alternative fuels

1. Alternative Fuels Maria Tome, P.E. State of HawaiiDepartment of Business, Economic Development, and TourismStrategic Industries Division Good afternoon. I'm Maria Tome, an alternate energy engineer with the Hawaii State Energy Office. I'll go through the slides quickly. If you need more information on something, you can refer to your handout, or we can come back to it at the end.Good afternoon. I'm Maria Tome, an alternate energy engineer with the Hawaii State Energy Office. I'll go through the slides quickly. If you need more information on something, you can refer to your handout, or we can come back to it at the end.

2. 2 Overview Transportation Fuel Demand Projections Alternative Fuels Alternative Fueled Vehicles Incentives

3. 3 Hawaii's Gasoline Use Here's a snapshot of Hawaii's gasoline use over the past 20 years. You can see that the '90s were relatively flat. We kept pretty close to the 400 million gallons per year mark. But in the past few years, the demand has been increasing quite rapidly. We hit 400 million gallons per year in 2000 and 450 million gallons per year in 2003. The vehicles that were purchased then, and that are being purchased now, will be on the roads for quite a few years. So, we don't expect to see much of a drop in the near future.Here's a snapshot of Hawaii's gasoline use over the past 20 years. You can see that the '90s were relatively flat. We kept pretty close to the 400 million gallons per year mark. But in the past few years, the demand has been increasing quite rapidly. We hit 400 million gallons per year in 2000 and 450 million gallons per year in 2003. The vehicles that were purchased then, and that are being purchased now, will be on the roads for quite a few years. So, we don't expect to see much of a drop in the near future.

4. 4 Gasoline Demand per YearActual (1983-2003) and Projected (2004-2015) Here's a projection of what Hawaii's gasoline demand might look like over the next few years. By the way, diesel fuel demand is expected to follow a similar trend, but the numbers are much smaller. Diesel provides less than 10% of our ground transportation fuel demand. OK, so this chart shows a reasonable estimate of light duty vehicle energy demand. There are some alternative fuels which can be used to meet this demand.Here's a projection of what Hawaii's gasoline demand might look like over the next few years. By the way, diesel fuel demand is expected to follow a similar trend, but the numbers are much smaller. Diesel provides less than 10% of our ground transportation fuel demand. OK, so this chart shows a reasonable estimate of light duty vehicle energy demand. There are some alternative fuels which can be used to meet this demand.

5. 5 Alternative Fuels Alcohol Fuels Ethanol Methanol Biodiesel Electricity Hydrogen LPG Natural Gas (CNG, LNG) Others under development (P-series, diesohol) These are alternative fuels, as defined at the Federal level. Let's go through and edit this list for Hawaii. P-Series P-Series fuel is a blend of natural gas liquids (pentanes plus), ethanol, and the biomass-derived co-solvent methyltetrahydrofuran (MeTHF). P-Series fuels are clear, colorless, 89-93 octane, liquid blends that are formulated to be used in flexible fuel vehicles (FFVs). P-Series are designed to be used alone or freely mixed with gasoline in any proportion inside the FFV's gas tank. These fuels are not currently being produced in large quantities and are not widely used. For more information on P-Series fuels contact Dr. Stephen Paul at Princeton University. http://www.eere.energy.gov/afdc/altfuel/p-series.htmlThese are alternative fuels, as defined at the Federal level. Let's go through and edit this list for Hawaii. P-Series P-Series fuel is a blend of natural gas liquids (pentanes plus), ethanol, and the biomass-derived co-solvent methyltetrahydrofuran (MeTHF). P-Series fuels are clear, colorless, 89-93 octane, liquid blends that are formulated to be used in flexible fuel vehicles (FFVs). P-Series are designed to be used alone or freely mixed with gasoline in any proportion inside the FFV's gas tank. These fuels are not currently being produced in large quantities and are not widely used. For more information on P-Series fuels contact Dr. Stephen Paul at Princeton University. http://www.eere.energy.gov/afdc/altfuel/p-series.html

