9
Other Alternative Fuel Options

This report has focused so far on the major part of the panel’s statement of task, namely, liquid fuels for transportation that use biomass and coal as feedstocks. To address the requirement of the statement of task regarding competitive fuels, the panel reviewed other potential fuels that could be available over the next 25 years. This final chapter briefly discusses other fuel technologies and their advantages and disadvantages. Compressed natural gas (CNG) is reviewed first, and then liquid fuels that can be produced from syngas, including gas-to-liquid (GTL) diesel, dimethyl ether, and methanol. The chapter discusses technology implications of using hydrogen in fuel-cell-powered vehicles.

Chapter 4 discussed how coal or coal and biomass gasification produces syngas, which can be converted to diesel and gasoline or to methanol, which can be converted to gasoline. Syngas can also be produced by reforming natural gas. Only if large supplies of inexpensive domestic natural gas were available—for example, from natural-gas hydrates—would the United States be likely to use natural gas as feedstock for transportation-fuel production. Chapter 4 discussed how methanol can be produced from coal synthesis gas, but the panel believes that the best approach is to convert synthesis gas to methanol and use methanol-to-gasoline technology to produce gasoline, which fits directly into the existing U.S. fuel-delivery infrastructure. Hydrogen has the potential to reduce U.S. greenhouse gas emissions and oil use, as discussed in two recent National Research Council reports, Transitions to Alternative Transportation Technologies—A Focus on Hydrogen (NRC, 2008) and The Hydrogen Economy: Opportunities, Costs, Barriers, and R&D Needs (NRC, 2004); but it is a long-term option.



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9 Other Alternative Fuel Options T his report has focused so far on the major part of the panel’s statement of task, namely, liquid fuels for transportation that use biomass and coal as feedstocks. To address the requirement of the statement of task regarding competitive fuels, the panel reviewed other potential fuels that could be available over the next 25 years. This final chapter briefly discusses other fuel technolo- gies and their advantages and disadvantages. Compressed natural gas (CNG) is reviewed first, and then liquid fuels that can be produced from syngas, including gas-to-liquid (GTL) diesel, dimethyl ether, and methanol. The chapter discusses technology implications of using hydrogen in fuel-cell-powered vehicles. Chapter 4 discussed how coal or coal and biomass gasification produces syngas, which can be converted to diesel and gasoline or to methanol, which can be converted to gasoline. Syngas can also be produced by reforming natural gas. Only if large supplies of inexpensive domestic natural gas were available—for example, from natural-gas hydrates—would the United States be likely to use nat- ural gas as feedstock for transportation-fuel production. Chapter 4 discussed how methanol can be produced from coal synthesis gas, but the panel believes that the best approach is to convert synthesis gas to methanol and use methanol-to- gasoline technology to produce gasoline, which fits directly into the existing U.S. fuel-delivery infrastructure. Hydrogen has the potential to reduce U.S. greenhouse gas emissions and oil use, as discussed in two recent National Research Coun- cil reports, Transitions to Alternative Transportation Technologies—A Focus on Hydrogen (NRC, 2008) and The Hydrogen Economy: Opportunities, Costs, Bar- riers, and R&D Needs (NRC, 2004); but it is a long-term option. 

