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Alternative Vehicle Fuel Types

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Six Alternative Fuel Types Vying to Power our Future

 

Not many years ago, there were two types of vehicles on the road, gasoline-powered and diesel. Now there is a wider variety with six main alternative fuels. Each of these is intended to put us on the path to reduced or carbon-neutral vehicles. Some have distinct advantages over others from a functional standpoint; all represent investment opportunities, as a few of these are likely to grow to be the primary energy source in tomorrow’s cars and trucks.

Investors interested in the alternative fuels area should make sure they know the basics of each. The following are the basics of all six.

 

Ethanol

Ethanol is a renewable fuel made from corn and other plant materials. Its use is widespread on the roads today. In fact, more than 98% of gasoline in the U.S. contains some ethanol. The most common blend of ethanol is E10 which is 10% ethanol and 90% gasoline.

Ethanol is also available as E85 (or flex fuel) which is an ethanol blend containing 51% to 83% ethanol, depending on geography and season, used in flexible fuel vehicles. E15is a blend increasing its market presence. It is approved for use in model year 2001 and newer light-duty conventional gas vehicles.

Ethanol is a renewable fuel made from various plant materials collectively known as "biomass." More than 98% of U.S. gasoline contains ethanol, typically E10 (10% ethanol, 90% gasoline), to oxygenate the fuel, which reduces air pollution.

Ethanol (CH3CH2OH) is clear and colorless. It’salso known as grain alcohol, ethyl alcohol, and EtOH. The fuel has the same chemical make-up regardless of whether it’s produced from starch- or sugar-based feedstocks like corn.

Ethanol has a higher octane than gasoline, so it can be used to raise the octane of low octane gasoline to prevent rough engine operation such as knocking. However, the fuel actually contains less energy per gallon than gas. Denatured ethanol (98% ethanol) contains about 30% less energy than gasoline per gallon. The experience of any cars fuel economy on ethanol depends on whether an engine is optimized to run on gasoline or partial ethanol.

Flexible Fuel Vehicles

Flexible fuel vehicles (FFVs) have an internal combustion engine and can operate on gasoline and/or any blend of gasoline and ethanol up to 83%, such as E85 flex-fuel. E85 is a gasoline-ethanol blend containing 51% to 83% ethanol, depending on geography and season.

According to IHS Markit, as of 2017, there were more than 21 million FFVs in the United States. Because FFVs are factory-made and are capable of operating on gasoline and gasoline-ethanol blends, many vehicle owners don't realize their car is an FFV and that they have a choice of fuels to use.

You can visit Fueleconomy.gov to learn how to identify an FFV or use the Alternative Fuel and Advanced Vehicle Search to find current FFV models.

Emissions

The carbon dioxide released by a vehicle when ethanol is burned is offset by the carbon dioxide captured when the feedstock crops are grown to produce ethanol. This differs from gasoline and diesel, which are refined from petroleum extracted from the earth. No emissions are offset when these petroleum products are burned.

On a life cycle analysis basis, greenhouse gas (GHG) emissions are reduced on average by 34% with corn-based ethanol produced from dry mills, and range between 88% and 108% if cellulosic feedstocks are used depending on feedstock type, compared with gasoline and diesel production and use.

 

Electricity

Electric vehicles, which for our purposes includes hybrid (gas and electric), have operating costs that are lower than conventional gas-powered cars. A little more than a decade ago, there was practically no mass market in the U.S.  But the consumer perception and evolution of technology, including battery efficiency, has been putting more hybrids and E.V.s on the road, with more entrants coming each year from the major car companies and start-ups.

Availability and Charging Speeds

Both all-electric cars and a plug-in hybrid have several options for charging. Often, drivers will do the majority of their charging from home. Workplaces, businesses, and some condos and apartments now provide charging. As far as public charging, there are over 16 thousand public charging stations located across the country.

There are three basic types of charging:

Level 1 charging is accomplished by plugging the car or truck into a regular 120 Volt home style outlet. This is the slowest type of charging, and the current pace is about 2 to 5 miles of range per hour of charging. It’s often the most convenient and requires no special charger or adapter. Most, if not all, plug-in vehicles come equipped with a cord to allow level 1 charging.

Level 2 charging is where a supply station offers current at 240 V (or 208 V), which provides 10 to 30 miles of range per hour of charging. Most public chargers are Level 2 chargers. Drivers can also have a Level 2 charger installed at their home. Most public chargers use a standard plug type that is compatible with all vehicles. Tesla charging stations, however, use a different plug type that cannot be used by other manufacturers' vehicles. Tesla provides an adaptor that allows its vehicles to use both Tesla and standard Level 2 charging stations.

Fast charging is also referred to as D.C. fast charging or D.C. quick charging. This is the fastest method. It allows 50 or more miles of range to the battery in 20 minutes. Not all vehicles can accept fast charging, nor do all vehicles use the same type of plug for D.C. fast charging. This is a consideration for those deciding if an E.V. makes sense for them. Quick charging stations are usually located along heavy traffic corridors. They are generally too expensive to be practical for home installation.

Market Demand

According to BlueWeave Consulting, the global market for electric vehicle market should grow from USD 121.8 billion in 2020 to USD 236.3 billion by 2027, with a CAGR of 10.6% during the forecast period (2021–2027).

