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  Summary Internal combustion engines operating on petroleum fuels · ICEVs that are much more efficient than those have powered almost all light-duty vehicles (LDVs) for the expected to be available by 2025; past century. However, concerns over energy security from · Hybrid electric vehicles (HEVs), such as the Toyota petroleum imports and the effect of greenhouse gas (GHG) Prius; emissions on global climate are driving interest in alterna- · Plug-in hybrid electric vehicles (PHEVs), such as the tives. LDVs account for almost half of the petroleum use Chevrolet Volt; in the United States, and about half of that fuel is imported · Battery electric vehicles (BEVs), such as the Nissan (EIA, 2011). LDVs also account for about 17 percent of the Leaf; BEVs and PHEVs are collectively known as total U.S. GHG emissions (EPA, 2012). plug-in electric vehicles (PEVs); In response to a congressional mandate in the Senate’s · Fuel cell electric vehicles (FCEVs), such as the Mer- Fiscal Year 2010 Energy and Water Development Appropria- cedes F-Cell, scheduled to be introduced about 2014; tions Bill (Report 111-45) for the U.S. Department of Energy, and Energy Efficiency and Renewable Energy (DOE-EERE), the · Compressed natural gas vehicles (CNGVs), such as National Research Council (NRC) convened the Committee the Honda Civic Natural Gas. on Transitions to Alternative Vehicles and Fuels (see Appen- dix B) to assess the potential for vehicle and fuel technology The non-petroleum-based fuel technologies examined in options to achieve substantial reductions in petroleum use the study are hydrogen, electricity, biofuels, natural gas, and and GHG emissions by 2050 relative to 2005. This report liquid fuels made from natural gas or coal. For each fuel and presents the results of that analysis and suggests policies to vehicle type, the committee determined current capability achieve the desired reductions. The statement of task (see and then estimated future performance and costs, plus bar- Appendix A) specifically asks how the on-road LDV fleet riers to implementation, including safety and technology could reduce, relative to 2005, development timelines. The report also comments on key federal research and development (R&D) activities appli- · Petroleum use by 50 percent by 2030 and 80 percent cable to fuel and vehicle technologies. by 2050, and BEVs, FCEVs, and CNGVs1 can operate only on their · GHG emissions by 80 percent by 2050. specific fuel, although hydrogen and electricity can be produced from a variety of sources that might or might not involve the control of emissions of carbon dioxide, the main SCOPE AND APPROACH GHG responsible for human-induced climate change. The Four general pathways could contribute to attaining both engines in ICEVs, HEVs, and PHEVs can use fuels produced goals—highly efficient internal combustion engine vehicles from petroleum, biomass, natural gas, or coal. (ICEVs) and vehicles operating on biofuels, electricity, The committee recognizes the great uncertainties regard- or hydrogen. Natural gas vehicles could contribute to the ing future vehicles and fuels, especially costs, timing of additional goal of reducing petroleum consumption by 50 technology advances, commercialization of those advances, percent by 2030. 1  This study considered the following types of LDVs: Vehicles that operate on CNG can also be designed as dual-fuel vehicles that can switch to gasoline when CNG is not available, or as hybrid electric vehicles. To keep the analysis manageable, these options are not considered in this report. 2

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SUMMARY 3 and their penetration into the market. As a result, the com- The vehicle and fuel data were then used to forecast mittee developed a range of estimates for use in this study. future LDV fleet energy use and GHG emissions using For vehicle technologies, the committee used two sets two models described in Chapter 5. VISION was used to of assumptions for cost and performance: (1) midrange assess technology pathways to on-road fleets in 2050 based estimates that are ambitious but reasonable goals in the on inputs from the vehicle and fuel analyses developed in committee’s assessment; and (2) optimistic estimates which Chapters 2 and 3. LAVE-Trans—a spreadsheet model that are potentially attainable, but will require greater successes takes into account consumer choices (discussed in Chap- in R&D and vehicle design. Both sets are predicated on ter 4), which are affected by vehicle and fuel characteristics, the assumption that strong and effective policies are imple- costs, and policy incentives—was used to compare different mented to continually increase requirements or incentives policy-driven scenarios. These scenarios are not intended as (at least through 2050) to ensure