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 Liquid Transportation Fuels from Coal and Biomass COMPRESSED NATURAL GAS In 2007, the main U.S. uses for natural gas were apportioned as follows: elec- tric-power generation, 30 percent; industrial use, 29 percent; residential use, 20 percent; and commercial use, 13 percent (EIA, 2008). Only 0.11 percent was used as fuel in transportation vehicles. It is the primary feedstock for fertilizers and pet- rochemicals. The cleanest and most efficient hydrocarbon fuel, natural gas is envi- ronmentally superior to coal for electric-power generation, and for similar reasons it could be a sound choice for transportation fuels. The chapter on fossil fuel of the report America’s Energy Future: Technology and Transformation (NAS-NAE-NRC, 2009) provides estimates of U.S. natural gas resources. Current natural-gas consumption needs are met mainly by domestic production. A switch to natural gas for a large segment of U.S. transportation use would probably trigger increased importation of natural gas or fuels produced from natural gas. Technologies for producing transportation fuels from natural gas are ready for deployment by 2020. If natural gas were used for transportation instead of for electricity, there would be a potential to supply roughly one-fifth to one-fourth of transportation needs from North American natural-gas reserves, but only with investment in distribution infrastructure. Supplying more would require importing natural gas. Compressed natural gas fuels natural-gas vehicles (NGVs). Natural gas is not a liquid fuel and it must be compressed to supply sufficient fuel for a vehicle. In 2008, there were more than 150,000 NGVs and 1,500 NGV fueling stations in the United States. Natural gas is sold in gallons of gasoline equivalent; a gal- lon of gasoline equivalent has the same energy content (124,800 Btu) as a gallon of gasoline. NGVs are more expensive than hybrid or gasoline vehicles. The Civic GX NGV has a manufacturer’s suggested retail price of $24,590 compared with $22,600 for the hybrid sedan and $15,010 for the regular sedan (Rock, 2008). Of all the fossil fuels, natural gas produces the least carbon dioxide (CO2) when burned because it contains the lowest carbon:hydrogen ratio. It also releases smaller amounts of criteria air pollutants. NGVs emit unburned methane (which has a higher greenhouse forcing potential than CO2), but this may be compensated for by the substantial reduction in CO2 emission. Dedicated NGVs emit less car- bon monoxide (CO), nonmethane organic gas, nitrogen oxides (NOx), and CO2 than do gasoline vehicles.

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Other Alternative Fuel Options  Natural-gas engines are more fuel-efficient than gasoline engines. The main benefit of CNG in the past was its low price (about 80 percent that of gasoline on the gallons of gasoline equivalent basis). Transport and distribution of natural gas are relatively inexpensive because the infrastructure for industrial and household use already exists (Yborra, 2006). Despite a possibly advantageous fuel-supply situation, NGVs still have a lot of hurdles to overcome. The two main challenges faced by NGVs are insufficient refueling stations and inconvenient on-board CNG tanks that take up most of the trunk space. An NGV market can be analyzed by using the vehicle-to-refueling- station index, defined as the ratio of the number of NGVs (in thousands) to the number of natural-gas refueling stations. According to Yeh (2007), “using tech- niques including consumer preference surveys and travel time/distance simulations, it has been found out that the sustainable growth of alternative fuel vehicles . . . during the transition from initial market development to a mature market requires the number of alternative-fuel refueling stations be a minimum of 10 to 20 per- cent of the number available for conventional gasoline stations.” A thriving NGV market tends to have an index of 1; this gives rise to a problem: new stations are not being opened because of the lack of users, but few people use NGVs because of the lack of refueling stations. A key disadvantage of NGVs is their low range. The average range of a gasoline or diesel vehicle is 400 miles, and the range of an NGV is only 100–150 miles, depending on the natural-gas compression. Because of the dearth of natu- ral-gas refueling stations, the current prevalent choice is to use a bifuel NGV that can run on both natural gas and gasoline. The problems associated with bifuel engines include slightly less acceleration and about 10 percent less power than a dedicated NGV because bifuel engines are not optimized to work on natural gas. Furthermore, warranties on new gasoline vehicles are severely reduced if they are converted to bifuel NGVs. The most important barriers for NGVs might be a pub- lic perception that CNG is a dangerous explosive to have on one’s vehicle and a perception that self-service refueling with a high-pressure gas is too risky to offer to the general public. About 22 percent of all new public-transit bus orders are for NGVs. Buses and corporate-fleet cars that stay in town have been the main market for NGVs, and both uses are mainly in response to the Clean-Fuel Fleet Program set up by the Environmental Protection Agency to reduce air pollution.