6. 6 Most Significant Alternative Fuels for Hawaii Alcohol Fuels Ethanol Methanol Biodiesel Hydrogen / Fuel Cell / Electricity LPG Natural Gas (CNG, LNG) Others under development (P-series, diesohol) Alcohol fuel has a great deal of potential. But we don't talk about methanol anymore; when we say alcohol fuel, we mean ethanol. Biodiesel is in use and is being produced in Hawaii. We'll talk more about this later. Hydrogen, fuel cell, electric, and hybrid vehicle technology are still under development but have significant potential, and Hawaii is a leader in this area, as you have heard earlier today. LPG, also called propane, is well-known in Hawaii. It's been used in fleets for years but is not getting the same support nationally as some of the other alternative fuels. Natural gas is not currently a player in the Hawaii market but if someone starts shipping in LNG that could change. And others are still under development; not yet available in Hawaii.Alcohol fuel has a great deal of potential. But we don't talk about methanol anymore; when we say alcohol fuel, we mean ethanol. Biodiesel is in use and is being produced in Hawaii. We'll talk more about this later. Hydrogen, fuel cell, electric, and hybrid vehicle technology are still under development but have significant potential, and Hawaii is a leader in this area, as you have heard earlier today. LPG, also called propane, is well-known in Hawaii. It's been used in fleets for years but is not getting the same support nationally as some of the other alternative fuels. Natural gas is not currently a player in the Hawaii market but if someone starts shipping in LNG that could change. And others are still under development; not yet available in Hawaii.

7. 7 Most Significant Alternative Fuels for Hawaii Ethanol LPG (Propane) Biodiesel Hydrogen / Fuel Cell / Electricity Here are the four we're going to talk about. We'll spend quite a bit of time on ethanol; I expect it will be receiving a fair amount of attention in the coming year.Here are the four we're going to talk about. We'll spend quite a bit of time on ethanol; I expect it will be receiving a fair amount of attention in the coming year.

8. 8 Fuel Ethanol Ethanol is also known as ethyl alcohol. It�s the alcohol in beer, wine, rum, vodka, etc. Ethanol was used to fuel some of the first automobiles. Here's fuel ethanol. It's the same alcohol that's found in beverages. But when it's used in fuel, it's denatured so that it won't be drinkable and it won't be subject to the alcohol beverage taxes. It's been used in automobiles since automobiles were invented.Here's fuel ethanol. It's the same alcohol that's found in beverages. But when it's used in fuel, it's denatured so that it won't be drinkable and it won't be subject to the alcohol beverage taxes. It's been used in automobiles since automobiles were invented.

9. 9 Fuel Ethanol On the Mainland, independent gasoline stations were generally first to offer E10 (formerly known as gasohol). 1970s-1980s: Used as a gasoline extender 1980s: An octane booster (raises octane 2-3 points) 1990s: Used as an oxygenate for clean air(Adds oxygen & reduces emissions of carbon monoxide) In 1908, Henry Ford expected ethanol to be the major fuel used in his Model T automobile. In the 1930s, oil discoveries in the U.S. peaked, and low gasoline prices resulted in a shift away from ethanol. It wasn�t until 1979 that ethanol-gasoline blends were reintroduced to the U.S. market when oil supply disruptions in the Middle East became a national security issue. Several major oil companies marketed ethanol blends as a �gasoline extender.� In 1974, unleaded gas became available and by 1986 lead had been completely phased out; all gasoline was unleaded. How to increase the octane of gasoline became an important question. Since ethanol increases octane by a couple of points, it was used as an �octane booster� in the 1980s. In 1990, the Clean Air Act Amendments required oxygen to be added to fuel in areas with unhealthy levels of carbon monoxide. In 1908, Henry Ford expected ethanol to be the major fuel used in his Model T automobile. In the 1930s, oil discoveries in the U.S. peaked, and low gasoline prices resulted in a shift away from ethanol. It wasn�t until 1979 that ethanol-gasoline blends were reintroduced to the U.S. market when oil supply disruptions in the Middle East became a national security issue. Several major oil companies marketed ethanol blends as a �gasoline extender.� In 1974, unleaded gas became available and by 1986 lead had been completely phased out; all gasoline was unleaded. How to increase the octane of gasoline became an important question. Since ethanol increases octane by a couple of points, it was used as an �octane booster� in the 1980s. In 1990, the Clean Air Act Amendments required oxygen to be added to fuel in areas with unhealthy levels of carbon monoxide.