that technology gains are predictions of the future but rather to evaluate the relative focused on reducing petroleum use and GHG emissions. potential impact on future petroleum use and GHG emissions Alternate assumptions were also developed for fuels to of technological success and policy options, and the resulting aid in assessing uncertainties. For example, several produc- costs and benefits. tion processes were considered for hydrogen and biofuels, By their nature, all models are simplifications and and both conventional generation and low-GHG-emission approximations of the real world and will always be con- scenarios were considered for electricity. strained by computational limitations, assumptions, and In its assessment of the current state of LDV fuel and vehi- knowledge gaps. All the models’ estimations depend criti- cle technologies and their projections to 2050, the committee cally on assumptions about technologies, economics, and built on earlier studies by the NRC and other organizations policies and should best be viewed as tools to help inform as listed in Appendix D. In addition, the committee exam- decisions rather than as machines to generate truth or make ined publicly available literature and gathered information decisions. The LAVE-Trans model in particular uses the through presentations at open meetings. Insofar as possible, committee’s assumptions about technological progress over the committee assessed the fuels and vehicle technologies on several decades, how people behave, what things cost and a consistent and integrated basis. Its approach accounted for what they are worth. It predicts, in a formal relational struc- important effects, including the following: ture, how the vehicle fleet composition would then evolve and what the impact would be on petroleum use and GHG · Potential projected performance characteristics of emissions. Some of the LAVE-Trans results were surprising, specific vehicles and fuel systems, but the committee examined them and the model, fixed mis- · Costs of the technologies including economies of takes, and revised assumptions, until it was satisfied with the scale and learning, robustness of the outputs that resulted from the inputs. Even · Technical readiness, so, there is considerable uncertainty about the results pre- · Barriers to implementation, sented here. Input assumptions are estimates that may prove · Resource demands, and inaccurate. The model’s handling of market relationships · Time and capital investments required to build new may be simplistic. Nevertheless, as described in Chapter 5, fuel and vehicle technology infrastructure. the results are robust for a variety of inputs, and, as long as the results are used with an understanding of the models’ The committee also considered crosscutting technologies. strengths and weaknesses, they should be valuable assets in For vehicles, these included weight reduction and improve- thinking about potential policy actions. ments in rolling and aerodynamic resistance; for fuels, car- The major results of the committee’s work are listed bon capture and storage (CCS). In addition, the analysis took below; additional findings and policy options are embedded into account sector-wide effects such as consumer prefer- in individual chapters of the report. ences and potential changes in vehicle miles traveled (VMT). The committee then analyzed the impact of the vari- MEETING THE GOALS OF REDUCING PETROLEUM ous options. Vehicle performance was projected using a USE AND GHG EMISSIONS model developed by the committee and its consultants that estimates the impact of reductions in energy losses. Costs Finding: It will be very difficult for the nation to meet were projected for expected technologies relative to a 2010 the goal of a 50 percent reduction in annual LDV base vehicle. These analyses and the results are described petroleum use by 2030 relative to 2005, but with addi- in Chapter 2. Efficiencies, costs, and performance charac- tional policies, it might achieve a 40 percent reduction. teristics were analyzed consistently for all vehicle classes and powertrain options, with the partial exception of travel Future petroleum use is likely to decline as more efficient range. Fuel technologies were analyzed individually using vehicles enter the market in response to the Corporate Aver- consistent assumptions and cost data across all fuels as age Fuel Economy (CAFE) standards and GHG requirements shown in Chapter 3. for 2025, more than compensating for the increased number

