5
Distribution

The final stage in supplying any fuel is distribution to users. Gasoline and diesel fuels benefit from a well-established distribution system that cost-effectively makes them available for customers to purchase individually at service stations and for vehicle fleets at refueling stations. In 2008, about 160,000 refueling stations in the United States supplied several grades of gasoline and sometimes diesel. The distribution system meets the demand for gasoline with varied octane (antiknock) ratings, whose composition varies seasonally to compensate for changes in ambient temperature and because of fuel requirements related to air-quality control. Diesel fuel also varies seasonally in composition because of cold-weather requirements.

The biofuel that is most available and most used today is ethanol, which accounts for nearly 6 percent of U.S. gasoline use by volume and 4 percent by energy content. The supply of ethanol is expected to increase steadily over the next decade and beyond as a result of the Renewable Fuel Standard as amended in the 2007 U.S. Energy Independence and Security Act (EISA). One of the important challenges to widespread use of ethanol as a transportation fuel is that it cannot be transported and delivered in existing petroleum-delivery systems (for example, pipelines) because of the incompatibility of materials and water absorption by ethanol in the pipelines. Therefore, this chapter focuses on the transportation and distribution of ethanol. Synthetic gasoline and diesel fuels produced from biomass and coal and future synthetic biofuels, such as biobutanol, are expected to be compatible with the existing infrastructure for petroleum products; distribution costs for these synthetic fuels are expected to be similar to those for petroleum-based fuels. Although their volume is expected to grow over the next decade or



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5 Distribution T he final stage in supplying any fuel is distribution to users. Gasoline and diesel fuels benefit from a well-established distribution system that cost- effectively makes them available for customers to purchase individually at service stations and for vehicle fleets at refueling stations. In 2008, about 160,000 refueling stations in the United States supplied several grades of gasoline and sometimes diesel. The distribution system meets the demand for gasoline with var- ied octane (antiknock) ratings, whose composition varies seasonally to compensate for changes in ambient temperature and because of fuel requirements related to air-quality control. Diesel fuel also varies seasonally in composition because of cold-weather requirements. The biofuel that is most available and most used today is ethanol, which accounts for nearly 6 percent of U.S. gasoline use by volume and 4 percent by energy content. The supply of ethanol is expected to increase steadily over the next decade and beyond as a result of the Renewable Fuel Standard as amended in the 2007 U.S. Energy Independence and Security Act (EISA). One of the important challenges to widespread use of ethanol as a transportation fuel is that it cannot be transported and delivered in existing petroleum-delivery systems (for example, pipelines) because of the incompatibility of materials and water absorption by ethanol in the pipelines. Therefore, this chapter focuses on the transportation and distribution of ethanol. Synthetic gasoline and diesel fuels produced from biomass and coal and future synthetic biofuels, such as biobutanol, are expected to be compatible with the existing infrastructure for petroleum products; distribution costs for these synthetic fuels are expected to be similar to those for petroleum- based fuels. Although their volume is expected to grow over the next decade or 

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 Liquid Transportation Fuels from Coal and Biomass two, the increasing volume could be accommodated incrementally in the existing infrastructure, so it is not explicitly discussed here. In considering ethanol as a transportation fuel, one needs to be aware that ethanol is not a one-to-one replacement for its petroleum-based counterparts. Ethanol contains only two-thirds of the energy of the same volume of gasoline. The corn grain used and the cellulosic biomass to be used to produce ethanol also vary in density and other physical characteristics that affect their costs of transportation from field to conversion plants, as discussed in Chapter 2. Most of the biomass will be produced in the interior of the United States (or from wood in the Northwest). The economics of transporting biomass feedstock versus fin- ished transportation fuel favor biorefineries in the Midwest, but 80 percent of the U.S. population—representing the largest current and future transportation-fuel markets—lives along the coasts. Figure 5.1 maps existing biorefineries and those Average Population Biorefineries in Production (139) Per Square Mile Biorefineries Under Construction (62) 500.0 or more 200.0–499.9 BG-9000 Producers Biodiesel Plants (171 Plants Total) Million Gallons per Year Million Gallons per Year 85.4–199.9 U.S. Density 85.4 Greater than 20.0 Greater than 20.0 50.0–85.3 5.1–20.0 5.1–20.0 Less than 50.0 5.0 and less 5.0 and less FIGURE 5.1 U.S. ethanol and biodiesel plant locations compared with state population density as of July 1, 2007. Source: Adapted from NBB (2007), U.S. Census Bureau (2007), and RFA (2008). ALTF 5-1

