Volkswagen counting on TDI to break through clean diesel barriers

VW TDI engineHow does this one sound? If you’re driving the new Volkswagen Passat turbocharged direct injection (TDI) sedan, you get 43 mpg on the highway, can travel 795 miles on one fueling, and it carries you with 140 horsepower and 236 lbs/ft of torque. The 2014 Passat TDI Clean Diesel starts at $26,675 (excluding taxes and destination charges), so it’s very price competitive with midsize gasoline engine cars that don’t get as good a mpg rating or driving range per fueling.

The latest TV commercial for the Passat TDI emphasizes freedom from range anxiety – you can drive from Los Angeles to Philadelphia on just three stops for fuel – just a hop, skip, and a jump. Other midsize sedans need a lot more fuel stops, VW says – and you can receive a $1,000 fuel reward card on your purchase. It seems to be working – Volkswagen is leading sales for diesel passenger cars in the US. About 55% of diesel passenger cars sold in the US are the Volkswagen Passat and Jetta (with the Passat at 29%), and these two models are way ahead of any other diesel passenger car.

“Cruise from A to B, not from A to filling station to B,” says VW’s website promoting clean diesel TDI. The Passat and Jetta are joined by the Jetta SportWagen, Golf, Beetle, Beetle Convertible, and Touareg in the VW clean diesel TDI family. VW’s Audi division currently offers five clean diesel TDI models – the A6, A7, A8 L, Q5, and Q7. For the 2015 model year, Audi is launching a new version of the Audi A3 TDI. At the New York Auto Show, the 2016 Audi A3 TDI Sportback was unveiled – bringing a station wagon to Audi’s TDI lineup.

VW seems to be enjoying a few advantages in its clean diesel offerings……
• TDI is a registered trademark for VW and Audi – turbocharged direct injection brings more power and efficiency to sedans and taps into what many American car owners admire about German automotive engineering. VW is focusing specifically on TDI clean diesel models of its cars that also come in gasoline-engine versions – and is counting on the concept to sink into consumer minds.
• Clean diesel is considered by some people to be an alternative fuel – while it’s not as clean as electricity, natural gas, biodiesel, or propane – it is an alternative to gasoline. For car shoppers, buying a diesel engine car can be as big a switch as buying a hybrid or plug-in. It also helps that US fuel stations are only selling ultra-low sulfur diesel (ULSD) these days – adding more weight to the “clean diesel” identity.
• You can find diesel just about anywhere at US gas stations. With the extended range on a fueling of a VW Passat and with fuel stations all over the map, range anxiety is relieved. (Diesel does cost more than gasoline, but the fact that they’re getting great mpg seems to be offsetting that price differential).
• TDI Clean Diesel technology is part of VW’s Think Blue initiative, the automaker’s goal of creating and encouraging eco-conscious products and behaviors. While some people scoff at the idea of clean diesel actually being clean (especially when compared to electric vehicles), it does play into the drive for clean transportation – reducing emissions compared to gasoline engines on a mile-per-mile basis.

Big Picture: Cadillac ELR “Poolside” TV ad generates backlash; Fisker launches new website under new owner

Cadillac ELR commercial 2Cadillac’s “Poolside” TV ad for its ELR extended range electric luxury car, which has been airing recently during the Winter Olympics and Oscars, has generated a lot of unintended backlash. It’s been enough for Ad Age to interview Cadillac advertising director Craig Bierley about it. He says that the TV commercial has been misconstrued – it’s not targeted to the wealthiest, but to self-made customers who’ve used “hard work and hustle” and are now making $200,000 a year more. It’s created a maelstrom of debate with right-wing commentators seeing it as affirmation of what’s made the US great; left-wing commentators see it as ugly American chest-thumping. Green Car Reports readers have felt strongly about it – a recent article generated heated debated and more than 300  comments. Uwe Ellinghaus, Cadillac’s global chief marketing officer, doesn’t have any problems with it. The TV ad is delivering what they’d intended. The early research Cadillac had done on the ad suggested “we would break through the clutter and generate a hell of a lot of buzz. Mission accomplished.” There’s always the question of what TV ads like this do to America’s (and Cadillac’s) image in important global markets.

