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green@work : Magazine : Back Issues : Nov/Dec 2006 : Cover Story

Cover Story

Beating America's Oil Addiction
Waste Management is utilizing methane gas to power one Quebec paper mill - and its environmental initiatives don't stop there.

by David Clayton Wells

We are fast approaching the tipping point at which world oil production begins to decline. The United States is not only by far the world’s largest oil and gas consumer, but it is also the largest importer. And in contrast to many other nations, there is no sign of policy-driven efforts to control consumption. Big energy-consuming countries such as China, the United States, Japan, Germany, the Republic of Korea and India are all contributing to rising oil prices.

Rises in oil prices have more complicated explanations. Fundamentally, supply and demand in the global oil market is rather fragile and a primary estimate suggests that, based on supply and demand alone, the price for crude oil should be around $40 per barrel. What comes next, the “terror premium?” Could the fear of emergencies such as acts of terrorism be bumping up oil prices? Some say it does, reckoning that this accounts for $10-$15 of the current per-barrel cost. As if that were not enough, the “speculation premium” adds another $15-20.

In his 2006 State of the Union address, President Bush called for an end to the nation’s “addiction to oil.” Keeping America competitive requires affordable energy. And here we have a serious problem: America is addicted to oil, which is often imported from unstable parts of the world. The best way to break this addiction is through technology.

Environmental Consideration Driving Manufacturers
Manufacturers are keen to optimize their environmental impact and communicate the positive steps they are taking to NGOs and other public interest groups. Increasingly, environmental considerations—and public input—are driving manufacturers’ decisions. The ways urbanization and urban transformations unfold over the next few decades will have profound implications for the prospects of sustainability at regional and global scales. 

In the near future, utilizing drive-by-wire (or direct-drive) technology, the hybrid’s electronic controls add a new degree of precision to the communication between driver and vehicle.

Drive-by-wire technology refers to the replacement of mechanical components with electronic controls. Basically, brake-by-wire means there is no mechanical connection between the brake pedal and the brakes during normal operation. This lets the system electronically optimize braking for maximum fuel economy and braking performance. If enough power is available for safe braking, the residual energy caused by the braking is channeled back to recharge the battery.

Along with the braking system, the hybrids utilize another form of drive-by-wire technology, the electronic throttle control. As with the brake pedal, when the driver steps on the gas pedal, a sensor monitors the movements. In turn, the vehicle control system balances the driver’s input with the amount of energy required by accessories like air conditioning that are running.

Drive-by-wire technology may be essential to the hybrid’s functioning, but the technology has also found a home in some of Ford Motor Co.’s non-hybrid vehicles. For instance, the 2004 Ford Explorer introduced electronic throttle control with the 4.0-liter V-6 and the 4.6-liter V-8 engines, while the redesigned F-150 also incorporates electronic throttle control. In Europe, a number of Ford vehicles have utilized drive-by-wire throttle controls for many years on both gas and diesel engines.

The most direct market signal to encourage consumers to demand fuel efficiency is an increase in the cost of driving. Recent record-high gasoline price increases encourage consumers to value fuel-saving technologies. However, motorist interest in fuel savings often dims when fuel prices decline. Advanced fuel-efficient technologies are frequently costly, particularly in their first years of introduction, and such incentives can facilitate the introduction of advanced technologies by helping to bridge the price differential between these vehicles and conventional vehicles. Congress has considered a variety of technology-based incentives in recent years to encourage consumers to purchase advanced-technology vehicles.

The Promotion Of Alternative Fuels
The promotion of alternative fuels has been the centerpiece of Bush’s energy policy. Bush has said the primary reason he would like to see more drivers shift to vehicles such as flex-fuel vehicles, which utilize the E85 ethanol-gasoline mix, is that it reduces the amount of oil the nation must buy from foreigners. “It’s in our national security interest and our economic interest as a state to diversify,” Bush said. “It would make sense to me to be reliant on sources of energy internationally that would be more stable than oil from Venezuela, oil from the Middle East (or) oil from Nigeria, where there is political instability or outright hatred of our country.”

While there’s debate on whether using more ethanol would make much of a dent in oil imports, environmentalists agree with Bush’s second reason for promoting its use: It spews much less pollution into the air. The E85 tends to promote a cleaner environment.

