Motor vehicles are an integral part of the American way of life. Private motor vehicles give us personal freedom and nearly unfettered mobility; and trucks, both large and small, bring goods to even the smallest towns throughout the country. Today, record numbers of vehicles are on the road and are being driven record numbers of miles.
Our reliance on motor vehicles has major implications for both international trade policy and environmental policy. Dependence on foreign oil reached its highest level in 17 years in 1994, with net imports amounting to 45 percent of consumption. Motor gasoline represented the greatest consumption of all oil products, 43 percent of all petroleum products supplied in 1994.1 Both foreign imports of petroleum and consumption of motor gasoline are on the rise; and consequently, the United States remains as vulnerable as ever to oil embargoes abroad.
Concern that highway-vehicle combustion of gasoline produces by-products that could lead to global warming has heightened awareness of the so-called “greenhouse gases.” Motor vehicles are a major source of greenhouse gases, and the trends of rising numbers of motor vehicles and miles driven could lead to more harmful emissions that may ultimately affect the world’s climate. One approach to curtailing such emissions is to use, instead of gasoline, alternative fuels: liquefied petroleum gas (usually propane), compressed natural gas, electricity, or alcohol fuels.
In addition to the concerns over greenhouse-gas emissions, there is also increasing concern over pollutants which are harmful to human health. The major examples of these pollutants are atmospheric ozone and carbon monoxide. Ozone is not only directly harmful to humans, acting as a powerful irritant to the human respiratory system, but also indirectly because it absorbs ultraviolet light, which can cause skin cancer. Carbon monoxide is also harmful to human health by reducing the flow of oxygen to the body’s organs and tissues. The Clean Air Act Amendments of 1990 authorized the U.S. Environmental Protection Agency to set National Ambient Air Quality Standards (NAAQS). These standards were set in order to address air pollution and designate standards to mediate carbon monoxide and ozone levels.
Energy Policy Act of 1992
The Energy Policy Act of 1992 (EPACT), which was adopted after the Persian Gulf conflict of 1990-1991, was the first new law to emphasize strengthened energy security and decreased reliance on foreign oil since the oil shortages of the 1970's. The EPACT emphasized increasing the number of alternative-fuel vehicles
(AFV’s) by mandating that Federal, State, and alternative fuel provider fleets incrementally increase the proportion of AFV’s in their vehicle fleets over the next few years. It was concluded that targeting fleets was the most practical approach to increasing the number of AFV’s on the road. One major drawback of alternative fuel use is the lack of a refueling infrastructure. Generally, commercial fleets are centrally refueled, so establishing a widespread refueling infrastructure would not be necessary.
Energy Security
The United States obtains 53 percent of its net imports of petroleum products from the Organization of Petroleum Exporting Countries (OPEC), mostly from Saudi Arabia and Venezuela. Canada is another major source of net imports, but is not a member of OPEC. The transportation sector consumes 65 percent of the total petroleum products supplied, and, by far, the largest share of product supplied to the transportation sector is motor gasoline.2
Growth in gasoline consumption has occurred in spite of significant advances in fuel economy. In 1973, the year of the Arab oil embargo, average miles per gallon for passenger vehicles was 13.3; in 1992, the average miles per gallon was 21.6.3 Automobile manufacturers instituted several engineering refinements to improve fuel economy, such as the use of lighter materials to decrease weight, aerodynamic body design to reduce drag, and the near universal use of radial tires instead of bias-ply tires. These refinements were encouraged by the Federal Corporate Average Fuel Economy (CAFE) standards, which set fuel efficiency standards for different types of vehicles. However, the number of motor vehicles on the road and the number of miles driven have continued to grow, and motor gasoline consumption has continued to increase. The energy security provisions of EPACT represent a new approach to decreasing U.S. vulnerability to oil price shocks abroad and call for practical approaches to promoting domestic energy sources.
The EPACT set a national goal to replace 30 percent of the petroleum content of fuels for light-duty vehicles with nonpetroleum-derived fuels by the year 2010. To help meet this goal, the legislation also provided the possibility for future requirements for private fleets to acquire AFV’s. Tax incentives for the purchase of AFV’s and the development of retail service stations are also a requirement in the EPACT, as is encouragement to States to develop their own programs.
The goals set by the EPACT are far from being met. Alternative fuels’ share of total vehicle fule consumption remains trivial (approximately 0.3 percent). There was, however, about 28 percent growth in alternative fuel consumption between 1992 and 1993 and 61 percent growth between 1992 and 1995. Growth in consumption of traditional fuels was not as substantial--1.2 percent between 1992 and 1993 and 4.4 percent between 1992 and 1995 (Figure 1).4 The Energy Information Administration (EIA) is monitoring the consumption of alternative fuels, the numbers of fleet vehicles, and the overall motor vehicle market. It is also taking a particularly detailed look at fleets in the Department of Energy (DOE)-designated "Clean Cities." These cities have DOE-accepted approaches for promoting the penetration of AFV’s and development of the associated infrastructure needed for AFV acceptance. They are located in climatically and geographically diverse parts of the country.