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Distribution  under construction that produce ethanol and biodiesel relative to U.S. state popu- lation densities. As discussed later in this chapter, there is an ethanol-compatible infrastructure for transporting ethanol to markets today for the relatively small volumes produced. However, if the ethanol markets increase rapidly over the next decade, the lack of delivery capacity and the complexity of constructing it will challenge the industry. As of 2008, most of the ethanol produced is blended in gasoline at up to 10 percent by volume; such ethanol-containing gasoline is designated E10. There are few outlets for higher ethanol blends, such as E85; close to 15 percent gasoline (by volume) is blended with pure ethanol for several reasons, for example, to improve vehicle cold-starting. If E10 fuels were sold at every refueling station in the United States, about 15 billion gallons of ethanol would be consumed each year. If the United States plans to produce about 40 billion gallons of cellulosic ethanol each year to improve energy security and to reduce carbon emissions, the number of E85 refueling stations will have to be increased to more than the 1900 stations that exist in 2008. ETHANOL TRANSPORTATION More than two-thirds of the quantity of U.S. petroleum products is shipped via pipeline, and the rest via barge (27 percent), truck (3 percent), or rail (2 percent) (Booz Allen Hamilton, 2007). Ethanol is not compatible with existing petroleum pipelines; it can damage pipeline seals and other equipment and even induce crack- ing in pipeline steel (Farrell et al., 2007). The pipeline industry, however, is consid- ering dedicated pipeline for ethanol as an option (as discussed later in this chapter). A typical ethanol-distribution system is shown in Figure 5.2. Typical ethanol transportation fuels are E10 and E85. As shown in the figure, truck transporta- tion is the critical last step in the system (transportation from blender to fueling station). It is unlikely that any other mode of transportation will replace trucks at this stage in the distribution system, because trucks are the most economical mode of short-range transportation. If larger volumes are to be carried between biorefineries and blending sta- tions, however, there could be several competing modes. A next-generation etha- nol plant taking in 4 million tons of biomass per year would produce 30,000 bbl of ethanol per day. One inland barge would transport about 30,000 bbl (1.3 mil- lion gallons) of denatured ethanol, one railroad car about 750 bbl (33,000 gal),

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 Liquid Transportation Fuels from Coal and Biomass Gasoline Gasoline Retail Outlet Retail Outlet E10 or E85 via Truck E10 or E85 via Truck Terminal for E95 Fuel Blending via Truck & Storage Terminal for E95 Fuel Blending via Rail & Storage Ethanol Plant or Biorefinery Grain Farm Cooperative Neighboring Farms FIGURE 5.2 Schematic of land-based truck and rail ethanol-distribution system. Source: USDA-AMS, 2007. ALTF 5-2

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Distribution  TABLE 5.1 Ethanol-Transportation Costs, by Mode of Transportation Mode of Transportation Truck Rail Barge Loading and unloading $0.02/gal $0.015/gal $0.015/gal Time-dependent $32/h per truckload Not applicable Not applicable Fixed cost Not applicable $8.80/100 gal $1.40/100 gal Distance-dependent $1.3/mile per truckload $0.0075/mile per 100 gal $0.015/mile per 100 gal Truck capacity 8,000 gal 33,000 gal 1.26 million gallons Source: Adapted from Jenkins et al., 2008. and one truck about 200 bbl (8,000 gal) (USDA-AMS, 2007). For comparison, a 12-inch pipeline could move up to 100,000 bbl (4.2 million gallons) per day. The cost of transportation and distribution is a substantial component of the total cost of ethanol. In the United States, ethanol is carried from biorefineries to staging1 and blending2 terminals and then to fueling stations by trains, trucks, and barges. Table 5.1 lists estimated costs associated with shipping ethanol via truck, rail, or barge (Jenkins et al., 2008). The cost of transporting petroleum fuels from refineries to fueling stations is about $0.03-0.05/gal, whereas the combined cost of transporting ethanol from production plants to fueling stations is estimated to be $0.13–0.18/gal (Morrow et al., 2006; GAO, 2007). However, as discussed later, the costs of ethanol transportation could be considerably higher if the delivery sys- tem is not optimized. Trucks Trucking of fuel ethanol is the most efficient and cost-effective transportation mode for distances up to about 300 miles (Reynolds, 2002). Transportation costs for longer distances are much higher, $0.20/gal. A typical transport truck can carry about 8,000 gal/load (Reynolds, 2002). Increasing the amount of E10 or E85 fuel distributed would require increases in the number of transport trucks. Today, for every 10 trucks transporting E10 fuel from a blending terminal to a fueling station, there is one truck carrying dena- 1Terminal where smaller shipments of ethanol are received and held until there is sufficient fuel to transport. 2Terminal where fuel-grade ethanol is blended with gasoline. Typical blends are E10 and E85.