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 Liquid Transportation Fuels from Coal and Biomass ALTERNATIVE DIESEL Syngas-production technology has been discussed in the context of coal-to-liquid (CTL) fuels. The GTL process for producing diesel is similar to the indirect liq- uefaction of coal. Instead of producing syngas via gasification of coal or coal and biomass, the syngas is produced by steam reforming of natural gas. As with CTL, synthesis gas can be converted to a distillate and wax with a catalytic modification of the Fischer-Tropsch process1 discussed in Chapter 4. The distillate and wax are hydrocracked to produce high-quality diesel and naphtha, as well as other streams that form the basis of such specialty products as synthetic lubricants. Although it is technically difficult, the naphtha can also be upgraded to gasoline. Naphtha is an ideal feedstock for the manufacture of chemical building blocks (for example, ethylene), and GTL diesel is a high-quality automotive fuel or blending stock (Johnson-Matthey, 2006). GTL is an option for producing diesel from “stranded” natural gas like that which exits in the Middle East and Russia. However, a couple of those plants would begin to swamp the chemical naphtha market with material. Hypothetically, converting natural gas to GTL diesel has several advantages over the use of CNG. All diesel vehicles can run on GTL diesel, and this gives gas producers access to new market opportunities. The range of diesel vehicles is much higher than that of NGVs because of diesel’s higher fuel density. Engine effi- ciency and performance are not compromised by the adjustment for GTL diesel. GTL diesel can be shipped in normal tankers and unloaded at ordinary ports (The Economist, 2006). There are several commercial GTL plants, including those of Sasol in Nigeria and Qatar and Shell in Malaysia and Qatar that produce GTL diesel; and a num- ber of companies, including World GTL and ConocoPhillips, have plans to build GTL plants in the next several years. The economics of GTL plants are closely tied to the price of natural gas, and their viability depends on inexpensive stranded gas. GTL diesel is viewed mainly as an alternative to liquefied natural gas for monetizing associated natural gas or large natural-gas accumulations like the one in Qatar. The high cost of producing GTL makes it unlikely that GTL processes 1Most evaluations of CTL assume the use of iron-based Fischer-Tropsch catalysts largely be- cause of impurities. GTL typically uses rhodium-based catalysts that do not have the poor selec- tivity of the iron-based catalysts and do not produce olefinic stocks.

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Other Alternative Fuel Options  will be developed in the United States unless an abundant and inexpensive source of natural gas, such as natural-gas hydrates, is found. METHANOL Methanol, an alcohol, is a liquid that can be used in internal-combustion engines to power vehicles. During the late 1980s, it was seen as a route to diversifying the fuels for the U.S. transportation system by converting natural gas from remote fields around the world to methanol and transporting the methanol to the United States to be used in the transportation system. That strategy was seen by energy planners as a way to convert what was cheap remote natural gas (around $1.00 per thousand cubic feet) to a marketable product. Today, it is used mainly as a commodity chemical and is produced primarily from natural gas. Methanol has a higher octane rating than gasoline and is therefore a suit- able neat fuel (that is, 100 percent methanol) for internal-combustion engines (for example, in racing cars). In practical terms, the penetration of methanol into a transportation system for light-duty vehicles that are fueled mainly by gasoline would require the construction of a distribution system and the use of flexible-fuel vehicles that could run on a mixture of gasoline and methanol. The use of a mix- ture of 85 percent methanol and gasoline (M85) would avoid the cold-start prob- lem caused by methanol’s low volatility, but methanol has about half the energy density of gasoline, and this affects the range that a vehicle can achieve on a full tank of fuel. Other drawbacks of methanol include its corrosivity, hydrophilicity, and toxicity. Methanol can cause various harmful effects to human health, includ- ing blindness and death if ingested, absorbed through the skin, or inhaled (Fisher Scientific, 2008). It would present substantial environmental, safety, health, and liability issues for station owners if it were introduced on a wide scale. One means of avoiding the infrastructure would be to convert the methanol to gasoline. DIMETHYL ETHER Dimethyl ether (DME) is a liquid fuel, at low pressure, with properties similar to those of liquefied petroleum gas. When burned, it produces less CO and CO2 than gasoline and diesel do because of its lower carbon:hydrogen ratio. DME contains oxygen, so it requires a lower air:fuel ratio than gasoline and diesel do. DME has

