The Role of Technologies and

Alternative FuelsDavid L. GreeneCorporate Fellow, Oak Ridge National Laboratory

Senior Fellow, Howard H. Baker, Jr. Center for Public Policy, The University of Tennessee

AASHTO/FHWA Climate Change Symposium

Washington, DC

August 5, 2010

What is transportation’s “fair share”?

• Wrong question?

• Equal reductions by all sectors?

• Equal marginal costs?▫ Just price carbon?

▫ Adapt policies to market realities?

Undervaluing energy efficiency

External costs

Co-benefits

Land use

Transportation infrastructure

Roads as public goods

Unpredictable evolution of technology

Requires comprehensive, realistic assessment, e.g., DOT, 2010, “Transportation’s Role in Reducing Greenhouse Gas Emissions”.

• My guess: 50% to 80% reduction over present levels by about 2050, and energy efficiency and alternative energy will carry most of the load.

Energy Information Administration Analysis of Alternative GHG

Reduction Policies ($30/tCO2 in 2010, $50/tCO2 in 2030)

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2005 2010 2015 2020 2025 2030M

illio

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Transportation Reference

Transportation $50/tCO2

Electric Power Reference

Electric Power $50/tCO2

The “energy paradox”: Markets appear to

undervalue future energy savings relative

to expected value.

• Inadequate information?• Bounded rationality?• Irrationality?• Unseen trade-offs?• Short pay-back periods?• Uncertainty/Loss-Aversion Bias?

▫ Future fuel savings uncertain▫ Benefit is fuel savings minus cost▫ Behavioral Economics: faced with risky bet,

consumers exaggerate probability of loss, count potential losses at 2-times potential gains.

Fuel economy standards work, which is why every

major auto manufacturing country has them.

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1965 1970 1975 1980 1985 1990 1995 2000 2005

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Miles of Travel and Fuel Use by Light-duty Vehicles: 1965-2008

Vehicle Travel

Fuel Consumption

FHWA, Highway Statistics, table VM-1, various years.

IF we stop the horsepower and size race, MIT

researchers foresee gains of 80-85% for gasoline

passenger cars and light trucks (2-2.5%/yr.) by 2030.

Potential for Advanced Technologies to Increase Fuel Economy by 2030

31.2

49.9

58.2 56.8

90.8

25.5

42.1

51.5

46.4

86.0

20.4

32.0

40.637.9

58.6

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2005 Base 2030 Adv. 2030 Diesel 2030 Turbo SI 2030 Hybrid

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Camry 2.5L

Camry 3.0

F-150 Pick-up

Kromer and Heywood, 2008. SAE Technical Paper Series, 2008-010459.

Beyond 2020: How quickly can we reduce the

costs of advanced automotive technologies?

y = 15498x2 + 4973.4x

y = 448.33x2 + 1677x

$0

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Percent Increase in Miles per Gallon Gasoline Equivalent Energy

Fuel Economy Cost CurvesMIT: On the Road in 2035

2005

2035

2005

2035

Battery EV

PHEV 30

Fuel Cell

Hybrid

Gasoline ICE Turbo

NRC Heavy Vehicle fuel economy report: 40% to 50%

increase with existing technologies. Then what?NRC, 2010, “Technologies and Approaches to Reducing the Fuel Consumption of Medium- and Heavy-

Duty Vehicles”, Figure S-1. Break-even fuel prices shown above bars.

$1.10

$4.20

$2.70

$5.40

$4.80

$1.70

$6.80

The RFS calls for 36 billion gallons of biofuel by 2022 but

the earliest cellulosic goal has already been missed. NRC

considers the long-term goal feasible, but….(NRC, Liquid Transportation Fuels from Coal and Biomass, 2010).

The premise of California’s Low Carbon Fuel Standard is

that a performance standard will lead to greater

innovation than mandating or subsidizing specific fuels.

6.7

2.82.3

-0.6 -0.8

-4.8

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-1.3

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Lifetime CO2 Emissions of Several Alternative Fuels

National Research Council, 2010. Liquid Transportation Fuels from Coal and Biomass.

Which biofuels from which feedstocks

for which uses?

• Gasify biomass to produce electricity with carbon capture and storage (CCS)?

• Make synthetic jet fuel for aircraft or diesel fuel for heavy trucks via Fischer-Tropsch synthesis?

• Make synthetic jet or diesel fuel from algae?

• Make gasoline from coal and biomass with CCS?

• Make ethanol from cellulose via enzymatic production of sugar and fermentation?

• Gasify biomass to produce hydrogen?

To achieve GHG reductions of 50% to 80% by 2050, electric

vehicles will require a decarbonized utility sector and fuel

cell vehicles will require low GHG hydrogen.

And won’t energy efficiency and alternative fuels

decimate the motor fuel tax?

How could we finance surface transportation?

• Universal VMT tax?• According to the laws of physics, transportation is

“work”, and energy is necessary to do work.• Universal energy tax

▫ All forms of energy taxed equally▫ Indexed to average energy efficiency▫ Indexed to inflation▫ Equivalent impact on VMT to a universal VMT tax▫ In addition, encourages continued energy efficiency

improvement and favors more energy efficient technologies.

What will it take?

Technology, policy, planning and public will.

• Energy Efficiency▫ Passenger car and light truck standards to 2016▫ On beyond 2016▫ Heavy-duty vehicle efficiency

• Rethinking Renewable or Low-Carbon Fuels▫ The Renewable Fuels Standard▫ California’s Low-Carbon Fuels Standard▫ Future biofuels

• A Transition to Sustainable Energy▫ Electricity?▫ Hydrogen?▫ Electricity & Hydrogen?

Thank you.