Though not yet the equal of gasoline and diesel , alternative fuels are beginning to get more attention from fleets

When HEB Grocery of San Antonio, Tex., started purchasing tractor-trailers designed to run on liquefied natural gas (LNG) several years ago, the intent was to brighten its image as a good corporate citizen.

With 260 stores spread throughout Texas, Louisiana and a few towns in Mexico, the $7-billion grocery retailer really didn't figure on saving any money by using dual-fuel engines in 61 of its 1,000 tractor-trailers - engines that run on 90% LNG and 10% diesel. As the state of Texas stepped up air quality improvement efforts to combat rising smog levels, HEB thought using alternative fuels in some of its trucks might be a good way to show support for its home state's efforts.

"We wanted to do our part for cleaner air, plain and simple," says Mike Moynahan, equipment procurement and asset manager for distribution at HEB.

In January 1998, HEB began purchasing 61 Sterling daycab tractors equipped with dual-fuel Caterpillar C-10 and later C-12 engines for its Houston terminal. At $98,500 a pop, the 12th largest grocery chain in the United States figured that was the price it had to pay to do its share for cleaner air.

Then the company made an interesting discovery. Over time, using LNG as a primary vehicle fuel saved the fleet some serious dollars.

Since LNG burns cleaner, HEB found it could increase oil change intervals from 20,000 to 40,000 miles compared to diesel fuel alone, saving $69,235. Based on oil change analysis studies, HEB has now increased that interval to 60,000 miles and believes it can reach 80,000 to 85,000 miles in the near future.

Cleaner-burning engines also meant less maintenance and longer life - an extra $683,200 worth of savings to HEB. Then came the fuel cost savings. After diesel prices skyrocketed, HEB found it saved some $911,889 in fuel costs by using LNG in those 61 trucks.

After taking into account the added expense of buying vehicles equipped with dual-fuel technology, HEB calculated its net savings as $580,842.

"Even though we have to burn more LNG to achieve the same distance from one gallon of diesel -about a 1.68 to 1 ratio - we're saving about 30 cents a mile on fuel cost today," says Moynahan. "That adds up significantly over time."

Those savings completely changed HEB's outlook on using alternative fuels for its tractor-trailer fleet. By the end of this year, HEB hopes to have 184 dual-fuel trucks in its fleet - converting two trucks a month - with a goal of 238 by 2001, 327 in 2002 and 407 by 2003.

Suddenly, using alternative fuels at HEB is no longer about projecting a "green" image to its customers; it's about better economics in fleet operations.

Slow going Despite the success HEB is experiencing, the rest of the trucking industry, as well as the general population, has been slow to use alternative fuels.

Currently, there are about 1-million alternative-fueled vehicles (AFVs) operating in the U.S. That's a drop in the bucket compared to the 12-million medium- and heavy-duty trucks and 188-million light-duty vehicles that travel America's roads. One reason AFVs aren't in wider use is because it's hard to justify their upfront costs. Coupled with a lack of refueling sites nationwide, it's no wonder AFVs remain stuck in neutral.

"In general, alternative fuels have several significant drawbacks," says George Survant, director of fleet services for Florida Power & Light, Juno Beach, Fla. "First, there's no broad-based refueling infrastructure. Second, because alternative fuels are traditionally less efficient than gasoline and diesel, they're a more expensive proposition. Finally, there's the conversion cost. There is no aftermarket for converted vehicles, so you have the cost of converting vehicles to use alternative fuels and then converting them back to run on gasoline and diesel in order to sell them."

The economics of alternative fuels are what's really slowing efforts to get more fleets involved in using them, says Keith Brandis, vice president of marketing for Volvo Trucks North America.

"Our customers are telling us that their business is really being squeezed on the margin side today," Brandis says. "They're paying higher insurance premiums, higher fuel prices and higher driver pay. They're not going to pay more for an alternative-fueled truck unless they get an economic payback. Right now, those trucks are cost-prohibitive because we, as manufacturers, need a high volume of orders to achieve economies of scale to get that payback."

