- 35% increase in hybrid sales
- Prius, Escape, Fusion, RX400h, Altima and Camry all saw gains
- Honda Insight still not selling
Inhabitat recent posted about the Top 5 Silliest Eco Inventions. While I do agree with most of the list, like the PETaPOTTY for Dogs, Solar Powered Bra, the Eco Button for putting your computer to sleep, and the Solar Powered Fan Hat, I disagree that the hybrid SUV is a silly invention. Not everyone needs an SUV, and one could convincingly argue that no one does.
One thing that’s harder to argue against is the need for All Wheel Drive. I recently went through my first Boston winter in a while, and our only car was a Prius. This winter was a particularly bad one, and for the most part we took public transportation when we could. However, public transportation doesn’t go everywhere. For those that have not driven in the snow, two things about the Prius that makes it a very bad choice for driving in the snow are the fact that it’s very light, and it’s got low rolling resistance tires (read: no traction in the snow). To make matters worse, our city parking spot is such that we need to back out, then up a small hill.
Another fun thing about Prius traction control is that when one wheel slips, the other stops without any power to it. There have been complaints about the behavior, and if you read the fine print, disabling traction control can be bad for your powertrain and you can void the warranty. I absolutely recommend the Prius, and it’s been a great car. However, it’s not the best choice if you live in a snowy area. Our living situation will soon be changing, and it will be more practical (notice I didn’t say “need”) to have another car.
With 2WD hybrids failing spectacularly in the snow, and my primary concern being safety on the road, I recently did some comparison shopping to find a green(ish) AWD vehicle. What I found was that the hybrid SUVs got better mileage than the other AWD vehicles available in the US. I would have been happy to drive an Audi A4 Avant TDI, but unfortunately they are not sold in the US. While Audi does sell diesel SUVs in the US, the mileage and reliability are not that impressive. Mercedes and BMW both have diesel AWD vehicles, some having equally good mileage, but my wife will be going back to school soon, and the price was more than we were willing to pay.
Finally, the options were narrowed down to the Ford Escape Hybrid, and the Toyota Highlander Hybrid. The Escape did get a few more mpg, but we thought the Highlander was nicer. As of a few weeks ago, I am the driver of a hybrid SUV. While it’s not the absolute greenest choice around, it still gets a combined 4 mpg better than the last sedan I owned. Hybrid SUVs may not be the best for the environment, but they are still better than the other suitable alternatives. Green is good, but in a lot of cases practicality takes priority. If you design green products, keep in mind that they still need to be practical, or they will not be successful.
I was doing some browsing, and saw GreenCar.com. If you’re about to buy a car with the Cash for Clunkers incentives, then it would be a good place to do research on, you guessed it, Green Cars. It’s also got MPG information on all vehicles so you can make comparisons. I’ve seen other sites that do the same thing, but the site is pretty clean and easy to use.
Most people already know that purchasing environmentally friendly products, rather than their less friendly competitors, helps increase the market for green products. One “product” that many people don’t know they could choose is taxi cabs. Most people have seen hybrid taxis, and even heard the fuss drivers make when cities institute rules requiring clean cabs. The drivers see turning the cars clean as an added expense, rather than for the benefits. In order for drivers to willingly change, they need to see the benefits.
I saw one of the potential benefits at play when I landed in Boston and took a cab home. There was a sign at the taxi stand that said “you can request a clean air cab.” I asked for the hybrid taxi, and there weren’t any near the front of the line. At first, the guy at the stand told me to wait up front while one came up to the front of the line. There isn’t as much benefit to asking for a hybrid if the standard cabs are still going to get used while I wait. I asked if there was one in line already, so he checked, and there was one near the end. He signaled the hybrid to the front of the line, and I was picked up immediately.
The hybrid taxi got to skip the line, most likely angering the other cabbies waiting (I hope so). As more people ask for hybrid taxis, the other drivers have to wait longer, and they begin to see benefits that are actually relevant to them. Aside from being and hybrid, and sometimes size for larger parties, there aren’t really any other reasons why taxis are given preference above the others. As taxi drivers see that driving a hybrid would get them fares sooner, saving them time and leading to more money, more cab drivers will choose hybrid cars.
Next time you call for a taxi, take one from the airport or hotel, or whenever they have to wait for customers in line, be sure to ask for a hybrid.
If the ideal case were plausible, the most effective way to increase production of biodiesel in the US would be to enact additional legislation mandating the blending of BD into all PD products sold. Existing legislation targeted at emissions already provides reason for PD distributors to include BD blends in fuels. Tightening emissions regulations for PD, beyond the ULSD requirements would be one way to enforce change. Now that the EPA has officially classified CO2 as a pollutant, enacting proposed carbon taxes on end consumption would drastically skew sales in the favor of BD or blends.