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 Liquid Transportation Fuels from Coal and Biomass a higher thermal efficiency than diesel fuel, so it could enable higher-efficiency engine design. The presence of oxygen in the structure of DME minimizes soot formation (Arcoumanis et al., 2008). Other exhaust emissions—such as unburned hydrocarbons, NOx, and particulate matter—are also reduced. The California Air Resources Board emission standards for automotive fuel are surpassed by DME; it is an ultraclean fuel. At present, the preferred route and most cost-effective method for producing DME is through the dehydrogenation of methanol from synthesis gas, which is a mixture of CO and hydrogen. The basic steps for producing DME are as follows: 1. Syngas production by steam reforming of natural gas or by partial oxi- dation of coal, oil residue, biomass, or a combination of those. 2. Methanol synthesis with the use of copper-based or zinc oxide catalysts. 3. Methanol dehydrogenation to DME with the use of a zeolite-based catalyst. The DME fuel produced is unsuitable for spark-ignition engines because of its high cetane number, but it can fuel a diesel engine with little modification. DME has properties similar to those of GTL diesel, including (Yao et al., 2006; Arcoumanis et al., 2008; Kim et al., 2008) good cold-flow properties, low sulfate content, and low combustion noise. The principal advantage of using DME as an automotive fuel is that it is a clean-burning fuel that is easy to handle and store. It has thermal efficiency and ignitability similar to those of conventional diesel. As in the case of other potential alternative fuels, the primary challenge to the use of DME as an automotive fuel is the need for an infrastructure for its distribution. Disadvantages of using DME include low viscosity, poor lubricity, a propensity to swell rubber and cause leaks, and a heating value lower than that of conventional diesel. HYDROGEN Hydrogen, like electricity, is an energy carrier that can be generated from a wide variety of sources, including nuclear energy, renewable energy, and fossil fuels. Hydrogen also can be made from water via the process of electrolysis, although this appears to be more expensive than reforming natural gas. Used in vehicles, both hydrogen and electricity make efficient use of energy compared with liquid-

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Other Alternative Fuel Options  fuel options on a well-to-wheel basis. As generally envisioned, hydrogen would generate electricity in a fuel cell, and the vehicle would be powered by an electric motor.2 Developments in battery technology that may make plug-in hybrid electric and all-electric vehicles feasible will be discussed in several forthcoming National Research Council reports. Hydrogen fuel-cell vehicle (HFCV) technology has progressed rapidly over the last several years, and large numbers of such vehicles could be introduced by 2015. Current HFCVs are very expensive because they are largely hand-built. For example, in 2008, Honda released a small number of HFCVs named FCX Clarity which cost several hundred thousands of dollars to produce (Fackler, 2008). How- ever, technological improvements and economies of scale brought about by mass production should greatly reduce costs. This section provides a synopsis of the National Research Council report Transitions to Alternative Transportation Technologies—A Focus on Hydrogen (NRC, 2008), by the Committee on Assessment of Resource Needs for Fuel Cell and Hydrogen Technologies. That committee concluded that the maximum practi- cal number of HFCVs that could be operating in 2020 would be about 2 million, among 280 million light-duty vehicles in the United States. By about 2023, as costs of the vehicles and hydrogen drop, HFCVs could become competitive on a life-cycle basis. Their number could grow rapidly thereafter to about 25 million by 2030, and by 2050 they could account for more than 80 percent of new vehicles entering the U.S. light-duty vehicle market. Those numbers are not predictions by that committee but rather a scenario based on an estimate of the maximum pen- etration rate if it is assumed that technical goals are met, that consumers readily accept HFCVs, and that policy instruments are in place to drive the introduction of hydrogen fuel and HFCVs through the market transition period. The scenario would require that automobile manufacturers increase produc- tion of HFCVs even while they cost much more than conventional vehicles and that investments be made to build and operate hydrogen fueling stations even while the market for hydrogen is very small. Substantial government actions and assistance would be needed to support such a transition to HFCVs by 2020 2Hydrogen also can be burned in an internal combustion engine (ICE), but the overall effi- ciency is much lower than that with a combination of fuel cells and a motor. It would be difficult to store enough hydrogen onboard to give an all-hydrogen ICE vehicle an acceptable range. The BMW hydrogen ICE also can use gasoline.