And in other clean transportation news……

  • The new website for Fisker Automotive speaks to its rebirth as an automaker now owned by Wanxiang America, the US arm of the largest auto parts company in China. “Fisker Automotive is poised & ready for a new beginning,” it states on the revamped website. It looks like the extended range Fisker Karma will return as it was before.
  • EcoMotors, the Michigan-based OPOC engine maker backed by Bill Gates and Vinod Kholsa, has created a joint venture in China with a subsidiary of First Auto Works (FAW), which is a Chinese state-owned auto manufacturing company. The FAW subsidiary, First Auto Works Jingye Engine Company, is investing more than $200 million into the venture that has been named BEM Shanxi Co. That venture will build an advanced engine designed by EcoMotors in 2015. EcoMotors previously established a similar deal with another Chinese company, Zhongding Power, nearly a year ago. Both Chinese companies are utilizing EcoMotor’s OPOC engine, which is said to be cheaper and more compact than conventional gasoline and diesel engines, and will deliver higher fuel economy and fewer emissions.
  • Linear City Development said it’s now offering the nation’s first apartment building to provide free electric vehicle charging for tenants. Linear City has installed 20 Level 2 EV charge stations at The Elysian, a 96-unit conversion of Los Angeles’ historic Metropolitan Water District (MWD) headquarters. It will cover the cost of electricity for the life of every original EV-driving tenant’s lease.
  • BMW is getting strong initial orders for its i3 electric car, Norbert Reithofer, BMW’s CEO, said at the Geneva Motor Show. It’s already available in Europe and will soon roll out in the US and Asia. Orders might be more than the automaker has production capacity for right now, he said. The model with the range extender (which can go 160 miles versus 80 for the battery electric model) is getting more purchase activity from early buyers, he said.
  • Toyota Chairman Takeshi Uchiyamada, father of the original Toyota Prius, foresees hybrid models making up 20% of global auto sales; they’re at the 13% to 14% mark now. Honda may add to those numbers; the company issued a press release stating its renewed commitment to hybrid technology. That may have been damage control after news broke last month about one of its original hybrid models, the Insight, being pulled off production lines by the end of this year.

Big Picture: Fisker Karma coming back to dealerships, Tesla financial losses could be offset by “gigafactory”

Fisker plant in DelawareFisker Automotive’s new owner has been shedding more light on where the luxury extended range sports carmaker is headed. Pin Ni, head of Wanxiang America (the US division of Wanxiang Group, China’s largest auto parts company), told Automotive News that the Karma will restart production as early as this year at its Finland plant; the Karma will be sold again in the US and Europe. Production could happen in the US as well, once sales move forward. Ni said there’s a “potential partner out of Michigan.” There’s always the former General Motors plant in Delaware, but Fisker Automotive may stay away from it. Long term, Wanxiang may set up production in China where there’s a lot of government purchase subsidies for cars like the Fisker Karma. Ni also commented on the Fisker Atlantic; Wanxiang wants to complete development of this mid-sized plug-in hybrid. It’s positioned to be more affordable model that is likely to be produced at higher volume than the Karma.

And in other clean transportation news………

  • Tesla Motors sold 22,247 cars last year, pulled in $2 billion in revenue, and took a $74 million loss. This year’s financials could be similar with speeding up production, starting production of the Model X, and expanding globally. Tesla also reported a second set of financial results outside of the generally accepted accounting principles – that one looked much better with a $46 million fourth quarter profit, which was up from $16 million in the third quarter. Tesla CEO Elon Musk also coined another phrase for how Tesla will rise to its challenges – the company may develop a “gigafactory” that would produce lithium batteries for its vehicles at much higher volume and much lower cost. More cash would be needed to do so, and with the company’s stock price so high, now could be a good time to make that investment, Musk said.
  • Check out two reports from the US Department of Energy. “A Guide to the Lessons Learned from the Clean Cities Community Electric Vehicle Readiness Projects” pulls together coverage of 16 different projects around the country. “State of the States: Fuel Cells in America 2013” looks at energy being produced at stationary fuel cell installations, fuel cell forklift deployments, and fuel cell buses, trucks, and cars placed in service.
  • The Kia Soul EV is being equipped with an advanced power pack featuring lithium-ion polymer battery cells supplied by SK Innovation. The battery pack features 192 lithium-ion polymer batter cells in eight modules that can output 27 kWh.
  • Echo Automotive will be adding the Chevrolet Express and GMV Savana full-sized vans to its plug-in hybrid lineup. Production will start in the first quarter of 2015 and will follow conversions of Ford E-Series vans.
  • Paice LLC filed a lawsuit against Ford Motor Co. for alleged patent infringement on its hybrid vehicle technology. The Baltimore company has won a similar case against Toyota Motor Corp. Paice said in its lawsuit that hybrid and plug-in versions of Ford’s C-Max and Fusion, and the Lincoln MKZ, infringe on patents that address ways to control electric motors and gasoline engines for increased fuel efficiency and reduced emissions. The two companies had made a deal in 2010 where Ford licensed one of Paice’s patents. Negotiations haven’t gone well, according to Paice, hence the lawsuit filing.
  • Nissan CEO Carlos Ghosn delivered two Leafs to the Kingdom of Bhutan last week in honor of the king’s birthday. He pledged more EVs to help the government electrify its fleet and the nation’s taxis. Nissan wants to showcase its technology in an unexpected market.

