In Michigan, the Center for Automotive Research 2010 Management Briefing Seminars brought out major car company plans on biofuels and hybrids, among other alternative technologies, giving us an opportunity to look at the transition to a renewable-based economy through the lens of the fleet’s capabilities.
Larry Nitz, GM’s executive director of hybrid and electric powertrain engineering, described ethanol as the the best short-term solution. GM has sold 5.5 million flex-fuel vehicles to date. “If the fuel was available at a competitive price, these cars could use it,” Nitz said.
GM also announced a $5 million investment in Bright Automotive, developing a plug-in hybrid technology for fleet owners, while confirming that it will re-enter the “mild hybrid” sector that use electric-motor assist and regenerative braking rather than “full hybrid” that powers vehicles solely on electric power. Last week, however, major car makers signalled that they may pull back from flex-fuel investment if there is not more evidence of the adoption of blender pumps or E85 service, for higher blends of ethanol that utilize flex-fuel technology.
Johannes-Joerg Rueger, senior V.P. of diesel engineering for global parts supplier Robert Bosch, predicted in a panel session that IC engines will hold 80 percent market share through 2020.
Barb Samardzich, Ford’s vice president of powertrain engineering, agreed that IC engines will dominate, but warned that the costs of manufacturing diesel engines, as well as the diesel/gasoline price differential, ruled out hopes for a large-scale switch to the more fuel-efficient diesel platform for passenger cars in the near term in the US.
The Digest’s take:
Flex-fuel vehicles. E85 is dead on arrival. The take up after several years of promotion has been abysmal. Service station owners generally make the bulk of their profits from convenience goods and make little profit from fuel sales. Neither agroundswell of consumer demand nor the economics of E85 installation (costing up to $50,000 per station conversion, and as much as $100,000 in selected locations) are driving E85 adoption.
Flex-fuel vehicles running higher blends of ethanol are more promising, but there is very little activity in distributing blender pumps. Growth Energy has proposed swapping the ethanol tax credit for a program jump-starting blender pumps with incentives; US Congressional support has yet to be measured, but the fall session of the US Congress is not widely regarded as a session for big spenders. Elsewhere around the world, countries outside of Brazil are implementing mandates generally below the 10 percent threshold and are counting on fuel blending to see them through.
In Brazil, ethanol generally holds even, or slightly ahead of gasoline sales. Part of the cause is the economics of sugarcane ethanol, which in most years offer lower prices than corn, wheat or cassava based ethanol (not so at the moment, however). Another root cause: government support in the form of long-term commitment to flex-fuel availability and a tax differential for ethanol that helps support the price differential between ethanol and gasoline. Generally, a 30 percent price discount between ethanol and gasoline brings serious traction for ethanol.
Back to the US, where gasoline is retailing for an average of $2.72 per gallon through July 19th, according to the EIA. E85 has to price at around $2.02 to reach that “magic” 30 percent threshold. According to E85 prices.com, the spread hovers at 20.7 percent – far from the levels needed to stimulate the long-term, large-scale ethanol market beyond statutory blending in the gasoline supply. That goes for E30 as much as E85 – consumers are motivated by price. With corn prices hovering at $3.80 or so per bushel and crude oil in the $75-$80 range, the economics are not there absent major tax credits.
Diesel technologies. They offer substantially better fuel efficiency, up to 30 percent gains in miles per gallon. But US car makers have struggled on costs and, absent diesel engine incentives along the lines of electric hybrids, it is unlikely this scenario will change dramatically through 2020.
Hybrids. Hybrids are gaining and will continue to gain significant traction – but plug-in hybrids and “full hybrid” models that run on electric power alone, rather than electric motor assist, are likely to be in scant evidence through 2020 absent a revolution in battery storage technologies. These are, in the end, using fossil fuels to generate electrons, and are generally better understood as energy-efficient fossil fuel based systems, rather than conversion platforms away from fossil fuels (plug-ins, if they can get a supply of renewable electrons and get decent range and non-subsidy based price, offer that hope)
Natural gas vehicles. These are, generally speaking, the one-carbon methane platform, and are highly dependent on the price differential between natural gas and gasoline (or other options) to gain significant traction. Fleet replacement is also an issue, and natural gas will face some of the same local distribution challenges as higher blends of ethanol.
The bottom line, part one. With a 20 percent conversion to hybrid and perhaps as much as 8 percent conversion to ethanol and 2 percent in biodiesel in the 2010s, the US will have made a substantial reduction in fossil fuel dependency, nearing the 15 percent mark. Conversion of the US corn ethanol capacity to biobutanol could extend that gain all the way to 20 percent, because butanol can replace roughly twice the BTUs that ethanol can, because of its higher fuel density and higher blending rates (16 vs 10 percent).
To reach the 30-70 percent ranges that will make a serious dent in global warming models or in energy security, drop-in fuels are likely to be the near-term solution to calls for higher conversion away from fossil fuels.
The bottom line, part two. Consumers have shown zero affection for high-priced fuels, and not much for high-priced engine systems (outside of a limited “cool car” factor). Nor has the Congress or public shown much appetite for long-term incentivization for large-scale fuel or engine transformation. Mandates or parity pricing are the two paths toward conversion away from fossil fuels and towards renewables.
The bottom line, part three. Maintaining biomass prices below $80 per ton should be a focus of any policy that aims to have drop-in cellulosic biofuels – at $100 per ton, or higher, as has been seen in some markets, offers fatal economics for cellulosics, and is the real danger zone that few legislators and lobbyists are truly focused on. The BCAP program that offers $40 per tons subsidies is a formula for simply pushing the price of biomass up $40 per ton – good news for growers in a transition period, but not the long-term policy needed. Long-term biomass price stabilization is an area the USDA has worked in for a long time – time to get really working on that.
Something to watch – Direct ethanol injection technology.
Ricardo calls it EBDI. You might call it an ethanol hybrid.
Back in February, Ricardo management said it had developed an ethanol-boosted direct injection technology that exceeds gasoline engine efficiency and approaches levels previously reached only by diesel engines.
According to management, “The EBDI engine project is a great example because it turns the gasoline-ethanol equation upside down. It has the performance of diesel, at the cost of ethanol, and runs on ethanol, gasoline, or a blend of both.”
Current flex-fuel engines pay a fuel economy penalty of about 30 percent compared to gasoline when operated on ethanol blends such as E85. The EBDI engine substantially improves ethanol’s efficiency, and performs at a level comparable to a diesel engine.
The engine is currently available in a 3.2 liter V6 engine prototype that could replace a large SUV engine, and is the product of a collaboration between Behr, Bosch, Delphi, Federal-Mogul, GW Castings and Honeywell.
in March, Ricardo announced the formation of a UK-based consortium that is open to automakers, Tier 1 suppliers, oil companies, additive manufacturers and government agencies, with the aim of evaluating the impact of biofuels on current and future light duty engine technologies.
In terms of biodiesel, areas of focus will include understanding the effect of the wide variability of fuel chemistry resulting from the very broad range of potential feedstocks, challenges of fuel storage resulting from instability and reactivity to air, and the potential for fuel dilution of lube oil.
The first module, partly funded by the UK Department for Transport, focuses on the effect of biofuel content on diesel performance, emissions and economy using conventional and advanced combustion control systems.