Another concern is the lack of refueling sites. For example, only 1,274 natural gas refueling sites exist nationwide - and that is the largest number for any of the alternative fuels currently available.

"The real concern is finding a place to fuel up," says Derrold Peck, director of logistics for Ace Hardware, Oak Brook, Ill. With a private fleet of 342 tractors, Ace has converted just one to operate solely on LNG.

"When you go to alternative fuels like LNG in Class 8 operations, your range is very limited, so you need a good refueling network to make it work," he says. "Range limitations mean that right now we're limited to regional operations for LNG."

Peck's analysis echoes that of the U.S. General Accounting Office (GAO), which reviewed the Energy Policy Act of 1992 - legislation aimed at increasing the use of alternative fuels to help reduce our dependence on imported oil.

"The goals in the Act for fuel replacement are not being met principally because AFVs have significant economic disadvantages compared to conventional ... vehicles," says the GAO in its February report. "The lack of refueling stations has been a major impediment to using alternative fuel vehicles."

The cost of building an alternative fuel refueling station isn't cheap, either. According to the GAO report, the cost of installing a compressed natural gas refueling facility is more than $300,000.

That high cost is restricting the development of the refueling infrastructure needed to encourage more AFV use. To reduce gasoline and diesel fuel consumption 30% by 2010, the Dept. of Energy (DOE) estimates that it would need between 60,000 to 63,900 AFV refueling stations nationwide - more than 10 times the number of AFV refueling sites currently in existence, says the GAO.

Combination technology Since most AFVs are currently aftermarket conversions, the economies of scale provided by the production line don't apply. But OEMs are trying to make vehicles less expensive to convert by preconfiguring engine compartments and fuel tank locations on the chassis so the technology can be more easily installed.

"We want to keep making that cost as low as possible," says Ramin Younessi, director of product marketing for Freightliner Corp. "That means we're continuing to optimize the installation of engine mounts, cooling systems, hoses, etc., to make the installation of alternative fuel technology more efficient," he says.

Range continues to be one of the biggest limitations of alternative fuels. A typical Class 8 tractor can go 2,000 to 3,000 miles on a full load of diesel, but only one-third that distance on an equivalent load of natural gas, says Younessi. To help circumvent the range and refueling issues, alternative fuels are now being used in combination with their petroleum brethren.

Power Systems Associates, Whittier, Calif., developed the dual-fuel Caterpillar C-10 and C-12 engines as aftermarket products, since there aren't enough orders for them to be built on Caterpillar's production line.

"Those engines use LNG as their primary fuel, but need diesel to provide that ignition 'spark' to ignite the gas," says Mark Hunsberger, LNG/CNG products manager for the company. "We use LNG because it's easier to work with and keeps GVW down."

According to Hunsberger, it takes 1.7 gal. of LNG to equal the driving distance of one gallon of diesel fuel. For CNG, the number climbs to 3.5 gal. "LNG is also easier to store and handle," he says. "We can refill a tank of LNG at a rate of 50 gal./min.; CNG is a much slower fill."

To save on space and weight, Power Systems Associates places a 63-gal. diesel tank on the truck's passenger side and a 119-gal. LNG tank on the driver's side. Because natural gas becomes a liquid only at very cold temperatures, the LNG tank can only be filled to 90% of its capacity so there's room for gas to expand.

The core selling point for those duel-fuel engines, says Hunsberger, is that as diesel engines they can switch from LNG to diesel without a hiccup. "It's the ultimate spare tire and it does it automatically," he says. "That's a huge selling point for drivers; they don't have to worry about reliability or downtime. If they run out of LNG and there's no refueling station nearby, they can run just as easily on diesel."