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4 TRANSITIONS TO ALTERNATIVE VEHICLES AND FUELS of vehicles on the road and the miles traveled. These vehicles purchases of the new technology. Figure S.1 shows potential will be mainly ICEVs, with an increasing share of HEVs. In petroleum use for technology-specific scenarios. addition, biofuels mandated by the Renewable Fuel Standard (RFS) could displace a significant amount of petroleum fuels Finding: Large reductions are potentially achievable by 2030, especially if coupled with advances in processes for in annual LDV GHG emissions by 2050, on the order producing “drop-in” cellulosic biofuels (direct substitutes for of 60 to 70 percent relative to 2005. An 80 percent gasoline or diesel fuel). reduction in LDV GHG emissions by 2050 may be Additional policy support may be required to promote technically achievable, but will be very difficult. increased sales of CNGVs, BEVs, and FCEVs. Even then Vehicles and fuels in the 2050 time frame would have the nation is unlikely to reach a 50 percent reduction in to include at least two of the four pathways: much petroleum use by 2030 because very little time remains for higher efficiency than current vehicles, and operation achieving the required massive changes in the on-road LDV on biofuels, electricity, or hydrogen (all produced with fleet and/or its fuel supply. Many of the vehicles on the road low GHG emissions). All four pathways entail great in 2030 will have been built by 2015, and these will lower uncertainties over costs and performance. If BEVs or the fuel economy of the on-road fleet. FCEVs are to be a majority of the 2050 LDV fleet, they would have to be a substantial fraction of new car sales Finding: The goal of an 80 percent reduction in LDV by 2035. petroleum use by 2050 potentially could be met by several combinations of technologies that achieve at Achieving large reductions in net GHG emissions from least the midrange level of estimated success. Contin- LDVs is more difficult than achieving large reductions in ued improvement in vehicle efficiency, beyond that petroleum use. In addition to making all LDVs highly effi- required by the 2025 CAFE standards, is an important cient so that their fuel use per mile is greatly reduced, it will part of each successful combination. In addition, bio- be necessary to displace almost all the remaining petroleum- fuels would have to be expanded greatly or the LDV based gasoline and diesel fuel with fuels with low net GHG fleet would have to be composed largely of CNGVs, emissions. This is a massive and expensive transition that, BEVs and/or FCEVs. because LDVs emit only about 17 percent of U.S. GHGs, would have to be part of an economy-wide transition to The committee considers that large reductions in LDV provide major GHG reduction benefits. use of petroleum-based fuels are plausible by 2050, possibly The benefits of biofuels depend on how they are produced even slightly more than the 80 percent target, but achieving and on any direct or indirect land-use changes that could lead reductions of this size will be difficult. A successful transi- to GHG emissions. Several studies indicate that sufficient tion path to large reductions in petroleum use will require biomass should be available to make a large contribution to not only long-term rapid progress in vehicle technologies for meeting the goals of this study, but the long-term costs and ICEVs and HEVs, but also increased production and use of resource base for biofuels produced with low GHG emissions biofuels, and/or the successful introduction and large-scale need to be demonstrated. Hydrogen and electricity must be deployment of CNGVs, BEVs with greatly improved bat- produced with low-net-GHG emissions, and the costs of teries, or FCEVs. large-scale production are uncertain. Achieving the goals Extensive new fuel infrastructure would be needed for does not require fundamental breakthroughs in batteries, fuel FCEVs. CNGVs would require new supply lines in areas cell systems, or lightweight materials, but significant con- where natural gas is unavailable or in limited supply, and tinuing R&D yielding sustained progress in cost reduction many filling stations. The infrastructure needed for BEVs and performance improvement (e.g., durability) is essential. would mostly be charging facilities, since electricity supply Overall, the committee concluded that LDV GHG emis- is already ubiquitous. The technology advances required do sions could be reduced by some 60 percent to somewhat not appear to require unexpected breakthroughs and can pro- more than 80 percent by 2050 as shown in Figure S.2. The duce dramatic advances over time, but they would have to be cost will be greater than that for meeting the 80 percent focused on reducing fuel use rather than allowing increases petroleum reduction goal because options such as CNGVs, or in performance such as acceleration. Thus, a rigorous policy BEVs operating on electricity produced without constraints framework would be needed, more stringent than the 2025 on GHG emissions, cannot play a large role. CAFE/GHG or RFS standards. Large capital investments would be required for both the fuel and vehicle manufactur- Finding: None of the four pathways by itself is pro- ing infrastructure. Further, alternative vehicles and some jected to be able to achieve sufficiently high reduc- fuels will be more expensive than the current technology tions in LDV GHG emissions to meet the 2050 goal. during the transition, so incentives to both manufacturers and Further, the cost, potential rate of implementation consumers may be required for more than a decade to spur of each technology, and response of consumers and

