To Green, Or Not To Green
Wednesday, 23 July 2008
Alternative FuelWhether you believe in "man-made climate change," or not, is no longer material to the decision to "green" your fleet. What matters is that a vocal and active minority of consumers believe it, and that the legislators we've elected are proceeding as if the hypothesis was true.

While the scientific debate on man's role in climate change has yet to really begin, the political debate is all but over. The remaining major party candidates in this year's presidential race are all campaigning with a plan to "solve" the age-old process of climate change, and the majority party in congress is firmly on the side of the green activists.

Even though there might be some hope for moderating the legislative efforts that will impact your fleet, it's a virtual certainty that greening your operations will be the subject of increasing pressure from activist groups, in the form of PR campaigns, demonstrations and even product boycotts.

Given this grim outlook, is it still possible for a beverage distributor to respond to legislative and public pressure, while at the same time making cost-effective bottom-line decisions when it comes to greening a distribution fleet?

Recently, at the 14th annual Alternative Fuel Vehicle Institute (AFVi) conference in Las Vegas, Nevada, more than 2,000 attendees gathered to discuss the products, politics and processes involved in deploying alternative technologies to meet the changing landscape of fleet acquisition and management. Government agencies, industry associations, fleet professionals and product specialists were all represented amongst the attendees.

Although space limitations preclude an in-depth analysis of all the technologies on display, we'll try to provide an overview that separates what is ready and practical from that which is far over the horizon.

Mechanical Solution
Apart from the various ways promoted for fueling vehicles, the one offering that is fuel-agnostic is the hybrid powertrain technology that has been out on the market in passenger vehicles for several years, and is just now making its debut for commercial truck applications.

A hybrid system uses an auxiliary battery pack and an integrated electric motor/generator situated between the truck's engine and transmission. The generator is used to capture energy normally lost to heat during braking. Once this energy is stored in the batteries, it is available to run the electric motor for adding power to the truck's main engine during periods of acceleration and high load, reducing fuel consumption by the main engine.

Well-known for its transmission and drivetrain products, Eaton Corporation is at the forefront of developing hybrid technology for commercial trucks. Eaton already has a practical hybrid system for medium-duty trucks on the market, and is actively working to develop a system for heavy duty trucks. Kenworth recently announced that it has sold 120 of its T270 trucks equipped with the Eaton hybrid system to Coca-Cola.

Alternative FuelFuel Options
In spite of the fact that exhaust emissions from conventional diesel engines have been reduced by 90 percent in just a little over a decade, the green lobby is strongly allied against petroleum use, so no matter how clean the engineers are able to make a conventional diesel, don't expect to see any tax or regulatory incentives for adopting cleaner diesel technology.

The fuel options that remain are ethanol (in place of gasoline), biodiesel (in place of petroleum diesel), and natural gas.
    
Ethanol
Light duty truck manufacturers including General Motors and Ford have sold hundreds of thousands of "flex fuel" vehicles capable of running on E85, a blend of 85 percent ethanol and 15 percent gasoline. In spite of political power behind corn-based ethanol, the E85 fuel is not widely available yet, so most flex fuel capable vehicles are still run predominantly on conventional gasoline.

Although the politically-inspired boost in ethanol production isn't directly responsible for all of the recent increase in food prices, volatility in the commodity market has highlighted the down-side of corn-based ethanol, reminding those concerned with supply stability that Mother Nature can be just as unreliable as a Mideast dictator.

Unlike those currently charged with promoting the ethanol industry, the companies that actually have to deal with the reality of bringing ethanol-capable vehicles to market have already distanced themselves from the concept of food-crop based ethanol, preferring instead to pursue the development of "cellulosic" ethanol, which can be made from wood chips, municipal waste and crop stover, amongst other sources.

While there are currently a number of tax incentive programs for purchasing ethanol-capable vehicles, and an increasing variety of light-duty flex fuel vehicles coming to market, commercial viability of ethanol fuels beyond the regional level is still a distant prospect.

Biodiesel
Similar to ethanol, biodiesel can be derived from a number of organic sources, with soybeans being the most predominant source at this time. Unlike ethanol, the soy derivatives used for biodiesel have little other use, creating less of an impact in commodity prices, but the source is still nonetheless subject to the whims of Mother Nature.

Algae has been touted as another potential source of biodiesel, but according to those already working on the commercialization of this concept, it's still way over the horizon.

Unfortunately, biodiesel production is far from a standardized process at this point. Numerous ASTM fuel quality standards are under development, and the industry has created its "BQ-9000" (modeled after ISO-9000) quality standards for biodiesel refiners and marketers, but quality assurance is still in the "caveat emptor" mode. Current users cited intensive "hygiene" requirements for biodiesel storage tanks, and the need to test every delivery of fuel before unloading.

Natural Gas
Alternative FuelBy a wide margin, the most practical of the alternative fuels presented at the conference was natural gas. With a huge delivery infrastructure covering most population centers already in place, natural gas offers a realistic alternative fuel source that is widely available now.

Although most natural gas is still a "fossil fuel," its virtue lies in the fact that it contains far less carbon than petroleum fuels, thereby drawing less ire from the activists and legislators. Natural gas can also be derived through organic processes, making it even more "green."

Conventional diesel engines can be factory-adapted to use natural gas, delivering virtually identical performance to the diesel version with far lower emissions and less need for exhaust after-treatment. Some currently available natural gas engines have already been certified to meet the 2010 exhaust emission regulations.

The natural gas power option has virtually no impact on the rest of the truck, apart from a modest increase in the physical size of the truck's fuel tanks, and of course, the cost. However, the current availability of tax incentives combined with the substantial difference between the price of natural gas and diesel can deliver a payback that will neutralize the added acquisition cost in as little as 18-24 months. Fleets can add to the tax benefits by installing their own refueling system, practical for as few as 10-15 natural gas vehicles.

It's Not Easy Being Green
Given the federal government's fickle history with tax incentives, and the cyclical nature of fuel prices, timing will be a critical factor in making the financial case for any of the alternatives. Yet ultimately, it may not be the bottom line that drives the purchase decision, but rather, consumer and political pressure. With that in mind, savvy managers must "get up to speed" on the various alternative fuel options and where each might fit in their fleet.
 
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