Big Picture: New SoCal alt fuel tech center, Fisker Automotive has a new owner

California Energy CommissionThe California Energy Commission has awarded funds to a consortium of Southern California-based organizations led by the Los Angeles County Economic Development Corporation (LAEDC) to establish a Southern California Center for Alternative Fuels and Advanced Vehicle Technology. The Center will consist of one virtual hub and two physical locations—one in San Diego, which will be managed by the California Center for Sustainable Energy, and one in Los Angeles, which will be managed by the Los Angeles Cleantech Incubator. The Center will serve the counties of Imperial, Los Angeles, Orange, Riverside, San Bernardino, San Diego, Santa Barbara and Ventura.

“Our goal with this critically important Center is to also leverage these assets to ensure that we’re a leading developer, designer and producer of these lower-emission technologies to add the high-value jobs and wages as well as the tax revenues that will result from a thriving advanced transportation cluster,” said Bill Allen, President and CEO, LAEDC. The California Center for Sustainable Energy (CCSE), a nonprofit organization that administers the statewide Clean Vehicle Rebate Project for the California Air Resources Board, will operate the San Diego Center. The Los Angeles Center will be managed by the Los Angeles Cleantech Incubator (LACI) at the La Kretz Innovation Campus in downtown Los Angeles.

And in other clean transportation news…….

  • Fisker Automotive has a new owner – Wanxiang:  The assets of bankrupt Fisker Automotive were sold to Wanxiang America for $149.2 million; Hybrid Tech Holdings had opened the bid for $55 million. It took two days and 19 rounds for the acquisition deal to be closed at the Delaware bankruptcy court. Wanxiang’s parent company in China is that country’s largest auto-parts supplier and it also owns A123 Systems, the lithium battery maker that has supplied battery packs to the Fisker Karma. US Bankruptcy Court Judge Kevin Gross chose the public auction route so that unsecured creditors could receive some payback from the deal.
  • Long Beach Clean Cities Coalition, which had been on hiatus for the past year, has now started up again through an alliance with the Municipal Equipment Maintenance Association (MEMA) Southern California chapter. Paul Condran, Fleet Manager for City of Culver City, CA, now serves as president of the board; three of the board members are Long Beach Clean Cities representatives. Bi-monthly MEMA meetings are serving as a main platform for recognizing Clean Cities’ goals and objectives; planning is being done for meetings, seminars, and educational sessions on green technologies, alternative fuels, and carbon footprint reduction methods. MEMA’s next general meeting will be on March 20, 2014 and details will be announced soon – see the chapter’s website for information on this meeting and alternative fuel vehicle educational sessions frequently offered by the organization.
  • US Secretary of State John Kerry mocked those who deny climate change in a speech in Indonesia. He didn’t say one word about the State Department’s and the Obama administration’s decision on the Keystone XL pipeline, which many analysts would say has a lot to do with climate change. Hmmmm………..
  • NAFA’s 2014 Institute & Expo (I&E) will be coming up April 8-11, 2014 in Minneapolis. I&E features over 60 hours of educational sessions, keynote speakers, an expo floor with more than 250 exhibitors, and excellent networking events. I had a great time attending last year, including the NAFA and Calstart workshops on alternative fuel vehicles and advanced technologies. Here’ s the conference’s website for more information and registration.
  • Tesla Motors will have its full-year financial reporting. There’s a slight chance the automaker may announce that day, or sometime soon, or never at all, that Apple may buy the luxury electric car maker. Executives may have had a conversation about it last fall and acquisition may have been discussed; another analyst said that, acquisition or not, Tesla may integrate Apple’s iOS system into Tesla vehicles.
  • ASTM International has issued a standard for dimethyl ether (DME), which could support a major advancement in alternative fuels that’s being developed by Oberon Fuels with Volvo Trucks and Mack. ASTM D7901 for DME provides guidelines for production of the diesel replacement fuel that can made from organic material. It would also apply guidelines to engine developers and for consumers of the fuel.
  • Green Automotive Company announced that its Californian subsidiary Newport Coachworks is planning to launch its 100% electric shuttle bus at the LCT Show in Las Vegas. The fully American built electric shuttle bus, The e-PATRIOT, will be presented for the first time at the upcoming February 16-18th International LCT Show at the MGM Grand Hotel & Casino in Las Vegas.
  • ChargePoint announced the installation of twenty-seven new stations at MGM resorts on the Las Vegas Strip and two new stations at Circus Circus in Reno.

Global Issue in Fleet Fueling is a Potential “Win-Win” for Heavy Vehicles Sector

Substantial HC Reductions to be Gained in the Capture of “Fugitive Transfer Emissions”

by Chris Hollerback

TCFS powerpoint slideHeavy duty vehicles have seen major transformations in hydrocarbon emission reduction in recent years. This is based on engine manufacturers’ massive investments in new technology and the mandates of Ultra Low Sulfur Diesel, along with SCR/Urea after-treatments. The industry has transformed diesel from the worst pollutant into one of the cleanest and most economic fuels available.