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0 Liquid Transportation Fuels from Coal and Biomass tured ethanol to a blending terminal. Expanded E85 distribution would require 8.5 truckloads of fuel ethanol for every 10 trucks leaving the blending terminal (API, 2008). The most pressing constraint on increasing ethanol transportation is the industry-wide shortage of drivers of long-haul, heavy-duty trucks, especially drivers with HAZMAT certification. The truck-transportation industry is already experiencing a shortage of drivers, and the imbalance between driver demand and working truck drivers is predicted to grow to more than 100,000 by 2014 (Ameri- can Trucking Associations, 2005). Barges Ethanol transportation via barge or ship is limited to locations near large water- ways, so only about 10 percent of the ethanol produced in the United States is transported by barges (USDA-AMS, 2007). Barges can, however, transport a large volume of ethanol in a single shipment. Inland tank barges, for example, can transport 1 million gallons of ethanol (USDA-AMS, 2007). Larger, ocean-faring ships and barges can transport about 1–12 million gallons of ethanol, depending on the size of the vessel and the final destination. Inland barges transport ethanol down the upper Mississippi River to staging terminals below the river’s navigation locks. Larger barges or ships that transport ethanol between staging facilities on the lower Mississippi and blending terminals on the West Coast require passage through the Panama Canal and take about 34 days to make the trip. Transporta- tion times to East Coast locations take about 24 days (Reynolds, 2002). Ship- ments to the densely populated Northeast coast add $0.10–0.12/gal3 to the price of ethanol (Reynolds, 2002). Funding to increase the size of the 1930s-built upper Mississippi navigation- lock system was approved in November 2007. The expansion from 600-ft locks to 1200-ft locks will open the upper Mississippi to larger modern barges. Increased barge and ship transportation will also require more and larger multipurpose stag- ing facilities along waterways. Such intermodal facilities will be able to accept and quickly unload ethanol arriving by barge, rail, and truck from the Midwest and then distribute it by the most economical mode of transportation (truck, train, or barge or ship). 3$0.02–0.04/gal for ship or ocean barge shipments, and $0.08–0.16/gal for inland barge shipments.

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Distribution  TABLE 5.2 Costs of Ethanol Transportation Between Southwest Iowa to Illinois and from Southwest Iowa to California or the Louisiana Basin via Unit Train, Gathered Train, or Single Car Unit Traina Gathered Trainb Single Car Route $/car Southwest Iowa to Illinois 2100 2500 2900 Southwest Iowa to California or 3900 4400 5300 Louisiana Basin $/gal Southwest Iowa to Illinois 0.07 0.09 0.10 Southwest Iowa to California or 0.13 0.15 0.18 Louisiana Basin a95-carethanol train originating at one plant. bEthanol train originating at two or three plants. Source: BNSF Railway Company, 2007. Rail Trains currently transport most fuel ethanol from biorefineries to blending ter- minals throughout the United States. Unit trains4 are the most economical and efficient mode of transportation (see Table 5.2). Typical unit-train turnaround time for delivery from the Midwest to coastal blending terminals is about 6 wk. However, if a biorefinery has insufficient capacity to fill a unit train, a single- commodity train can gather ethanol from several biorefineries, or it can be shipped in a single car as part of a multicargo train. In those cases, assembly and disassembly increase the delivery time and cost. Because the costs and time for transporting ethanol via rail and barge are similar (Table 5.1), the main benefit of marine cargo transport is the ease of unloading at the destination because of its high volume (Reynolds, 2002). As of January 1, 2007, 41,000 rail tank cars capable of shipping ethanol were in use (USDA-AMS, 2007). Existing rail capacity can accommodate current ethanol transportation demand, but increases in ethanol production will lead to a possible railcar shortage. Railcar manufacturers have a 1.5-yr backlog of tank-car orders, and shortages are expected to continue for the next few years because of the steep rise in ethanol production (Crooks, 2006). 4A single-commodity train shuttling between a sole point of origin and a sole destination.

