Can Fuel Efficiency Standards Be Met Cost-Effectively?

To cut petroleum usage and reduce greenhouse gas emissions, fuel efficiency standards are set to rise significantly by 2025 under the Corporate Average Fuel Economy (CAFE) and greenhouse gas (GHG) standards—jointly administered by the National Highway Traffic Safety Administration (NHTSA) and EPA. However, the automotive marketplace has changed significantly since the standards were written in 2009. Sustained low gas prices and the growing popularity of trucks and SUVs have led the auto industry to claim that it will be impossible to meet both 2025 and long-term efficiency standards without significant changes to the programs. Fortunately, there is another low-cost pathway available to regulators to preserve strong fuel efficiency standards and improve fuel quality. Research suggests that high-octane, low-carbon fuel is the lowest-cost compliance option for both consumers and the automotive industry.

Key to this discussion is an understanding that automakers are increasingly producing smaller, more efficient direct-injection, turbocharged engines. According to the Energy Information Administration, the production of these vehicles has increased from around 3 percent in model year 2009 to nearly 18 percent in model year 2014, and is expected to increase to over 80 percent of all light-duty vehicles sold in the United States by 2025. In producing these vehicles, automakers are creating additional demand for high-octane fuels, as higher amounts of octane are needed to prevent engine knock in these engines and produce efficiency gains. Premium gasoline is a high-octane fuel – whose octane can come from either a renewable, clean burning source – ethanol – or from aromatics, a petroleum derivative, which is toxic.

Highlights

Dr. Robert McCormick, Principal Engineer, Fuels and Combustion Science Group, National Renewable Energy Lab (NREL)

• Dr. McCormick emphasized that the main goal needs to be better fuels and better vehicles sooner - which can happen with fuel-engine co-optimization. Fuel-engine co-optimization focuses on making engines more efficient by co-optimizing fuels and engines as a system.
• Currently, however, the fuels we use constrain engine design. A common issue is engine knock, which occurs when unburned fuel and air auto-ignite. This can cause engine damage. Increasing the compression ratio, downsizing/downspeeding engines, turbocharging, and direct injection can all increase efficiency, but often make engine knock more likely. Higher octane fuels (important in reducing knock) would enable the use of the above technologies to make engines more efficient, and thus improve fuel economy.
• Renewable, high octane fuels are a top contender. Such fuels can have widespread benefits for consumers, the economy and the environment.
• Ethanol, a renewable high octane fuel, is widely available now. It is a relatively low-cost source of octane. The E25 blend (25 percent ethanol, 75 percent gasoline) may be the best option.

Brian West, Group Leader, Fuels, Engines, and Emissions Research Group, Oak Ridge National Lab (ORNL)

• Brian West focused on ethanol and why it is a very effective octane booster.
• Ethanol has a lower energy content than gasoline, but because its high octane rating allows for more efficient engines, an E25-E40 blend in an optimized car could have the same "tank mileage" as the current E10 blend in today's cars (i.e., the cars would be able to travel the same distance with the same amount of fuel).
• The Department of Energy and the automotive industry are already experimenting with ethanol blends to determine which percentage is optimal for more efficient engines, both in the existing vehicle fleet and for future cars and trucks. Mr. West discussed a few examples, including tests on a Cadillac ATS, a Mini Cooper, and a 2006 Dodge Charger. In each case, using E25-E30 blends resulted in efficiency gains (of up to 12 percent) compared to E10.
• Not only do mid-level blends increase efficiency, they also increase torque or turning power. Using mid-level ethanol blends like E25 – E30 can improve a car's acceleration.

Dean Drake, President, Defour Group, LLC

• Dean Drake pointed out that not all vehicles can and will be battery-powered. Some vehicles, such as trucks and airplanes, will continue to need liquid fuel for the foreseeable future because it allows longer distances to be traveled and more weight to be carried. Moving into the future, liquid fuels should be cleaner and renewable.
• Presently, most gasoline sold in the United States is comprised of about 10 percent ethanol (E10). This transition from 3 percent to 10 percent took place in less than 10 years, from 2005 to 2015. Several factors explain this fast transition, including the fact that E10 is less expensive than pure gasoline. Lessons can be drawn from this for the transition from E10 to E25-E30.
• We can make this happen, but there will need to be wide-scale support from a majority of stakeholders, and the public needs to be educated.
• If our vehicle fleet was optimized to run on high octane fuels, we would see average savings of $436 per vehicle (engines could be made smaller and still achieve the same performance).
• E25 is a more economically viable solution to make high-octane fuel widely available than today's Premium grade E10 (which is also a high octane fuel). E25 would likely cost the same or less than today's regular E10. In other words, going from a 10 percent to a 25 percent ethanol blend would create a fuel with the same octane content as Premium-grade gasoline while costing less than Regular-grade gasoline. This is an economic win for consumers.
• There is enough ethanol to go around. Demand for fuel is declining as a whole (as engines become more efficient, car-sharing becomes more widespread, and electric vehicles take off), and the increased need for ethanol would be relatively modest going from E10 to E25. Establishing a supply and demand system will not be difficult as its base is already in place.

Andrew Varcoe, Partner, Boyden Gray & Associates

• Andrew Varcoe addressed the current mid-term evaluation of the EPA’s greenhouse gas (GHG) standards and NHTSA’s fuel economy standards. In 2012, the administration set efficiency and GHG standards for model years 2017-2025, which require increasingly stringent GHG criteria. The EPA target is for new vehicles in 2025 to have an average fuel economy of 54.5 mpg, up from 35.5 mpg in 2016.
• The standards are to be evaluated by April 2018 to make sure they remain appropriate and feasible. The Obama administration had ruled in January 2017 that the existing standards remain appropriate, but the new Administration has reopened the evaluation process. This creates a window for change. The Administration will simply decide “yes” or “no” as to whether the standards are feasible.
• EPA has opened the door for consideration of the role of octane: it is inviting comments on “the impact of the standards on advanced fuels technology, including but not limited to the potential for high-octane blends.” This is a significant development.
• Reducing regulatory barriers to higher-octane fuels (particularly ethanol blends) could help carmakers comply with the 2017 - 2025 fuel standards and save drivers money.

While not directly addressed at the briefing, the issue of gas station infrastructure compatibility with these fuels was raised. For more information on this issue please refer to these two publications:

• DOE Handbook for Handling, Storing, and Dispensing E85 and other Ethanol-Gasoline Blends
• UST Component Compatibility Library

Taking steps to reduce GHG and toxic emissions from the passenger vehicle fleet is critical. The U.S. transportation sector is responsible for 27 percent of greenhouse gas emissions as well as half of all toxic emissions in the United States. Numerous health studies have linked tailpipe exhaust to serious developmental and many chronic health conditions. While electric vehicles represent the greatest potential reduction in lifecycle and tailpipe emissions and will play an important role in decarbonizing the transportation sector, the internal combustion engine is likely to dominate vehicle sales for the next several decades. Therefore, it is important to ensure that fuel economy is addressed in these vehicles.

Higher-octane, low-carbon fuels enable greater engine efficiencies, thereby lowering GHG and toxic emissions and improving fuel economy. Automotive engineers have expressed interest in raising the octane level of gasoline, which would enable the design and sale of these more efficient engines, but the administration must act to enable a viable pathway for these fuels to enter the marketplace. A high-octane, low-carbon blend of 25 percent ethanol and 75 percent gasoline (E25), for example, would lead to fuel efficiency improvements between 5 and 10 percent, significantly reducing consumer fuel costs and harmful tailpipe emissions.