Options and Implications for Future Automotive Fuels

This article contains a condensed summary of the remarks made by Charles L. Gray, Jr., Director of the U.S. Environmental Protection Agency's Clean Automotive Technology program, at the Congressional R&D Caucus meeting on January 28, 2005.

Crude oil consumption and production capacity are among the most important topics today in the United States and in the world. The developed countries are obviously dependent on crude oil for fueling their industries and transportation systems. As developing countries advance, they too become more dependent on petroleum for quick energy to fuel their emerging economies. China, for example, is experiencing phenomenal growth and doubling its crude oil consumption every eight years. Some estimates predict that by 2030 China will consume as much petroleum as the United States.

The timeline in Figure 1 puts a historical perspective on world wide petroleum consumption. The petroleum era will be seen as a very short portion of world history, where nearly all of the crude oil resources were consumed. When, not if, world petroleum consumption exceeds production capacity, transportation and economic growth around the world, as well as life as we have known it, will change.

	Figure 1 Timeline for World Crude Oil Production and Consumption.

Zooming in for a closer look in figure 2 at the oil consumption peak reveals that the peak of world oil production could arrive as soon as 2007 (the red curve). Using a sensitivity analysis, we doubled today's proven reserves (the green curve) - assuming we could somehow find twice as much oil world wide than we know exists today - to see how much more time we would have available for, if you will, a transition period. It is quite sobering to realize that this does not move the peak much further away, around 2016 - 11 years from now!

	Figure 2 Timeline for planning for post Petroleum-Era Fuels.

This does not mean we will run out immediately when we reach the peak, but prices will go up around the world when oil production can just meet consumption needs. This will be a global phenomenon because most countries import oil. Countries that have money will pay more for the oil, and the poorer countries will have even more difficulties economically as they struggle to grow their economies into prosperity. Eventually, as prices continue to rise, we'll begin to see crude oil consumption reduce because the world will not have enough petroleum to meet unlimited demand.

It is extremely important to begin planning for some kind of transition with a sense of urgency, first, because the production/consumption peak is almost certain to occur in the foreseeable future, and second, because it takes so long to make changes in vehicle technology and fuel infrastructure. It will take a long lead time to switch to different kinds of vehicles that have high efficiency and use different kinds of fuel.

Obviously, there are a lot of implications due to the global use of oil - climate change, green house gas emissions, as well as other obvious direct environmental consequences. As with all energy consumption, our use of oil consumes the commodity and yields no long-term value or equity for the expenditure. This consequence has huge economic implications, as the world's massive oil consumption results in almost unimaginable transfers of capital to purchase the crude oil from supplier countries. The economic implications are clearly seen by simply examining the U.S. trade deficit and seeing its link to U.S. dependency on imported oil.

The US is experiencing an ever increasing negative trade deficient, with the 2004 total deficit being close to $600 billion dollars away from our economy. Imported petroleum products constitute nearly 25% of our trade deficit. With the current price of petroleum near $50 per barrel, it should not be surprising to see 2005's trade deficit for imported oil to be over $200 billion dollars. We need to understand that the US is continuing to increase its dependence on imported oil, and the economic consequences of this situation will only get worse with time.

Future Fuels

Having examined the economic situations that will certainly drive changes in transportation, we must look forward in our search for the technology opportunities that exist for future advanced fuels, engines and drivetrains. First we will examine the options and choices for advanced transportation fuels, and then later examine advanced engines and drivetrains.

But before beginning, I would like to highlight that EPA's experience has shown that it is most often best to set performance standards for new technologies, rather than try to pick specific successful technologies in advance. Unless one can perfectly guess what the market place will ultimately find as the most cost-effective solution, we are always better off focusing on performance goals we want to achieve and allowing the natural market selection process to select the best solution.

Today, we see the primary transportation fuels are clean low sulfur gasoline and diesel (derived from petroleum), which are currently required in the United States for environmental reasons. There are quite a number of other transportation fuels that are being used in vehicles to some extent somewhere in the U.S, some of more promising which are described in the Future Fuels inset.