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SUMMARY 5 2.50 Petroleum Consumption (billion barrels per year) 2.00 50% Reduction from 2005 levels 1.50 1.00 80% Reduction from 2005 levels 0.50 0.00 Committee Efficiency Efficiency Plug-In Electric Fuel Cell Electric Natural Gas PEVs + FCEVs + Reference Efficiency + Carbon/Oil + Biofuels Vehicles (PEVs) Vehicles (FCEVs) Vehicles Biofuels (Current Policies) Price + Feebates 2030 2.10 2.00 1.86 1.82 1.93 1.73 1.42 1.30 2050 2.17 1.08 0.41 0.39 0.80 0.13 0.40 0.00 FIGURE S.1  Estimated U.S. LDV petroleum use in 2030 and 2050 under policies emphasizing specific technologies. Midrange values are the committee’s best estimate of the progress of the technology if it is pursued2050.eps scenarios except the Committee Reference Figure S-1 Oil Usage in vigorously. All Case (current policies, including the fuel economy standards for 2025) include midrange efficiency improvements. Controls for GHG emis- sions from hydrogen and electricity production are not assumed because the main objective is to reduce petroleum use. Policy-Driven Petroleum Consumption Scenarios (LAVE-Trans Model) (2005 Consumption = 2.96 B bbl/yr) 1200 (million metric tons of CO2 equivalent per year) 1000 GHG Emissions in 2050 800 600 400 80% Reduction from 2005 levels Carbon/Oil Price Reference Grid with 20% CCS Low-GHG Grid Low-GHG H2 200 Low-Cost H2 + Feebates Production Production Grid & H2 Low-GHG 0 Committee Efficiency Plug-In Electric Fuel Cell Electric Natural Gas PEVs + FCEVs + Reference Efficiency + Biofuels Vehicles (PEVs) Vehicles (FCEVs) Vehicles Biofuels (Current Policies) Reference 1184 721 508 662 621 801 Production Low-GHG 389 335 567 310 190 Production Figure S-2 Emissions in 2050.eps FIGURE S.2  Estimated U.S. LDV GHG emissions in 2050 under policies emphasizing specific technologies. All scenarios except the Com- mittee Reference Case (current policies, including the fuel economy standards for 2025) include midrange efficiency improvements. Fuel production for these scenarios is assumed to be constrained byEmissions Scenarios (low GHG production). Policy-Driven Greenhouse Gas policies controlling GHG emissions in 2050 (LAVE-Trans Model) (2005 GHG Emissions = 1514 MMTCO2e/yr)

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6 TRANSITIONS TO ALTERNATIVE VEHICLES AND FUELS manufacturers to policies are uncertain. Therefore, nationwide basis through strong and effective policy an adaptive framework that modifies policies as tech- intervention by the federal government. nologies develop and as conditions change is needed to efficiently move toward the long-term policy goals. All four transition paths are based on technology options that are currently more expensive than their ICEV equivalent, Continued improvements in vehicle efficiency, espe- and some will require substantial infrastructure changes and cially load reduction (e.g., through the use of light weight possibly consumer adaptation. Thus, success will depend but strong materials), are essential to achieving high GHG on consistent and sustained policies that support reduced reductions and are included in all scenarios as a key step in petroleum use and GHG emissions. improving the feasibility of all the other pathways. In addi- tion, some combination of biofuels, BEVs, and FCEVs (with Finding: Even if the nation falls short of the 2050 goals, the last two operating on low-GHG electricity or hydrogen) there are likely to be environmental, economic and must play a large role. Given the uncertainties surrounding national security benefits resulting from the petroleum all four of these pathways, there is no single, clearly sup- use and GHG emissions reductions that are achieved. ported choice of vehicle and fuel system that will lead to 80 percent reduction in GHG emissions. Finding: The CAFE standard has been effective in Much more efficient or alternative vehicles are currently reducing vehicle energy intensity, and further reduc- more costly than today’s ICEVs and their prices are projected tions can be realized through even higher standards to remain high until the newer technologies are more mature. if combined with policies to ensure that they can be Achieving an extensive transition by 2050 will thus require achieved. government action. These transition costs are in addition to those associated