Since 2001, Ford has spent nearly $10 billion to develop cleaner, cheaper and more reliable alternative energy sources—and the company is on the threshold of incredible advances. But we must also change how we power our automobiles. At Ford, we will increase our research in developing better batteries for hybrid and electric cars, and in pollution-free cars that run on hydrogen. We’ll also fund additional research in cutting-edge methods of producing ethanol, not just from corn, but from wood chips and stalks, or switch grass. Our goal is to make this new kind of ethanol practical and competitive within six years.

These days, small cars are making a comeback. Automakers are rediscovering how easy it is to sell good fuel economy and low prices. “Small is big in America,” said Mark Fields, Ford’s head of American operations. To illustrate this point, consider that the top Japanese car companies, Toyota, Honda and Nissan, are launching $11,000-$14,000 subcompacts smaller and cheaper than their popular Corolla, Civic and Sentra compact sedans, respectively.

Ford is using the international auto show to test reaction to its Reflex concept car, a coupe so small that only one adult fits in the back seat. Audi already is selling a subcompact hatchback, the A3, in the United States. Mazda is marketing a mini-minivan. Mercedes-Benz and BMW keep thinking out loud about bringing subcompact cars to America. Online car-shopping service Autobytel reports that 42 percent of online shoppers surveyed would “definitely” buy a subcompact.
Not all automakers are convinced that small cars make good business sense. Chrysler is exploring the idea of making a small car with an outside, Asian partner, but the business case would have to show Chrysler making a solid profit. If economy models zoom as much as automakers think, it’ll be a huge about-face for a country in which bigger has been better for years, and in which trucks have outsold cars handily. Three-dollar-per-gallon gasoline and an evolving moderation seem to have redirected shoppers toward small cars.

A recent KPMG survey showed that 84 percent of the executives believe that fuel economy is a top concern of buyers, second only to quality. That presages a push for higher-mileage models over the next few years. Automakers hope the fresh array of economy models will divert some used-car buyers into new-car showrooms. Automakers aren’t fielding low-price, high-mileage small cars altruistically to put fuel efficiency and the new-car smell within reach of most Americans; they are doing it to make money and keep making money.

Concern for Safety
Consumers are looking for ways to save fuel, and they need to know that if they decide to buy a much smaller vehicle, they aren’t putting themselves and their families at risk. Compacts made up 13.4 percent of vehicles on the road in 2004, and data account for 30 percent of vehicle fatalities occurring in compacts that year. Small cars have more than twice as many occupant deaths each year as large cars. The deadly potential of small cars isn’t, as many people fear, because big SUVs crash into them. Instead, 41.5 percent of small-car deaths in 2004 were single-vehicle accidents. Another 6.1 percent of small-car deaths were from small cars crashing into one another. Small cars lack the size to provide generous crash-absorption structures.

Some say an overabundance of choice is a hurdle. The economic models are hitting the market along with a staggering array of other cars and trucks, slamming shoppers with a ton of selection that could bewilder, even paralyze. Chances are, you’ll walk out of the showroom with nothing. On the other hand, low price is a big selling point. Instead, automakers are planning a record 67 vehicle introductions for the 2007 model year, according to a tally by investment house Merrill Lynch. With a $12,000 price point, the economy-car market goes beyond gasoline prices.

Another factor for change has been the federal Clean Air Act. For years, dozens of health groups—including the American Medical Association, American Lung Association, American Heart Association, American Cancer Society and American Academy of Pediatrics—have urged the EPA to set tougher standards for short-term and long-term exposure to particle pollution from vehicle tailpipes and factory smokestacks. Particle pollution can trigger asthma attacks, heart attacks and premature death from various heart and lung ailments. Transportation sources contribute more than half the total amount of man-made air pollution in the United States today. Motor vehicle emissions account for approximately 77 percent of the carbon monoxide.

In compliance with the Clean Air Act, car makers have since greatly reduced the amount of pollution that comes out of the tailpipe. New cars are estimated to run 90-percent cleaner than those made 20 years ago. Still, a few months ago, the U.S. government approved new air pollution standards, promising “cleaner air to all Americans,” but health and environmental groups said the revised rules are too weak to protect against lung disease and other pollution-related ailments.