Hunsberger also explained that diesel fuel in these dual-fuel Caterpillar engines is used as a 'liquid spark plug' because of LNG's higher ignition point. "The engine pulls in air and injects a lot of natural gas into it, with just enough diesel to get ignition," he says. "At idle, though, we burn 100% diesel; it's tough to operate a natural gas engine at the low compression ratios found at idle. As we build up engine power, more natural gas is added." The full use of diesel at idle is offset by using LNG during over-the-road driving.

Another combination technology utilizes electric power. These hybrid systems make use of diesel engines and either a battery pack or a hydrogen-powered fuel cell to provide an alternate source of power.

Volvo uses a hybrid system in its 21st Century truck program, which is a joint project between Volvo, Lockheed Martin and Radian to build a diesel-electric hybrid Class 8 tractor for the U.S. Army.

Volvo's truck is propelled at low speeds by two 250-hp. electric motors and at highway speeds by a 460-hp. diesel engine. The vehicle is currently being tested and is scheduled for delivery at the end of the year.

"The hybrid propulsion system gives us the best of both worlds," says Brandis. "We get range similar to diesel but with less emissions and fuel consumption over that range."

Weight and battery disposal are issues that have to be dealt with in hybrid systems, however, especially when we're talking about highway tractors. According to Brandis, since battery technology is still limited, a fully capable electric system (batteries and motors combined) could weigh in at 4,000 lb. And a fleet's battery-disposal problem would grow in size if hybrids were added to the mix.

"These are complex issues. We're working with advanced battery technologies to find ways to increase battery power, lower the weight and deal with the disposal issue," he says.

Fuel cells A fuel cell produces electricity using stored hydrogen rather than batteries. Basically, a fuel cell takes hydrogen and oxygen and feeds them into a cell or "membrane" where an electrochemical reaction creates electrical current. Water is only a by-product.

Developed by Ballard Power Systems, British Columbia, Canada, fuel cell technology is currently being tested as a sole-source fuel on buses.

According to Younessi, some OEMs, like Freightliner, see fuel cells as a way to provide auxiliary power to run electronic components within the vehicle, reducing the need to idle the engine.

"Sometimes trucks idle from 30% to 40% of their life span," he says. "That's a lot of fuel. You can't run truck batteries indefinitely - in fact, maybe only four to ten hours - before you begin to affect the vehicle's starting capability. There has to be a cheaper and cleaner way to get that power; maybe fuel cells are the answer."

Freightliner estimates that idling can consume almost a gallon of fuel per hour. The DOE calculates that the cost of fuel burned during idling, as well as the related wear and tear on the engine, can reach $1,800 a year per truck. That's why fuel cells could prove to be an alternative fuel solution, at least for idling purposes.

Once again, however, weight and cost spoil the party. In Freightliner's case, its fuel cell system - called an auxiliary power unit (APU) - requires a 52-gal. tank to hold enough hydrogen (stored at 2,500 lb./sq. in.) to get an entire 24 hours worth of use out of the device. An extra tank is also needed to collect the water by-product. That adds cost and weight (200 lb.) to a standard tractor. Also, one diesel fuel tank has to be eliminated to gain space for the APU and its tanks. Freightliner estimates that it's three to five years away from having a commercially viable fuel cell APU for the trucking market.

The future Adopting alternative fuels is a complicated decision for any fleet. Conversion costs are not insignificant, and refueling networks are not plentiful. Adding extra weight to the vehicle and decreasing its range only exacerbate the negative economic impact of using alternative fuels.

There are some significant advantages, however, including decreased maintenance and fuel costs, that could mitigate some of those upfront expenses.

It's a complex equation that HEB's Moynahan knows all too well. "One of the drawbacks of using LNG is that drivers have to fuel twice - once with diesel and once with LNG - before they can get out on the road. We also have to provide training in fueling with LNG safely."

On the other hand, HEB's drivers have found some unexpected advantages to LNG. "Using LNG at highway speed gives us significantly more power to pull hills and maintain road speed; it makes a truck act more like a car on the top end," he says. "LNG-powered engines also have much lower decibels than diesel engines. Our drivers can actually talk in the cab and be heard. Since they sit in those cabs 10 to 12 hours a day, that's important."