with bringing the technologies to readiness Policy Option: The committee suggests that LDV fuel and providing needed infrastructure. economy and GHG emission standards continue to be Displacing the incumbent ICEVs and petroleum-based strengthened to play a significant role after model year fuels will be difficult. Technologies may not be as successful 2025 as part of this country’s efforts to improve LDV fuel as anticipated, and the policies to encourage them may not economy and reduce GHG emissions. be as successful as modeled by the committee. Furthermore the costs would likely be very large early on, with benefits  Finding: “Feebates,” rebates to purchasers of occurring much later in time. It is essential, then, to ensure high-fuel-economy (i.e., miles per gallon [mpg]) that policies, especially those that focus on investment in vehicles balanced by a tax on low-mpg vehicles is a particular technologies, are not introduced too early (for complementary policy that would assist manufactur- example, before those new fuel and vehicle technologies ers in selling the more-efficient vehicles produced to are close to market readiness, taking into account the best meet fuel economy standards. available information on consumer behavior) or too late (for example, not allowing for the benefits of learning to Policy Option: The committee suggests that the U.S. gov- be realized and to contribute to meeting the goals). Further, ernment include “feebates” as part of a policy package to it is essential that policies are designed so that they can be reduce LDV fuel use. adapted to changing evidence about technology and market acceptance, and to market conditions. Finding: Several types of policies including a price In pursuing these goals, costs and benefits of the intended floor for petroleum-based fuels or taxes on petroleum- action should both be assessed. Action should be under- based fuels could create a price signal against petro- taken only upon a reasoned determination that the benefits leum demand, assure producers and distributors that of intended proposed regulation justify its costs. Scenario there is a profitable market for alternative fuels, and analysis has identified strong tipping points for the transi- encourage consumers to reduce their use of petroleum- tion to new vehicle technologies. If policies are insufficient based fuels. High fuel prices, whether due to market to overcome the early cost differentials, then the transition dynamics or taxes, are effective in reducing fuel use. to such technologies will not occur, and the costs will have been largely wasted. The impact of increases in fuel prices, especially on low- income and rural households, could be offset by using the Finding: Substantial progress toward the goals of increased revenues from taxes or a price floor for reductions reducing LDV petroleum use and GHG emissions is in other taxes. Alternatively, some or all of the revenue gen- unlikely unless these goals are set and pushed on a erated could be used to replace income lost to the Highway

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SUMMARY 7 Trust Fund as gasoline sales decline, so that transport infra- to performance-based policies, or policies that target structure could continue to be supported. reductions in GHG emissions or petroleum use rather than specific technologies. Performance-based policies Finding: Fuel cells, batteries, biofuels, low-GHG for deployment (e.g., CAFE standards) or technology production of hydrogen, carbon capture and storage, mandates (e.g., RFS) do not require direct government and vehicle efficiency should all be part of the current expenditure for particular vehicle or fuel technologies. R&D strategy. It is unclear which options may emerge Additional deployment policies such as vehicle or fuel as the more promising and cost-effective. At the pres- subsidies, or quantity mandates directed at specific ent time, foreclosing any of the options the committee technologies are risky but may be necessary to attain has analyzed would decrease the chances of achieving large reductions in petroleum use and GHG emissions. the 2050 goals. For alternative-vehicle and fuel systems, government involvement with industry is likely to be needed to The committee believes that hydrogen/fuel cells are at least help coordinate commercial deployment of alterna- as promising as battery electric vehicles in the long term and tive vehicles with the fueling infrastructure for those should be funded accordingly. Both pathways show promise vehicles. and should continue to receive federal R&D support. Policy Option: The committee suggests that an expert Policy Option: The committee supports consistent R&D to review process independent of the agencies implementing advance technology development and to reduce the costs the deployment policies and also independent