10. 10 Projected US Ethanol Demand Here is historical and projected demand for fuel ethanol in the US. The increased use of ethanol for fuel is not limited to the United States. It's international. For example, according to the China Energy Report, all gasoline sold in Henan Province is required to be blended with ethanol. In October, 2004, China's economic planning body accelerated efforts to promote ethanol mixed gasoline in over a hundred Chinese cities. Apart from Henan, there are another eight pilot provinces involved in the switch to ethanol fuel. Graph: from ethanol alternatives report by Stillwater AssociatesHere is historical and projected demand for fuel ethanol in the US. The increased use of ethanol for fuel is not limited to the United States. It's international. For example, according to the China Energy Report, all gasoline sold in Henan Province is required to be blended with ethanol. In October, 2004, China's economic planning body accelerated efforts to promote ethanol mixed gasoline in over a hundred Chinese cities. Apart from Henan, there are another eight pilot provinces involved in the switch to ethanol fuel. Graph: from ethanol alternatives report by Stillwater Associates

11. 11 Fuel Ethanol Today, ethanol-blended gasoline is available in most states. All of Minnesota's gasoline contains ethanol Minneapolis/Saint Paul, 1995 Statewide, 1997 California, New York, and Connecticut switched completely at the end of 2003 and are now using ethanol rather than MTBE. Let's come back to the U.S. Today, about one third of the gasoline sold in the U.S. is blended with ethanol. And in some areas, ALL of the gasoline contains ethanol.Let's come back to the U.S. Today, about one third of the gasoline sold in the U.S. is blended with ethanol. And in some areas, ALL of the gasoline contains ethanol.

12. 12 States With 10 or More Years of Fuel Ethanol Use According to the Energy Information Administration, ethanol blends have been available for over 10 years in over 38 states. The basis for the EIA data actually under-states the use of ethanol, because "in States where gasohol is taxed at the same rate as gasoline, gasohol is usually not reported separately from gasoline, and volume data are not available.� So this is a conservative number. I think we can sum this up by saying ethanol blends have been in widespread use for many years. Hawaii shows up in 1980, 1981, and 1982 (3 years).According to the Energy Information Administration, ethanol blends have been available for over 10 years in over 38 states. The basis for the EIA data actually under-states the use of ethanol, because "in States where gasohol is taxed at the same rate as gasoline, gasohol is usually not reported separately from gasoline, and volume data are not available.� So this is a conservative number. I think we can sum this up by saying ethanol blends have been in widespread use for many years. Hawaii shows up in 1980, 1981, and 1982 (3 years).

13. 13 Hawaii Gasoline to Contain 10% Ethanol Beginning in April of 2006, at least 85 out of every 100 gallons of gasoline sold in the State for use in motor vehicles shall contain 10% ethanol by volume. HRS �486J(10), HAR 15-35 Hawaii will soon be joining the states that blend ethanol in their gasoline. Beginning in April of 2006, at least 85 out of every 100 gallons of gasoline sold in the State for use in motor vehicles shall contain 10% ethanol. From a practical perspective, the fuel distributors may decide to blend ethanol in all their gasoline. That's shown on the graph. Note that the demand for both gasoline and ethanol are projected to continue to increase. Not shown on this chart are displacement of fuel demand due to: efficiency; use of alternative fuels, such as E85 or propane; or development and use of hybrid and fuel cell vehicles. Let's briefly talk about E85.Hawaii will soon be joining the states that blend ethanol in their gasoline. Beginning in April of 2006, at least 85 out of every 100 gallons of gasoline sold in the State for use in motor vehicles shall contain 10% ethanol. From a practical perspective, the fuel distributors may decide to blend ethanol in all their gasoline. That's shown on the graph. Note that the demand for both gasoline and ethanol are projected to continue to increase. Not shown on this chart are displacement of fuel demand due to: efficiency; use of alternative fuels, such as E85 or propane; or development and use of hybrid and fuel cell vehicles. Let's briefly talk about E85.

