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CONTENTS

NOTATION ................................................................................................................................... vi

ACKNOWLEDGMENTS ........................................................................................................... viii

ABSTRACT ................................................................................................................................... ix

1 INTRODUCTION .................................................................................................................... 1

2 CURRENT NATURAL GAS VEHICLE MARKET STATUS ............................................... 3

2.1 Vehicle/Engine Availability ........................................................................................... 4

2.2 Fuel Prices ...................................................................................................................... 5

2.3 Refueling Infrastructure ................................................................................................. 6

2.4 Fossil Natural Gas Supply .............................................................................................. 9

2.5 Renewable Natural Gas ................................................................................................ 10

3 BARRIERS TO EXPANDING NATURAL GAS USE IN TRANSPORTATION ............... 12

3.1 Vehicle Efficiency ........................................................................................................ 12

3.2 On-Board Natural Gas Storage..................................................................................... 12

3.3 Natural Gas Fueling Station Cost ................................................................................. 13

3.4 Vehicle and Station Methane Emissions ...................................................................... 13

3.5 Upstream Natural Gas Methane Emissions .................................................................. 14

3.6 Renewable Natural Gas Cost and Availability ............................................................. 14

4 TRANSPORTATION ENERGY USE TRENDS AND POTENTIAL NATURAL GAS USE TARGETS ...................................................................................................................... 16

4.1 Transportation Modes and Subsectors ......................................................................... 16

4.2 Transportation Energy Use Projections ........................................................................ 17

4.3 Assumptions for Expanded Natural Gas Use Assessment ........................................... 19

5 IMPACTS OF EXPANDED NATURAL GAS USE ............................................................. 23

5.1 Energy Use by Fuel Type ............................................................................................. 23

5.2 Natural Gas Use............................................................................................................ 23

5.3 Change in Greenhouse Gas Emissions ......................................................................... 26

5.4 Changes in NOx Emissions .......................................................................................... 28

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CONTENTS (CONT.)

5.5 Changes in Lifetime Levelized Cost of Driving .......................................................... 29

6 SUMMARY ............................................................................................................................ 31

7 REFERENCES ....................................................................................................................... 32

FIGURES

1 Natural Gas Vehicles and Fuel Consumption, 2003–2011 ....................................................... 3

2 Clean Cities’ NGVs as Reported by Clean Cities Coalitions, 2009–2015 ............................... 4

3 Medium-Duty and Heavy-Duty NG Engine Offerings ............................................................. 5

4 Average CNG and Diesel Fuel Prices per DGE ....................................................................... 6

5 CNG and LNG Stations, 2009–2017 ........................................................................................ 7

6 Map of CNG and LNG Stations, 2018...................................................................................... 7

7 Schematic of Fast-Fill and Time-Fill CNG Stations, 2018....................................................... 8

8 Projected Sectoral NG Use in 2050 ........................................................................................ 10

9 LCFS NG and Diesel Volumes by Quarter............................................................................. 11

10 California Fossil and RNG Supply Curves ............................................................................. 15

11 Transportation Energy Consumption Projections by Subsector in AEO 2017 ....................... 18

12 Energy Use by Fuel Type for the Selected Seven Subsectors from AEO 2017 and in the Expanded-NG-Use Scenario ................................................................................................... 24

13 Natural Gas Use by Transportation Subsectors from AEO 2017 and in the Expanded-NG-Use Scenario .................................................................................................................... 25

14 Impact of Expanded Transportation-Sector NG Use on AEO 2017 Projected Exports .......... 26

15 Annual Change in GHG Emissions Due to Increased Use of NG .......................................... 27

16 Annual Change in NOx Emissions Due to Increased Use of NG ........................................... 29

17 Lifetime LCD Using AEO 2017 Reference Case and AEO 2017 High Oil Price Case .......... 30

v

TABLES

1 Top 10 U.S. Gas Fields by Production as of December 2013 .................................................. 9

2 Estimated Practical Annual RNG Potential of Select Biogas Sources in the United States ........................................................................................................................... 14

3 Transportation Modes and Subsectors and Their 2015 Energy Use ....................................... 17

4 Gaseous Fuel Energy Shares in AEO 2017 and Selected Subsector Targets for Expanded-NG-Use Assessment .............................................................................................. 20

5 Assumed Fuel Economy Difference Between Gaseous Fuels and Reference Fuels for the Selected Subsectors ........................................................................................................... 20

6 Assumed NOx Emission Difference Between Gaseous Fuels and Reference Fuels for the Selected Subsectors ........................................................................................................... 21

7 AEO 2017 Fuel Prices Based on Reference Case and High Oil Price Case ........................... 21

8 Vehicle Prices for NG and Conventional Vehicles................................................................. 22

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NOTATION AEO Annual Energy Outlook AF alternative fuel AFDC Alternative Fuels and Advanced Vehicles Data Center CARB California Air Resources Board CEC California Energy Commission CI compression-ignited CNG compressed natural gas CO2e carbon dioxide equivalent DOE U.S. Department of Energy EIA U.S. Energy Information Administration EPA U.S. Environmental Protection Agency FHWA Federal Highway Administration GHG greenhouse gas GREET Greenhouse gases, Regulated Emissions, and Energy use in Transportation GVW gross vehicle weight HDT heavy-duty truck HDV heavy-duty vehicle HEV hybrid electric vehicle HHV higher heating value HPDI high-pressure direct injection LCD levelized cost of driving LCFS Low Carbon Fuel Standard LDV light-duty vehicle LNG liquefied natural gas MDT medium-duty truck MDV medium-duty vehicle MSW municipal solid waste NG natural gas NGV natural gas vehicle NGVA Natural Gas Vehicles for America NOx nitrogen oxides NREL National Renewable Energy Laboratory PEV plug-in electric vehicle

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R&D research and development RFS Renewable Fuel Standard RNG renewable natural gas SI spark-ignited SU single-unit VIUS Vehicle Inventory and Use Survey VMT vehicle miles of travel WWTP wastewater treatment plant UNITS OF MEASURE Btu British thermal unit(s) DGE diesel gallon equivalent g/bhp-hr grams per brake horsepower-hour GGE gasoline gallon equivalent L liter MMT million metric tons psi pounds per square inch Quad quadrillion Btu TCF trillion cubic feet

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ACKNOWLEDGMENTS

This work was supported by the Office of Energy Efficiency and Renewable Energy of the United States Department of Energy, under contract DE-AC02-06CH11357. We acknowledge the support of Kevin Stork, Michael Weismiller, Dennis Smith, and Mark Smith of the Vehicle Technology Office (VTO). We thank Thomas Wallner and Marianne Mintz of Argonne National Laboratory, Brad Zigler of National Renewable Energy Laboratory, and Scott Curran of Oak Ridge National Laboratory for their inputs.

