Briefing Summary

More Bad News than Good When It Comes to Alternative Transportation Fuels

The U.S. economy is rapidly becoming "re-carbonized," said noted transportation analyst Dan Sperling, who spoke at the June 20 Energy 2050 seminar on the future of alternative fuels. Reserves of conventional oil--cheap to extract and found primarily in the Middle East--are dwindling. In response, politicians and oil companies are looking for more sources of "unconventional" oil, which has large environmental and economic costs and produces high amounts of greenhouse gases (GHGs).

Handout:
Facts and Statistics on Alternative Fuels

"The era of easy oil is over," said Sperling, quoting Chevron CEO David Reilly from a recent company advertising campaign. With two-thirds of U.S. oil imports being used for transportation, record-high gas prices, and ongoing, deep concern over our dependence on foreign oil, the big oil companies are starting to shift course and explore alternatives like hydrogen fuel cells and biofuels.

But sustaining real change will be difficult, said Sperling, who is the founding director of the Institute of Transportation Studies at the University of California, Davis. The trends are all going in the wrong direction: cars keep getting bigger and heavier, average fuel economy levels are falling, and the number of cars per licensed driver is growing.

"We have to break our hopeless addiction to oil," said Sen. Brian Dorgan, D-ND, who opened the seminar. Doing so will require setting goals, targets, and timetables, he said. Unlike Social Security, where the projections keep shifting, he said, "this is a real crisis."

The Senate Hydrogen and Fuel Cell Caucus co-sponsored the event with RFF, GLOBE USA (Global Legislators Organization for a Balanced Environment USA), and the Henry M. Jackson Foundation.

Technically possible but politically unlikely

So what can be done right now to reduce energy use and GHG emissions? There are options, Sperling said, but they are highly unpopular with voters and politicians. Reducing vehicle travel to any substantial degree will be impossible, he said; the percentage of the population that uses public transportation is less than 2 percent. Improving conventional automotive technology holds great promise but gains to date have not gone toward fuel economy, he said. Instead cars now have a lot more horsepower and are a lot faster. Expanding the use of alternative fuels holds the most promise but only in the long run. Billions of federal dollars have been spent on research over the past 20 years but with no substantial return to show for it.

Alternative fuels have so far failed in the United States, Sperling said, for two reasons. Public support dissipated when studies showed that the public benefits were oversold: the air quality benefits tended to be small and the environmental costs (in the case of synfuels) were large. Market interest evaporated: battery-powered electric vehicles were too expensive for automakers and customers, and natural gas-fueled vehicles would require new fuel distribution systems for consumers (although Honda has begun taking steps in this area).

Conversely, hydrogen fuel cells could work, Sperling said, although widespread market acceptance is years away. They could virtually eliminate greenhouse gases, air pollutants, and oil use from the transport sector and possibly others. Hydrogen can be made from a range of sources, including water, biomass, and coal. And the automotive industry believes that fuel cells are the Holy Grail, unlike their attitude toward all previous alternative fuels, he said.

In the meanwhile

RFF Fellow Carolyn Fischer turned the discussion toward policy alternatives for addressing the problems of oil security and climate change. By 2025, vehicle miles traveled are expected to double, she said. Hydrogen-fueled vehicles could represent 10 percent of the market by then, if technology and fuel distribution issues are resolved.

"But a fast transition to hydrogen will be challenging and costly," she said. "Should we wait longer or push forward?"

Equivalent, intermediate actions could go a long way toward meeting that same basic goal of lowering the amount of GHGs produced, she said. These include requiring a 10-percent improvement in conventional fuel economy, a 10-percent increase in the use of biofuels, a 10-percent displacement in the number of private vehicles by public transit, a 35-percent market penetration of hybrid vehicles, or a modest mix of the above.