oversight

Mass Transit: Use of Alternative Fuels in Transit Buses

Published by the Government Accountability Office on 1999-12-14.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                 United States General Accounting Office

GAO              Report to Congressional Committees




December 1999
                 MASS TRANSIT
                 Use of Alternative
                 Fuels in Transit Buses




GAO/RCED-00-18
      United States
GAO   General Accounting Office
      Washington, D.C. 20548

      Resources, Community, and
      Economic Development Division

      B-282893

      December 14, 1999

      The Honorable Phil Gramm
      Chairman
      The Honorable Paul Sarbanes
      Ranking Minority Member
      Committee on Banking, Housing, and Urban Affairs
      United States Senate


      The Honorable Bud Shuster
      Chairman
      The Honorable James Oberstar
      Ranking Democratic Member
      Committee on Transportation and Infrastructure
      House of Representatives

      Improving air quality in urban settings has been a long-standing national
      objective. Transit buses powered by diesel engines have been identified as
      contributors to air pollution in these areas. To help address this problem,
      various fuels that are alternatives to diesel have been proposed for use in
      transit buses. Alternative fuel buses use such fuels as compressed natural
      gas (CNG), liquefied natural gas (LNG), methanol, ethanol, biodiesel fuel,
      and propane. Some of these buses use various propulsion technologies
      that are being designed and tested, such as hybrid electric systems.

      The Transportation Equity Act for the 21st Century (TEA-21) mandated that
      we study low- and zero-emissions (alternative fuel) technologies for transit
      buses. This report focuses primarily on the use of CNG because the vast
      majority of alternative fuel buses are using this fuel. As agreed with your
      offices, this report addresses (1) the status of the development and use of
      alternative fuel technologies in transit buses, particularly the use of CNG as
      a fuel; (2) the air quality benefits of such technologies; (3) the costs
      incurred by transit operators to use CNG buses, as well as other alternative
      fuels, compared with the costs to use diesel buses; and (4) the primary
      incentives and disincentives for using these technologies. Appendix I,
      which describes the scope and methodology of our review, includes a list
      of the 12 transit operators we contacted, their locations, and the types of
      fuel they use. Appendix II provides a list of all of the other parties we
      contacted. Appendixes III through X provide detailed information on the
      status and costs of the alternative fuel technologies other than CNG that
      can be used in transit buses.




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                   Alternative fuel buses account for a very small, but growing, portion of the
Results in Brief   nation’s transit bus fleet. In 1997, 5 percent of the nation’s approximately
                   50,000 transit buses operated on some alternative fuel system.1 The most
                   commonly used alternative to diesel fuel is compressed natural
                   gas—accounting for an estimated 75 percent of the full-sized alternative
                   fuel transit buses in 1998. Transit operators are also beginning to test and
                   demonstrate new propulsion system technologies—hybrid electric
                   systems and fuel cells—in their transit buses. According to Federal Transit
                   Administration officials, hybrid electric transit buses are currently
                   available, and fuel cell buses will be commercially available by 2002.

                   Data are limited on the extent to which alternative fuel transit buses
                   provide air quality benefits in urban areas. On a national scale, transit
                   buses do not significantly affect air pollution levels because, according to
                   the Department of Transportation, they constitute only about 0.02 percent
                   of the approximately 208 million automobiles, trucks, and other vehicles in
                   the United States. However, because individual alternative fuel transit
                   buses emit less pollution than do individual diesel buses, alternative fuel
                   buses have some beneficial effect on the air quality of the urban areas in
                   which they operate.

                   Transit operators pay more to buy, maintain, and operate compressed
                   natural gas buses than they pay for diesel buses. Eight of the 12 transit
                   operators that we contacted operate compressed natural gas buses. At the
                   outset, operators that buy compressed natural gas buses typically pay
                   approximately 15 to 25 percent more for each of these buses than they do
                   for diesel buses. Also, the costs of installing fueling facilities and
                   upgrading maintenance garages for compressed natural gas buses vary
                   among transit operators. However, constructing a compressed natural gas
                   fueling station typically costs about $1.7 million, and modifying a
                   maintenance facility typically costs about $600,000. In addition, six of the
                   eight transit providers that we spoke with who were able to provide us
                   with operating cost estimates reported higher operating costs for their
                   compressed natural gas buses than for their diesel buses. Also, almost all
                   of these operators reported higher maintenance costs for their
                   compressed natural gas buses, and half of them reported higher fuel costs
                   for these buses.