The views expressed in this report do not necessarily represent the views of the U.S. Department of Energy or the United States Government.

ix

ASSESSMENT OF EXPANDING NATURAL GAS USE IN TRANSPORTATION

by

Andrew Burnham, Anant Vyas, Yan Zhou, and Michael Wang

ABSTRACT

This report summarizes an analysis of the impacts of a successful expansion of natural gas use by the transportation sector. While natural gas has been successfully introduced into a few niche markets, it currently makes up a small fraction of transportation energy use. The barriers to expansion include several technical issues currently limiting the natural gas vehicle market. If research and development is successful in addressing these technical challenges, there could be a significant shift to natural gas vehicles. With the increased production of cheap natural gas, the Energy Information Administration within the U.S. Department of Energy projects a surplus production of 5.56 trillion cubic feet of natural gas to be exported in 2050. The analysis presented in this report shows that up to 3.40 trillion cubic feet of this surplus could be used by a set of selected transportation modes.

The report reviews the current status of the natural gas vehicle market. This includes examining vehicle and engine availability for light-duty, medium-duty, and heavy-duty vehicles. Current and past fuel prices are presented and the price advantage of natural gas is highlighted. The current natural gas refueling infrastructure is reviewed and various options being researched to expand and improve the natural gas infrastructure are presented. The current fossil and renewable natural gas production estimates are summarized and natural gas production projections by the Energy Information Administration are shown. The detailed projections of natural gas use by various consuming sectors through the year 2050 are depicted to show the projected surplus allocated for export.

Various barriers to expanded use of natural gas by the transportation sector are reviewed and research and development efforts to overcome these barriers are described. The barriers include the current lower energy efficiency of natural gas engines, cost of on-board natural gas storage, refueling infrastructure costs, potential for natural gas leakage during various handling stages, and renewable natural gas cost and supply.

Various modes and sub-sectors within the transportation sector are summarized with their current and projected energy use. A set of modes and sub-sectors is selected as a candidate for expanded natural gas use. Each mode/sub-sector within this set is assigned an introduction year and a maximum market share after evaluating competition from other technologies and natural gas-related limitations. Market penetration profiles are developed for each of these modes/sub-sectors and sales data are simulated through Argonne’s models. The results in terms of energy use, greenhouse gas emissions, and criteria pollutant emissions are estimated. The change resulting from expanded natural gas use in transportation is summarized in terms of energy consumption by fuel type, greenhouse gas emissions, and NOx emissions.

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1 INTRODUCTION

Abundant natural gas (NG) reserves and increased production in the U.S. provide an opportunity to expand the use of NG in various end-use sectors, including transportation. Natural gas is a hydrocarbon mixture, consisting primarily of methane, that is produced domestically from a wide variety of sources and is not vulnerable to global disruptions that may impact petroleum fuels. In addition, the U.S. has a significant NG transmission and distribution pipeline network. Natural gas vehicles (NGVs) offer several potential benefits, including petroleum savings, lower emissions, and lower cost of vehicle ownership.

The ability of NGVs to provide low air pollutant emissions has long been one of their major advantages. In addition, NGVs can provide significant greenhouse gas (GHG) emission benefits when using renewable natural gas (RNG). Natural gas fuel prices have been consistently low and stable for more than a decade. The retail price of compressed natural gas (CNG) and liquefied natural gas (LNG) is much less than that of petroleum fuels and has lower price volatility. Therefore, the use of NGVs affords the opportunity to significantly reduce fuel costs, which are often a key driver of the total cost of ownership of heavy-duty vehicles (HDVs).

While NG has been successfully introduced into a few vehicle markets, such as transit buses and refuse trucks, it currently accounts for a small portion of transportation fuel use. The barriers to significant expansion of NG in transportation include the cost of vehicle on-board fuel storage, lower vehicle efficiency, the cost of building and operating refueling infrastructure, and upstream and vehicle methane leakage. Because NG occupies a considerably larger storage volume per unit of energy at atmospheric pressure than refined petroleum liquids, it is stored aboard the vehicle as either a compressed gas or a liquid. The tanks required to store NG on a vehicle are quite expensive; they can cost tens of thousands of dollars for HDVs, depending on driving range requirements. In addition, these tanks increase vehicle weight and tend to reduce fuel economy.

The current generation of heavy-duty NGVs employ spark-ignited (SI) engines, which are less efficient than compression-ignited (CI) engines. The cost to build NG refueling infrastructure can be more than a million dollars for large public stations, owing to the cost of compressors and storage. In addition, compression costs are a significant portion of the retail price of CNG. Moreover, methane leakage can occur anywhere from well to wheels for NGVs, reducing their environmental benefits. While there have been efforts to analyze and reduce upstream methane leakage, leakage from refueling infrastructure and vehicles has received less attention.

As many of these barriers are technical, further research and development (R&D) of NGV technology is needed to enable the expansion of NG use in transportation. Since 1992, the U.S. Department of Energy (DOE) has been supporting the development of NGVs, and DOE recently helped in the development of several heavy-duty NG engines that are available today (DOE 2018a). In addition, the DOE has partnered with the California Energy Commission (CEC) and the South Coast Air Quality Management District on NG engine development and on a forum to bring stakeholders together to discuss high-impact R&D opportunities.

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Through those efforts, R&D priorities have been outlined for DOE and CEC to improve the efficiency and lower the costs of NGVs (Wang et al. 2014, Schroeder 2015). In 2018, DOE announced $12 million in funding for early-stage research on NG engines to continue to address these challenges. However, further R&D is needed by DOE, industry, and other groups to help expand the use of NG in transportation.

This report summarizes the current market status of NGVs and the key technical challenges for expanding NG use in transportation. It then explores the markets for expanded NG use in transportation and discusses factors determining the potential for expanded NG use. Finally, the report examines the potential benefits of expanded NG use.

3

2 CURRENT NATURAL GAS VEHICLE MARKET STATUS

The U.S. Energy Information Administration (EIA) estimated that about 120,000 NGVs operated in the U.S. in 2011 and that they consumed about 250 million gasoline gallon equivalents (GGEs), while NGV Global estimates that there were 160,000 on-road in 2017 (EIA 2015; NGV Global 2018). According to Natural Gas Vehicles for America (NGVA), in 2014 there were 87,000 light-duty vehicles (LDVs, Class 1–2a), 25,800 medium-duty vehicles (MDVs, Class 2b–6), and 39,500 HDVs (Class 7–8) using NG (NGVA 2015).

As shown in Figure 1, the number of NGVs did not increase significantly (by about 4%) between 2003 and 2011; however, fuel consumption increased significantly (by about 70%). During this time, the NG HDV population and its fuel consumption doubled, while the NG LDV population and its fuel consumption decreased by about 25% (Burnham 2015). The focus on HDVs in lieu of LDVs was primarily driven by economics, as HDVs are large fuel users that are able to pay back the incremental vehicle cost via the use of lower-cost NG fuel. As of 2011, California accounted for a significant portion of the NGVs and their fuel consumption. Other states with significant NGV fuel consumption include New York, Texas, and Arizona. The EIA no longer collects comprehensive fuel usage and vehicle count data, but it currently provides fleet data from the federal government, state governments, transit agencies, and fuel providers (EIA 2018a).