 

Hydrogen

 

Hydrogen can power a vehicle in two ways: fuel cells, and internal combustion. Fuel cell vehicles (FCVs) turn hydrogen and oxygen from the air into electricity, powering an electric motor. The most abundant element on Earth (H) can also be burned in internal combustion engines (ICEs); the by product (exhaust) is H2O (water).

Emissions

In a virtual sense, Hydrogen doesn’t produce any greenhouse gas emissions. You essentially generate power through a hydrogen fuel cell that just emits warm air and water vapor. Internal combustion methods of propulsion, in the end, combine Hydrogen with oxygen producing harmless water.

Challenges

When it comes to hydrogen fuel, the major challenge is to initially extract the fuel from water or hydrocarbons. Hydrogen does not exist in a lone elemental form; separating it from others atoms requires energy input. In terms of storage, hydrogen creates more hurdles. If you want compact storage of hydrogen fuel, it will need low temperatures and high pressures. Hydrogen is available at fewer than 50 public stations, mostly in California. However, more fueling stations are planned for the future.

Fuel cell hydrogen vehicles cost more than conventional vehicles, but costs are decreasing. Still, only a few models are currently available for sale. Internal combustion hydrogen vehicles are typically conversions of gasoline engines.

 

Natural Gas

Fundamentals

In 2021, Natural Gas has become one of the most used fuels in the world. Unlike other types of fuel, Natural gas doesn’t contain hydrocarbons; it is one of the cleanest burning alternative fuels. It is used in the form of compressed natural gas (CNG) or liquefied natural gas (LNG) in cars, trucks, and buses.

There are Dedicated natural gas vehicles and bi-fuel. Dedicated are designed to run on natural gas only, while bi-fuel vehicles can also run on gasoline or diesel. Bi-fuel vehicles allow users to take advantage of the widespread availability of gasoline or diesel but use a cleaner, more economical alternative when natural gas is available. Since natural gas is stored in high-pressure fuel tanks, bi-fuel vehicles require two separate fueling systems, which take up passenger/cargo space.

Availability

Natural gas vehicles are not available on a large scale in the U.S.—only a few models are currently offered for sale. However, conventional gasoline and diesel vehicles can be retrofitted for CNG.

Chemical Process

Chemically, renewable natural gas is similar to other fossil fuels that make it highly usable. Creation of biomethane is through an anaerobic digestion process that involves waste from livestock and landfills. This process breaks down the microorganisms into biodegradable material.

 

BioDiesel

Fundamentals

BioDiesel fuel production is more common than many people realize. The production of the fuel requires animal fats, recycled grease, or vegetable oil. BioDiesel can be used in different diesel vehicles. This is because the chemical makeup is not substantially different from petroleum diesel.

Emissions

In comparison, BioDiesel burns more cleanly, eco-friendly, and safer than traditional petroleum diesel. On average, BioDiesel has more than 130 degrees Celsius of flashpoint, which is significantly higher than normal diesel. What’s more, is that B100 or pure BioDiesel decreases carbon dioxide emissions by up to 75% more than conventional diesel.

 

Propane

Propane, or liquefied petroleum gas (LPG), is a clean-burning fossil fuel that can be used in internal combustion engines.

Most of the propane used in the U.S. is produced domestically. It’s often less expensive than gasoline and does not degrade performance. LPG-fueled vehicles emit lower amounts of some air pollutants and greenhouse gases, depending on vehicle type, calibration, and drive cycle.

Challenges

The drawbacks to LPG are the limited number of fueling stations and vehicles. Over 900 public fueling stations sell LPG. A few light-duty vehicles - mostly larger trucks and vans - can be ordered from a dealer with a prep-ready engine package and converted to use propane. Consumers can also convert in-use conventional vehicles for LPG use. Some LPG vehicles run on propane only. Others can switch between propane and a conventional fuel such as gasoline.

Propane is stored as a liquid in pressurized fuel tanks rated to 300 psi. So, LPG conversions consist of installing a separate fuel system (if the vehicle will use both conventional fuel and LPG) or a replacement fuel system (LPG-only operation).

Converting a vehicle to use LPG can cost $6,000 to $12,000. However, this cost may be recovered in lower fuel and maintenance costs.

Propane fuel refers to liquefied petroleum gas that makes it one of the most viable alternative fuels. In fact, it is a high-energy and clean-burning fuel that offers many benefits to the automotive industry.

Emissions

On average, the greenhouse gasses reduction from propane fuel is around 10% relative to gasoline.

Cost-Benefit Ratio

On the flip side, propone vehicles are, in fact, quite expensive compared to gasoline vehicles.

 

Take-Away

These are fuels that will either be stopgaps on our way to cleaner burning fuels or may take a lead in powering our future. As we’re on this path, the increased demand for some or waning demand for others provides opportunity in all the surrounding aspects, of the fuels.

 

Suggested Reading:

Investment Opportunities in Hydrogen
The Future of Electric Vehicles

Ford's Announcement is Another Reason for Copper Investors to Smile
Raw Materials and Scalability of Tesla’s Vision

 

Sources:

https://afdc.energy.gov/fuels/

https://www.nap.edu/read/1889/chapter/14#390

https://www.inspirecleanenergy.com/blog/clean-energy-101/types-of-alternative-energy

https://www.globenewswire.com/news-release/2021/02/10/2173513/0/en/Electric-Vehicles-market-Demand-to-Be-Twofold-in-the-Next-Five-Years-with-a-strong-CAGR-of-10-6-during-forecast-period-2021-2027.html

 

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