The new standards will reduce premature deaths, heart attacks and hospital stays for people with heart and lung disease, and bring health benefits valued at between $20 billion and $160 billion a year. The EPA, the California Air Resources Board, engine manufacturers and others have completed tests and demonstration programs showing that using the advanced emissions-control devices enabled by the use of Ultra Low Sulfur Diesel (ULSD) fuel reduces emissions of hydrocarbons and oxides of nitrogen (precursors of ozone), as well as particulate matter to near-zero levels. EPA studies conclude that ozone and particulate matter cause a range of health problems, including those related to breathing, with children and the elderly among those most at risk. The EPA estimates that there are significant health benefits associated with this program.

Breakthroughs on this and other new technologies will help us reach another great goal: to replace more than 75 percent of our oil imports from the Middle East by 2025. By applying the talent and technology of America, this country can dramatically improve our environment, move beyond a petroleum-based economy and make our dependence on Middle Eastern oil a thing of the past.

Green Vehicle Research
Right now there appear to be two directions in which green vehicle research is headed. One is toward the development of cellulosic ethanol—ethanol made from everything from wood chips to grass clippings—as replacement for gasoline in conventional cars. The other path is toward better battery technology, specifically with lithium-ion batteries to be used in hybrid, plug-in hybrid or electric vehicles. Will one technology beat the other in the race for cleaner vehicles for tomorrow? Or will the technologies simply converge and complement each other?

Since cellulosic ethanol could be derived from nearly free plant waste or cheaply grown fuel crops (such as switch grass), it seems likely that it will be less expensive to produce than today’s ethanol made from corn or sugar cane. Further conventional gasoline engines need only minor and inexpensive conversions to allow them to run on ethanol. Those two attributes alone should give cellulosic ethanol an edge. But ethanol will always have less energy content than gasoline. More needs to be burned for the same number of miles driven. Automakers have set a goal of selling 1 million hybrids, diesel and ethanol vehicles in 2006, and 2 million by 2008. They are selling 46 models of alternative-fuel automobiles, including ethanol vehicles capable of running on E85, clean-diesel autos and hybrid electric vehicles. Thirty-five models of alternative-fuel autos are in development for future introduction.

The number of alternative-fuel autos on U.S. roads has more than doubled from 3 million in 2000. Electric and plug-in hybrid cars can use energy from a variety of sources: coal, nuclear, natural gas or oil-fired power plants, as well as solar, wind, geothermal or landfill gas.

Advocates for diesel—a less-refined fuel than gasoline that burns more completely in the engine, delivering more power—say it can cut oil use, perhaps more quickly and cost effectively than alternatives such as hybrids and ethanol. Diesel fuel is also far more widely available than some alternative fuels such as ethanol. Nearly half of the nation’s filling stations already carry diesel, compared to the less than 5 percent that offer an E85. But new environmental regulations pose a problem for automakers, stopping all of them other than DaimlerChrysler’s luxury Mercedes brand from setting a date for a diesel engine introduction in cars and light trucks.

Even Volkswagen, which has the largest range of diesel-powered cars and light truck offerings now on the market, may have to pull out of the market at least temporarily, as it can’t say when it will be able to meet the new regulations that go into effect with the 2007 model year. The government plans to change how it calculates fuel economy for new cars and trucks; it will knock down expected mileage for city driving in conventional cars 10 percent to 20 percent, and in gasoline-electric hybrids up to 30 percent.

The EPA is proposing new test methods for calculating the fuel economy estimates that are posted on the window stickers of new cars and trucks. The new miles-per-gallon (MPG) estimates will take effect with model year 2008 vehicles, which will be available in dealer showrooms in the fall of 2007. Auto makers will continue to be responsible for performing the fuel economy testing and calculating the label MPG estimates. The EPA will continue to confirm the manufacturers’ test results by performing audit testing at its National Vehicle and Fuel Emissions Laboratory in Ann Arbor, Mich.