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 Liquid Transportation Fuels from Coal and Biomass Pipelines Pipelines are the most economical method for transporting large quantities of liquids over long distances. Shipping fuel through pipelines costs $0.025/gal or less per 1,000 miles (Curley, 2008). Gasoline-transportation costs by the various modes were estimated as follows (Curley, 2008): • Pipeline: $0.015–0.025/gal per 1000 miles. • Barge: $0.04–0.05/gal per 1000 miles. • Train: $0.075–0.125/gal per 1000 miles. • Truck: $0.30–0.40/gal per 1000 miles. Pipelines are not available for commercial biofuel transportation in the United States, although they might have much lower costs. The combination of increased ethanol production and demand with the time, volume, and cost benefits associated with pipeline transportation is spurring interest in overcoming the oper- ational, technical, and economic issues associated with biofuel pipeline transporta- tion. The primary issues associated with such pipeline transportation are these: • Ethanol has a greater affinity for water than does gasoline. • Ethanol is a much better solvent than gasoline. • Ethanol is more corrosive than petroleum products. • Existing pipelines are not near biorefineries. • The practical bounds on the “transmix” (a term that the industry uses for a mixture of immiscible or otherwise incompatible fluids that need to be separated) have yet to be established. Because of its affinity for water, ethanol is hydrated by ambient water from other transported fuels, terminals, and tank roofs as it flows through a multiuse, multipipeline network. Pipelines for transporting traditional petroleum fuels are not airtight, so moisture can get into the pipeline; the small amount of water that enters, however, does not mix with the gasoline and can be easily drained off. Ethanol, in contrast, has a higher affinity for water than does gasoline. Water con- tamination picked up during ethanol transportation will increase the fraction of water above allowable fuel-ethanol specifications, and the fuel will not be able to be sold to consumers. In a blended ethanol-gasoline fuel, once the ethanol absorbs enough water in a pipeline system, the fuel does not stay blended and separates

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Distribution  into an aqueous phase that contains ethanol and water and a gasoline-rich phase. In both cases, ethanol can be recovered from the aqueous phase only by distilla- tion. Fuel ethanol is routinely shipped via pipeline in Brazil, where phase separa- tion is mitigated by first shipping hydrous ethanol and then anhydrous ethanol (Hammel-Smith et al., 2002). Nonetheless, pipeline shipment of ethanol in the United States will require capital investment and involve additional maintenance costs. Because ethanol is a better solvent than petroleum products, transporting ethanol through existing multiuse pipelines dissolves many common polymers in the pipelines and thus contaminates the fuel ethanol. According to ethanol- pipeline testing conducted by Buckeye and Williams Energy Services, frequent dewatering of pipelines,5 closed floater storage tanks, dry storage tanks, inline cor- rosion monitoring, and filtration systems would be required to transport ethanol through multiuse pipelines on a regular basis. Ethanol-only pipelines constructed of ethanol-compatible materials would avoid many contamination issues. How- ever, construction of new pipelines would cost $1–2 million per mile, depending on, for example, right-of-way issues and material and labor costs (GAO, 2007). Costs could be even higher in a tight construction market as existed in the middle of 2008. Another issue associated with the solvent properties of ethanol is an increase in stress-corrosion cracking (SCC) in pipelines in high-stress locations. Cases of SCC have been reported in pipelines, storage tanks, and associated handling equipment at distribution and blending terminals. No cases of SCC have been reported at biorefineries or after blending or in trucks, railcars, or barges (Kane and Maldonado, 2003). Thus, it might be possible to design new pipelines that minimize stress to reduce the possibility of SCC. The pipeline industry throughout the world is seeking solutions to those issues. As Curley (2008) observed in his review of the problem, Since increased ethanol usage is being mandated in autos by the federal government, cheaper ways to transport ethanol are needed. Using an existing pipeline to transport ethanol is likely not practical because all the valves, gaskets, and tank seals on float- ing roofs would need to be checked to see if the construction materials are compatible with ethanol. However, a new multi-products pipeline could easily be designed with ethanol compatible polymers in valves, gaskets, and seals. The steel for the pipeline could be specified to minimize the possibility of stress corrosion cracking (SCC). 5To remove water from pipelines.