FIGURE 1 Natural Gas Vehicles and Fuel Consumption, 2003–2011 (EIA 2015)

DOE’s Clean Cities program, which advances the nation's economic, environmental, and energy security by supporting local actions to cut petroleum use in transportation, has worked with industry to continue to increase the number of HDVs on the road, as shown in Figure 2. An important driver of Clean Cities’ impact on the NGV market was awards from Clean Cities Recovery Act grant funding. The NGVs were deployed into a wide range of market segments, including taxis, delivery vans, utility vehicles, paratransit vehicles, airport shuttles, school buses,

4

refuse trucks, cement mixers, and regional-haul trucks. In addition, the Recovery Act’s demonstration of the viability of NGVs, in new market segments in some cases, along with the significant increase in public NG fueling infrastructure, has helped increase NGV sales (Laughlin and Burnham 2013, 2014).

FIGURE 2 Clean Cities’ NGVs as Reported by Clean Cities Coalitions, 2009–2015 (DOE 2018b)

2.1 VEHICLE/ENGINE AVAILABILITY

Currently, no original-equipment manufacturers directly produce light-duty NGVs. However, both Ford and GM engines with “gaseous prep” packages, which include hardened valves, valve seats, and pistons, can be used by small-volume manufacturers to produce aftermarket conversions for light-duty and medium-duty NGVs with an engine size ranging from 2 to 7 liters (L). Companies offering U.S. Environmental Protection Agency (EPA)-certified (and in some cases California Air Resources Board [CARB]-certified) conversions include Altech-Eco, IMPCO, Landi Renzo, and Westport (EPA 2017). Most heavy-duty NG engines are produced by Cummins Westport, with engine sizes ranging from 9 to 12 L; Cummins-Westport also produces a 6.7-L engine designed primarily for school buses. As seen in Figure 3, a wide variety of vehicles are available, including street sweepers, refuse trucks, transit buses, delivery trucks, and long-haul trucks.

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FIGURE 3 Medium-Duty and Heavy-Duty NG Engine Offerings (NREL 2017) 2.2 FUEL PRICES

Retail public CNG prices have been consistently around $2.50 per diesel gallon equivalent (DGE) (or $2.00 per GGE) for the period from 2009 to 2017 (DOE 2018c). In addition, many owners of NGV fleets build on-site fueling stations, which can lead to lower fuel prices, averaging about $2.00 per DGE for private stations (DOE 2018c), while diesel prices have ranged from about $2 to $4 per DGE over the same time period (DOE 2018c). In addition, fuel prices can differ significantly by state and region, as areas such as California consistently have higher diesel prices. As seen in Figure 4, diesel prices were consistently higher than both public and private CNG prices until late 2015. The current low diesel prices make the economics of NGVs more difficult, especially for those users relying on public stations.

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FIGURE 4 Average CNG and Diesel Fuel Prices per DGE (DOE 2018c) 2.3 REFUELING INFRASTRUCTURE

NGVs are fueled either with CNG—in which case NG is delivered through the pipeline system at low pressure to CNG stations, where it is compressed—or LNG, which is normally delivered by truck from LNG production facilities to fueling stations. As of March 2018, there were 1,671 public and private CNG stations and 135 LNG stations in the United States (DOE 2018d). As seen in Figure 5, the availability of NG fueling stations has grown relatively steadily over the past decade even as older, lower-pressure stations have been retired. A significant portion of this growth can be attributed to the Clean Cities Recovery Act, which supported the addition of 143 CNG and nine LNG stations. Currently, more than half of the CNG stations (56%) and LNG stations (53%) are publicly accessible. There are a significant number of private NG fueling stations, typically used to support fleet applications, often in return-to-base operations, e.g., transit buses and refuse haulers.

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FIGURE 5 CNG and LNG Stations, 2009–2017 (AFDC 2018)

As shown in Figure 6, CNG stations are located throughout the U.S., with notable concentrations in large metropolitan areas and states like California, Oklahoma, Texas, and Pennsylvania. LNG stations are typically spaced along interstate corridors.

FIGURE 6 Map of CNG and LNG Stations, 2018 (DOE 2018d, OpenStreetMap 2018, uMap 2018)

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As seen in Figure 7, fast-fill CNG stations typically contain a dryer; one or more multi-stage compressors; a cascade system consisting of several pressure vessels, associated piping, and programmable logic controls; electrical and safety equipment; one or more dispensers with high-flow hoses, a flow meter and card reader; and a refrigeration unit to offset the heat of compression. Time-fill stations are simpler, often consisting of a dryer; a single multi-stage compressor from which vehicles can be fueled directly or high-pressure storage vessels can be filled; site storage; multiple low-flow hoses; and control and safety equipment. Many public-access stations that also serve a domiciled fleet are mixes of time- and fast-fill types. Often called “combo” or “hybrid” stations, these stations are becoming increasingly common.

FIGURE 7 Schematic of Fast-Fill (Top) and Time-Fill (Bottom) CNG Stations, 2018 (DOE 2018e)

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2.4 FOSSIL NATURAL GAS SUPPLY

In 2016, NG was the most-produced energy source in the U.S., accounting for 33% of the total U.S. energy production (EIA 2017a). Natural gas production in the U.S. increased from 23.5 trillion cubic feet (TCF) in 2006 to 32.6 TCF in 2016 (EIA 2018b). This increase was largely due to production of NG from shale formations through the advent, over the past decade, of horizontal drilling and high-volume hydraulic fracturing technologies. Shale gas production increased from 2.0 TCF in 2007 to 16.6 TCF in 2016 and now accounts for 51% of U.S. NG production (EIA 2018b). According to the EIA, the U.S. had nearly 350 TCF of NG reserves in 2013 (EIA 2015). The top 100 NG-producing fields accounted for 239.7 TCF (68%) of these reserves. Table 1 lists the top 10 NG-producing fields and their production in 2013, ranked by their production.

TABLE 1 Top 10 U.S. Gas Fields by Production as of December 2013

Rank Field name Location

2013

Estimated Production

(BCF) Discovery

Year

1 Marcellus Shale Area PA & WV 2,836 2008 2 Newark East (Barnett Shale) TX 1,952 1981 3 Haynesville Shale Unit LA 1,426 2008 4 B-43 Area (Fayetteville Shale) AR 1,025 2005 5 San Juan Basin Gas Area CO & NM 1,025 1927 6 Carthage TX 653 1936 7 Pinedale WY 568 1955 8 Wattenberg CO 305 1970 9 Jonah WY 239 1977 10 Prudhoe Bay AK 148 1967

Total 10,177

Note: Total proven reserves for the top 10 gas fields are 144,614 billion cubic feet.

The U.S. used 27.5 TCF (28.3 quadrillion Btu1, or Quads) of NG in 2016 (EIA 2018c). The largest amount of NG use in 2016 was for electricity generation (36.3%), with the industrial sector as the second largest (28.1%), followed by residential use (15.8%), commercial use (11.3%), and NG use as pipeline fuel plus lease and plant fuel (8.3%). Together, these sectors accounted for 99.8% of total NG use. The transportation sector consumed only 0.2% of the NG.

1 All energy values in this report are presented using higher heating value (HHV), to be consistent with EIA’s

Annual Energy Outlook results.

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EIA develops annual projections of energy use by various energy-consuming sectors and by type of energy. These projections are presented in its Annual Energy Outlook (AEO) and are identified by the year in which the report is released. In its AEO 2017, EIA projects the annual NG supply to increase to 34.8 TCF (35.9 Quads) by 2050, of which 5.56 TCF (5.7 Quads) is projected as exports (EIA 2017b). Figure 8 shows NG projections by EIA in AEO 2017. In Section 4, we analyze the potential for expanding NG-fueled transportation as compared to this AEO scenario.