                   Transit operators approach the decision of whether to switch to
                   alternative fuels by considering a range of factors. According to the transit

                   1
                   The data from 1997 were the most recent data that were available from the Federal Transit
                   Administration’s national transit database at the time we completed our review.



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             operators we talked to, factors such as adhering to more stringent
             emissions standards and the public’s concerns about transit bus pollution
             encourage them to operate alternative fuel transit buses. However, factors
             such as the increased costs and reduced reliability of alternative fuel buses
             experienced to date discourage the use of fuels other than diesel. Also,
             diesel buses have become significantly cleaner over the past 11 years,
             thereby reducing the environmental advantages of shifting to alternative
             fuel buses.


             Automobiles, diesel-fueled trucks, and transit buses emit pollution that
Background   affects the air quality in many large cities in the United States. The
             automotive, truck, and transit industries have been experimenting with
             ways to reduce vehicle emissions. Since 1992, transit operators have tested
             alcohol-based fuels (methanol and ethanol), natural gas fuels (CNG and
             LNG), biodiesel fuel (a fuel derived from such biological sources as
             vegetable oil), liquefied petroleum gas, and batteries. Fuel cell and hybrid
             electric technologies—defined as alternative propulsion systems—are also
             currently being developed for use in transit buses. Fuel cell systems
             convert fuel to an electric current without combustion. Hybrid electric
             systems use a small internal combustion engine and electricity for
             propulsion.

             The Environmental Protection Agency (EPA), the Department of Energy
             (DOE), and the Department of Transportation (DOT) have programs in place
             that encourage the use of alternative fuels in vehicles, including transit
             buses. EPA is responsible for implementing programs designed to reduce
             air pollution. The agency regulates the emissions of certain pollutants
             from motor vehicles by establishing standards for how much pollution
             mobile sources can emit.2 EPA tests heavy-duty engines and certifies them
             when they meet mobile source emissions standards. DOE is responsible for
             providing federal leadership on the acquisition and use of alternative fuel
             vehicles. Among other activities, DOE conducts research on alternative
             fuels, operates the alternative fuel data center, and runs the Clean Cities
             Program, all of which are designed to provide information on and promote
             the use of alternative fuels. In addition, DOT’s Federal Transit
             Administration (FTA) provides funding for the acquisition and use of transit
             buses and sponsors the development of and demonstrations of alternative
             fuel bus technologies. In fiscal year 1998, FTA obligated almost $1.5 billion



             2
              Mobile sources of pollution are those that move, such as automobiles, tractors, airplanes, and buses.



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                         for the procurement and operation of transit buses.3 These funds are used
                         for expenditures for both diesel and alternative fuel buses, although the
                         ratio of federal to local matching funds can vary, depending upon whether
                         bus-related equipment complies with the Clean Air Act.4

                         Other federal actions may also affect the future use of alternative fuels in
                         transit buses. TEA-21 established the Clean Fuels Formula Grant Program
                         and authorized up to $200 million a year to finance the purchase or lease
                         of clean diesel buses and facilities and the improvement of existing
                         facilities to accommodate clean diesel buses.5 The program focuses on
                         urban areas that do not attain the Clean Air Act’s ozone or carbon
                         monoxide standards. FTA has not implemented the program because of a
                         lack of funding in fiscal year 1999. Similarly, no funding has been provided
                         for fiscal year 2000. DOE is currently considering whether to promulgate a
                         rule that would require certain operators of bus fleets to acquire and use
                         alternative fuel vehicles. If implemented, this rule could lead transit
                         operators to acquire more alternative fuel buses. DOE officials do not
                         anticipate publishing a notice of proposed rulemaking before the end of
                         1999.