Reducing Greenhouse-Gas Emissions
Reducing greenhouse-gas emissions is another priority of the EPACT. Transportation, through the burning of petroleum products, accounts for about 30 percent of all anthropogenic greenhouse gases in the United States. Greenhouse gases are gases that absorb heat or prevent its release into the stratosphere, thus warming the Earth (the "greenhouse effect"); or that reflect sunlight, preventing its entry into the troposphere and striking the Earth’s surface, thus cooling the Earth. The major gases--carbon dioxide, methane, and nitrous oxide--are found in combustion of hydrocarbons like motor gasoline and diesel fuel. Other gases, including carbon monoxide, nitrogen oxides, and nonmethane volatile organic compounds, are not greenhouse gases, however, they contribute indirectly to the greenhouse effect and are found in vehicle emissions.
In the United States, the transportation sector contributes:
- about one-third of carbon dioxide emissions
- about one-third of nitrous oxide emissions
- less than 1 percent of anthropogenic methane emissions
- 77 percent of carbon monoxide emissions
- 45 percent of nitrogen oxide emissions
- more than one-third of nonmethane volatile organic compounds6
Alternative-fuel vehicles have the potential to reduce the emissions of many greenhouse gases, but they present a number of drawbacks for the consumer--including shorter driving ranges, less cargo space (because of extra fuel tanks or batteries), and fewer refueling outlets. Only electricity has a suitable fueling infrastructure in place; however, in many respects, electricity is the alternative fuel most in need of technological improvements in order to be a practical transportation fuel.
Fuel distributors are reluctant to build the necessary infrastructures for AFV’s until these vehicles are more prevalent on the road; and, at the same time, automobile manufacturers fear the market for AFV’s will be very limited until the refueling infrastructure is in place. The EPACT purchase mandates are designed to increase the market for AFV’s, but the purchase mandates apply to entities—government and commercial fleets—that are least likely to use retail fuel outlets. Fleet vehicles are much more likely to refuel in a centralized location, often owned by the fleet operator.
In addition to the aforementioned requirements set forth by the EPACT, the Act directed the EIA to establish several new data collection programs. In particular, Section 407 of EPACT required information useful to those entering the markets related to AFV's and the associated infrastructure. As with any emerging market, the core information includes the makeup of the market in which new products would have to compete and the nature of the products that new technology might replace. The text box below gives overviews of the EIA programs required by EPACT Sections 407 and 503. The box first summarizes EIA’s data acquisition programs required by Section 407, and then addresses those programs designed to comply with EPACT Section 503, which relates to AFV’s in particular rather than to the vehicle market in general. Section 503 required EIA to identify AFV’s already in use, AFV’s likely to be in use in the following year, and AFV’s being made available to the market each year.
This report describes current and potential markets for AFV’s. It begins by assessing the total vehicle stock. Then it focuses on the current use of AFV’s in alternative fuel provider fleets and the potential for use of AFV’s in U.S. households. These topics are covered in the following three sections:
Section 2. Composition of the U.S. Vehicle Stock
Section 407 required information about the total U.S. vehicle market, and the EIA determined that the composition of the U.S. vehicle stock should be assessed. Using existing data sources and the new data collection systems designed to comply with EPACT, a speculative attempt was made to detect where and in what capacity vehicles are being operated within the United States. Results of this effort are presented in this section.
Section 3. Fleets of Alternative Fuel Providers
In addition to the various data collection systems, EPACT implemented programs designed to encourage governments and private companies to purchase AFV’s for their fleets. These programs require that a certain percentage of new vehicle acquisitions be AFV’s. These purchase mandates, which go into effect at different times for the various fleet subpopulations, increase incrementally over several years. The fleets operated by the Federal government were the first to be affected, with purchase requirements going into effect in 1993. Beginning with model year 1997 (approximately September 1996), alternative fuel providers--sellers and distributors of propane, electricity, and natural gas--may fall under AFV purchase mandates.
The EIA established three fleet-level surveys to collect data concerning fleets and fleet vehicles operated by alternative fuel providers. The results of the three surveys: the Propane Provider Fleet Survey, the Electric Utility Fleet Survey, and the Natural Gas Supplier Fleet Survey are presented in this section. The EIA surveyed only providers of propane, natural gas, and electricity because there were existing EIA databases that made the population of those providers easily accessible. At the time the surveys were conducted, there was no database in existence for easy access to the methanol and ethanol providers, and it was still uncertain (due to pending Rules) whether the oil providers/refiners would be covered under the EPACT as alternative fuel providers.
Section 4. Consumer Vehicle Preferences
Section 407 of the EPACT also called for data on consumer preferences relating to vehicle operation to assess consumer acceptance of AFV’s. To comply, EIA obtained data from a national consumer vehicle preference survey that was designed and conducted by a practicum class in the Joint Program in Survey Methodology sponsored by the University of Maryland, the University of Michigan, and Westat, Inc. This survey collected data concerning consumer vehicle preferences and attitudes toward AFV’s and the possible limitations commonly associated with them. Analysis of these data is presented in this section.
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Consumer Vehicle Preferences
File Last Modified: June 17, 1998 | 