of any politi- of alternative fuels and vehicles. The best approach is to cal or economic interest groups advocating for the technol- promote a portfolio of vehicle and fuel R&D, supported by ogies being evaluated be used to assess available data, and both government and industry, designed to solve the criti- predictions of costs and performance. Such assessments cal technical challenges in each major candidate pathway. could determine the readiness of technologies to benefit Such primary research efforts need continuing evaluation from policy support to help bring them into the market at of progress against performance goals to determine which a volume sufficient to promote economies of scale. If such technologies, fuels, designs, and production methods are policies are implemented, there should be specific goals and emerging as the most promising and cost-effective. time horizons for deployment. The review process should include assessments of net reductions in petroleum use and Finding: Demonstrations are needed for technologies GHG emissions, vehicle and fuel costs, potential penetra- to reduce GHG emissions at appropriate scale (for tion rates, and consumer responses. example, low-carbon hydrogen and CCS) to validate performance, readiness, and safety. Integrated dem- TECHNOLOGY- AND POLICY-SPECIFIC FINDINGS onstrations of vehicles and fueling infrastructure for alternative vehicle and fuel systems will be necessary Vehicles (Chapter 2) to promote understanding of performance, safety, con- sumer use of these alternatives, and other important · Large increases in fuel economy are possible with characteristics under real-world driving conditions. incremental improvements in currently known technology for both load reduction and drivetrain Policy Option: The committee supports government involve- improvements. The average of all conventional LDVs ment in limited demonstration projects at appropriate scale sold in 2050 might achieve CAFE test values of 74 and at appropriate times to promote understanding of the mpg for the midrange case. Hybrid LDVs might performance and safety of alternative vehicles and fuel- reach 94 mpg by 2050. On-road fuel economy values ing systems. For such projects, substantial private sector will be lower. investment should complement the government investment, · To obtain the efficiencies and costs estimated in and the government should ensure that the demonstration Chapter 2, manufacturers will need incentives or incorporates well-designed data collection and analysis to regulatory standards or both to widely apply the new inform future policy making and investment. The infor- technologies. mation collected with government funds should be made · The unit cost of batteries will decline with increased available to the public consistent with applicable rules that production and development; in addition, the energy protect confidential data. storage (in kilowatt-hours) required for a given vehi- cle range will decline with vehicle load reduction and Finding: The commercialization of fuel and vehicle improved electrical component efficiency. Therefore, technologies is best left to the private sector in response battery pack costs in 2050 for a 100-mile real-world

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8 TRANSITIONS TO ALTERNATIVE VEHICLES AND FUELS travel range are expected to drop by a factor of about fuels, refineries, pipelines, and filling stations might 5. However, even these costs are unlikely to create also become obsolete. For BEVs to operate with low a mass market for BEVs, because a battery large GHG emissions, coal- and natural gas-fired electric- enough for a 300-mile real-world range would still ity generation might have to be greatly reduced unless present significant weight and volume penalties and CCS proves cost-effective. Reliance on natural gas or probably could not be recharged in much less than hydrogen for transportation would require additional 30 minutes. Therefore, BEVs may be used mainly for infrastructure. With currently envisioned technology, local travel rather than as all-purpose vehicles. sufficient biofuels could be produced by 2050 to meet · BEVs and PHEVs are likely to use lithium-ion bat- the goal of 80 percent reduction in petroleum use teries for the foreseeable future. Several advanced if the committee’s vehicle efficiency estimates are battery technologies (e.g., lithium-air) are being attained. developed that would address some of the drawbacks · With increasing economic natural gas reserves and of lithium-ion batteries, but their potential for com- growing domestic natural gas production mostly mercialization by 2050 is highly uncertain, and they from shale gas, there is enough domestic natural gas may have their own disadvantages. to greatly increase its use for the transportation sector · PHEVs offer substantial