At 22.2 pounds of CO2 emitted per gallon of PD, a carbon tax of $100 per ton would cost an extra $1.11 per gallon purchased. The increase in retail price of PD would make it less cost competitive. Unfortunately, since BD production is close to only 1% of the total production of PD, drastic increases in production will be necessary for BD to fully displace PD. At a yield of 70 gallons per acre per year for soy based BD, approximately 919M acres (1.53M square miles) of farm land devoted to just soy for BD would be necessary to just displace US PD usage. That is 228% of the total arable US farmland, meaning using only soy based BD is not a viable option to fully displace BD sales. Multiple methods of BD production, will be necessary, as well as using sources that have higher yields per acre.
Because algae based BD production does not have to use arable land and production yields are much higher, it must be explored as option for displacing PD in the US transportation industry. The Aquatic Species Program reached sustained production rates of 5,000 gallons per acre per year, which would require only about 21K square miles of non-arable land. Theoretical limits calculated by the ASP were up to 15,000 gallons per acre, reducing the necessary land to 7K square miles. To reach these theoretical limits, investment in actual production technology must be made. The ASP did much of the research necessary, their conclusions just need to be implemented. As production yields increase, the retail cost per gallon should decrease, making it more viable in the market without subsidy.
While new production technologies are being investigated, producers will need to explore all potential sources of income to decrease production costs, including selling glycol byproducts, and production in conjunction with coal fired power plants to offset CO2 emissions. The ASP also concluded that algae has the potential to drastically reduce CO2 emissions from power plants, so if a carbon tax is instituted, revenue can potentially be generated by working in collaboration with major emitters.
The most important factor in determining the market viability of BD is the profitability of production. The environmental benefits of BD have been known for years, but production of PD increased because of market factors, not direct environmental factors. Even with the environmental benefits of BD known for years, production did not increase until legislation was enacted which made production profitable, even at prices higher than competing PD.
Of the factors involved in the retail price, the two most important factors have been the cost of producing plant oil as a source material, and the legislation surrounding BD. The two are tightly coupled because the source material for producing the plant oils is directly affected by legislation that directly subsidizes agriculture. On the opposite end of the BD product cycle are the tax credits given to biofuel producers, which directly reduce the retail price. Legislation for mandated inclusion and emissions regulations allow for a higher sales price because of increased demand that cannot be met by pure PD. Minnesota’s mandated B2 blend meant that PD producers were required to purchase BD for mixing, even if it did cost more. The EPA federal regulations for ULSD for reducing SOx emissions led to PD producers blending with BD, which also increases the demand and the subsequent production.
Ramping up production requires additional plant oil, in turn requiring the purchase of source plant materials. In the case of soy, the added demand can drive up market prices, resulting in higher costs. Because soy is also a food crop, and is in demand for reasons other than BD production, soy prices can also increase independently of what is caused by BD production. Increased costs without increased production requires retail prices to go up to preserve profitability.
In order for BD production to increase while still remaining profitable, source materials without external market demand can be used for plant oil. Because there is not currently market demand and the marginal costs after up front capital investment are low, algae has the potential to be a major source of BD in the future. Even though algae agriculture is cheap, the processing facilities and production methods used to turn it into pure oil remain expensive. To keep overall algae based BD production costs down, additional subsidies will be required, whether direct or indirect.
To remain competitive in a market where cost is the determining factor, BD must have a final selling price at or below the price of Petroleum based Diesel. The retail price of PD is mainly determined by cost components similar to BD, mainly the source material (crude oil 64%) and processing (refining 21%). Additionally, distribution and marketing account for 5% and taxes 10%. [DOE EIA]
Of the major components in the retail price, everything but the crude oil is relatively fixed. Refining costs do not increase with the cost of oil, and taxes are levied at a fixed amount per gallon. Distribution costs do go up with the price of PD because trucks and trains fueled by PD are used in transport, but the amount is relatively small compared to the total selling price. Because the price of crude oil is the largest component of the final retail price of PD, the price of PD tracks the price of oil.
The figure above shows the correlation of oil prices to the retail price of diesel [DOE EIA]. As the price of oil rises, the price of PD rises. Because the retail price of BD is not dependent upon the price of oil, as oil increases, the price gap decreases. In 1995, the ASP concluded that the price of a barrel of oil would need to be approximately $59 for algae based BD production to be cost competitive. Historical information from the EIA shows that oil surpassed $60 in 2006, and has since been climbing, meaning that cost competitive algae based BD production may now be viable.
Legislation in the United States affects the production and sales of BD because it alters the market for the product in a number of ways, including cost reduction via direct subsidy and indirect subsidy via tax credit, mandated use, and increased cost for competing goods. The following graph (Source: BD Conference) shows production output of BD in the US per year, in conjunction with the the introduction of legislation affecting the market.
The legislation included above affects the supply, demand, and price. The 1998 alternative fuel use credit reduced the price to consume BD, but supply was relatively fixed until the USDA established the CCC Bioenergy Program in the 2000 and the reauthorization in the 2002 “Farm Bill.” The Farm Bill made it cheaper for BD producers to purchase feedstock, which led to a cheaper and more competitive end product.