                         Since 1992, alternative fuel transit buses have accounted for a very small
The Use of Alternative   proportion of the total number of transit buses in the United States.
Fuel Technology in       According to DOT’s national transit database, the number of full-sized
Transit Buses Is         alternative fuel transit buses increased from 815 buses in 1992 (2 percent
                         of the total number of full-sized transit buses) to 2,659 buses in 1994
Limited but Increasing   (5 percent of the total number of full-sized transit buses). This percentage
                         generally remained unchanged through 1997, the most recent year in



                         3
                          The urbanized area formula grant program and capital program are the primary federal sources of
                         mass transportation funding. Through the formula program, FTA provides capital, operating, and
                         planning assistance for mass transportation. In fiscal year 1998, FTA obligated a total of $2.4 billion for
                         this program, including $1.3 billion for bus-related activities. Through the capital program, FTA
                         provides funding for the establishment of new rail or busway projects, the improvement and
                         maintenance of existing rail and other fixed-guideway systems, and the upgrading of bus systems. In
                         fiscal year 1998, FTA obligated a total of $1.6 billion for this program, including about $213 million for
                         bus projects.
                         4
                          The typical ratio for federal funds to state and local funds is 80 percent to 20 percent. Transit
                         operators can qualify for a higher federal match for vehicle-related equipment purchased to be in
                         compliance with the Clean Air Act or the Americans With Disabilities Act. Transit operators
                         purchasing buses that meet these guidelines can receive up to a 90 percent federal share for a discrete
                         piece of vehicle-related equipment or an 83 percent federal share for the entire vehicle cost.
                         5
                          While “clean diesel” vehicles would be eligible for funding from the Clean Fuels Formula Grant
                         Program, there is no standard definition of clean diesel. According to some industry officials, clean
                         diesel refers to newer diesel engines that emit lower levels of pollution, while, according to other
                         industry officials, clean diesel refers to diesel fuel with lower levels of sulfur.


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                                          which data are available from this database.6 The transit industry has
                                          tested some diesel alternatives over the past several years. As a result,
                                          alcohol-based fuels are being discarded, and newer fuels and propulsion
                                          systems are coming to the forefront. The current alternative fuels and
                                          propulsion systems available range from CNG—the most common
                                          alternative fuel—to hybrid electric and fuel cell propulsion systems, which
                                          are still under development. Diesel is by far the most common fuel used by
                                          transit operators. In 1997, 47,034 full-sized transit buses—95 percent of all
                                          full-sized transit buses—used diesel. (See table 1.)


Table 1: Number of Full-Sized Transit Buses by Type of Fuel, 1992 Through 1997
Type of fuel                           1992            1993            1994                            1995                  1996                   1997
Diesel                             50,181                49,118                48,119                47,644                47,389                47,034
Diesel alternatives:
CNG                                   116                    249                   465                   575                   857                 1,469
Ethanol                                  5                    29                    33                     22                  347                      338
Diesel (particulate trap)a            236                    411                 1,265                 1,212                   418                      218
Methanol                               57                    392                   402                   402                     63                     54
LNG                                    10                     52                      9                    50                    50                     50
Liquefied petroleum gas                59                     59                      2                     2                     4                      4
Electric battery                         0                      0                     0                     0                     1                      3
        b
Other                                 332                    334                   463                   418                   421                      378
Total diesel alternatives             815                  1,526                 2,659                 2,681                 2,161                 2,515
Total                              50,996                50,644                50,778                50,325                49,550                49,549
                                            Note: The table covers transit operators in urbanized areas with populations of 50,000 or more.
                                            The number of buses includes those on order but not received.
                                          a
                                           A particulate trap is a diesel engine exhaust after-treatment device designed to trap or otherwise
                                          destroy particulate matter.
                                            b
                                             “Other” includes fuel types in the national transit database categorized as other, kerosene, dual
                                            fuel, and gasoline.

                                            Source: national transit database, The Volpe Center, FTA.



                                            DOE’s   Energy Information Administration (EIA) estimate that the number of
                                             full-sized alternative fuel transit buses in all of the United States will




                                            6
                                             We have categorized a “full-sized transit bus” as a bus that is at least 35 feet long or has at least 35
                                            seats.



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increase from about 4,500 in 1999 to more than 6,000 in 2000.7 In 1999, the
most commonly used alternative to diesel fuel is CNG, accounting for about
3,400 full-sized transit buses—75 percent of all alternative fuel transit
buses. According to an FTA official, it is difficult to estimate the future
long-term demand for transit buses or for alternative fuel transit buses
because of funding uncertainties. However, according to the American
Public Transit Association, as of January 1, 1999, 17 percent of its
members’ new bus orders were for alternative fuel buses. Of the 12 transit
operators we spoke with, 6 plan to acquire diesel buses, 5 plan to acquire
CNG buses, and 1 plans to acquire both diesel and CNG buses.


