alternative motor fuels
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Alternative Motor Fuels. Hugh Hughson Doug Shepherd. September 22, 2006. Alternative Motor Fuels. The push for alternatives A brief overview of fuel types Vision for the future Tax Implications Oregon’s alternative approach. The Push for Alternatives. Environmental concerns - PowerPoint PPT PresentationTRANSCRIPT
Alternative Motor Fuels
September 22, 2006
Hugh Hughson
Doug Shepherd
Alternative Motor Fuels
• The push for alternatives
• A brief overview of fuel types
• Vision for the future
• Tax Implications
• Oregon’s alternative approach
The Push for Alternatives
• Environmental concerns
• Supply, demand and price concerns
• Governments:– Incentives (e.g., tax exemptions, fixed/percentage based blends)
– Directives (e.g., mandated fuel blends)
• Two approaches:– Improved fuel efficiency (e.g., new engine technology,
aerodynamics)
– New fuels
Compressed Natural Gas
• Underground deposits – Pro’s
• Existing distribution network (e.g., pipelines)
– Con’s• Non renewable• High octane but low energy content (44,000 BTU)
• Significant retooling of fuel station infrastructure and vehicles (must be compressed to 3,000 – 3,600psi., therefore larger, heavier and more expensive tanks)
• Existing/competing demand (e.g., home heating)
Ethanol (1 of 2)
• Grain alcohol using a distillation process – Pro’s
• Higher octane therefore cooler engine• Greenhouse gas neutral • Supports a struggling agriculture sector• Most vehicles can use E10 without modification
– Con’s• Lower energy content compared to gas (E85 =
80,000 vs. 124,800 BTU)• Corrosive solvent – need stainless steel or plastic
for fuel injection, pumps, tanks and hoses (vehicle and distribution chain)
Ethanol (2 of 2)
• Less volatile therefore gas blended for cold weather • Environmental impact - intensive farming/feedstock
process (e.g., pesticides, fertilizers, equipment and transport)
• Insufficient feedstock to meet demand– One acre of corn can produce 300 gallons of ethanol
– Need to dedicate 71% of US farmland to meet current fuel consumption
– Notes• US in 2005 produced 4.3 billion gallons (3% of current
consumption) (others say 15 billion)
• Cellulosic ethanol using enzymes to break down waste grasses (not food) into ethanol
Biodiesel (1 of 2)
• Vegetable oils, animal fats and cooking oils– Pro’s
• Similar energy content (4% lower for BCTT) • Reduced CO2 emissions (B100 -75%, B20 -15%) • Vehicles can use without modification (any blend and
diesel engines more tolerant of varying fuel quality)
– Con’s• Blending and clouding issues – therefore additives
or heating required (should be heated to 70C to mix properly with cold diesel)
Biodiesel (2 of 2)
• High cost to produce ($1/gallon more) (80% of final product is feedstock)
• Insufficient feedstock to meet demand – Total agricultural production in Canada could supply B10 to
the entire fuel market
• Petroleum industry/infrastructure reluctant to handle because of quality, contamination and blending concerns
– Notes• Quality of finished product which varies by the type
of feedstock and the manufacturing process • 75 million gallons produced in 2005 (compares to 3
billion litres in Europe)
Electricity• Rechargeable battery packs (pure and hybrid - battery packs
and electrical generation during slowing and stopping)
– Pro’s• Existing distribution network (e.g., power lines) • Inexpensive (2 cents per mile)• Lower emissions (10% of current ic engine)
– Con’s• Pure has limited range (100-120 miles per charge) and slow
charging • Environmental impact – only 2.3% of electricity comes from
renewable resources• Vehicles are expensive and technology breakthrough
required
Methanol• Wood alcohol using steam and catalyst
– Pro’s • Greenhouse gas positive• Higher octane therefore cooler engine
– Con’s• Lower energy content (64,000 BTU)
• Corrosive solvent and invisible flame • Less volatile therefore gas blended for cold weather
– Notes• Most methanol comes from natural gas (i.e., non
renewable) but can be obtained from coal and fermenting organic matter (e.g., sewage, manure)
PuriNOx
• Diesel (80%-92%) plus water and emulsifier – Pro’s
• Reduced PM emissions (50-60%)
• Most vehicles can use without engine modification
– Con’s• Lower energy content (power loss 15%-20%)
• Fuel must be agitated or fuel/water separates• Cold weather problems
Hydrogen• Water and electricity releasing oxygen
– Pro’s • Abundant supply of water• Highest energy per unit of mass of all chemical fuels
(120MJ/kg compared to 42MJ/kg for petroleum)
– Con’s• Expensive (electricity and mostly non-renewable resources)
• Significant retooling of fuel station infrastructure and vehicles (must be compressed 5,000+psi., or must be frozen -423F
therefore larger, heavier and more expensive tanks)
– Notes• Technology breakthrough required• President Bush wants hydrogen powered cars on the market by 2020
Current Environment• Government targets:
– Canada – a 45% E10 and 5% biofuel content by 2010
– USA - a 4% (28 billion) renewable fuel content by 2012
– EU has a 5.7% target by 2010
• There is no clear alternative fuel “winner” (but the days of a single fuel source are gone)
Current Environment
• Petroleum Industry – Focused on ultra low sulphur diesel (USLD) – Reluctant to handle alternative fuels because of:
• Supply and quality concerns• Infrastructure concerns
• Car Industry– Research and development (i.e., more efficient
engines, more flexible fuel vehicles - already 34 models E0 – E85, and fuel cells);
– To make a variety of power trains; and– To extend warrantees to alterative fuels
Tax Implications/Challenges
• Revenue:– If tax incentives are offered (vs. mandated volumes)
– If lower taxed “fuels” are used (e.g., electricity, vegetable oil)
– If fuels are manufactured below the tax radar (e.g., biodiesel)
– If there are difficulties auditing taxpayers
• Administration:– Reporting processes (if tax incentives used)
– Refunds of new fuels (if tax incentives used)
Tax Implication/Challenge
• IFTA:– Licensees required to keep records and report
each fuel type separately– Jurisdictions required to provide tax rates for
each fuel type– Result:
• Infinite number of tax rates• Licensees unable to report correctly• Difficulties auditing fuel records and consumption
rates• Potential tax evasion
Tax Implication/Challenge
• IFTA Board resolution (2005):– Blended fuels should be reported as one fuel
type/tax rate (e.g., diesel) – Use the exempt fuel provisions (R830) to
encourage the use of alternative motor fuels
The Future
• Fuel costs will rise • Fuel demand will rise (i.e., 2 million barrels /day)
• Alternative fuels will not satisfy demand
• We will be forced to change how we live:– More high density housing – Softer real estate in bedroom communities– Choose between renewable fuel and food
• Demand for food is expected to double in 50 years• Demand for transportation fuel is expected to double
in 32 years
The Future
• Variables:– Research and development– Cost competitiveness of petroleum fuels to new
fuels – Cost competitiveness of new fuel vehicles to
existing:• Internal configuration/carrying capacity (e.g., fuel storage) • Life costs
– Purchase/resale prices compared current vehicles– Operating costs per kilometre/mile– Additional maintenance costs
Oregon’s Alternative Approach
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