	Future Fuels Bio-diesel, which has received a fair amount of attention, is a good diesel fuel. The big question with bio-diesel is cost and total quantity that can be provided from its base resource. Fischer-Tropsch Diesel is basically a high-quality diesel fuel that can be made from any organic material such as coal, natural gas, or municipal waste because it's made through a gasification process. We believe that gas-to-liquid or other gasification-based transportation fuels, even if the gas may have started out as coal, are likely to be the primary source fuels for the post petroleum-era transportation system. There is a substantial amount of diesel made world-wide now by gasification and catalytic processes using coal or natural gas. Dimethyl Ether (DME) is another good diesel fuel that can be made from the same gas-to-liquid process, made by reacting methanol. Methanol is also a very good transportation fuel, and from our analysis is the lowest cost of the above options. Ethanol is not as likely to be a fuel derived from coal or natural gas, but is likely to continue to play a role being derived from corn and cellulose bio-mass. Natural Gas, as well as LPG and propane, will continue to be used in vehicles, but the US does not have a large amount of excess natural gas available to meet the full appetite of the transportation system. Hydrogen is a potential fuel that can be made from the gasification of natural gas, coal, etc. Electricity is also a potential transportation fuel since we can potentially burn any base chemical energy feedstock to produce electricity and store it in batteries to run any electric vehicle. Electric vehicles have not turned out to be as cost-effective as we have hoped they would be, but potential technical improvements continue to be explored.

Natural Resource/Energy Feedstocks

The United States holds about 24% of the world energy reserves. The problem is the U.S. does not have much oil or natural gas. However, we hold about 25% of the world's coal reserves, and from a domestic stand point most of our energy is in the form of coal. Consequently, on a long-term perspective we need to be thinking about what transportation fuels are compatible with coal. We need to re-evaluate our position of continuing to import energy over the long haul and its effects on our capital base.

Gas-to-Liquid Processing

	World Natural Resource/Energy Reserves Coal (61% of World energy reserves - 25% is in the US) Most of the world energy is in the form of coal; The US as an individual country has the second largest amount of coal. Oil (15% of World energy reserves - 2% is in the US) Natural Gas (15% of World energy reserves - 3% is in the US) There is a lot of natural gas with significant energy content, but much of it is "remote gas" that can't be easily transported to cities for use in home heating and factories. Natural gas will be in competition with coal as the next major energy source as we start running short on oil. We hear a lot about liquefied natural gas (LNG), which is natural gas chilled to -260 degrees Fahrenheit. Shipping liquid natural gas requires specially designed ships to keep LNG in its liquid form. o Remote gas can also be converted on-site to a liquid like Fischer-Tropsch diesel, DME, or methanol and can be transported very cost-effectively to market. Oil Shale (9% of the World's energy reserves - 90% is in the US): The U.S. has a fair amount of oil shale, and there are also tar sands in Alberta, Canada along with a few other places.

The gas-to-liquids (GTL) process takes natural gas, primarily methane, and essentially adds oxygen to it when it is passed through a particular catalyst. The product is hydrogen and carbon monoxide known as SYNGAS. These basic chemical energy carriers in SYNGAS are then reacted across different catalysts to produce various fuels shown in the insert.

Price of Non-Petroleum Fuels

These projections came from an in-house study where we looked at how different transportation fuels could be generated from various feedstocks including municipal waste. It shows the gasoline equivalent pump price of various transportation fuels including CNG, ethanol, methanol (which could also include Fischer-Tropsch diesel and DME), and electricity that can be produced from a number of domestically available feedstocks.

The figure 3 reveals that the average pump price (including taxes) of these non-petroleum fuels made from these different feedstocks would be quite competitive to what we are paying at the pump today for petroleum based fuels. It shows that cost-effective options for domestically based transportation fuels are quite possible, if we can just plan and manage a successful transition.

Economics of GTL Processing

In 2000 at an Energy Frontiers International conference, BP - the petroleum company, presented an interesting analysis showing very attractive business case economics for GTL processing. The BP presentation analyzed return-on-investment, cost of the energy feedstock, operating expenses, capital investments with an emphasis showing the manufacturing costs with four different profit margin scenarios, each producing a barrel of non-petroleum fuel at costs very compatible to today's cost of petroleum.

	Figure 3 Price estimate of non-petroleum fuels form different feedstocks.