As shown in table 1 and as estimated by EIA, the use of alcohol-based fuels
(methanol and ethanol) has declined in recent years. According to FTA and
industry officials, this decline has occurred because of the decreased
performance and high operating cost of alcohol-fueled buses. For
example, the Los Angeles County Metropolitan Transportation Authority,
which tested both natural gas and alcohol-based fuels in the late 1980s and
early 1990s, eventually converted its alcohol-fueled buses to diesel
because of the high rate of engine failures and low engine reliability. By
September 1999, the agency’s original alcohol-fueled fleet of 333 buses had
been reduced to approximately 10 buses that were operational.
Heavy-duty engine manufacturers no longer produce alcohol-fueled
engines, and EIA estimates that only 89 alcohol-fueled buses have operated
across the United States in 1999.

According to FTA officials, hybrid electric transit buses are currently
available from two bus manufacturers, and fuel cell buses will be
commercially available by 2002.8 Various types of hybrid vehicles are in
the developmental and demonstration stages by FTA’s bus technology
program, the Advanced Technology Transit Bus Program, the New York
State Consortium with Orion Bus Industries, and Demonstration of

7
 Because at the time we completed our work FTA’s data on the use of fuels for full-sized buses were
current only through the end of 1997, we used data from EIA for additional analysis on trends in fuel
use from 1998 through 2000. FTA’s data pertain only to metropolitan areas with 50,000 people or
greater, while EIA’s data estimate fuel use nationwide.
8
 Two types of hybrid electric-drive configurations exist. The first is primarily battery-electric but uses
a small engine-driven generator set to reduce the battery output that would otherwise be needed,
thereby extending the operating range between charges. The vehicle’s batteries are externally
recharged and constitute the primary energy source. The second is a system with generator sets large
enough to directly power the drive motors in all operating modes without being supplemented by a
discharging energy storage device. The engine’s fuel is the primary energy storage medium, and the
vehicle is not equipped for external battery recharging. Fuel cells are electrochemical devices that
convert a fuel’s energy directly to electrical energy. These cells can be fabricated in a wide variety of
transportation applications and offer the potential to significantly increase fuel economy and reduce
vehicle emissions. Currently, fuel cells are fueled by hydrogen that can either be stored on-board or
generated from other fuels, such as methanol.



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                        Universal Electric Transportation Subsystems. Officials of two transit
                        operators that we contacted said they are also testing diesel hybrid
                        electric buses: the Metropolitan Transportation Authority’s New York City
                        Transit recently took delivery of the first five diesel hybrid buses and
                        placed them into service, while Minneapolis Metro Transit recently
                        ordered five diesel hybrid buses and expects to receive them in early 2000.
                        Moreover, the Chicago Transit Authority is testing three prototype fuel cell
                        buses.


                        There are limited data to quantify the extent to which alternative fuel
Data on the Extent of   transit buses provide air quality benefits in urban areas. DOT, EPA, and DOE
Air Quality             officials told us that these agencies had not studied how a transit
Improvements in         operator’s use of alternative fuel transit buses has affected regional air
                        quality. Moreover, EPA does not routinely monitor the effects of transit
Urban Areas Caused      buses on urban air quality. On a national scale, transit buses, including
by Alternative Fuel     alternative fuel buses, do not significantly affect national levels of air
                        pollution because they constitute a very small portion of the total number
Buses Are Limited       of automobiles, trucks, and other vehicles in the United States. The
                        Federal Highway Administration estimated that there were 208 million
                        such vehicles on the road in 1997. The approximately 50,000 full-sized
                        transit buses that were operating in that year constituted about
                        0.02 percent of all vehicles nationwide. Alternative fuel buses account for
                        only about 5 percent of all full-sized transit buses. In addition, EPA
                        estimates that heavy-duty diesel buses, in general, account for 5 percent of
                        all emissions from heavy-duty vehicles.9

                        At the same time, because individual alternative fuel buses emit less
                        pollutants than do individual diesel buses, it is likely that the use of
                        alternative fuel buses causes some yet-to-be-quantified beneficial impact
                        on air quality in the urban areas in which they operate. Individual
                        alternative fuel transit buses produce less major emissions—nitrogen
                        oxides and particulate matter—than diesel buses do.10 EPA has certified
                        that both the Detroit Diesel and the Cummins heavy-duty CNG engines
                        produce lower levels of nitrogen oxides and particulate matter than