14. 14 Ethanol-based Alternative Fuel: E85 Gasoline with ethanol is still gasoline. It's not an alternative fuel. An increasing number of new vehicles can use E85 (15% gasoline, 85% ethanol), which is an alternative fuel. Gasoline with ethanol is still gasoline. It's not an alternative fuel. According to an editorial in a Madison newspaper, about 25% of new vehicles can use E85, a blend of 85% ethanol with 15% gasoline. These are flexible-fuel vehicles, and have been sold as standard equipment to individuals and fleets since 1998. You may have one and not even know it! http://www.zwire.com/site/news.cfm?BRD=1302&dept_id=181990&newsid=13125200&PAG=461&rfi=9Gasoline with ethanol is still gasoline. It's not an alternative fuel. According to an editorial in a Madison newspaper, about 25% of new vehicles can use E85, a blend of 85% ethanol with 15% gasoline. These are flexible-fuel vehicles, and have been sold as standard equipment to individuals and fleets since 1998. You may have one and not even know it! http://www.zwire.com/site/news.cfm?BRD=1302&dept_id=181990&newsid=13125200&PAG=461&rfi=9

15. 15 E85 Flexibly-Fueled Vehicles Here are just some of the current models. They are called "flex-fueled" vehicles because they can operate on any combination of gasoline and up to 85% ethanol. Here are just some of the current models. They are called "flex-fueled" vehicles because they can operate on any combination of gasoline and up to 85% ethanol.

16. 16 Onroad Alternative Fuel and Hybrid Vehicles in the U.S., 2003 You can see that by far the greatest number of alternative fuel vehicles in 2003 were E85 flexible fuel vehicles. Once again, this is based on EIA data which tends to under-report the numbers. Data from the manufacturers indicates that there are about 3.5 million E85 FFVs on the road today. Some of those are used in fleets to meet Federal requirements for the purchase of alternative-fuel-capable vehicles.You can see that by far the greatest number of alternative fuel vehicles in 2003 were E85 flexible fuel vehicles. Once again, this is based on EIA data which tends to under-report the numbers. Data from the manufacturers indicates that there are about 3.5 million E85 FFVs on the road today. Some of those are used in fleets to meet Federal requirements for the purchase of alternative-fuel-capable vehicles.

17. 17 State, Federal, and Fuel Provider Fleets are Required to Purchase AFVs A Federal law requires Federal, State, and fuel provider fleets to purchase light-duty vehicles capable of operating on alternative fuels. The law allows some of the vehicle requirement to be offset by the use of biodiesel fuel. The alternative fuel vehicles in use in Hawaii include flex-fueled vehicles, propane vehicles, and electric vehicles, and of course biodiesel fuel in standard diesel engines. A Federal law requires Federal, State, and fuel provider fleets to purchase light-duty vehicles capable of operating on alternative fuels. The law allows some of the vehicle requirement to be offset by the use of biodiesel fuel. The alternative fuel vehicles in use in Hawaii include flex-fueled vehicles, propane vehicles, and electric vehicles, and of course biodiesel fuel in standard diesel engines.

18. 18 Propane (LPG) Propane has been used in Hawaii for many years. There are many forklifts, some State, and many City and County of Honolulu vehicles which operate on propane.Propane has been used in Hawaii for many years. There are many forklifts, some State, and many City and County of Honolulu vehicles which operate on propane.