Truck engines and diesel fuel are two of several emissions sources that must be reduced to hit strict, ambitious federal standards to reduce greenhouse gas. So the big question is: “Where will the next significant reduction come from?” It is my belief that considerable gains can be realized through advances in fuel dispensing equipment. “Fugitive Transfer Emissions,” along with vapor purge, happens during the transfer of liquid and compressed gas refueling.

If the goal is to reduce hydrocarbons, wouldn’t it be prudent to capture as much of these emissions as well? With the exception of vapor recovery and on-board refueling vapor recovery (ORVR) in gasoline, this issue is currently “not on the radar” of the US Environmental Protection Agency (EPA). Consider that fugitive loss is a global occurrence and one that can be substantially corrected with significant benefits to the environment, the transportation industry, and the consuming public.

Diesel has secured the environmental future in the EPA’s focus of exhaust emissions.  In spite of these major advances, future reductions of hydrocarbon emissions are still being demanded by the EPA for the heavy duty vehicles market.

The EPA’s focus for hydrocarbon reduction in transportation is currently limited to “exhaust” emissions, which by definition is the measurement of “unburned” fuel. Fugitive transfer emissions (FTEs) are the vapors or purge containing concentrated levels of raw fuel, in suspension, that “vent” in order to displace liquid or compressed gas into a fuel vessel. Venting is a necessary function with all dispensing equipment.

Venting occurs somewhere near the refueling point and always after the fuel meter. The concept of the proposed solution is a common sense plumbing adjustment that effectively moves the vent point back to the supply source capturing vapor, and overfills, in a closed loop. With that said, how significant are these losses, and what gains can be made through total containment?

I am singling out diesel refueling as a starting point to illustrate how significant FTE reduction can be. Diesel refueling raised my awareness of the issue and inspired the proposed solution.

Fifteen years ago I was introduced to the non-public side of fleet transportation through refueling operations at a major metropolitan bus facility. Facility hygiene conditions were, and still remain, appalling.

As an outsider, my first impressions were of how grimy the fuel barn was with puddles of fuel that were obvious slip hazards. Everything was coated with fuel throughout the property. The pungent odor of diesel was inescapable, even in the office areas. My initial questions were “How can people work under these conditions” and “Why isn’t someone doing something to correct it?”

Pressure cleanings were a weekly event with spot cleanings performed daily.  “The nature of the fuel just gets on everything, you get used to it after a while.” This is the one comment that is consistently repeated and sums up the acceptance of the conditions industry wide. So what is the root cause of this rapid recurrence as a need for constant clean-up, and more importantly, can a solution be found to permanently correct it?

From a logistics stand point, the hectic activity to process 500 buses for the next day was fascinating. The buses all come in at once at days end, and stretch around the facility in an endless line.

“Hostlers” drive these vehicles into the fueling area, quickly connect a “high speed” fuel nozzle to a mating connection. Fuel is dispensed at an impressive 40 gallons per minute (GPM). The Hostler jumps back into the bus to sweep out trash and debris. (I still can’t shake the pungent smell of fuel.)

A “whistling” noise pierces the air during fueling; this is a safety indicator that the fuel tank is “pressurized” signaling the fuel nozzle is not to be removed until the whistling stops. This “safety whistle” is cleverly activated by pressure from within the tank, sort of like an industrial tea kettle. This whistle, combined with another pressure relief valve, is designed to dissipate tank pressure and a likely source for aerosol fuel releases. (All fuel tanks must relieve pressure or risk rupture. The trucking industry uses a standard nozzle and an over-sized filler neck that allows venting around the inserted nozzle.)

To confirm the theory in “MacGyver” fashion, I wrapped a handkerchief over the two suspect vent points, producing two oily damp spots. One source of contamination identified, but how significant is the output?

Despite the manufactures warnings, at this location, the fuel hose was repeatedly removed from each bus with the whistle still sounding to get to the next bus. This practice resulted in a back-pressure fuel spill, partially captured by a sludge pit.

As the hostler kicks the fuel door shut with his foot, fuel trails down the side of the bus and is tracked onto the tarmac out to the parking area. This tracking of fuel makes its way to storm drains with wash downs, rain, and snow melt run off.

Two sources of fuel release identified – what’s the volume for each and would there be a significant payback if these conditions could be corrected? The back-pressure spills were the most obvious, so I asked the obvious question “Why would they disconnect before the whistle stops if they know it will result in such a large fuel loss?” The answer was the fuel loss was acceptable as an offset for the extra minutes saved on each bus to reduce labor expense and time.