                        9
                         EPA’s estimate is based on information from its Mobile model—a computer model that is designed to
                        estimate vehicle emissions. The California Air Resources Board recently reported that transit buses
                        account for only 0.03 percent of the total vehicles operating in the state of California and that urban
                        buses consisting of both transit and tour buses, contribute only 1.1 percent of the total nitrogen oxides
                        and 0.34 percent of the total particulate matter emissions statewide.
                        10
                          Nitrogen oxides include several gaseous compounds made of nitrogen and oxygen. Particulate matter
                        is a collection of small particles emitted by an engine.



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comparable heavy-duty diesel engines.11 In addition, West Virginia
University and others found that CNG buses have the potential to
significantly lower nitrogen oxides.12

Some beneficial impact on urban air quality through the use of cleaner
alternative fuel buses is also indicated by the nature of bus travel in urban
areas. For example, the typical route of a transit bus—involving frequent
stops and starts because of traffic congestion and passenger
boarding—creates high particulate emissions in those areas in which it
operates. West Virginia University and others found that CNG buses emit
virtually no particulate matter. Moreover, FTA reported that, in 1997, 73
percent of transit bus service occurred in urban areas with populations
greater than 1 million, including such areas as Los Angeles, Chicago, and
New York, where pollution levels have exceeded the national standards.

Diesel buses are also becoming much cleaner. According to EPA, emissions
from individual diesel buses have declined substantially over the past 11
years. Improvements in diesel engine technology have resulted in
heavy-duty diesel engines that are more reliable, durable, and less
polluting than the diesel engines of the past. Many of these improvements
are the result of more stringent EPA emissions standards promulgated
under the Clean Air Act.13 Initially established in 1985, these standards,
under EPA’s current test procedures, have become more restrictive over
time, leading to increasingly cleaner mobile source emissions. The
emissions regulations for full-sized buses target the engines rather than the
entire vehicle (as with automobiles) because heavy-duty engine
manufacturers often do not assemble complete vehicles. As shown in table
2, permissible nitrogen oxide levels declined 63 percent (from 10.7 grams
per brake horsepower per hour [g/bhp-hr] to 4.0 g/bhp-hr) from 1988 to
1998, while permissible particulate matter levels declined 83 percent (from
0.60 g/bhp-hr to 0.10 g/bhp-hr).14


11
  Both diesel and CNG engines that meet EPA’s requirements will be available in 2002.
12
  West Virginia University, under contract with DOE and the National Renewable Energy Laboratory,
has been conducting studies to evaluate emissions of alternative fuel transit buses. The University also
found that the reduced emissions from alternative fuel buses are highly dependent on the engine
technology and the condition of the vehicle. Improperly tuned buses had to be repaired before being
able to achieve low emissions.
13
  According to DOE officials, it is not clear that heavy-duty diesel engines operate on the road with the
type of emissions promised by the manufacturer. The Department of Justice and EPA alleged that
seven engine companies, including Cummins and Detroit Diesel, installed computer software in their
engines that allowed the engines to pass EPA’s emissions tests but then function differently during
highway driving.
14
 Grams per brake horsepower per hour (g/bhp-hr) is an emission rate that is based on the amount of
work performed by the engine during the federal transient test procedure.


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Table 2: EPA’s Exhaust Emission Certification Standards for Heavy-Duty Diesel Engines
                                 Nitrogen oxides          Diesel particulate         Hydrocarbons                            Carbon monoxide
Year                                     (g/bhp-hr)        matter (g/bhp-hr)            (g/bhp-hr)                                  (g/bhp-hr)
1984-87                                           10.7               Not applicable                              1.3                       15.5
1988-89                                           10.7                           0.60                            1.3                       15.5
1990                                                6.0                          0.60                            1.3                       15.5
1991                                                5.0                          0.25                            1.3                       15.5
1993                                                              0.10, new buses;
                                                    5.0              0.25, all other                             1.3                       15.5
1994                                                       0.07, new urban buses;
                                                    5.0             0.10, all other                              1.3                       15.5
1996                                                       0.05, new urban buses;a
                                                    5.0              0.10 all other                              1.3                       15.5
1998                                                       0.05, new urban buses;
                                                    4.0             0.10, all other                              1.3                       15.5
2004b                       2.4 or 2.5 with a limit of     0.05, new urban buses;
                                      0.5 on NMHCc                  0.10, all other                 Not applicable                         15.5
                                           a
                                            In 1996 and later, the standard for urban buses is 0.05, and the in-use standard for diesel
                                           particulate matter for new urban buses is 0.07 g/bhp-hr.
                                           b
                                            As a result of a July 1999 consent decree, heavy-duty diesel engine manufacturers will be
                                           required to produce engines that meet the 2004 standards by October 1, 2002.
                                           c
                                            Nitrogen oxides plus non-methane hydrocarbons.