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 Liquid Transportation Fuels from Coal and Biomass The main unresolved issue is how to handle the ethanol transmix in a cost-effective manner. If this issue could be resolved, transporting ethanol in a multi-products pipe- line could occur. Nevertheless, a small diameter dedicated ethanol pipeline may be the best alternative since there are no transmix or product quality issues with this alterna- tive. A 4- or 6-inch dedicated pipeline could be placed in the same trench as a new gasoline/diesel pipeline at a relatively low cost. The Brazilians are studying running a small diameter (about 12-inch) carbon steel pipeline from the interior (ethanol production areas) of the country to the east coast of Brazil. Kinder Morgan Energy Partners started up a converted 106-mile-long etha- nol-pipeline test in late 2008. The conversion and cleaning of the petroleum-fuel pipeline included replacing gaskets and rotating element pumps with ones that are compatible with ethanol. Extra pipe scrubbers were sent to remove excess buildup to prevent ethanol from picking up contaminants along the way. The pipeline was used to send pure ethanol that was batched side by side with gasoline going through the pipe. Corrosion inhibitor was to be injected into the entire batch (Gunter, 2008a). In October 2008, Kinder Morgan said that the pipeline test was a success and that clients could start shipping ethanol in the middle of November 2008 (Gunter, 2008b). Retrofitting all existing multipurpose pipelines is likely not practical; how- ever, new multipurpose pipelines could be designed with ethanol-compatible poly- mers in valves, gaskets, and seals and designed to minimize SCC. Laying ethanol- only pipelines next to existing multipurpose pipelines would be more cost-effective than purchasing rights-of-way for new routes. Integration of ethanol into the commercial fuel-shipment schedule with other fuels and fuel grades requires that economical trailback tests6 and transmix- handling procedures be developed. Transporting a biofuel, such as ethanol, directly before or after a conventional petroleum fuel will result in a mixture of ethanol and hydrocarbons that is beyond the acceptable specification for either fuel. The points where the transmix starts and ends are related to the acceptability of trace amounts of fuel contamination (Curley, 2008). The trailback threshold depends on whether low levels of biofuels affect the performance of other fuels, such as avia- tion fuel, and whether the biofuels meet acceptable specification after shipment. 6Trailback refers to the contamination of products in a multipurpose pipeline by additives or residues left on the pipeline walls by ethanol products that were shipped previously. Trailback tests assess the level of contamination in products shipped.

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Distribution  Expansion of the Delivery System As of 2008, delivery of ethanol from plant to refueling station takes place in an existing system of trucks, barges, rail, and central blending plants. The system has expanded incrementally as ethanol production has increased. However, if the large production volumes envisioned by the EISA occur and the majority of ethanol is produced in the Midwest and consumed on the coasts, the delivery infrastructure will have to be expanded considerably. The alternative would be to use ethanol close to where it is produced. Although the cost of delivery is a small portion of the overall ethanol-fuel cost, the logistics and capital requirements for widespread expansion could be substantial hurdles if they are not planned well. Morrow et al. (2006) provided a thorough analysis of the complexities and costs of widespread fuel ethanol expan- sion in the United States. If planning is suitable and fuel ethanol’s cost is competi- tive in the fuel market, the panel believes that the ethanol-delivery infrastructure would be expanded to meet demand. Brazil, where almost all new vehicles sold are capable of using fuel from E20 to E95, provides a good example of how a dis- tribution system for ethanol, the retailing of fuel, and the production of flexible- fuel vehicles could work smoothly without being expensive. The panel cautions that biofuel technologies will probably evolve from etha- nol to biofuels that are more compatible with the existing petroleum infrastruc- ture. Thus, planning for biofuel expansion should consider when biofuels other than ethanol might come onto the market and ensure that the ethanol-delivery infrastructure is not overbuilt and underused. THE MARKET FOR BIOFUELS Consumer acceptance of biofuels will be determined by a combination of favor- able prices relative to those of conventional petroleum products; subsidies and mandates for biofuel; the prevalence of E85 and biodiesel fueling stations (Figure 5.3); and the availability and affordability of flexible-fuel vehicles. Distribution Infrastructure Refueling availability is fundamental to the widespread adoption of alternative fuels. Biofuel-refueling stations must grow beyond niche markets to a density suf- ficient for supporting alternative-fuel vehicles. The number of fueling stations