19. 19 Produced locally (Maui & Oahu) from used cooking oil Can also be produced from oilseed crops For use in diesel engines Biodiesel Biodiesel is produced locally and is used in National Parks as well as in boats, stationary diesel power generator sets, County vehicles, private vehicles, and yes, there is a rental car company that features a biodiesel-powered vehicle. It can be blended with regular diesel and used in existing vehicles. No modifications are necessary. Blends of up to 20% biodiesel with regular diesel are the most common. It can also be used straight. The City and County of Honolulu uses a 20% biodiesel blend. They didn't make any modifications to their diesel storage or equipment.Biodiesel is produced locally and is used in National Parks as well as in boats, stationary diesel power generator sets, County vehicles, private vehicles, and yes, there is a rental car company that features a biodiesel-powered vehicle. It can be blended with regular diesel and used in existing vehicles. No modifications are necessary. Blends of up to 20% biodiesel with regular diesel are the most common. It can also be used straight. The City and County of Honolulu uses a 20% biodiesel blend. They didn't make any modifications to their diesel storage or equipment.

20. 20 Hydrogen / Fuel Cell / Electricity Hawaii has contributed to advances in electric vehicle technology. This will serve us well in the transition to electric hybrids and fuel cell vehicles. Fuel cell vehicles are sometimes described as the best of both worlds - they can offer the fuel flexibility of internal combustion engines, and the energy efficiency of fuel cell electric technology. The fuels that we are used to -- gasoline, alcohol fuels, natural gas, propane -- all contain hydrogen. A device called a "reformer" can be located on the vehicle -- or at the fueling station -- and the reformer can produce hydrogen from these fuels. The hydrogen can then be used in a fuel cell to produce electricity on-board the vehicle. Or, electricity can be used to produce the hydrogen from water molecules.Hawaii has contributed to advances in electric vehicle technology. This will serve us well in the transition to electric hybrids and fuel cell vehicles. Fuel cell vehicles are sometimes described as the best of both worlds - they can offer the fuel flexibility of internal combustion engines, and the energy efficiency of fuel cell electric technology. The fuels that we are used to -- gasoline, alcohol fuels, natural gas, propane -- all contain hydrogen. A device called a "reformer" can be located on the vehicle -- or at the fueling station -- and the reformer can produce hydrogen from these fuels. The hydrogen can then be used in a fuel cell to produce electricity on-board the vehicle. Or, electricity can be used to produce the hydrogen from water molecules.

21. 21 Incentives Federal ethanol credit: 51� per gallon Federal biodiesel credit: $.50 or $1.00 per gallon Federal small ethanol producer credit: 10�/gallon Federal Commodity Credit Corp: credits for new production of ethanol and biodiesel (amounts vary; approx. $100 million nationwide) State credit for ethanol facility: up to $4.5 million State highway taxes reduced for alt. fuels E10 exempt from 4% state excise tax until 12/31/06 Electric vehicles with special license plates are allowed free parking at meters; HOV access Counties provide highway tax reductions or exemptions for alternative fuels OK, for the record, there are a bunch of incentives for alternative fuels. There are Federal incentives, State incentives, and even County incentives.OK, for the record, there are a bunch of incentives for alternative fuels. There are Federal incentives, State incentives, and even County incentives.

22. 22 Sum of State & County Highway Taxes (cents per gallon) This slide shows the combined rate of State and County highway taxes on alternative fuels.This slide shows the combined rate of State and County highway taxes on alternative fuels.

23. 23 Summary Transportation Fuel Demand is Projected to Increase Alternative Fuels and Vehicles are Available Ethanol LPG Biodiesel Hydrogen / Fuel Cell / Electricity Incentives are Available And finally, the summary - Transportation Fuel Demand is Projected to Increase (and now you know how much and why); Alternative Fuels and Vehicles are Available (and now you know which ones and how many); and Incentives are Available (and you know about those too). And finally, the summary - Transportation Fuel Demand is Projected to Increase (and now you know how much and why); Alternative Fuels and Vehicles are Available (and now you know which ones and how many); and Incentives are Available (and you know about those too).

24. 24 Thank You! Thank you for your attention! (Ask moderator) Do we have time for questions?Thank you for your attention! (Ask moderator) Do we have time for questions?