FIGURE 8 Projected Sectoral NG Use in 2050 2.5 RENEWABLE NATURAL GAS

Renewable natural gas is biogas that has been upgraded by removal of CO2 and other contaminants, which increases its energy content to a level comparable to pipeline-quality fossil NG. Biogas can be produced from the anaerobic conversion of organic materials in landfills, farm digesters, and wastewater treatment plants (WWTPs). Biogas is typically flared to reduce methane and criteria pollutant emissions or used to generate electricity for on-site use. However, owing to its low carbon intensity, biogas has increasingly been used to generate renewable power for state Renewable Portfolio Standards or upgraded to RNG for use in vehicles as incentivized by EPA’s Renewable Fuel Standard (RFS) and California’s Low Carbon Fuel Standard (LCFS). RNG LCFS volumes have increased significantly since 2013 and now account for about 70% of the total volume of NG fuels in the LCFS program. In 2017, NG comprised about 5% of the volume of diesel in California, as shown in Figure 9.

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FIGURE 9 LCFS NG and Diesel Volumes by Quarter (CARB 2018)

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3 BARRIERS TO EXPANDING NATURAL GAS USE IN TRANSPORTATION 3.1 VEHICLE EFFICIENCY

Natural gas engine technologies can differ in the method used to ignite the fuel in the engine cylinders, the air-fuel ratio, the compression ratio, and the resulting performance and emissions capabilities. There is a significant need to develop heavy-duty NG engines with improved efficiency and performance, while maintaining low emissions. NGVs can be dedicated to NG as a fuel source, or they can be bi-fuel, with an SI engine typically running on either NG or gasoline, or dual-fuel, with a CI engine using both NG and diesel.

In the past few decades, NG engines have undergone significant changes in their performance, emissions, and fuel economy. Testing has shown that SI NG engines have a lower efficiency than CI diesel engines because of their lower compression ratio, slower combustion speeds, and need for throttling at partial loads. Currently available SI NG engines have exhibited improved fuel economy (10–15% reduction in fuel economy versus diesel) compared with older NG models (20–25% reduction versus diesel), largely owing to the introduction of closed-loop control and optimization of the air-fuel control system. Nonetheless, the gap in efficiency between NG and diesel for HDVs continues to adversely impact the economics and environmental performance of NGVs.

As SI NG engines exhibited significant reductions in fuel efficiency and performance, a high-pressure direct injection (HPDI) CI engine was developed that provided better efficiency and torque. As NG by itself does not work well in a CI engine, the HPDI engine uses a small amount of diesel as a pilot fuel along with LNG that is pumped to a high pressure, vaporized, and delivered to the engine at approximately 4,500 pounds per square inch (psi). Testing showed that HPDI CI engines had similar performance and efficiency compared to their diesel-fueled counterparts. However, owing to market conditions, these systems are no longer being sold. To meet this challenge, the DOE has recently announced funding to develop cost-effective NG engines that achieve diesel-like efficiency. 3.2 ON-BOARD NATURAL GAS STORAGE

The cost of on-board NG storage is one of the biggest challenges facing expanded use of NG in transportation. Natural gas can be stored aboard a vehicle as a compressed gas or a liquid. Compressed natural gas is pressurized in a storage tank (also called a cylinder) at up to 3,600 psi. These tanks can come in various designs, including full metal (typically steel) construction (Type 1), hoop-wrapped composite with a metal liner (Type 2), full composite wrap with a metal liner (Type 3), and full composite wrap with a plastic liner (Type 4). From Type 1 to Type 4, the weight of the storage tank decreases but the cost increases. In the U.S., weight and space are important considerations; thus, NGVs typically use the lightest types of tanks (e.g., Type 3 and Type 4). Even at 3,600 psi, CNG has a lower energy density than either gasoline or diesel, so vehicle range can be reduced unless the vehicle carries a significant number of cylinders. A CNG storage tank package that provides 400 miles of driving range for an HD freight truck can cost about $35,000, while a diesel fuel tank providing equivalent range costs less than $1,000 (Deal 2012; 4 State Trucks 2018).

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Liquefied natural gas is produced by purifying NG to remove impurities such as hydrogen sulfide and carbon dioxide and then cooling the NG to –260°F. Liquefied natural gas is stored in double-walled, vacuum-insulated tanks and is used in several HDV applications, as it requires smaller storage volumes than CNG to provide sufficient range. Liquefied natural gas tanks cost less than CNG tanks when storing an equivalent amount of NG, i.e., about $25,000 to provide 400 miles of range; however, the fuel cost of LNG is higher than that of CNG. For comparison, long-haul diesel trucks often have fuel storage for 700 miles of range.

Current R&D efforts focus on reducing the cost of the materials for structural applications. These efforts should be supplemented with additional research on tank packaging onboard the vehicle, especially as it concerns alternative structures, shapes, and formability. Low-pressure sorbent-based storage technologies offer attractive alternatives to high-pressure tanks. Sorbent-based storage at pressures of 500 psi could achieve NG storage capacities equal to, or better than, a high-pressure CNG tank, and would improve refueling-storage capacity. Sorbent material design, synthesis, engineering, and system integration represent major technology opportunity areas. DOE’s ARPA-E MOVE program has funded efforts on low-pressure sorbent materials and improved CNG high-pressure tanks (ARPA-E 2012). 3.3 NATURAL GAS FUELING STATION COST

The high cost to build and operate NG fueling infrastructure is a barrier to increased NGV adoption. A large fast-fill CNG station can cost $1 million or more, primarily because high-flow compressors are expensive and failure-prone, necessitating redundant units, additional storage, and/or backup gas supplies from alternate sources. Liquefied natural gas stations have similar cost challenges, as capital costs remain high ($2 million or more per station). Large public stations typically require an anchor tenant with guaranteed large fuel requirements to make economic sense. In addition, fleets using HDVs are often capital-constrained, so investing in private stations can be a risky endeavor.

Additional improvements in compressor design and in integrating compressor and cascaded vessel operation are needed and can benefit from ongoing DOE-supported work on hydrogen station design and optimization. If sorbent-based technology were successfully developed, it would greatly reduce compression costs and could be used for low-pressure home refueling of light-duty NGVs. ARPA-E’s MOVE program has funded efforts on lowering the cost of NG compressors (ARPA-E 2012). 3.4 VEHICLE AND STATION METHANE EMISSIONS

Research has found that both CNG and LNG vehicles’ methane emissions can be a very significant portion of their life-cycle GHG impacts, and can limit their environmental benefits (Burnham et al. 2016; Cai et al. 2017). In addition, NG refueling station emissions represent a major information gap with respect to the life-cycle performance of NGVs, and have only recently been investigated (Clark et al. 2016). While NGV methane emissions have been reduced recently, further work is needed to continue to address these issues. Specifically, duty-cycle

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aging of the engine and aftertreatment systems may play a significant role as emissions increase when these vehicles age. Analysis of station emissions could also benefit from ongoing DOE-supported work on hydrogen. 3.5 UPSTREAM NATURAL GAS METHANE EMISSIONS