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 Liquid Transportation Fuels from Coal and Biomass even with continued technical progress in fuel-cell and hydrogen-production technologies. A large per-vehicle subsidy would be needed in the early years of the transi- tion, but the number of vehicles per year would be low (Box 9.1) (NRC, 2008). Subsidies per vehicle would decline with fuel-cell costs, which are expected to drop rapidly with improved technology and economies of scale. By about 2025, an HFCV would cost only slightly more than an equivalent gasoline vehicle. Annual expenditures to support the commercial introduction of HFCVs would increase from about $3 billion in 2015 to $8 billion in 2023, at which point more than 1 million HFCVs could be joining the U.S. fleet annually. The cost of hydro- gen also would drop rapidly, and, because the HFCV would be more efficient, it would cost less per mile to drive it than to drive the gasoline vehicle in about 2020. Combining vehicle and driving costs suggests that the HFCV would have lower life-cycle costs starting in about 2023. After that, there would be a net pay- off to the country, which cumulatively would balance the prior subsidies by about 2028. Substantial and sustained research and development (R&D) programs will be required to reduce the costs and improve the durability of fuel cells, develop new onboard hydrogen-storage technologies, and reduce hydrogen production costs. R&D investments are shown in Box 9.1. These programs should continue after BOX 9.1 Costs of Implementing Hydrogen Fuel-Cell Vehicles According to NRC (2008) Scenarios By 2023 (breakeven year), the government will have spent about $55 billion: $40 billion for the incremental cost of HFCVs. $8 billion for the initial deployment of hydrogen-supply infrastructure. $5 billion for research and development. There would be 5.6 million HFCVs operating. By 2050, There would be more than 200 million HFCVs operating. There would be 180,000 hydrogen stations. There would be 210 central hydrogen-production plants. There would be 80,000 miles of pipeline. Industry would have profitably spent about $400 billion on hydrogen infrastructure.

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Other Alternative Fuel Options  2023 to reduce costs and improve performance further, but the committee did not estimate that funding. The 2008 National Research Council study determined the consequent reductions in U.S. oil consumption and greenhouse gas emissions that could be expected in this scenario. HFCVs can yield large and sustained reductions in U.S. oil consumption and greenhouse gas emissions, but several decades will be needed to realize those potential long-term benefits. Figure 9.1 compares the oil consump- tion that would be required in this scenario with a reference case based on Energy Information Administration high oil-price projections, which include the recent increases in corporate average fuel economy standards. By 2050, HFCVs could reduce oil consumption by two-thirds. Greenhouse gas emissions would follow a similar trajectory if hydrogen produced from coal in large central stations was accompanied by carbon separation and sequestration. The study then compared those reductions with the potential impact of alter- native vehicle technologies (including conventional hybrid-electric vehicles) and 200,000 Million Gallons Gasoline per Year 150,000 100,000 Reference 50,000 Case 1 (H2 Success) 0 2000 2010 2020 2030 2040 2050 Year FIGURE 9.1 Oil consumption with maximum practical penetration of HFCVs compared with reference case. Source: NRC, 2008. ALTF 9-1