The fuel and maintenance savings add up. "We're saving 30 cents a gallon by using LNG," says Moynahan. Not to mention oil-change intervals. "If we get them up to 80,000 miles instead of the 20,000 we get with diesel, that's four fewer oil filters and four times less labor," he says.

And since HEB's trucks return to their home base every night, refueling is not the issue for them that it is for so many other fleets. "The refueling infrastructure is the biggest weakness in the alternative fuel system. Luckily, we're back every night and have our own refueling site," he says.

Federal and state agencies are trying to counteract that refueling problem by developing "clean corridors" throughout the U.S. that link to Mexico and Canada as well. These highways, which are part of DOE's Clean Cities Coalition, are designated as major truck traffic thoroughfares, along which alternative fuel filling stations would be developed.

For example, the International Clean Transportation Corridor runs from the Texas/Mexico border north to Manitoba, Canada. Along this route, investments are earmarked to develop alternative-fuel filling stations for medium- and heavy-duty trucks.

In spite of all this, HEB may still put its alternative fuel program in a holding pattern. It wants to see whether it can get federal and/or state aid to help defray the costs of conversion and refueling.

"There's a significant - and I mean significant - cost associated with getting into and staying in the alternative-fuel business," Moynahan says. "We need some support packages to help us stay in it for the long term."

There's a wide range of alternative fuels available on the market today, some successful in trucking applications and some not. Here's a rundown:

Propane. It's officially called Liquefied Petroleum Gas (LPG), but propane is the main ingredient. A by-product of natural gas processing and crude oil refining, LPG is widely used to fuel portable heating devices. According to the National Propane Gas Assn., the advantage of using LPG as a vehicle fuel is that it produces less carbon buildup in engines. The disadvantage is that it has to be stored under pressure, requiring special tanks and refueling equipment.

Compressed Natural Gas (CNG). Stored under high pressure, CNG has some of the same drawbacks as propane. It requires use of extra equipment on vehicles and at refueling sites, and fleet refueling stations can cost anywhere from $250,000 to $3 million.

Liquefied Natural Gas (LNG). A natural gas that has been cooled down to a liquid state, more LNG can be stored onboard to increase range. But since LNG must be stored at extremely cold temperatures (-260 deg. F), refrigeration systems must be added to vehicles. Storage tanks must be vented to prevent ruptures if the LNG warms up; even minimal venting is said to reduce vehicle range.

Ethanol. Also called ethyl alcohol or grain alcohol, ethanol is mixed with gasoline to form a blended fuel. E-85 (85% ethanol) and E-95 (95% ethanol) are made from agricultural products such as corn, barley and wheat. Both are still undergoing rigorous testing and are not widely available to the commercial market.

Methanol. Though it's an alcohol-based fuel, methanol is made from both agricultural products and natural gas. Methanol is also a fuel that is widely blended with gasoline. For example, M-85 is an 85% methanol, 15% gasoline blend.

Electricity. The good thing about using electric vehicles (EVs) is that the refueling infrastructure is already in place, with a wide network of power plants and cable supplying electricity to homes and businesses across the country. The disadvantage is that the batteries needed to store electricity in the quantities necessary to power a vehicle at least 100 miles restrict the size and weight-hauling characteristics of EVs. These vehicles will most likely be used as commuter cars or in local delivery operations.

Biodiesel. The advantage to biodiesel, which is made from natural oils, methanol and a sodium hydroxide catalyst, is that no vehicle conversions are required and it can be used in the same refueling network as gasoline and diesel fuel. Biodiesel is typically used as a blended product called B20 (20% biodiesel, 80% diesel). B20 does not have the black smoke generated by the particulate matter found in diesel exhaust, nor the traditional diesel odor. However, B20 costs 15% to 20% more than diesel. According to the National Biodiesel Board, B100 (100% biodiesel ) works just as well in truck engines as B20, and requires only limited changes in handling and maintenance procedures.