Middle East, which was home to 90 percent of the world's proven oil reserves—over the country's dependency on foreign energy sources, as well as evolving attitudes toward environmental stability, have played the leading role in the push toward alternative vehicle fuels.
The impact of a mass alternative fuel-based economic conversion is a sticky issue, both domestically and globally. The tenuous balance of geopolitical power and international governmental alliances is intricately tied to control over energy supplies, which has served as the backdrop to wars as well as less dramatic international tensions. On the domestic front, some of the nation's largest enterprises have staked their fortunes on traditional energy sources slated for replacement by alternative fuels. Power companies, electricians, coal companies, and oil firms are just a handful of the players throughout the economy that will need to scramble for a meaningful place in a dramatically changed market.
Market forces, as a result, are unlikely to be the primary motivating factor in the rollover from oil-based fuels to alternative vehicle energy sources. AFVs typically cost several thousand dollars more than conventional vehicles, and the fueling station infrastructure to accommodate alternative fuel vehicles (AFVs) has been sorely lacking. Compared with the 200,000 gasoline and diesel refueling stations in the U.S. in 2003, the 1,600 natural gas refueling sites looked conspicuously inadequate to inspire mass market penetration of AFVs. For perspective, the U.S. General Accounting Office (GAO) reported that in order to reduce gasoline and diesel fuel consumption by 30 percent between 2000 and 2010, the nation would require some 64,000 AFV fuel stations, which, at some $300,000 apiece, amounts to an enormous investment in infrastructure just to make the cars—themselves still expensive and developing—a viable commercial reality.
Thus, one of the biggest challenges facing the alternative fuels industry has been how to incorporate such fuels into vehicles and power systems on a mass scale cheaply and without sacrificing everyday conveniences and comforts. The question of how best to accomplish this task amidst the range of hurdles—logistic, economic, and environmental—is not so easily answered and remains the most nebulous aspect of the alternative fuels industry.
Because of the interrelationship and interdependency between transportation fuels and the national economy as well as national security, both the gasoline and alternative fuel industries are heavily structured, controlled, and regulated by federal and state interests. Control spills over into the user market in that private industry must not only produce alternative fuel vehicles that can compete with the price and efficiency of traditional gasoline-fueled vehicles but must also meet strict emissions and other environmental regulation standards.
The Energy Information Administration reports that the primary determinant of the choice and scale of alternative fuel production is governmental policy, noting that use of such technology takes off only following public policy initiatives, whereas incentive seems to be in short supply absent government spurs. Not surprisingly, then, federal funding remains a cornerstone of alternative fuels development programs.
To ease the pain of regulation as well as stimulate interest, numerous laws and tax incentives are directed toward both producers and users of domestically produced alternative fuels, giving them a chance to compete with the oil industry and its monopolized hold on the global market. Some of the more important federal legislation supporting bio-fuels includes the Energy Security Act (1978); the Energy Tax Act (1978); the Gasohol Competition Act (1980); the Crude Oil Windfall Profit Tax Act (1980); the Energy Security Act (1980); the Surface Transportation Assistance Act (1982); the Tax Reform Act (1984); the Alternative Motor Fuels Act (1988); the Omnibus Budget Reconciliation Act (1990); the Clean Air Act Amendments (1990); the Energy Policy Act (1992); the Building Efficient Surface Transportation and Equity Act (1998); and the Energy Conservation Reauthorization Act (1998). These acts are administered and overseen by the U.S. Department of Energy (DOE).
The manner in which these laws affect and interface with private industry can be summed up by the Alternative Motor Fuels Act of 1988. Its stated objective is to encourage the widespread development and use of methanol, ethanol, and natural gas as transportation fuels. Section 400AA requires the U.S. government to acquire the maximum number of alternative-fueled vehicles in its fleets as is practical. Importantly, the vehicles are to be supplied by original equipment manufacturers (OEMs), thus stimulating private industry. The act also mandates that the DOE must assist state and local governments in developing public transportation buses capable of operating with alternative fuels.
Concurrently, acts such as the Clean Air Act and its amendments continue to focus on reducing the amount of pollutants emitted from motor vehicles. The U.S. Environmental Protection Agency (EPA) also remains greatly involved in the monitoring of environmental effects caused by vehicular traffic and fuel byproducts. In the late 1990s, for example, the EPA ruled that particulates, microscopic specks of carbon emitted from diesel engines that can lodge in lungs and cause a host of medical complications (including death), constituted air quality health hazards.
To monitor progress under the Energy Policy Act of 1992 (EPAct), which extends the Alternative Motor Fuels Act by requiring the incorporation of AFVs into the fleets of federal and state governments, the DOE reports to Congress annually on the progress of the act's focus, which is to encourage use of alternative fuels. Field researchers, OEM markets, and fuel suppliers complete lengthy annual surveys that primarily address the number and type of alternative fuel vehicles available; the number, type, and geographic distribution of those vehicles in use; the amount and distribution of each type of alternative fuel consumed; and information about the refueling/recharging facilities. As the data builds from year to year, the DOE...
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