amounts of electric-only without significantly affecting the traditional natural driving while avoiding the range and recharge-time gas markets. Currently the cost of natural gas is very limitations of BEVs. However, their larger battery low ($2.5 to $3.5/million Btu) and could remain low will always entail a significant cost premium over for several decades. Environmental issues associated similar HEVs, and their incremental fuel savings will with shale gas extraction (fracking) must be resolved, decrease as the efficiency of HEVs improves. including leakage of natural gas, itself a powerful · The technical hurdles that must be surmounted to GHG, and potential contamination of groundwater. develop an all-purpose vehicle acceptable to consum- There are several opportunities, direct and indirect, ers appear lower for FCEVs than for BEVs. However, to use natural gas in LDVs, including producing the infrastructure and policy barriers appear larger. electricity for PEVs and producing hydrogen for Well before 2050 the cost of FCEVs could actually FCEVs. The fastest way to reduce petroleum use is be lower than the cost of an equivalent ICEV, and probably by direct combustion in CNGVs coupled operating costs should also be lower. FCEVs are with efficiency improvements, but that approach is expected to be equivalent in range and refueling time likely to interfere with achieving the GHG goal in to ICEVs. 2050. · If CNGVs can be made competitive (with respect to · Making hydrogen from fossil fuels, especially natural both vehicle cost and refueling opportunities), they gas, is a low-cost option for meeting future demand will offer a quick and economical way to reduce from FCEVs, but such methods, by themselves, will petroleum use, but as shown in Figure S.2, the reduc- not reduce GHG emissions enough to meet the 2050 tions in GHG emissions are insufficient for CNGVs goal. Making hydrogen with low GHG emissions is to be a large part of a fleet that meets the 2050 GHG more costly (e.g., renewable electricity electrolysis) goal. or requires new production methods (e.g., photoelec- · Although fundamental technology breakthroughs trochemical, nuclear cycles, and biological methods) are not essential to reach the mpg, performance, and or CCS to manage emissions. Continued R&D is cost estimates in Chapter 2, new technology develop- needed on low-GHG hydrogen production methods ments would substantially reduce the development and CCS to demonstrate that large amounts of low- cost and lead time. In particular, continued research cost and low-GHG hydrogen can be produced. to reduce the costs of advanced materials and battery · Natural gas and coal conversion to liquid fuel (GTL, concepts will be critical to the success of electric CTL) can be used as a direct replacement for petro- vehicles. leum gasoline, but the GHG emissions from these fuels are slightly greater than those from petroleum- based fuels even when CCS is employed at the pro- Fuels (Chapter 3) duction plant. Therefore, these fuels will play a small · Meeting the GHG and petroleum reduction goals role in reducing petroleum use if GHG emissions are requires a massive restructuring of the fuel mix used to be reduced simultaneously. for transportation. The use of petroleum must be · Carbon capture and sequestration is a key technol- greatly reduced, implying retirement of crude oil pro- ogy for meeting the 2050 goal for GHG emissions duction and distribution infrastructure. Depending reductions. Insofar as fossil fuels are used as a source on the progress in drop-in biofuels versus non-liquid of electricity or hydrogen to power LDVs, CCS will

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SUMMARY 9 be essential. The only alternatives are nuclear power transition over and above what the market is willing and renewable energy sources, including biofuels. to do voluntarily. However, as noted above, modeling Applying CCS to biofuel production could result in results should be viewed as approximations at best slightly negative net emissions. because there is by necessity in such predictions a great deal of uncertainty in estimates of both benefits and costs. Furthermore, the costs are likely to be very Consumer Barriers (Chapter 4) large early on with benefits occurring much later in · Widespread consumer acceptance of alternative time. vehicles and fuels faces significant barriers, includ- · It is essential to ensure that policies, especially those ing the high initial purchase cost of the vehicles and that focus on investment in particular technolo- the perception that such vehicles offer less utility and gies, are not introduced before those new fuel and convenience than conventional ICEVs. Overcoming vehicle technologies are close to market readiness these barriers is likely to require significant govern- and consumer behavior toward them is well