When comparing the cost of fuels made from a Gas-to-Liquids process, the BP presentation indicates that you can make a good return on investment making Fischer-Tropsch diesel from natural gas at a price comparable to a barrel of oil, provided you can be assured that oil prices would remain above $20 per barrel. In the past companies couldn't be assured that oil prices would remain above $20 per a barrel, so they did not want to risk building significant infrastructure to process high volumes of gas-to-liquids. However, at the point where there is sufficient certainty that oil prices will remain above $20 per barrel, we will begin to see a lot more investment in gas-to-liquids plants.

GTL Production Scenarios

The U.S. already produces a fair amount of ethanol fuel used for transportation from corn and this in-house analysis tried to realistically estimate what could be done to produce other fuels with serious investments in processing plants. The analysis looked at how much alternative fuel could be produced under two investment scenarios (one low and one high) - considering the availability of US energy resources/feedstocks (CNG, bio-mass, etc.), investment potential, etc. to arrive at these estimates.

	Viable Transportation Fuels from GTL Processing Methanol - is simply methane with one oxygen atom - which turns the gas into a liquid. Methanol is an extremely good fuel. Methanol is also being made in large quantities by the GTL process. MTBE, commonly used as a gasoline additive, is made from methanol. Dimethyl Ether (DME) - the next most complicated molecule that can be synthesized from these building blocks is dimethyl ether, a very good diesel fuel. Fischer-Tropsch Diesel - a fuel that is directly compatible with conventional diesel fuel and the current distribution system. Quite a bit of diesel fuel is already being made world-wide from this process.

The figure 4 shows that because of the tremendous amount of oil consumed every day, it would take a long time for us develop enough production capacity to make a significant supply of alternative fuels. The Fischer-Tropsch diesel was assumed to be derived from North Slope Alaska gas and transported through the excess capacity in the Alaska pipeline to Valdez. In the longer term, much larger quantities of transportation fuels could be produced from U.S. coal.

	Figure 4 Non-Petroleum Highway Fuel.

It's possible with the right kind of incentives we could see non-petroleum fuels representing 5-10% of transportation fuel demand in less than 10 years. Now this is not a lot, but it is so much more than we will have if we do not start soon. 2005 to 2012 gives us seven years to develop some alternative fuels in sufficient quantities to understand with some depth of experience the processes of making non-petroleum fuels for transportation. There must be a sense of urgency - today - if we are to be marginally prepared for the transition from petroleum to petroleum plus other alternative fuels for transportation.

Advanced Automotive Powertrains

While there are numerous options for feedstock and chemical forms of future transportation fuels including several attractive options for U.S. based resources, it is still true that the lowest cost fuel and the fuel with the lowest environmental impact is the fuel we do not waste through continue use of conventional inefficient vehicle powertrains.

The typical American uses less than 1% of the chemical energy in fuel to actually to move themselves (i.e., their weight) around in today's vehicles. We waste an incredible amount of the chemical energy meeting our personal transportation needs. If we are truly concerned about world energy consumption, then it is extremely important that we improve this situation and create much more efficient engines and drivetrains. If we double the efficiency, we cut in half the amount of petroleum consumption.

Clean and Efficient Engines

Today's big vehicles and bigger engines do not operate very efficiently. We have to think about designs that treat the fuel, engine and drivetrain as a system. The engine/powertrain converts the chemical energy in the fuel to useful work, and the transmission/drivetrain delivers that useful work to the wheels of the vehicle to transport us from place to place.

Clean and Efficient Drivetrains

Future drivetrains are being designed to improve vehicle efficiency. These drivetrains include Continuously Variable Transmissions (CVT), as well as Electric Hybrids and Hydraulic Hybrids. All of these drivetrains allow further optimization of the operation of the engine, and hybrids also provide the ability to recover braking energy. The inset shows two configurations for hybrids - parallel and series.

	Figure 5 Series hydraulic hybrid in a large car test chassis.

EPA summarized its hybrid concept work for large SUVs and passenger cars in a 200-page technology report comparing the efficiency, cost and consumer payback of: parallel verses series hydraulic hybrids; with gasoline verses diesel engines - with or without variable displacement. The report is available on EPA's web site (www.epa.gov/otaq/technology). One key point made in the report is that there are many highly efficient and cost-effective configurations of hydraulic hybrid SUVs, with low enough cost and high enough efficiency to offer the consumer payback in the range of 1-3 years. The following is a summary of hydraulic hybrid work being done at EPA's National Vehicle and Fuel Emissions laboratory in Ann Arbor, Michigan.