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0 Liquid Transportation Fuels from Coal and Biomass 180,000 160,000 Million Gallons Gasoline per Year 140,000 120,000 100,000 80,000 60,000 Reference 40,000 Case 4 (Portfolio) 20,000 0 2000 2010 2020 2030 2040 2050 Year FIGURE 9.2 Oil consumption for combined HFCVs, high-efficiency conventional vehicles, and biofuels compared with reference case. Source: NRC, 2008. ALTF 9-2 biofuels oil consumption and greenhouse as emissions. Over the next 2 decades, those approaches could deliver much greater reductions in U.S. oil use and green- house gas emissions than could HFCVs, but hydrogen offers greater longer-term potential. Thus, the greatest benefits will come from a portfolio of research and development in technologies that would allow the United States to nearly elimi- nate oil use in light-duty vehicles by 2050 (Figure 9.2). Achieving that goal would require substantial new energy-security and environmental-policy actions in addi- tion to technological developments. Broad policies aimed at reducing oil use and greenhouse gas emissions will be useful, but they are unlikely to be adequate to facilitate the rapid introduction of HFCVs.

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Other Alternative Fuel Options  REFERENCES Arcoumanis, C., C. Bae, R. Crookes, and E. Kinoshita. 2008. The potential of di-methyl ether (DME) as an alternative fuel for compression-ignition engines: A review. Fuel 87:1014-1030. Economist, The. 2006. Arabian alchemy. Vol. 379, Issue 8480, 00130613, June 3. EIA (Energy Information Administration). 2008. Natural gas consumption by end use. Available at http://tonto.eia.doe.gov/dnav/ng/ng_cons_sum_dcu_nus_m.htm. Accessed December 4, 2008. Fackler, M. 2008. Latest Honda runs on hydrogen, not petroleum. New York Times, June 17. Available at http://www.nytimes.com/2008/06/17/business/worldbusiness/17fuelcell. html?_r=1&oref=slogin. Accessed August 28, 2008. Fisher Scientific. 2008. Material Safety Data Sheet: Methanol. Available at http://fscimage. fishersci.com/msds/14280.htm. Accessed February 3, 2009. Johnson-Matthey. 2006. Reducing emissions through gas to liquids technology. Available at http://ect.jmcatalysts.com/pdfs/Reducingemissionartp2-3.pdf. Accessed October 20, 2008. Kim, M.Y., S.H.Yoon, B.W. Ryu, and C.S. Lee. 2008. Combustion and emission character- istics of DME as an alternative fuel for compression ignition engines with a high pres- sure injection system. Fuel 87:2779-2786. NAS-NAE-NRC (National Academy of Sciences-National Academy of Engineering- National Research Council). 2009. America’s Energy Future: Technology and Transformation. Washington, D.C.: The National Academies Press. NRC (National Research Council). 2004. The Hydrogen Economy: Opportunities, Costs, Barriers, and R&D Needs. Washington, D.C.: The National Academies Press. NRC. 2008. Transitions to Alternative Transportation Technologies—A Focus on Hydrogen. Washington, D.C.: The National Academies Press. Rock, B. 2008. An overview of 2007 American 2007 natural gas vehicles. Helium, Inc. Available at http://www.helium.com/items/451632-an-overviewof-2007-american- 2007-natural-gas-vehicles. Accessed September 2, 2008. Yao, M., Z. Chen, Z. Zheng, B. Zhang, and Y. Xing. 2006. Study on the controlling strate- gies of homogeneous charge compression ignition combustion with fuel of dimethyl ether and methanol. Fuel 85:2046-2056. Yborra, S. 2006. Taking a second look at the natural gas vehicle. American Gas (August/ September):32-36. Yeh, S. 2007. An empirical analysis on the adoption of alternative fuel vehicles: The case of natural gas vehicles. Energy Policy 35:5865-5875.

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