under- ment policy intervention that could include subsidies stood. Forcing a technology into the market before and vigorous public information programs aimed at it is ready can be costly. Conversely, neglecting a improving consumers’ familiarity with and under- rapidly developing technology could lead to forgone standing of the new fuels and powertrains. Consum- significant benefits. Policies should be designed to ers are used to personal vehicles that come in a wide be adaptable so that mid-course corrections can be variety of sizes, styles, and prices that can meet most made as knowledge is gained about the progress of needs ranging from basic transportation to significant vehicle and fuels technologies. Further, it is essential cargo hauling. Conventional ICEVs can be rapidly that policies be designed so that they can be adapted refueled by a plentiful supply of retailers, effectively to changing evidence about technology and market giving the vehicles unlimited range. Conversely, in acceptance, and market conditions. the early years, alternative vehicles will likely be lim- · Depending on the readiness of technology and the ited to a few body styles and sizes and will cost from a timing of policy initiatives, subsidies or regulations few hundred to many thousands of dollars more than for new-vehicle energy efficiency and the provision their conventional ICEV counterparts. Some will rely of energy infrastructure may be required, especially on fuels that are not readily available or have limited in the case of a transition to a new vehicle and fuel travel range, or require bulky energy storage that will system. In such cases, policy support might be limit their cargo and passenger capacity. required for as long as 20 years if technological prog- ress is slow (e.g., BEVs with lithium-ion batteries may require 20 years of subsidies to achieve a large Additional Findings from Policy Modeling (Chapter 5) market share). · Including the social costs of GHG emissions and · Advance placement of refueling infrastructure is petroleum dependence in the cost of fuels (e.g., critical to the market acceptance of FCEVs and via a carbon tax) provides important signals to the CNGVs. It is likely to be less critical to the market market that will promote technological development acceptance of grid-connected vehicles, since many and behavioral changes. Yet these pricing strategies consumers will have the option of home recharg- alone are likely to be insufficient to induce a major ing. However, the absence of an outside-the-home transition to alternative, net-low-carbon vehicle tech- refueling infrastructure for grid-connected vehicles nologies and/or energy sources. Additional strong, is likely to depress demand for these vehicles. temporary policies may be required to break the Fewer infrastructure changes will be needed if the “lock-in” of conventional technology and overcome most cost-effective solution evolves in the direction the market barriers to alternative vehicles and fuels. of more efficient ICEVs and HEVs combined with · If two or more of the fuel and/or vehicle pathways drop-in low-carbon biofuels. identified above evolve through policy and technol- · Research is needed to better understand key factors ogy development as shown in a number of the com- for transitions to new vehicle fuel systems such as mittee’s scenarios, the committee’s model calcula- the costs of limited fuel availability, the disutility of tions indicate benefits of making a transition to a vehicles with short ranges and long recharge times, low-petroleum, low-GHG energy system for LDVs the numbers of innovators and early adopters among that exceed the costs by a wide margin. Benefits the car-buying public, as well as their willingness include energy cost savings, improved vehicle tech- to pay for novel technologies and the risk aversion nologies, and reductions in petroleum use and GHG of the majority, and much more. More information emissions. Costs refer to the additional costs of the is also needed on the transition costs and barriers to

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10 TRANSITIONS TO ALTERNATIVE VEHICLES AND FUELS production of alternative drop-in fuels, especially REFERENCES on the type of incentives necessary for low-carbon EIA (Energy Information Administration). 2011. Annual Energy Review biofuels. The models this committee and others have 2010. Washington, D.C.: U.S. Department of Energy. used to analyze the transition to alternative vehicles EPA (Environmental Protection Agency). 2012. Inventory of U.S. Green- and/or fuels are first-generation efforts, more useful house Gas Emissions and Sinks:1990-2010. Available at http://www. for understanding processes and their interactions epa.gov/climatechange/Downloads/ghgemissions/US-GHG-Inventory- 2012-Main-Text.pdf. than for producing definitive results.