Natural gas leakage along the NG supply chain has been one of the key environmental topics since the shale gas boom. Since 2010, researchers have been refining estimates of leakage, and at present, atmospheric observations of methane concentrations (a “top-down” approach) produce an estimated 5–10% leakage rate from NG production and distribution networks, while direct measurements of leakage from individual pieces of equipment along the supply chain (a “bottom-up” approach) produce an estimated 1–2% leakage rate (Cai et al. 2017). Research has been done to reconcile the differences, but continuing to analyze and determine methane leakage will be important for understanding NGV GHG emission performance. 3.6 RENEWABLE NATURAL GAS COST AND AVAILABILITY

Expanding the production and use of RNG will require substantial quantities of organic-material feedstocks. Of the 1,076 landfills, 6,900 dairy and swine farms, and 1,200 large WWTPs in the U.S. that could supply that feedstock, 636 landfills, 239 farms, and over 160 WWTPs currently have operational waste-to-energy projects (Burnham 2015). However, only 46 of those projects (37 landfills, 3 dairies and 6 WWTPs) produce RNG for pipeline injection or use as a vehicular fuel (Burnham et al. 2015). Thus, there is a substantial untapped market of candidate sites that may be able to add biogas purification equipment to produce RNG. Table 2 shows the estimated practical annual potential RNG from major biogas sources through anaerobic digestion. On-road vehicles consumed about 40 billion diesel gallons in 2016 (EIA 2017c). The midpoint RNG potential estimate is about 5 billion DGE per year, or 12% of on-road diesel use.

TABLE 2 Estimated Practical Annual RNG Potential of Select Biogas Sources in the United States (Coleman 2016)

Source

RNG Potential

(BCF/yr) RNG Potential

(Billion DGE/yr) Animal manure 100–140 0.8–1.0 Wastewater 30–120 0.3–1.0 Landfills 230–440 1.7–3.4 Food waste 60–110 0.4–0.8 Fats, oils, and greases 50 0.4 Total 470–860 3.6–6.5

15

The challenge to expanding RNG use is its cost of production, as it is significantly more expensive than fossil NG. To date, credits from the RFS and LCFS have incentivized the development of RNG. However, increasing the supply of RNG increases fuel costs, owing to the high capital costs of RNG production and issues of scale at potential sites, as shown in Figure 10 (Jaffe et al. 2016).

FIGURE 10 California Fossil and RNG Supply Curves (Jaffe et al. 2016)

16

4 TRANSPORTATION ENERGY USE TRENDS AND POTENTIAL NATURAL GAS USE TARGETS

Several transportation subsectors and modes currently use small amounts of NG. These subsectors/modes could expand their NG use with the availability of suitable NG engines, NG refueling infrastructure, and maintenance facilities. 4.1 TRANSPORTATION MODES AND SUBSECTORS

U.S. transportation is almost totally dependent on petroleum-based fuels. Table 3 shows 2015 energy consumption by each transportation mode/subsector, as summarized in EIA’s AEO 2017 (EIA 2017b). Heavy-duty truck (HDT) energy consumption in AEO 2017 is not separated into energy consumption by single-unit (SU) trucks and by combination trucks. To separate energy consumption by SU trucks, we used data in the Transportation Energy Data Book and Highway Statistics. The Transportation Energy Data Book (Davis et al. 2017) gives medium-duty truck (MDT) energy consumption by fuel type and provides the higher heating value (HHV) of each fuel to facilitate estimation of fuel volume. Highway Statistics, published by the U.S. Department of Transportation’s Federal Highway Administration (FHWA 2017), provides the total volumes of fuel consumed by SU MDTs and HDTs. These two sources made it possible to estimate the amount of 2015 energy use by SU HDTs. Also, aviation energy consumption in AEO 2017 is not separated into commercial aviation and general aviation. General-aviation energy consumption in Table 3 is based on the Transportation Energy Data Book.

Among these subsectors/modes, LDVs, MDTs, and HDTs currently use NG in small amounts, while transit buses use a moderate amount of NG and school buses use some propane. Freight rail companies have conducted trials in the past and are receptive to increased use of NG in their operations. However, existing locomotive engines would need to be modified, regulatory aspects of NG tenders would need to be resolved, and refueling infrastructure would need to be established before the rail sector could start using NG in substantial quantities.

Natural gas pipelines use NG exclusively unless restricted by air-quality regulations. Because the NG pipeline subsector uses as much NG as possible, it is excluded from our analysis. The aviation subsector could use liquid fuels derived from NG. However, the cost of NG-derived liquid fuels would be much higher than that of petroleum fuels. Because of this issue, the aviation mode is excluded from our analysis.

Within the marine sector, domestic marine energy use is dominated by recreational boats. Currently, recreational boats account for over half of domestic marine’s energy use, and the EIA projects that share to exceed 80% by 2050. Domestic marine has not been targeted for use of NG, and is excluded for the time being. The international marine subsector has been investigating expanding its use of NG. However, its engines last for a very long time, resulting in a slow rate of penetration for new technologies. Therefore, the international marine subsector is also excluded from this analysis.

17

TABLE 3 Transportation Modes and Subsectors and Their 2015 Energy Use

Transportation Sector/Mode Subsector

2015 Energy Use (Trillion Btu)a

Light-duty vehicles (LDVs)

Cars & motorcycles 6,495 Light trucks 10,139

Medium-duty trucks (MDTs)b

1,472

Heavy-duty trucks (HDTs)c

Single-unit 668 Combination 3,409

Buses Transit 112

School 148 Intercity 36

Rail Freight 539

Intercity 11 Commuter 17 Transit 15

Aviation Commercial 2,154

General 209 Marine Domestic freight 102

International freight 683 Recreational 247

Pipeline NG pipeline 692 Total 27,148 a Higher heating value b Gross vehicle weight (GVW) from 10,000 to 26,000 lb c GVW greater than 26,000 lb

4.2 TRANSPORTATION ENERGY USE PROJECTIONS

As mentioned earlier, EIA develops annual projections of energy use by various energy-consuming sectors in its AEO. Figure 11 shows energy use projections for all transportation subsectors in AEO 2017.

18

FIGURE 11 Transportation Energy Consumption Projections by Subsector in AEO 2017

Currently, the LDV subsector consumes over 60% of total transportation energy and is projected to remain the largest energy-consuming subsector through 2050. The LDV subsector’s energy use was 15.8 Quads in 2015, and it is projected to decline to 12.5 Quads by 2050. Substantial R&D efforts are expected to lead to this reduction, even though LDV vehicle miles of travel (VMT) is projected to increase by 31% between 2015 and 2050. This subsector’s fuel economy is regulated through Corporate Average Fuel Economy standards and tailpipe GHG emission standards.

The HDT subsector is the next largest consumer of transportation energy. This subsector includes combination (tractor pulling one or more trailers) and single-unit (or straight) trucks. Combination trucks account for over 80% of energy consumption by all HDTs (FHWA 2017, VIUS 2004). Single-unit HDTs include vans and vocational trucks. The top five energy-consuming body types within SU HDTs are dump trucks, vans, refuse trucks, flatbed trucks, and concrete mixers.

