In fuel race, gas and diesel staying ahead

But hybrid, electric autos find stable niche markets

PITTSBURGH - Margie Gilfillan fondly recalls her electric hybrid car.

“I absolutely loved it,” said the associate professor at Point Park University. “The mileage was terrific. Driving it increased my sensitivity to my driving method and how that affects the mileage.”

But she gave up the Toyota Prius when the lease lapsed because the vehicle had only front-wheel drive - a challenge when presented with Pittsburgh’s winters and terrain.

“I live on a hill. I needed the four-wheel drive. Pittsburgh is terrible with the amount of hills it has,” Gilfillan said. “Otherwise, I would have kept it.”

Vehicles that run on fuels such as electricity, natural gas, ethanol, biodiesel and propane have been growing in popularity, but their market share is still small compared with those using traditional gasoline and diesel. And there are still kinks to work out before alternative fuel vehicles can be adopted more widely - access to fuel, needed infrastructure and greater awareness of the options.

When alternative fuels are used, it’s more common to find them in fleet vehicles, said Jeremy Michalek, associate professor at Carnegie Mellon University and director of CMU’s vehicle electrification group.

“It’s an important but very small segment,” Michalek said. “It’s unlikely that any alternative fuel could completely replace petroleum in the near future.”

The more likely scenario: a mix of several alternative fuels while petroleum products continue to fuel vehicles, he said.

According to the U.S. Department of Energy, the number of alternative-fuel vehicles in use nationally “has been increasing steadily during the past 15 years, largely due to federal policies that encourage and incentivize the manufacture, sale and use of vehicles that use non-petroleum fuels.”

There were more than 938,600 alternative-fuel vehicles on U.S. roads in 2010, up from 592,100 in 2005, according to data from the U.S.Energy Information Administration. In 2010, the lion’s share were fueled with E85 ethanol (65 percent), followed by propane (15 percent), compressed natural gas (12 percent) and electric (6 percent).

Government and private sector fleets are the primary market for alternative fuels, according to the Energy Department. They consume the largest amount of fuel and generally can travel a set distance and return to home base to refuel - a hub-and-spoke model.

Chuck Wichrowski, owner of Baum Blvd. Automotive in Pittsburgh, saw an opportunity in that growth.

His shop specializes in repairs and maintenance on alternative-fuel vehicles, as well as conventional vehicles. It also has a free public charging station for electric vehicles and sells biomass fuel. His customer base is largely made up of university and medical professionals.

“It’s less likely that the average driver will use them, but if you have a taxi service or a garbage truck fleet, one alternative may work,” he said.

Ultimately, the decision will be about how it hits the bottom line.

“You can say, ‘We should limit our dependence on foreign oil and reduce our carbon footprint,’ but when you tell someone they can save $1 per gallon, then they’re interested,” Wichrowski said.

Tiffany Groode, director of automotive scenarios for Colorado-based consulting and research firm IHS Cera, said alternative fuels are going head to head with more efficient conventional vehicles.

“There’s a lot of money being invested into conventional vehicles because there’s already been so much investment in them,” Groode said. “Consumers are used to them, and infrastructure is already in place. We’re talking about 100 years of investment.”

On the light-duty front, natural gas vehicles cost more than their conventional counterparts, and the payback period is longer. It could be 10 years for a private owner, compared to one to three years for a fleet owner, Groode noted.

Electric vehicles could do well in urban centers where there are shorter distances to travel, Groode said. The market saw a growth spurt after the Chevrolet Volt, a gas-electric hybrid, was released in 2010.

Still, one big question is whether drivers can reliably charge a car at home, Michalek said. Many drivers have at-home chargers, but someone living in a high-density area might find the only free space to park is two blocks away from the front door.

“We’ve found that less than half of the homes in the U.S. have off-street parking where the driver could have their own charger,” Michalek said. “If we wanted to replace petroleum, we’d have a big parking problem we need to solve.”

Biofuel can be made from a variety of sources, but typically is ethanol derived from corn. Much is being mixed with gasoline or diesel to create E85 or E10, which refers to the percentage of ethanol. Most U.S. vehicles can run on a blend of 10 percent ethanol.

But biofuels currently don’t have the cost savings that electricity and natural gas offer, Michalek said. “If something really changed the economics, it could replace petroleum quickly,” he said.

Business, Pages 21 on 05/05/2014

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