The fuel “spilled” was less than 1% of total fuel purchased and fuel was not “lost” as it was captured in the sludge pit and sold to “re-processers.”

The calculation for back-pressure spills rounded to .09% equated to 169,000 gallons annually based on this total fleet’s volume. The collected fuel is contaminated and not suitable for reuse and is sold for less than purchase.

Most facilities avoid overfills by properly waiting for tank pressure to dissipate; However, the “atomization” that occurs remains unavoidable due to dispenser design. Overfills, back-pressure spray, and atomized fuel losses all occur after the fuel meter, so for the most part, have gone unnoticed, and more importantly, unaccounted for.

What about the atomized fugitive loss? Is this a big deal? Specific measurement will be calculated with (yet to be determined) university collaboration, but viewed under an infrared camera, the visible “cloud” is significant. A little digging produced a citable reference regarding “fugitive transfer emissions” in an early study of vapor recovery. This was a collaborative effort which included the EPA and American Petroleum Institute (API).

The collaborative calculation states the fugitive transfer loss to be 8.4 lbs of liquid for every 1,000 gallons dispensed. (Conversion is approximate to 1.5 gallons of liquid fuel.)

This specific reference was performed with gasoline which admittedly has very different properties from diesel, but as a liquid transfer, this serves as a reference point for the theory. Gasoline is dispensed at 10 GPM whereas diesel fuel is commonly dispensed at 30 GPM at a travel plaza, and 40 GPM or better, through the pressurized system utilized by 98% of mass transit groups.

The transit group referenced dispenses 18 million gallons of diesel fuel in a year with a total fleet of 1,300 buses. The atomized loss at 1.5 gallons per 1,000 gallons dispensed would equal a 27,000 gallon loss which contaminates the site and places employees at unnecessary occupational risks. This volume in fugitive loss, if captured, would obviously better serve the fleet as usable fuel and provide a cleaner and healthier work environment for the total labor force.

Multiple regulatory programs seek reductions of contamination sources such as: The Air Pollution Act, Water Pollution Act, Spill Prevention, Control and Countermeasure (SPCC), Environmental Justice Act, SmartWays Partnership, Map 21, and OSHA’s Permissible Exposure Limits (PEL) guidelines.

Every commercially available fuel dispenser has a measurable degree of fugitive transfer loss. Diesel fuel does not evaporate as gasoline, but shares some of the same toxins such as benzene. Consequently, vapor recovery has not been required for use in diesel fuel dispensing. Due to the fact that it does not evaporate is reason for capture.

Looking beyond just exhaust emissions will further environmental and health efficiencies. Challenging antiquated dispensing processes provides opportunity to further reduce heavy duty vehicle emissions to improve environmental and occupational health. A closed loop containment dispensing assures that fuel consuming fleets are actually getting all the energy they are purchasing. That’s a “Win-Win” and reasons to consider the change.

Chris Hollerback has a 30 year background in facilities management and process improvement. He is the designer and utility patent holder of the Total Containment Fueling System (TCFS). The patent awards 43 claims of innovations above the state of the art in dispensing. A proof of concept prototype has been developed to validate a solution for fleet application as a logistics tool. Hollberback’s LinkedIn page offers a summary of the TCFS.

Big Picture: Consumers worried about driverless cars, Leaf and Volt sales down

Google driverless carsGovernment officials, DMVs, Google, and automakers (especially Nissan) are much more excited about autonomous, driverless cars than are American consumers. A new study by Harris Poll found that 88% of US adults (18 and older) are nervous about riding around in a driverless car. Some of their concerns focus on equipment in a driverless car failing such as a braking software glitch or failed warning sensor alerting the robot driver about upcoming danger. Nearly 60% are worried about liability issues – primarily who’s responsible for the crash if one were to happen. More than half are worried about hackers taking over the car and playing dangerous games. There’s also concern by 37% of the respondents that personal data will be extracted from the car that could be used against the owner. Another news item from last week about automated cars came from the National Highway Traffic Safety Administration; the agency announced it’s moving forward on V2V (vehicle-to-vehicle) technology as a key to saving lives and improving traffic flow in congested urban areas. It represents the next generation of safety improvements for NHTSA, and eventually will enhance development of autonomous vehicles that automakers want to put on US roads starting in 2020.

And in other clean transportation news…….