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 Liquid Transportation Fuels from Coal and Biomass Biodiesel Stations E85 Stations FIGURE 5.3 U.S. biodiesel and E85 fueling-station locations. required to service a community adequately is unknown. However, a recent assess- ALTF 5-3 ment based on urban population density relative to existing petroleum fueling-sta- tion density estimated that about 50,000 stations would provide sufficient cover- age for the general public while providing retail competition between stations. That translates to about 0.5 station per square mile in a city with a population of 500,000 and a population density of 2,000 per square mile. The estimated upper and lower bounds on sufficient urban station coverage are shown in Figure 5.4 (Melaina and Bremson, 2008). Retrofitting existing fueling stations with storage and dispensing equipment compatible with the chemical properties of E85 fuels is often expensive, and some station owners are averse to carrying these biofuels. To retrofit existing fuel- ing stations, underground storage-tank systems, pumps, and dispensers must be converted to be compatible with the higher-ethanol blends. Several issues associ- ated with retrofitting existing fueling stations are similar to those associated with pipeline transportation of ethanol and ethanol blends: phase separation as a result

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Distribution  1.75 y = 0.0148x0.5206 y = 0.0013x0.7921 1.50 New York, NY Washington, DC 1.25 Station Density (spsm) 1.00 Los Angeles, CA San Francisco, CA 0.75 Chicago, IL > 3.0 M 1.0–3.0 M San Diego, CA 0.50 0.5–1.0 M Riverside, CA 0.25–0.5 M Seattle, WA 0.1–0.25 M Indianapolis, IN 0.025–0.1 M 0.25 All Cities Rochester, NY Lower Bound Santa Rosa, CA 0.00 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 Population Density (ppsm) FIGURE 5.4 Estimated sufficient alternative fueling-station coverage relative to urban population density. Upper and lower boundaries are shown. Note: ppsm = persons per square mile; spsm = stations per square mile. ALTF 5-4 Source: Reprinted from Melaina and Bremson, 2008. Copyright 2008, with permission from Elsevier. of hydration, SCC, and contamination as a result of incompatible materials com- monly found throughout conventional fueling stations. Another hurdle in adding E85 capability to fueling stations is the restric- tions placed on branded stations and the ability to obtain insurance (Johnson and Melendez, 2007). Many refining companies that own major gasoline brands do not allow E85 dispensers to be placed under the same canopy as their branded gasoline dispensers. If a branded fueling station wishes to add E85 capacity, a sep- arate canopy must be added. That requirement increases the total cost of an E85 retrofitting project (Johnson and Melendez, 2007).

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 Liquid Transportation Fuels from Coal and Biomass TABLE 5.3 Generalized Costs for Installing New E85 Equipment or Retrofitting Existing Petroleum Equipment to Be Ethanol-Compatible Major Variables Scenario Estimated Cost Description Affecting Cost New tank, new or $50,000–200,000 Includes new Dispenser needs, concrete retrofit dispensers underground work, excavation, sell- storage tank, pump, backs, canopy, tank size, dispensers, piping, location, labor cost, electric, excavation, permitting requirements concrete work Converting existing $2,500–30,000 Tank cleaning, Dispenser needs, number tank, new or retrofit replacement of of incompatible dispensers incompatible components, location, components in piping labor cost, permitting and dispensers requirements Source: NREL, 2008, and references cited therein. The National Renewable Energy Laboratory conducted a survey and litera- ture search on the cost of adding E85-fueling capacity to existing gasoline sta- tions (NREL, 2008). The survey included the costs incurred for 120 E85 stations, 84 of which would have new tanks installed and the remainder would convert existing tanks. Replacing one gasoline dispenser and retrofitting existing storage tanks to carry E85 at an older existing fueling station would cost $1,736–68,000. The installation cost for a new E85-compatible fueling station would be $7,559– 247,000. The generalized costs for retrofitting or building a new E85-compatible fueling station collected from the literature are listed in Table 5.3 (NREL, 2008). The installation or retrofitting costs might not be considered high for some, but they might not be feasible for some individual station owners. Fuel Use by Flexible-Fuel Vehicles As of 2007, there were about 5 million flexible-fuel cars and light trucks in the United States—about 2 percent of the total U.S. fleet. Since their introduction, the number of flex-fuel vehicles7 available has steadily increased. The increase, however, is largely a result of U.S. corporate average fuel economy (CAFE) mile- 7Vehicles are designed to run on ethanol–gasoline blends from E10 up to E85 fuel.