The MDT subsector is the fourth largest energy-consuming subsector, behind aviation. The MDT sector consumes nearly 26% of combined MDT and HDT energy and is projected to increase that share to 34% by 2050 (EIA 2017b).

0

5

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35

2015 2020 2025 2030 2035 2040 2045 2050

Tran

spor

tatio

n En

ergy

(Qua

ds)

LDVs Medium Trucks Heavy TrucksFreight Rail Intercity & Commuter Rail Transit BusesSchool Buses Intercity Buses Transit RailAviation Domestic Marine International MarinePipeline Natural Gas

Source: AEO 2017

19

4.3 ASSUMPTIONS FOR EXPANDED NATURAL GAS USE ASSESSMENT

In order to select the subsectors to include in this analysis, we evaluated their potential for use of NG and possible competition from other fuels and technologies. We also examined the current and projected energy use by each subsector being considered, as full NG penetration in a small subsector would not replace much petroleum. However, some small subsectors, e.g., transit and school buses, are very receptive to using NG or propane for reasons such as lower operational costs and local air pollution concerns. While freight rail is also a relatively small subsector, the industry has shown significant interest in the use of NG (EIA 2018d). If freight rail locomotives were designed to use NG effectively, intercity and commuter rail would also switch to NG.

Although the LDV subsector consumes the most energy, several technologies are being introduced to reduce its petroleum energy consumption. Charge-sustaining hybrid electric vehicles (HEVs), plug-in HEVs, and battery electric vehicles are making inroads into this subsector. In the case of NGVs, the economics for personal-use LDVs are challenging because of the current cost of NG storage cylinders. However, there is potential for light-duty commercial vehicles that drive significant numbers of miles to take advantage of the low cost of NG fuels. Taking all this into account, a target of 5% NG energy use by 2050 was set for LDVs.

The HDT subsector can use NG to power its engines, and with proper refueling infrastructure, combination trucks could switch to NG. A target of 50% NG energy use by 2050 was set for HDTs.

The MDT subsector includes various body types used for different purposes. For it to use more NG, storage cost and weight issues need to be resolved. A lower target of 36% NG energy use by 2050 was set for MDTs.

The transit bus subsector already uses NG for 13% of its energy needs, while the school bus subsector uses propane energy for 1% of its needs (EIA 2017b). EIA, in its AEO 2017, projects NG use to account for 60% of transits buses’ needs by 2050. Assuming that hybrid electric and battery electric technologies, with their greater pollution benefits, will compete with NG technology within the transit subsector, the transit bus target was kept at 60% NG energy by 2050. EIA projects school bus use of gaseous energy (NG and propane) to be slightly over 2% by 2050. However, with improvements from R&D, the school bus sector’s gaseous energy use could be higher; a target of 50% gaseous energy use in 2050 was set.

As mentioned earlier, the freight rail subsector is receptive to increased use of NG. The EIA projects NG to account for 45.5% of freight rail energy use by 2050 (EIA 2017b). Considering the requirement of modified diesel locomotives for 20–40% diesel fuel when using NG, and the time required to introduce dedicated NG locomotives that have energy efficiency similar to that of diesel locomotives, a target of 35% NG energy use by 2050 was set for freight rail. With increased NG use by freight rail, NG technology is expected to be introduced in intercity and commuter rail locomotives too. A target of 35% NG energy use by 2050 with delayed introduction was set for intercity and commuter rail.

20

Table 4 summarizes the year-2050 targets used in analyzing expanded gaseous fuel use and also shows AEO 2017 projections.

TABLE 4 Gaseous Fuel Energy Shares in AEO 2017 and Selected Subsector Targets for Expanded-NG-Use Assessment

AEO 2017 Gaseous

Energy Share

Expanded-NG

Use-Target

Subsector/Mode 2015 2050

2050 Light Duty (<=10k lb) 0.1% 0.2% 5.0% Medium Trucks (>10k–26k lb) 0.1% 0.4% 36.0% Heavy Trucks (>26k lb) 0.8% 2.0% 50.0% Transit Buses 13.3% 60.0% 60.0% School Buses 1.0% 2.2% 50.0% Freight Rail 0.0% 45.5% 35.0% Intercity & Commuter Rail 0.0% 0.0% 35.0%

Natural gas- and propane-powered engines at present have lower fuel economy than gasoline-powered LDV engines and diesel-powered engines in all selected subsectors. This disparity could be eliminated with increased R&D. Energy efficiency parity was assumed to be achieved by 2035 for the expanded-NG-use analysis. Table 5 shows the assumptions related to NG and propane engine fuel economy relative to each subsector’s reference fuel.

TABLE 5 Assumed Fuel Economy Difference Between Gaseous Fuels and Reference Fuels for the Selected Subsectors

Subsector 2015 2020 2025 2030 2035 2040 2045 2050

Reference

Fuel Light Duty (<=10k lb) -5% -5% -3% -2% 0% 0% 0% 0% Gasoline Medium Trucks (>10k-26k lb) -15% -15% -10% -5% 0% 0% 0% 0% Diesel Heavy Trucks (>26k lb) -10% -10% -5% -2% 0% 0% 0% 0% Diesel Transit Buses -15% -15% -10% -5% 0% 0% 0% 0% Diesel School Buses -15% -15% -10% -5% 0% 0% 0% 0% Diesel Freight Rail -8% -8% -4% -2% 0% 0% 0% 0% Diesel Intercity & Commuter Rail -8% -8% -4% -2% 0% 0% 0% 0% Diesel

21

Current NGVs provide nitrogen oxides (NOx) emission benefits in comparison to heavy-duty diesel vehicles (Cai et al. 2017). Using data from the GREET and MOVES models, we estimated potential NOx benefits of NGVs by mode, assuming no further tightening of emission regulations. If future regulations are enacted, the relative NOx emissions will be impacted. Table 6 shows the assumptions of relative NG NOx emissions as compared to the reference fuel. TABLE 6 Assumed NOx Emission Difference Between Gaseous Fuels and Reference Fuels for the Selected Subsectors

Subsector 2015 2020 2025 2030 2035 2040 2045 2050 Reference

Fuel

Reference

Fuel Emission

Rate (g/mi) LDV Car (<=10k lb) 0% 0% 0% 0% 0% 0% 0% 0% Gasoline 0.07 LDV Truck (<=10k lb) 0% 0% 0% 0% 0% 0% 0% 0% Gasoline 0.10 MDT (>10k–26k lb) -76% -94% -94% -94% -94% -94% -94% -94% Diesel 0.80 HDT – SU (>26k lb) -75% -94% -94% -94% -94% -94% -94% -94% Diesel 0.80 HDT – Combination (>26k lb)

-63% -67% -67% -67% -67% -67% -67% -67% Diesel 3.50

In order to estimate the levelized cost of driving (LCD) of NGVs versus conventional vehicles, we need fuel price estimates. In this analysis, we used two fuel price scenarios, the Reference Case and the High Oil Price Case, from EIA’s AEO 2017, as shown in Table 7. The EIA fuel prices and our analysis are in 2016 dollars.