  • Nissan Leaf and Chevrolet Volt sales were down in January. At 1,252 units sold, the Leaf was way up over a year ago but down from the 2,529 units sold in December. The Volt saw 918 units sold in January, down from 2,392 units in December and 1,140 from January 2013. January has been a tougher month for sales and bad weather through much of the US hurt sales, too.
  • President Obama voiced support for natural gas vehicles during his State of the Union speech last week. He urged Congress to support construction of natural gas fueling stations for American cars and trucks. It’s part of his “all-of-the-above” energy strategy to create new jobs in America, reduce US dependency on foreign oil, and help curb climate change.
  • AltCar Expo will make its Northern California debut on March 14-15, 2014, at Craneway Pavilion in Richmond, Calif. Similar to AltCar Expo conferences in Santa Monica and Dallas, this one will start with an Industry/Fleet day and then will be followed by a Public Day; ride and drives will be available.  Partners include: Honda, Nissan, California Fuel Cell Partnership, San Francisco Clean Cities, and East Bay Clean Cities.
  • Happy birthday to Green Car Reports, which just celebrated five years and 9,800 articles. According to senior editor John Voelcker, “many people worked long hours for very little reward to tell the stories and spread the word that green cars come in a variety of forms and can be propelled by many different forms of energy.”
  • At the Washington Auto Show last week, US Energy Secretary Ernest Moniz said that nearly $50 million will be available to accelerate research and development of new vehicle technologies. This new funding includes support for the Energy Department’s EV Everywhere Grand Challenge, a broader initiative launched in March 2012 to make plug-in electric vehicles (PEVs) more affordable and convenient to own and drive than today’s gasoline-powered vehicles within the next 10 years.
  • Clean Cities just released its 2014 Vehicle Buyer’s Guidea comprehensive list of 2014 hybrids and vehicles that run on propane, CNG, electricity, E-85, and biodiesel. Like its previous reports, the guide focuses on fuel economy, emissions, information on fuel types, and vehicle pricing.

Reader Survey: What do you think it will take to move green vehicles forward?

Volt driving up mountainIf you’ve been on a conference call with stakeholders, or had a coffee at Starbucks with a few of them, questions always come up:

  • What will it take to grow sales of electric vehicles, natural gas vehicles, and other alternative fuels and vehicles?
  • Where is the charging and fueling infrastructure going?
  • How do you deal with misinformation being thrown out over the internet on alternative fuels and vehicles?
  • Are government incentives going away?
  • How do you educate regulators (and voters and consumers) on what it really takes for these technologies to work in the marketplace?
  • How are automakers going to comply with stringent fuel economy and emissions standards?
  • How many years away are we from advanced batteries, fuels, and technologies becoming more economically viable?

Green Auto Market is featuring its first reader survey with the goal of making the newsletter more reader friendly. The survey questions are also designed around gaining insights on your ideas and experience in what it’s going to take for alternative fuel vehicles and clean transportation to move forward in sales, public support, and the regulatory and economic environment.

When you click on the survey link, you’ll find five questions asking for your input on:  topics of interest; issues that need to be addressed to gain more purchasing interest; the importance of stakeholder groups in shaping the industry’s future; related topics you’d like read more about such as renewable energy and futuristic, advanced technologies; and marketing and education methods that you think would be most effective in promoting support for purchasing decisions and public perception.

Results from this survey will be presented soon in an upcoming issue of the newsletter. Your privacy will be respected – survey respondents will not be revealed in coverage of the survey results. Readers of Green Auto Market tend to be active in the new and growing industry – your feedback would be much appreciated. Click here to take the survey.

Keystone XL Pipeline: What’s likely to happen next

Keystone pipelineThe US State Department issues its long-awaited report Friday on the proposed 1,700-mile Keystone XL pipeline from Alberta, Canada to gulf coast refineries in Texas. The State Department report said the pipeline would not substantially worsen greenhouse gas pollution. Once it’s built, the pipeline could carry 830,000 barrels of oil a day; the report says that this volume of oil would still be extracted from oil sands fields in Alberta and delivered to US refineries to have the oil extracted by rail instead.

Here are a few points I would make about this decision:

  • President Obama is likely to support the 1,700-mile Keystone pipeline; in a speech last summer, he said his administration would approve the pipeline if it didn’t “significantly exacerbate” the problem of greenhouse gas emissions. Secretary of State John Kerry is in a tough position as he studies his department’s 11-volume report and issues a statement about it in weeks or months ahead. Kerry has been a clear advocate of fighting climate change, and many significant environmental leaders are putting the pressure on Kerry and Obama to reject the Keystone pipeline.
  • The US has been working hard on reducing imports of foreign oil in recent years, and this is one way it’s being done. Canada is, by far, the largest provider of foreign oil imports to the US, and Mexico is also one of the top suppliers of oil to the US. The Mexican government recently passed a sweeping energy reform bill allowing foreign investors in their market instead of the state-run oil giant controlling all of it. The Keystone pipeline, changes in the Mexican regulatory environment, and substantial growth in US oil and gas fields, means that there’s more oil coming to this country from North America and not from OPEC countries. Canada and Mexico are NAFTA partners and are much closer than other markets in the Middle East, Africa, and South America. Shipping the oil is faster and cheaper than from other markets, and the US has strong alliances with these two neighboring countries.
  • Gasoline and diesel prices have been softening in the US and they should stay down this year. As mentioned above, the oil supply in North America is growing and that’s likely to keep prices down. That’s also likely to have some effect on market demand for electric vehicles, hybrids, and alternative fuel vehicles that usually cost more than comparable gasoline-engine vehicles. If you look at the surveys and marketing campaigns for green vehicles, gasoline prices are usually a top issue. That will need to change to get average consumers interested in making that purchase. Early adopters already own their green cars, and now it will probably take a revised marketing message to grow the market. Long-term cost savings and environmental benefits (emissions reductions) usually go over well with consumers, fleets, and transportation companies.

