DALLAS — “It’s going to be messy.”
That comment from a panelist at the Fuels Institute’s Fuels2019 conference, held May 21-23 in Dallas, sums up the path from today’s fossil fuel-dominated transportation infrastructure to an electrified, autonomous future.
More than 150 attendees, including fuel retailers and producers, vehicle manufacturers, government agencies and mobility experts, gathered for the event. They listened to a series of presentations and panels on the outlook for liquid fuels, electric vehicles (EVs) and mobility. But despite the wealth of information and off-the-record viewpoints—or perhaps because of it—at least a few attendees admitted to going home “with more questions than answers” about the future of transportation.
That said, a few truths seemed evident about the transition ahead. They include …
Government can push, but consumers need to pull
Whether it was a discussion about how the Renewable Fuel Standard has supported the development of biofuels, or state zero-emission-vehicle mandates or incentives to install electric-vehicle charging stations, the government has several tools to encourage and accelerate change in transportation fueling.
But consumers must want the alternative to gasoline or diesel. While in some cases it may mean a financial incentive, in most it requires more education about the benefits of the alternative. Case in point: EVs, which despite their higher up-front cost, have a lower cost of ownership compared to internal combustion engine-powered vehicles. But they have struggled to gain traction in the United States because they require consumers to think differently about fuel costs.
Breaking alternative fuels’ dependence on high oil prices is critical
As any automaker can testify, consumer interest in smaller, more fuel-efficient vehicles drops along with oil and gasoline prices. As prices rise, so does demand for EVs and hybrids. But fleet owners—especially large ones with huge fuel needs and expenses—need to have a longer-term vision. “We are trying to avoid the cycle of interest in alternative fuels,” one fleet owner observed at the Fuels2019 conference.
Instead, they and the alternative fuel industry aim to double down during these low oil-price periods on improving production costs to make alternatives financially sustainable on their own.
The writing is on the wall for the internal combustion engine
The internal combustion engine (ICE) is not dead—yet. Engineers continue to squeeze greater fuel efficiency out of the ICE, although each improvement is coming at a higher cost.
Meanwhile, as the rounds of layoffs at General Motors and Ford show, original equipment manufacturers are shifting their investments toward electrification—at the expense of ICE improvements.
Nobody is making money from selling EV charging—yet
This refrain—that EV charging does not currently turn a profit or have a business case—was heard a few times throughout the conference, including from those with a vested interest in EVs’ success.
One issue is that the current demand-charge model—in which utilities charge electricity consumers much higher rates during periods of peak of demand—has made reselling electrons a money-losing venture for many providers of EV charging. And a general lack of price transparency for electricity compared to gasoline and diesel has complicated the picture.
Fleets and fuel retailers who have invested in EV charging have pledged to stick with it, however, confident it will become the new norm.
There is no magic bullet for cutting carbon emissions
Although electrification has the spotlight when it comes to tackling rising greenhouse gas emissions, it cannot currently handle every transportation need—especially in the long-haul, heavy-duty space. Other alternatives such as compressed and renewable natural gas, biodiesel, propane and hydrogen fuel cells can shoulder these needs today. But they all have their trade-offs, and the “right fuel” is often dependent on timing and individual circumstances.
But in the absence of a larger U.S. federal policy on carbon reductions, it has fallen to the private sector and states to feel their way forward. As one fuel retailer commented, “There are no clear answers unless the government makes the decision for everyone.”