Hydraulic Hybrid Test Chassis - Figure 5 shows our full series hydraulic hybrid test chassis (circa 2000), developed in conjunction with the PNGV program. This chassis represents a "large car" platform, like a Taurus or Impala. This chassis demonstrated over 85 MPG without any weight reductions from a baseline standard vehicle, or any loss in acceleration performance time. This demonstration vehicle led to several cooperative R&D partnerships, as well as licensing agreements with industry wanting to explore adapting this cost-effective technology to the market.

	Figure 6 Full series hydraulic hybrid in a Ford Expedition.

Hydraulic Hybrid Sport Utility Vehicle - Figure 6 shows our current work on a full series hydraulic hybrid Sport Utility Vehicle which we announced publicly at the 2004 SAE World Congress. The purpose of this vehicle is to demonstrate the synergies available from combining full series hydraulic hybrids with a diesel engine. In fact, we choose a small 1.9 liter diesel engine to show the performance of one-half of a larger diesel engine in urban driving (demonstrating part of the twin crank variable displacement concept). This vehicle is capable of improving the fuel economy of a typical large gasoline SUV by 85% (combined city/highway driving). During city only drive cycles, it is capable of 125% improvement in fuel economy over the baseline vehicle. This is all possible with a 1 to 3 year payback to the consumer.

	Figure 7 Full series hydraulic hybrid system in a UPS truck.

Hydraulic Hybrid Urban Delivery Vehicle - Figure 7 shows another hydraulic hybrid project EPA is working on for heavy duty trucks. Urban delivery vehicles like a UPS truck operate on a heavy stop-go duty cycle and are very well suited for a hydraulic hybrid configuration. In February 2005 we announced our latest partnership involving International Truck and Engine Corporation (the largest U.S. truck manufacturer), Eaton (the largest U.S. based hydraulics supplier), UPS (a large fleet operator who wants to see how well these cost-effective hybrids will operate in the real world), and the U.S. Army (interested in hydraulic hybrid technology for military trucks). The partnership is building hydraulic hybrid vehicles to demonstrate a projected 60-70% improvement in fuel economy in an urban environment. This mpg improvement will provide fleet owners payback in 2-3 years.

Summary

Clearly, crude oil consumption and production capacity are among the most important issues today - not only in the United States, but throughout the world. Dependence on foreign crude oil stresses our environment and the U.S. economy, as well as that of other developed and developing nations. As the world reaches limits of crude oil production capacity, there will be both struggles and real economic incentives forcing change in transportation fuels, as well as in engine and drivetrain technologies. Fortunately, there are many choices which can actually make things better environmentally and economically. Unfortunately, the best clean, efficient and cost-effective choice is not yet clear. Today, we need to provide the right (performance based) kinds of strategic incentives, so the inevitable transition occurs on our terms, rather than waiting until we are desperate and forced to make changes quickly. The choice is ours to make.

