information sources. The tasks the committee performed include:

  • Assessed the current state of the technology readiness for each fuel using information gathered from presentations made to this committee and published literature.
  • Estimated future improvements to these technologies that could be broadly deployed in the study period.4
  • Estimated the range of costs based on future technology for each fuel delivered to the LDV at a fueling station in a similar way for each fuel. The reference price basis in the Energy Information Administration’s (EIA’s) Annual Energy Outlook 2011 (EIA, 2011a) is used for all primary fuel prices. Investment costs are expressed in 2009 dollars.
  • Estimated the initial investment costs needed to build the infrastructure for each fuel pathway.5
  • Estimated the net GHG emissions per gallon of gasoline-equivalent for each fuel based on the methods selected for producing the fuel. An upstream GHG component, a conversion component, and a combustion component were included in the estimate of net GHG emissions.

3.1.5 Costs of Alternative Fuels

The costs of alternative fuels through 2035 are estimated based on the energy raw material prices in the reference case of the Annual Energy Outlook 2011 (AEO; EIA, 2011a), and the basis and assumptions for the estimates are explained in the individual fuel sections. Fuel prices beyond 2035 were estimated by the committee. Table 3.2 summarizes the expected alternative fuel costs for 2030 on a $/gge or $/kWh basis for some of the fuel pathways and shows the consumer’s annual fuel costs for a new vehicle of that type based on 2030 estimated vehicle mileage.

While the values in Table 3.2 are useful guideposts for this analysis, there are a few factors to keep in mind. First, the fuel costs shown in Table 3.2 are untaxed—current or future taxes are not included and could alter the actual annual cost that consumers pay. Second, the per-gallon of gasoline-equivalent fuel cost estimates in 2030 are a snapshot in time and will likely change as technology develops and world energy prices change. Third, the untaxed fuel-purchase costs to consumers each year appear similar for most fuels except for CNG and the BEV, which are significantly lower than others. Given the small separation for the other options in 2030, untaxed fuel costs are not expected to be a significant driving force for consumers to switch from gasoline to alternate vehicle technologies in this timeframe. Untaxed fuel cost differences of only several hundred dollars per year will not cover the additional vehicle costs described in Chapter 2.6

TABLE 3.2 2030 Annual Fuel Cost per LDV, Untaxed Unless Noted

Fuel Fuel Cost ($/gge or kWh) Annual Consumer Use (gge or kWh) Annual Consumer Fuel Cost ($/yr)
Gasoline (taxed) 3.64/gge    325 gge% 1,183
Biofuel (drop in) 3.39/gge    325 gge% 1,102
Gasoline (untaxed) 3.16/gge    325 gge% 1,027
PHEV10a 3.16/gge    260 gge%    913
0.141/kWh    650 kWh
CTL with CCS 2.75/gge    325 gge%    894
GTL 2.75/gge    325 gge%    894
PHEV40b 3.16/gge    130 gge%    752
0.175/kWh 1,950 kWh
Hydrogen—CCS case 4.10/gge    165 gge%    676
Natural gas—CNG 1.80/gge    325 gge%    585
BEV 0.143/kWh 3,250 kWh    465

NOTE: All fuel costs are based on the 2011 AEO (EIA, 2011a) for 2030. The assumed fuel economies are representative of on-road LDV averages for 2030 described in the scenarios in Chapter 5. The following assumptions were made: 13,000 mi/yr traveled and 40 mpgge for liquid and CNG vehicles, 80 mpgge for hydrogen and 4.0 mi/kWh for electric vehicles. PHEV10 gets 20 percent of miles on electric, PHEV40 gets 60 percent. All costs are untaxed unless noted. Electricity cost includes the retail price plus amortization of the cost of a home charger.
aPHEV10 is a plug-in hybrid vehicle designed to travel about 10 miles primarily on battery power only before switching to charge-sustaining operation.
bPHEV 40 is a plug-in hybrid vehicle designed to travel about 40 miles primarily on battery power only before switching to charge-sustaining operation.

Finding: As the LDV fleet fuel economy improves over time, the annual fuel cost for an LDV owner decreases. With high fleet fuel economy, the differences in annual fuel cost between alternative fuels and petroleum-based gasoline decreases and the annual costs become similar to one another. Therefore, over time fuel-cost savings will become less important in driving the switch from petroleum-based fuels to other fuels.

3.1.6 Investment Costs for Alternative Fuels

The investment costs to build the fuel infrastructure are sizable for all of the alternative fuel and vehicle pathways. In fact, these costs remain among the most important barriers


4Some future technologies that might be developed during the study period are not included for detailed analysis because future efficiencies and costs are not well understood. Examples of this include photoelectrochemical hydrogen production and biofuels from algae.

5Investment costs are explained in Appendix G.2, “Infrastructure Initial Investment Cost.”

6As pointed out in Chapters 4 and 5, consumers tend to value about 3 years worth of fuel savings when making decisions on initial vehicle purchases. Using the numbers in Table 3.2, 3 years of untaxed hydrogen saves only $1,501 compared with taxed gasoline during 2030. The cost saved is not enough to cover the higher cost of a fuel cell electric vehicle (FCEV).

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