TABLE 7 AEO 2017 Fuel Prices Based on Reference Case and High Oil Price Case

Fuel Price

Reference Case

High Oil Price Case

2015 2035 2050 2015 2035 2050 Crude oil (bbl) $49.35 $95.58 $110.35 $49.35 $206.58 $234.36 Gasoline (GGE) $2.37 $2.94 $3.21 $2.37 $5.03 $5.52 Diesel (GGE) $1.95 $2.77 $2.99 $1.95 $4.74 $6.04 CNG (GGE) $1.84 $1.72 $1.75 $1.84 $1.92 $2.12 LNG (GGE) $1.92 $1.79 $1.81 $1.92 $1.99 $2.18

22

Using the AFLEET Tool, we looked at three vehicle types: a CNG commercial light pickup truck compared to gasoline, a CNG medium-duty vocational truck compared to diesel, and a LNG heavy-duty freight truck compared to diesel. Default AFLEET vehicle prices were used in the analysis, as shown in Table 8.

TABLE 8 Vehicle Prices for NG and Conventional Vehicles

Fuel

Commercial Light-Duty

Truck

Single-Unit Short-Haul

Medium-Duty Truck

Combination Long-Haul

Heavy-Duty Truck

Gasoline $36,000 N/A N/A Diesel N/A $65,000 $100,000 CNG $44,000 $105,000 N/A LNG N/A N/A $150,000

23

5 IMPACTS OF EXPANDED NATURAL GAS USE

Using Table 4, market penetration profiles were developed for selected subsectors for estimating the impacts of expanded NG/gaseous fuel use. Argonne National Laboratory’s VISION model was used to assess the impacts on the LDV, MDT, and HDT subsectors (Argonne 2017). The fuel share profiles were used directly for freight rail, intercity and commuter rail, transit buses, and school buses. 5.1 ENERGY USE BY FUEL TYPE

Under the expanded-NG-use scenario, total energy use by the selected seven subsectors increased slightly, mainly owing to lower fuel economy of the vehicles during the 2015–2035 period. For example, total energy use in 2050 was 20.23 Quads in AEO 2017, and this figure increased to 20.48 Quads under the expanded NG use case. Petroleum consumption by the selected seven subsectors declined from 0.01 Quads in 2020 to 3.06 Quads in 2050. Because petroleum fuels are assumed to be blended with ethanol and biodiesel, consumption of biofuels also declined by 0.24 Quads by 2050. This result assumes that ethanol and biodiesel are blended into gasoline and diesel at the current blending levels. As blending levels, especially for ethanol, increase in the future, biofuel volumes could increase to replace an additional portion of petroleum fuels. Figure 12 shows fuels consumed by the selected seven subsectors according to AEO 2017 and assuming expanded NG use. 5.2 NATURAL GAS USE

AEO 2017 projected NG use by all transportation subsectors to be only 0.46 Quads (0.44 TCF) by 2050. Freight rail is the transportation subsector in AEO 2017 with the largest NG use in 2050, with 0.24 Quads (0.23 TCF). The largest NG-consuming subsector within the expanded-NG-use scenario is HDT, with 2.10 Quads (2.03 TCF) of NG use in 2050. The expanded-NG-use scenario results in 4.04 Quads (3.92 TCF) of NG use in 2050, which is 20% of the total transportation energy use. Figure 13 contrasts NG use by various subsectors in AEO 2017 and in the expanded-NG-use scenario. Please note that the maximum vertical-axis value for the AEO 2017 chart is 0.5 Quads and that for the expanded NG use chart is 4.5 Quads.

24

FIGURE 12 Energy Use by Fuel Type for the Selected Seven Subsectors from AEO 2017 (Top) and in the Expanded-NG-Use Scenario (Bottom)

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)Petroleum Gaseous Biofuels Electricity

AEO 2017: Energy Use by Selected Transportation Modes

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Natural Gas Case: Energy Use by Selected Transportation Modes

25

FIGURE 13 Natural Gas Use by Transportation Subsectors from AEO 2017 (Top) and in the Expanded-NG-Use Scenario (Bottom)

As described in Section 2.4, the transportation sector used only 0.2% of the NG consumed in the U.S. in 2015. An important question when analyzing an increase in NG use is “how will other sectors be impacted?” For illustrative purposes, we assume that increasing NG for transportation will decrease exports, while in reality the issue would be more complicated. In

0.0

0.1

0.2

0.3

0.4

0.5

2015 2020 2025 2030 2035 2040 2045 2050

NG

Use

in A

EO 2

017

(Qua

ds)

LDVsMedium TrucksHeavy TrucksFreight RailIntercity & Commuter RailTransit BusesSchool BusesOthers (Excl NG Pipeline)

AEO 2017: Natural Gas Use in Transportation (Total 0.46 Quads in 2050)

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

2015 2020 2025 2030 2035 2040 2045 2050

NG

Use

in N

G C

ase

(Qua

ds) LDVs

Medium Trucks

Heavy Trucks

Freight Rail

Intercity & Commuter Rail

Transit Buses

School Buses

Others (Excl NG Pipeline)

Increased NG Use Case: Natural Gas Use in Transportation (Total 4.04 Quads in 2050)

26

AEO 2017, the EIA projects net NG exports to rise from 0.94 TCF (0.95 Quads) in 2018 to 5.56 TCF (5.74 Quads) by 2050. In comparison, the expanded NG analysis projects a net increase of 3.40 TCF (3.51 Quads) in the transportation sector’s NG use by 2050. This net increase accounts for the transportation-sector NG use already projected in AEO 2017. Thus, even with the increased NG use described in this analysis, there will be surplus production that can be exported, i.e., 2.16 TCF (2.23 Quads) in 2050. In addition, because of the very slow rate of net increase until 2030, NG exports would experience very limited impact until 2030. Figure 14 shows the impact of our scenario of expanded NG use in transportation on AEO 2017’s projected net exports.

FIGURE 14 Impact of Expanded Transportation-Sector NG Use on AEO 2017 Projected Exports

5.3 CHANGE IN GREENHOUSE GAS EMISSIONS

Natural gas-powered vehicles can reduce GHG emissions because NG has a lower carbon content than petroleum fuels. However, because of increased methane leakage in the supply chain and vehicle, the potential benefit is reduced. Also, as explained in Section 4, NG-powered vehicles are assumed to have lower fuel economy than the reference fuel-powered vehicles until 2035. Because of increased NG use during the period 2015–2035, GHG emissions would increase slightly relative to AEO 2017. Figure 15 shows this trend in terms of million metric tons (MMT) of carbon dioxide equivalent (CO2e) GHG emissions. Also, even though fuel economy parity is achieved by 2035, older and less efficient vehicles will constitute a substantial share of vehicles on the road for another decade or so, constraining the rate of GHG emissions reduction.

0

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7

2015 2020 2025 2030 2035 2040 2045 2050

Impa

ct o

n N

G Ex

port

s (TC

F) Increased NG Use CaseNet Export

27

FIGURE 15 Annual Change in GHG Emissions Due to Increased Use of NG

As shown in Figure 15, GHG emissions increase initially, with an increase as high as 3.1 MMT CO2e per year during the period 2019–2025. This increase is caused by the lower fuel economy of NG engines. GHG emissions start declining after 2025 and reach the level of AEO 2017 (zero change) by 2031. By 2050, a reduction of 47.2 MMT CO2e a year is reached. Compared to GHG emissions in AEO 2017, only freight rail increases its GHG emissions, while all other subsectors decrease their emissions. The increases associated with freight rail are due to a lower 2050 NG share of total fuel use, i.e., 45.5% in AEO 2017 vs. 35% in the expanded-NG-use scenario (see Table 4).