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Distribution  age rating requirements as opposed to the availability of E85 fuel or consumer demand for alternative-fuel vehicles. Building a vehicle capable of running on E85 fuel adds about $100 to its production cost. Flexible-fuel vehicles have upgraded fuel systems with large fuel pumps and injectors that enable them to accommodate the greater fuel volume required for the same energy content as gasoline (Hammel-Smith et al., 2002). The fuel tanks and lines are composed of ethanol-compatible materials. Operating on E85 involves an increase of a few percent in horsepower as a result of extra cool- ing of the in-cylinder air and the higher fuel octane rating, and maximum vehicle acceleration is higher. Because of the lower energy of ethanol relative to gasoline, fuel consumption (in gallons per 100 miles) with ethanol is about 25 percent higher, although overall vehicle efficiency can be up to 5 percent better (West et al., 2007). The attractive antiknock characteristics of ethanol could be used to improve the efficiency with which engines use gasoline in a dual-fuel engine setup (Edmunds, 2008). Encouraging the use of flexible-fuel vehicles and the use of gasoline with a high proportion of ethanol is a complex issue. As discussed earlier in this chap- ter, getting large quantities of those fuels to where the vehicles are can be chal- lenging. In the past, the U.S. Congress mandated that federal agencies gradually increase the number of flexible-fuel vehicles in their fleets, but most purchased vehicles are used in places where flexible fuel is not readily available (Kindy and Keating, 2008). To complicate the issue, many of those flexible-fuel vehicles are large sedans and sport utility vehicles. Because of their large flexible-fuel engines and low fuel efficiency, those vehicles used more gasoline than smaller and more fuel-efficient vehicles (Kindy and Keating, 2008). The simultaneous implementa- tion and market penetration of E85 fuel and flexible-fuel vehicles is an important practical consideration. FINDINGS AND RECOMMENDATIONS Finding 5.1 The need to expand the delivery infrastructure to meet a high volume of etha- nol deployment could delay and limit the penetration of ethanol into the U.S. transportation-fuels market. Replacing a substantial proportion of transportation gasoline with ethanol will require a new infrastructure for its transport and distri-

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0 Liquid Transportation Fuels from Coal and Biomass bution. Although the cost of delivery is a small fraction of the overall fuel-ethanol cost, the logistics and capital requirements for widespread expansion could present many hurdles if they are not planned for well. Recommendation 5.1 The U.S. Department of Energy and the biofuels industry should conduct a comprehensive joint study to identify the infrastructure system requirements of, research and development needs in, and challenges facing the expanding biofuels industry. Consideration should be given to the long-term potential of truck or barge delivery versus the potential of pipeline delivery that is needed to accommo- date increasing volumes of ethanol. The timing and role of advanced biofuels that are compatible with the existing gasoline infrastructure should be factored into the analysis. Finding 5.2 Expansion of the flexible-fuel vehicle fleet needs to be complemented by the pres- ence of ethanol stations close to where the vehicles are used. Past policy that mandated the increased use of alternative-fuel vehicles did not result in reduced gasoline consumption, because ethanol pumps were not readily available in many areas where flexible-fuel vehicles were used. The close coupling of alternative fuels and alternative-fuel vehicles is an important practical consideration. Future policy measures need to take into account implementation of alternative-fuel vehicles, availability of alternative fuels, and proximity of vehicles to fueling stations to ensure an effective vehicle and fuel transition. REFERENCES American Trucking Associations. 2005. The U.S. truck driver shortage: Analysis and fore- casts. Available at http://www.truckline.com/StateIndustry/Pages/DriverShortageReport. aspx. Accessed October 19, 2008. API (American Petroleum Institute). 2008. Shipping Ethanol Through Pipelines. Available at http://www.api.org/aboutoilgas/sectors/pipeline/upload/pipelineethanolshipmentfinal- 3.doc. Accessed October 19, 2008.

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