                                           Source: EPA.



                                           FTA requires that transit operators operate buses that they purchase with
                                           federal funds for at least 12 years.15 However, officials from the American
                                           Public Transit Association indicated that transit operators will typically
                                           extend this time frame to 15 or more years. Consequently, some transit
                                           buses that were manufactured in the late 1980s are still in operation. Since
                                           then, permissible levels of nitrogen oxides and particulate
                                           matter—pollutants disproportionately attributable to diesel engines—have
                                           declined. EPA has mandated a further reduction in nitrogen oxides from
                                           new engines. Beginning in 2002, heavy-duty engines will be limited to 2.4
                                           g/bhp-hr of a combination of nitrogen oxides and non-methane
                                           hydrocarbons, further reducing nitrogen oxide emissions by 40 percent
                                           from 1998 levels (from 4.0 g/bhp-hr to 2.4 g/bhp-hr). In addition, EPA is
                                           already developing more stringent emissions standards for diesel engines
                                           that, according to an EPA official, would further significantly reduce
                                           permissible levels of nitrogen oxides and particulate matter.


                                           15
                                               According to FTA, minimum service life requirements are either 12 years or 500,000 miles.



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                           This section addresses CNG-fueled transit buses because CNG is the
Compressed Natural         predominant fuel among full-sized alternative fuel buses. Adding those
Gas Buses Cost More        buses to an existing diesel bus fleet generally increases capital and
Than Diesel Buses          operating costs. The capital costs of bus fleets include both vehicle and
                           infrastructure costs.16 Operating costs are those associated with transit
                           agency operations, such as vehicle operator labor, vehicle maintenance,
                           and general administration. Eight of the 12 transit operators we contacted
                           operate CNG buses. According to these transit operators as well as transit
                           bus manufacturers, the capital costs of CNG buses exceed those of diesel
                           buses. In addition, the transit operator must make additional capital
                           outlays to install fueling facilities and upgrade maintenance facilities. The
                           costs of vehicle maintenance associated with the fuel and propulsion
                           systems are typically higher for CNG buses than for diesel buses because of
                           more frequent maintenance and the higher costs for parts.17 In addition,
                           the operating costs of CNG buses are increased by reduced fuel economy
                           and lower vehicle reliability.


The Capital Costs of CNG   According to transit bus manufacturers, transit operators who operate CNG
Bus Fleets Are Greater     buses pay approximately 15 to 25 percent more, on average, for full-sized
                           CNG buses than for similar diesel buses. On the basis of recent bus
Than Those of Diesel
                           procurements, typical CNG buses cost between $290,000 and $318,000,
Fleets                     while typical diesel buses cost between $250,000 and $275,000.
                           Manufacturers charge more for CNG buses to cover their costs for
                           development, certification, and warranty service. Also, the relatively low
                           number of CNG bus orders contributes to the higher prices of CNG buses.
                           However, according to some economists, if the production of these buses
                           were to increase significantly, then the production costs per bus would
                           likely decrease, and therefore the price of the buses would likely decrease.

                           In order to operate CNG buses, transit operators generally must construct
                           fast-fill fueling stations with gas compressor systems. These new capital
                           investments would not be necessary to operate diesel buses. The costs to
                           construct CNG fuel facilities can range from hundreds of thousands to
                           millions of dollars. FTA estimates that a CNG fueling facility for a typical


                           16
                             The additional capital costs for alternative fuel buses relative to diesel buses consist of the extra cost
                           to purchase the buses and the extra cost, if any, to modify the facilities to fuel, service, and maintain
                           those buses.
                           17
                            The overall operating costs for running a transit bus fleet include those costs that can be directly
                           attributed to the vehicle, such as fuel and vehicle maintenance, and those general costs that are not
                           specific to a particular vehicle, such as driver labor, facilities maintenance, and administration. The
                           costs likely to be affected by the use of an alternative fuel include fuel and lubricant costs and vehicle
                           maintenance costs. Together, these constitute about one-fourth of the total operating costs.