These results show that R&D to improve NGVs’ fuel efficiency is a key factor affecting their potential to reduce GHG emissions. In the future, gasoline and diesel engine efficiency will likely improve; therefore, NGVs must not only keep pace with technological improvement but close the efficiency gap. Efforts are needed by the DOE, CEC, industry, and other groups to build upon past and existing R&D efforts to address this challenge.

-50

-40

-30

-20

-10

0

10

2015 2020 2025 2030 2035 2040 2045 2050

Chan

ge in

GHG

Em

issi

ons (

MM

T CO

2e)

HDTsMDTsLDVsTransit BusesSchool BusesIC & Comm RailFreight Rail

GHG Emissions Change: Increased NG Use Case Minus AEO 2017

28

5.4 CHANGES IN NOX EMISSIONS

Recent strict air pollutant emission standards for both LDVs and HDVs have forced conventional vehicles to develop advanced engine controls and after-treatment systems to meet them. As a result, NGVs typically have emissions similar to those of gasoline and diesel vehicles. However, because of severe air quality concerns in California, CARB adopted optional low NOx standards in 2014, with three levels to which engines can be certified: 0.10, 0.05, or 0.02 grams per brake horsepower-hour (g/bhp-hr). In 2016, the South Coast Air Quality Management District, along with 10 other state and local agencies, petitioned the EPA to revise the EPA HDV NOx standard to be 0.02 g/bhp-hr (South Coast Air Quality Management District, 2016). The petition states that to meet the new 70-parts-per-billion ozone standard, these areas will need the lower HDV engine standard for NOx emissions.

The first heavy-duty engines to meet both the EPA’s and CARB’s 2010 standards and the CARB optional 0.02-g/bhp-hr NOx standard were NG-powered 8.9-L engines (Cummins Westport 2016). Recent in-use emission testing showed that new NGVs perform similarly to their certification test results. However, diesel vehicle aftertreatment performance and resulting in-use NOx emissions were highly duty-cycle-dependent. Diesel vehicles showed much higher emissions than their certification results in applications with long idle times, low speeds, and low loads (Cai et al. 2017).

We analyzed the impact of increased NGV use on NOx using results from Argonne’s recent analyses of NGVs (Cai et al. 2017). As seen in Figure 16, the NOx benefit increases gradually as MDT and HDT VMT increase. NG LDVs are assumed to not provide a NOx benefit, while the low VMT of transit and school buses results in small reductions. Specifically, NG combination HDTs drive the total potential NOx benefit, with their VMT and the resulting NOx benefit growing rapidly after 2030. By 2050, a reduction of about 350,000 metric tonnes is reached if no further emission regulations are enacted.

29

FIGURE 16 Annual Change in NOx Emissions Due to Increased Use of NG 5.5 CHANGES IN LIFETIME LEVELIZED COST OF DRIVING

The economics of NGVs depend on having low enough operating costs to pay back the incremental cost of storage tanks and other engine modifications as compared to gasoline and diesel vehicles. Using the NGV and gasoline/diesel fuel economy, fuel price, and vehicle cost data discussed in Section 5 above for each vehicle type, we analyzed the lifetime LCD of NGVs versus their gasoline and diesel counterparts for 2015, 2035, and 2050. In the AEO 2017 Reference Case, for all years, all NGVs (except for the CNG MDT in 2015) have a lower LCD than their counterparts, as seen in Figure 17. In 2035 and 2050, the difference is about $0.20 per mile in all NG cases, with reductions ranging from 24% to 35%. In the AEO 2017 High Oil Price Case, NGVs have a significantly larger LCD benefit. In 2035, the difference is about $0.50 per mile in all the NG cases, with reductions ranging from 47% to 53%. In 2050, the difference is about $0.50 per mile for light commercial NGVs and $0.70 per mile for medium- and heavy-duty NGVs, with reductions ranging from 53% to 60%.

-400,000

-350,000

-300,000

-250,000

-200,000

-150,000

-100,000

-50,000

0

2015 2020 2025 2030 2035 2040 2045 2050

Chan

ge in

NO

x Em

issi

ons (

met

ric to

nnes

)

NOx Emissions Change: Increased NG Use Case

HDTs - CombinationHDTs - Single UnitMDTsLDVs - TruckLDVs - CarTransit BusesSchool Buses

30

FIGURE 17 Lifetime LCD Using AEO 2017 Reference Case (Top) and AEO 2017 High Oil Price Case (Bottom)

$0.00

$0.25

$0.50

$0.75

$1.00

$1.25

$1.50

Commercial Light Truck(gasoline/CNG)

Medium Truck(diesel/CNG)

Heavy Truck(diesel/LNG)

2015 2035 2050 2015 2035 2050 2015 2035 2050

LCD

($/m

i)Lifetime Levelized Cost of Driving - AEO17 Reference

Petroleum FuelNG Fuel

$0.00

$0.25

$0.50

$0.75

$1.00

$1.25

$1.50

Commercial Light Truck(gasoline/CNG)

Medium Truck(diesel/CNG)

Heavy Truck(diesel/LNG)

2015 2035 2050 2015 2035 2050 2015 2035 2050

LCD

($/m

i)

Lifetime Levelized Cost of Driving - AEO17 High Oil $

Petroleum FuelNG Fuel

31

6 SUMMARY

The shale gas revolution offers a significant opportunity to expand the use of NG for transportation. In this report, we described the current NGV market. Although it has grown in the past decade, NG still accounts for a very small portion of fuel use for the highway and rail sectors. The barriers to expanding NG in transportation include vehicle efficiency, on-board storage cost, fueling station cost, methane leakage, and RNG availability. The DOE is working to address technical challenges facing NGVs, and if this effort is successful, there is a potential for a significant shift to NG by 2050.

With the success of NG fuel and NGV R&D, it is anticipated that NG use in transportation can be significantly expanded. The sector with the most potential for NG is heavy-duty freight trucking (2.10 Quads), though medium-duty freight and vocational vehicles (1.04 Quads) and light-duty pickup trucks (0.69 Quads) could all experience significant increases in NG use by 2050. In our expanded-NG-use scenario, NG transportation increases to 4.04 Quads, which is 20% of the total transportation energy use in 2050 (20.48 Quads). Even this increase in NG for transportation would likely not greatly impact other sectors’ use of NG, as there would still be 2.23 Quads of NG exports in 2050 in our scenario.

Improvements in vehicle efficiency through R&D can lead to petroleum use reduction (3.06 Quads in 2050) and GHG reduction (47.2 MMT in 2050), which would be enhanced with expanded use of RNG. In addition, medium- and heavy-duty NGVs currently have significantly lower NOx emissions than diesel vehicles, and their expanded use could reduce transportation NOx by a large amount (350,000 metric tons in 2050). Finally, one of the key benefits of NGVs is their ability to significantly reduce fuel costs. NG freight trucks could potentially experience a reduction in the LCD by up to 60% by 2050, which would be a significant benefit to the trucking industry and the U.S. economy.

32

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