	Advanced Engine Technologies Clean Diesel Engines are the most efficient engines we have today, but in the past they were not as clean as gasoline engines. However, the new light-duty Tier2 and heavy-duty 2007/2010 emission standards require all engines, diesel or otherwise, to be as clean as gasoline engines. To meet these emissions standards, a new generation of diesel engines is being developed, holding great promise as a future powertrain technology. EPA has recently demonstrated a very clean and cost-effective way to burn diesel fuel called Clean Diesel Combustion (CDC). The engine-out emissions from CDC engines are clean enough to avoid the need for any NOx aftertreatment to meet EPA's HD 2010 NOx standards. In May 2004, International announced their partnership with EPA to explore the application of CDC to their V6 and V8 family of engines. Just this past January 2005, Ford and EPA announced their success in demonstrating CDC technology in Ford's Galaxy mini-van, where they met the critical Tier2 bin 5 emissions levels while maintaining the high fuel economy from of the diesel engine. Methanol and Ethanol Engines dedicated to burning alcohol fuels have been proven to be much more efficient than those burning gasoline. EPA demonstrated engines which get diesel like efficiency (40+ %) with extremely clean combustion running with methanol and ethanol fuels. EPA believes that methanol engines could compete with diesel engines to greatly improve the vehicle efficiency over gasoline engines, while being extremely clean. Variable Displacement Engines allow "re-sizing" a vehicle's engine to meet the power required as the driver's needs change. As an example, for normal urban driving operation only half the engine's cylinders are used so the vehicle fuel economy is more like one equipped with a small engine. But when there is a need for more acceleration or towing capability, the other half of the engine is available to provide the extra power. EPA has a unique concept for variable displacement engines that is different than today's cylinder deactivation systems. This engine has two crankshafts, essentially packaging two engines in one engine block. Each half of the engine is independently operated, so when one half of the engine's cylinders shut off the other half is stopped and does not generate friction or load. This approach improves the vehicle fuel economy by as much as 15%, far greater than displacement on demand designs. Variable Compression Engines vary a key (conventionally fixed) engine parameter, the compression ratio, to meet the instantaneous optimum engine condition. When an engine is operated at light loads, the compression ratio is set higher to get high efficiency, and the compression ratio is set lower to enable high engine power when desired. By adding a supercharger to boost the engine, variable compression allows extension of power to even higher levels. A description of EPA's unique variable compression concept can be found in a technology report at www.epa.gov/otaq/technology. Direct Injection Gasoline Engines are used in Europe and Japan to improve the efficiency of conventional gasoline engines. This technology is not broadly available in the U.S. because it has a problem meeting Tier 2 emissions standards. Gasoline HCCI Engines (Homogeneous Charge Compression Ignition) are run by introducing the fuel with the intake air and auto-igniting it from the compression stroke of the engine. Gasoline HCCI combustion is a nearer-term engine technology that produces extremely low emissions and very high fuel efficiency - competitive to the diesel. EPA has recently demonstrated an HCCI engine in a full series hybrid truck platform that achieved Tier2-bin2 NOx and virtually no PM emissions. There is a great deal of optimism surrounding this ultra clean engine technology, particularly when coupled with use in hybrid drivetrains. Fuel Cell powertrain technologies are evolving, requiring hydrogen fuel to produce almost nothing but water as emissions. Currently, the fuel cell costs and an adequate hydrogen infrastructure are constraints. As we consider longer term options, future advanced engines versus fuel cells should provide some exciting competition in future vehicles. EPA is part of the California Fuel Cell Partnership and is partnered with UPS' fuel cell demonstrations by supporting hydrogen refueling at our Ann Arbor, MI laboratory. Free Piston Engine technology provides an exciting glimpse to the future, where unique and new types of powertrain engines are enabled by series hybrid drivetrains. A Free Piston Engine ("FPE") is an exciting new kind of engine that doesn't have a crankshaft. EPA's FPE produces hydraulic power directly from the linear motion of the combustion piston without going through a crankshaft or hydraulic pump, making it an extremely efficient power plant for a future hybrid. EPA has successfully operated the first multi-cylinder four stroke free-piston engine in our laboratory. HyTEC (Hybrid Thermal Energy Converters) describe a field of novel energy recovery systems capable of capturing and reusing some of an engine's waste energy normally rejected as heat in the coolant and exhaust (nearly 60% in a typical engine). A HyTEC device returns some of the recovered energy (30%-40%) as power to the engine's output shaft, typically working best with engines that mostly operate at continuous loads, such as long haul trucks. HyTEC technology development points toward engines that compete with fuel cells in terms of pollution & energy efficiency at a fraction of the fuel cell cost.

	Hybrid Configurations Parallel Hybrids retain a driveshaft connection between the vehicle wheels and the engine. In this concept, you add an electric or hydraulic motor to the drive shaft to add or remove power from the vehicle, storing and consuming energy to\from batteries or hydraulic accumulators. The Toyota Prius is a parallel system. Series Hybrids remove the rotating driveshaft connection between the vehicle wheels and the engine. In a Series Hybrid, there is no conventional transmission or traditional driveshaft connected to the wheels. The engine transfers its power through electric generators or hydraulic pumps, and electric motors or hydraulic motors drive the wheels. Batteries or hydraulic accumulators are placed in the system to compensate for energy mis-matches between the engine and the wheel. In these vehicles, the engine operation can be optimized independent of the speed of the vehicle. This is the kind of drive system that can be most cost-effective, with the highest efficiency and the lowest cost.