Nearly all semi-trucks, delivery vehicles, buses, trains, ships, boats and barges, farm, construction, and military vehicles and equipment have diesel engines. In 2005, diesel fuel accounted for about 15 percent of total refined petroleum products and 75 percent of the total distillate consumed in the United States. On-highway motor vehicles use about 80 percent of total diesel fuel, with off-highway vehicles, construction and farming equipment, and diesel-electric generators consuming the rest.

Most diesel fuel consumed in the United States is produced in U.S. refineries. In 2005, about five percent was imported from foreign countries, mainly Canada and the Virgin Islands. U.S. refineries produce diesel fuel from crude oil, of which about 65 percent was imported in 2005. Most diesel fuel is transported by pipeline (some by barge and rail) from refineries and ports to terminals near major consuming areas, where it is loaded into tanker trucks for delivery to individual refueling stations.

The Petroleum Industry Is Producing ULSD fuel
New EPA standards require a major reduction in the sulfur content of diesel fuels and emission levels from diesel engines and vehicles. To meet the EPA standards, the petroleum industry is producing ULSD fuel, a cleaner-burning diesel fuel containing a maximum 15 parts-per-million (ppm) sulfur.

As of June 1, 80 percent of the highway diesel fuel produced or imported is ULSD fuel, replacing most Low Sulfur Diesel (LSD) fuel, which contains a maximum of 500 ppm sulfur. Used in combination with cleaner-burning diesel engines and vehicles, ULSD fuel will help to improve air quality by significantly reducing emissions. By December 1, 2010, all highway diesel fuel offered for sale must be ULSD fuel. Many public and private organizations are collaborating through the Clean Diesel Fuel Alliance to facilitate the introduction of ULSD fuel. The U.S. Department of Energy (DOE); the EPA; engine, vehicle and component manufacturers; all sectors of the petroleum industry; and fuel consumers, such as truckers, are providing comprehensive information and technical coordination.

Owners of 2007 and later-model-year diesel-powered highway vehicles must refuel only with ULSD fuel. Owners of 2006 and earlier-model-year diesel-powered highway engines and vehicles may use ULSD fuel or LSD fuel during the transition period. Only ULSD fuel will be available for highway use starting on December 1, 2010. Under typical operating conditions, there should be no noticeable impact on overall power using ULSD fuel. Fuel economy may be reduced slightly because the process that removes sulfur also can reduce the energy content of the fuel.

Engine and vehicle manufacturers expect ULSD fuel to be fully compatible with the existing fleet, including 2006 and earlier-model-year vehicles. In some instances, the introduction of ULSD fuel to older vehicles may affect fuel system components or loosen deposits in fuel tanks. As part of a good maintenance program, owners and operators of existing cars, trucks and buses are encouraged to monitor their diesel-powered vehicles closely for potential fuel system leaks or premature fuel filter plugging during the changeover to ULSD fuel.

Like LSD fuel, ULSD fuel requires good lubricity and corrosion inhibitors to prevent unacceptable engine wear. As necessary, additives to increase lubricity and to inhibit corrosion will be added to ULSD fuel prior to its retail sale. With these additives, ULSD fuel is expected to perform as well as LSD fuel. Diesel-powered highway engines and vehicles for 2007 and later model years are designed to operate only with ULSD fuel. Improper fuel use will reduce the efficiency and durability of engines, permanently damage many advanced emissions-control systems, reduce fuel economy, and possibly prevent the vehicles from running at all. Manufacturer warranties are likely to be voided by improper fuel use. Additionally, burning LSD fuel (instead of ULSD fuel) in 2007 and later-model-year diesel cars, trucks and buses is illegal and punishable with civil penalties.
There should be no operational problem if consumers switch from a biodiesel-ULSD fuel blend to ULSD fuel without biodiesel. ULSD fuel will enable the use of cleaner-technology diesel engines and vehicles, resulting in significantly improved air quality. Annual emissions reductions will be equivalent to removing the pollution from more than 90 percent of today’s trucks and buses, when the current heavy-duty vehicle fleet has been completely replaced in 2030.

As an additional environmental benefit, ULSD fuel will enable diesel-powered passenger cars and light trucks to meet the same stringent emissions standards as gasoline vehicles. Diesel-powered vehicles tend to be more fuel efficient than gasoline-powered vehicles.

David Clayton Wells is an automotive industry consultant.

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