Big Picture: Good news for EV fans – Federal agency reports growth in renewables and decline in coal for electricity

Total installed operatiing generating capacity 2013Electrified transportation has major challenges to overcome with one of them being where the electricity comes from. Your car could be zero emission, but if the energy source used to generate the electricity powering your motor is spewing carbon, then what’s the point? Or so the thinking goes. One bright spot is that new power plant capacity is seeing big growth in renewable energy and natural gas, and steep decline in coal-fired plants. A new report from the Federal Energy Regulatory Commission’s Office of Energy Projects says that renewables (such as solar, wind, biomass, geothermal, and hydropower) made up 37.16% of new domestic electrical generating capacity during 2013 for a total of 5,279 milliwatts (MW). Natural gas led 2013 with 7,270 MW of new capacity (51.17%). Renewable energy made up for three times that of coal (1,543 MW or 10.6%); oil (38 MW – 0.27%); and nuclear power (0 MW – 0.00%) combined.

Electricity production accounts for about 33% of greenhouse gas emissions in the US, according to US Environmental Protection Agency. Natural gas is a fossil fuel, just like coal, but it’s a much cleaner source of power – the EPA says its produces less nitrogen oxides and carbon dioxide than coal, and half as much carbon dioxide, less than a third as much nitrogen oxides, and only one percent as much sulfur oxides at the power plant. As you can see in the Federal Energy Regulatory Commission chart above, coal still makes up for a large share of US power plant operations at 28.57% last year. It used to be right above 50%; natural gas has been taking some of that share away for the past two years. Water and wind make up the biggest part of the renewable category; solar gets a lot of attention but is still in an early stage of development – but if you look at the new roll outs last year, solar is looking better. Solar led the way with 266 new units totaling 2,936 MW, followed by wind with 18 units producing 1,129 MW. Biomass provided 97 new units totaling 777 MW; water had 19 new units and 378 MW; and geothermal steam had four new units and 59 MW.

And in other clean transportation news:

  • Along with the new fuel economy standard, the US Environmental Protection Agency began working more closely and cooperatively with automakers in 2011 on tailpipe smog emission standards. At the Detroit Auto Show, EPA Administrator Gina McCarthy told automakers that the agency will take final action on its “Tier 3” standards next month; it’s putting stricter limits on tailpipe emissions and will have a mandate for oil companies limiting the amount of sulfur that can be used in gasoline. The rule will cost less than a penny a gallon and bring improved health protections to the public, McCarthy said to Automotive News. Automakers are pleased with the prospect of making and selling the same vehicles globally with better emission controls, as long as the oil industry does its part. The negotiations in 2011 appear to have been the start of ongoing cooperation between government and the auto industry. Technology is now in a place to provide solutions to barriers that used to be insurmountable.
  • Tesla Motors CEO Elon Musk thinks leasing is the answer for electric vehicle acquisitions, and just about all other types of vehicles out on the roads. Tesla guarantees the future value of its cars during the lease, allowing it to bring down monthly payments for the luxury, sporty sedan, the Model S. The premise of the guaranteed residual value has been based on the Mercedes Benz S Class as the benchmark – Tesla promises the Model S won’t depreciate any lower than the S Class; and Tesla will buy back the car at the agreed price. It will be very interesting how Tesla and its finance department do in the future; automakers get a lot of flexibility in how they report profit and loss from leasing within their captive finance divisions; some would call it “creative finance.” The Model S will cost much more in China – about $121,000. There’s bound to be very competitive lease deals in that country, which Tesla is counting on for pushing forward in its unit sales.
  • The 2015 Cadillac ELR took the Green Car Technology of the Year award. That extended range plug-in hybrid luxury car just rolled out last month and has only sold a handful of units. Winning the award should help, just like cars have done winning Green Car Journal’s sister award, the Green Car of the Year award, which is given out in November at the LA Auto Show. Ron Cogan and the other award judges were particularly impressed with the ELR’s paddle shifters used to increase the amount of energy it’s able to regenerate and store in its battery pack. That helps increase its range.
  • More students are being called on for breakthroughs in green vehicle technologies. Not long after Ford showed off its Fusion Hybrid automated research vehicle, Ford announced two alliances with impressive universities. Ford has projects started with Massachusetts Institute of Technology and Stanford University to research and develop solutions to some of the challenges that come up with automated driving. The teams will explore Ford’s Blueprint for Mobility, where driverless, automated driving is expected to bring long-term social contributions.
  • Going green is becoming more appealing to auto dealers around the country as a marketing message and as a strategy to build employee and customer loyalty – something to be proud of contribute to the local and global community. Rossi Honda of Vineland, NJ, says it’s the first-ever US dealer to become “Electric-Grid Neutral” and that happens through using no net electricity from its local utility. Rossi Honda installed solar panels during 2012 that took care of 90% of its need for electricity; the other 10% and its neutrality rating came from replacing metal halide lamps with LED lamps. Installing canopies outside for weather protection was also part of it neutral program.
  • Via Motors has made an $80 million purchase agreement with Sun Country Highway, a Canadian company that’s bringing electric vehicle charging stations to the nation’s highways. The deal will bring 1,000 of Via’s extended range plug-in hybrid Vtrux vans as shuttle vehicles for the Best Western hotel chain.
  • The Smart ForTwo Electric Drive was named the most environmentally friendly vehicle on American roads, according to the 2014 Greenest Vehicles list released by the American Council for an Energy-Efficient Economy; an assortment of battery-electric vehicles, plug-ins, hybrids – and one natural gas model – rounding out the Top 10. Toyota and Honda overwhelming dominated the ACEEE list of “Greenest” models.