In 2002, Minnesota was the first state to mandate diesel sold in the state be a BD blend, at a minimum of 2% (B2) by 2005. Mandating B2 sales increased the demand for BD in a fixed supply market, which raises prices. Increased prices and increased demand provides incentives for producers because of the greater potential for profit. Production increased from 15M gallons in 2002 to 25M gallons in 2004. In 2004, the American Jobs Creation Act provided additional tax credits for BD production ($1 per gallon) and recycling fats and oils ($0.50 per gallon).
By drastically reducing the price at the pump, and pending mandated inclusion of BD, the market spiked to 75M gallons in 2005. Because of a variety of market factors, soy based BD became price competitive with PD and production ramped up to 450M gallons in 200713 and most recently, 700M gallons in 2008. While not priced below PD, EPA requirements for Ultra-Low Sulfur Diesel increase the demand for BD because it is used as a fuel additive to compensate for loss of lubricity.
Included in legislation that provides for biofuel subsidies, are taxes on competing products, making them more expensive and less competitive in the market. An example applicable to biofuels, although not BD, is that of ethanol in the United States. Ethanol gasoline blends are subsidized via VEETC by the US government at a rate of $0.51 per gallon. To directly pay for the subsidies provided at the pump for corn based ethanol, a $0.54 per gallon tariff is levied on sugarcane based ethanol imports from Brazil [H.R. 6137]. Not only does the subsidy directly reduce the price of corn based ethanol at the pump, it increases the price of sugarcane based ethanol, making domestic production of ethanol more cost competitive.
Total environmental impact is best calculated by doing a full Life Cycle Inventory (LCI [pdf]) on each biodiesel production method, as resource consumption and energy usage can vary drastically. The most in depth LCI of BD versus PD was completed in 1998 in a joint project with the US DOA and the US DOE. The study concluded that total LCI usage for soy based BD compared to PD was 95% less. The comparison was made for BD and PD consumption in the US transportation industry, specifically urban buses.
Resource and energy consumption differ for planting, growing and harvesting different crops. Transportation costs can vary based on where crops are located in relation to the production facilities. Production of oils, in this case crushing the soybeans, varies by crop. Conversion to a standard BD chemistry, like ASTM D-6571, can also vary because plant chemistry can vary. Post production, the impact of BD from different sources would be the same because transportation to the location of end use, and the use itself would be very similar.
Because of strict standards, the chemical and physical properties of the end BD products upon final delivery are nearly identical. ASTM D-6751 requires that “the product[s] shall undergo chemical analysis for flash point, methanol, water and sediment, kinematic viscosity, sulfated ash, oxidation stability, sulfur, copper strip corrosion, cetane number, cloud point, acid number, carbon residue, total and free glycerin, phosphorus, reduce pressure distillation temperature, atmospheric equivalent temperature, combined calcium and magnesium, and combined sodium and magnesium,” and must meet standards at time and place of delivery.
Over the entire life cycle, soy based BD reduces total CO2 emissions by 78.45%, compared to petroleum diesel.2 The use of B100 over PD reduces the total emissions of particulate matter (TPM) 32.4%, carbon monoxide (CO) 34.5% and sulfur oxides (SOx) 8%. Unfortunately, one of the trade offs is that nitrous oxide emissions are increased by 13.35%.2 Total hydrocarbon (THC) emissions are also increased by 35.9% in the total life cycle of soy based BD because hexane is released in production.
Published LCI studies with algae based BD have not been as thorough because study has been focused on production, rather than combustion. Since production methods are not standardized, it is not yet possible to do a full life cycle inventory that represents all algae based BD. However, since algae based BD is essentially CO2 neutral, it saves 22.2 pounds of CO2 per gallon of diesel fuel it displaces.
One of the market barriers to using higher BD blends has been the lack of factory ready vehicles that can run on B100 without voiding the engine warranty. The lack of factory ready vehicles has been attributed to the lack of standard chemical properties because of differing production methods. Recent standards for BD have been approved, ASTM D-6751, which is expected to result in the ability of more engines to use higher blends of BD out of the factory. ”Some engine companies have already specified that the biodiesel must meet ASTM D-6751 as a condition, while others are still in the process of adopting D-6751 within their company or have their own set of guidelines for biodiesel use that were developed prior to the approval of D-6751. It is anticipated that the entire industry will incorporate the ASTM biodiesel standard into their owner’s manuals over time.” (National Biodiesel Board)
Ignoring the warranty related issues, which can cause consumers to avoid BD, most engines manufactured after 1993 been constructed with gaskets and seals that are BD resistant. Most current PD storage tanks in cars and distribution facilities can store B100 without materials compatibility problems. Fuel pump hoses and seals have commonly been the components degraded from higher BD blends, but the manufacturer switch to components suitable for Ultra-Low Sulfur Diesel (ULSD) has caused a concurrent switch to components that are suitable for use with BD. One necessary addition to the infrastructure for B100 distribution in cold climates is heated storage tanks. However, they are not necessary with low percentage blends.