When it comes to the world of alternative fuels, alternative power and environmental initiatives for fleets, the Green Fleet Conference is the hub of the universe. From last week’s conference in Phoenix and other recent travels and inquiries, here are a few trend lines to follow:
Natural gas is taking over the universe.
Not really, but it feels that way. In recent years, the movement to compressed natural gas (CNG) was advancing with the help of third-party CNG conversion manufacturers such as Westport, Landi Renzo and Venchurs. These companies are not only surviving, but they’re also expanding their offerings. But when the auto manufacturers initiate their own product offensives, you know that CNG has come into its own.
General Motor’s next generation HD pickups will have a bi-fuel CNG option for all cab styles, while dedicated CNG options continue to be available on GM vans. Chrysler’s CNG Ram 2500 went on sale this year. Ford has expanded CNG offerings with four QVMs now. Large truck makers, including Kenworth, Navistar and Mack, are adding options for CNG and LNG (liquefied natural gas). Navistar head Dan Ustian has called natural gas “the most realistic alternative fuel option to the trucking industry.”
The premium on CNG conversions is shrinking. Materials costs for tanks are coming down and economies of scale are being realized. A few years ago, light-duty conversions retailed for more than $11,000; today, Venchurs’ conversion for Ford’s F-250 and F-350 models with a 24-gallon tank costs $8,350.
At Green Fleet, when the conversation centered on fleet implementation and measurable return on investment, fleet managers were talking about CNG more than anything else.
Propane is still a part of the conversation and is expected to grow, especially in vocational applications such as school transportation and shuttle buses. Though per-gallon pricing is generally higher than CNG and pricing is subjected to more fluctuation, propane is particularly attractive because the costs to install a fueling station are significantly less than one for CNG.
The EV market has stalled (at least with fleets).
Again, when truck manufacturers either expand or abandon their alt-fuel or power product portfolios, it’s a good way to gauge how the trade winds are blowing. Last year, Ford ditched its Transit Connect Electric upon the bankruptcy of electric components maker Azure Dynamics. Navistar is no longer making its eStar electric truck, while Eaton has quietly dropped its Hydraulic Launch Assist system for diesel-electric hybrids.
At a Green Fleet seminar, Andrew Douglas of Kenworth reported “a dramatic drop off in sales of diesel-electric hybrids in favor of CNG.” In general, fleets report that they are staying on the sidelines when it comes to electric because the technology still relies on government subsidies, and no one thinks that existing subsidies will remain for much longer.
And while the premium for a hybrid-electric truck is high, larger truck fleets are disappointed with actual fuel economy. Admittedly, it’s partly because drivers haven’t been trained properly to reap the maximum miles per gallon, or they’re deciding not to drive with fuel economy in mind.
Nonetheless, companies such as XL Hybrids are implementing a smarter approach by offering an aftermarket hybrid system for trucks and vans with a much quicker payback. At less than $9,000 to install – compared to the $40,000 premium on an Enova hybrid upfit from two years ago – the XL system forgoes electric-only power, which doesn’t return a tremendous fuel economy improvement anyway.
Electric vehicle proponents realize that a holistic approach to EV adoption is needed, so organizations such as the Electrification Coalition are coordinating with stakeholders at OEMs, dealerships, charging station makers and municipalities as well as through public education campaigns to “get it right.”
In his session, Dave Hurst of Navigant Research said that hybrids and all-electric vehicles will find greater traction in the consumer market, while propane and natural gas will be fleet plays.
All this while everyone waits for that big battery power breakthrough, which doesn’t seem to be close.
Watch out for Renewable Natural Gas.
Renewable Natural Gas (RNG) comes from methane from waste streams such as landfills, dairies and sewage plants. In terms of carbon fuels, RNG is the cleanest. While traditional CNG emits about 30% fewer greenhouse gases than gas or diesel fuel, RNG is 90% cleaner.
A business model is being created around the U.S. government’s renewable energy incentives. As RNG can be added to any existing CNG supply, fleets can get credit for buying RNG that enters the pipeline, even though they’d be fueling up with regular CNG at their pump.
Fleets in the waste industry have been natural first adopters of RNG, as landfill owners have a ready supply to convert. But other types of fleets, particularly municipal, are coming onboard. Last week Clean Energy announced an initiative to start selling RNG at the pump, and Keith Leech, fleet manager for the City of Sacramento, is the first customer. He uses restaurant waste from an anaerobic digester system, calling it “farm to fork to fuel.”
RNG is more expensive to produce than CNG, though companies like Clean Energy are subsidizing RNG production. However, if fleets can source fuel directly from a landfill, this closed system makes it easier to write a long-term fuel contract, with or without subsidies.
Other green fuels haven’t gone away, yet they’re limping along with the crutch of government support to survive.
Remember cellulosic ethanol, which is derived from non-food organic matter such as plant stalks and wood chips and was heralded as the future of ethanol as a fuel? The good news is that more than a dozen cellulosic ethanol plants will come online next year. The not-so-good news is that the production pales in comparison to corn ethanol factories. Debate centers on whether cellulosic ethanol is considered “renewable” and thus able to reap similar incentives to RNG.
Hydrogen power is still “the future.” Hydrogen was all the rage eight years ago before electricity became the power du jour. Nonetheless, new funding in California will result in the growth of the number of hydrogen fueling stations from nine presently to 100 in a year, according to the California Fuel Cell Partnership. Toyota and Hyundai are introducing new fuel cell models. There have been breakthroughs: in 2002, hydrogen power cost $270 a kilowatt hour while today that figure stands at $41. The goal is $35 kw/hr by 2017 for commercial viability.
At Green Fleet, there was talk of a new, ultra-clean burning fuel called DME (di-methyl ether), which can be produced from natural gas. DME performs like diesel but can lower CO2 emissions by as much as 95% when produced by biomass. And because it’s a liquid, it’s easier to store and transport. Heavy truck makers like it; Volvo and Mack are readying engines to run on DME.
It’s still the little things that count.
By 2020, Navigant Research predicts that 90% to 95% of the vehicles will still be powered by gasoline or diesel fuel. This projection points to the reality that in seven years, the great majority of carbon emissions reductions will still come from initiatives that don’t revolve around switching to alt-fuel or alt-powered vehicles.
At Green Fleet, many fleet managers said that the nature of their fleets prohibits them from taking advantage of alt-fuels. Still, they are doing plenty to reduce their carbon emissions. David Tosh, the fleet manager for Benco Dental Supply, went to newer, smaller cargo vans and uses a moving company to ship larger items. Similarly, Tom Winnberg of Aramark did an analysis of every piece of inventory in his vans and was able to reduce his average van weight by 215 lbs.
These initiatives, along with optimizing routes, managing idling and driver awareness and education, will never make headlines. But be sure to quantify those environmental savings, in addition to the savings to your bottom line.