What Rick Sikes and Joe Stergios say about managing green fleets

Rick Sikes and Joe Stergios webinarI would suggest that you take an hour and listen to the webinar from last week sponsored by 2014 ACT Expo and featuring Rick Sikes, feet superintendent for the City of Santa Monica, and Joe Stergios, area sales manager for Enterprise Fleet Management. Their experience and expertise is quite impressive, and it points toward what can be shared at ACT Expo in a few months. Sikes has been at it since the early 1990s and now has a 78% green vehicles in its 800 unit fleet, with natural gas vehicles making up about half of its fleet and electric vehicles (EVs), propane, hybrids, and hydrogen making up the rest of the green vehicles. Stergios works for Enterprise, which has the world’s largest private fleet with about 1.4 million vehicles on roads; the company serves about 9,000 commercial and government fleet accounts. Hybrids, EVs, and compressed natural gas vehicles are what Enterprise has been testing out on the rental and fleet sides. Enterprise’s alternative fuel vehicle experience increased four years ago when the company adopted an environmental stewardship initiative with the assistance of the CICS sustainability consulting agency.

Here are some of the more interesting points they made:

  • Sikes: Having a written policy on alternative fuels is important tied into strategic objectives like reducing fossil fuel consumption and reducing greenhouse gas emissions. With that, keeping an accurate inventory of the vehicles and their fuel use is important. Where and how its fueled onsite and offsite; making better use of under-utilized assets can free up capital and make operations more efficient.
  • Stergios: Creating a total cost of ownership (TCO) model is an important part of managing the assets. There are five aspects that need to be analyzed – acquisition, funding, compliance, operation, and remarketing. Those go into the TCO model and show you where the best fleet decisions are being made for the vehicle’s lifecycle. Stergios showed a chart with an electric vehicle, plug-in hybrid, clean diesel, hybrid, and fuel efficient car for comparison – they came out very close to each other. Trucks are in the same realm lately – where gasoline, bi-fuel CNG, and diesel are very close to one another on a financial level.
  • Sikes: Grant funding is bringing down the lifecycle costs of these vehicles, so you need to do your research. When asked whether he’s seeing the 50 cent per gallon equivalent for natural gas affecting fuel prices, he’s not seeing that happen. His fleet doesn’t buy off local pumps; they may see it in the future but he doesn’t have a sense of how much they’re passing it on to customers lately.
  • Stergios: Enterprise managers turn about 700,000 vehicles a year and most all of them are at risk units; it’s still a bit early to get accurate readings on where green vehicles are going in resale values – if anyone has insight on that one, he’d like to hear from them. (Santa Monica keeps its vehicles 12 to 14 years, so Sikes doesn’t have much to share on this topic, though five-to-eight year turn-ins are common for other fleets, he says.)
  • Sikes: Santa Monica is looking at bringing in extended range trucks from Via Motors. He likes the low maintenance that EVs have to offer, but is concerned about the range anxiety, so the 40 miles on electric and then the extended range on Via pickups and vans are interesting to him.
  • Stergios: Complying with California regulations can be tricky especially when a green vehicle might lack CARB and EPA conformity. Certification with CARB is starting to get a bit easier with more engines passing the certification process.