                           Page 10                                                                 GAO/RCED-00-18 Mass Transit
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                            200-bus transit fleet costs $1.7 million.18 Similarly, Tacoma, Washington’s,
                            Pierce Transit Authority spent about $950,000 for its fueling facility; the
                            Greater Cleveland Regional Transit Authority spent $3 million for one of
                            its fueling facilities; and New York City Transit and Los Angeles County
                            Metropolitan Transportation Authority each spent $5 million for a fueling
                            facility.19 At the same time, some transit operators that we interviewed
                            avoided the costly investment of installing a CNG fueling facility. The Miami
                            Dade Transit Agency, for example, refueled its few experimental CNG
                            buses at an airport’s CNG fueling station and spent about $16,000 to modify
                            its facilities.

                            In addition, transit operators that switch to CNG buses must modify their
                            maintenance facilities to include proper ventilation and leak detection and
                            monitoring systems and typically spend $600,000 to modify one
                            maintenance garage, according to FTA. For example, Thousand Palms’
                            SunLine Transit (Calif.) reported spend about $320,000; Tacoma’s Pierce
                            Transit Authority spent about $645,000; the Greater Cleveland Regional
                            Transit Authority and Los Angeles County Metropolitan Transportation
                            Authority spent $750,000 and $1 million, respectively; and New York City
                            Transit spent $15 million to modify its facilities.


In Many Cases, the          Eight of the transit operators that we contacted operate CNG buses. Seven
Operating Costs of CNG      of these operators provided assessments of the operating costs of their
                            CNG buses relative to their diesel buses. Six of these operators stated that
Buses Exceed the
                            the overall operating costs of CNG buses are higher than those of diesel
Operating Costs of Diesel   buses, while one said that the operating costs of its CNG buses were less
Buses                       than those of diesel buses.

                            Seven of the transit operators that we contacted that operate CNG buses
                            provided us with maintenance cost data. According to six of these
                            operators, the maintenance costs of CNG buses (an operating cost that
                            includes engine and fuel system repairs and parts replacement) exceed
                            those of diesel buses. For example, Pierce Transit reported that the
                            engine-related maintenance costs of its CNG buses were 16 percent higher
                            than the costs of its diesel buses. Among the factors that contribute to the
                            cost difference are increased fuel system inspection and tune-up costs and


                            18
                              The Transit Cooperative Research Program (a program sponsored by the FTA) and the
                            Transportation Research Board published an assessment of the state of alternative fuels in transit
                            systems: Guidebook for Evaluating, Selecting, and Implementing Fuel Choices for Transit Bus
                            Operations, TCRP Report 38 (1998). We used information about the costs and characteristics of
                            alternative fuels from that report.
                            19
                              Cost figures are represented in 1998 dollars unless indicated otherwise.


                            Page 11                                                               GAO/RCED-00-18 Mass Transit
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more expensive parts.20 On the other hand, SunLine Transit said that the
maintenance costs of its CNG buses were lower than the costs of its diesel
buses.21 Transit operators noted that many of the additional costs are
hidden while the engines are under the manufacturer’s warranty and only
become apparent once the warranty expires.

In some cases, the fuel costs of operating the CNG buses are higher than
those of diesel buses, while in other cases, those costs are lower. Three of
the six CNG transit operators that we interviewed that provided us with fuel
costs reported that their costs for CNG fuel exceeded their costs for diesel
fuel. However, Pierce Transit of Tacoma, Washington, and SunLine Transit
of Thousand Palms, California, reported that their costs for CNG fuel are
less than what they would be for diesel fuel, while the St. Louis Bi-State
transit operator replied that its costs for CNG fuel are the same as they
would be for diesel fuel. According to DOE, for 1999, the nationwide
average price of diesel fuel was 25 percent higher, on an energy-equivalent
basis, than the fuel price of CNG.22 However, transit operators’ CNG costs
can vary, depending on geographic location, the cost to compress the
natural gas, and the extent to which any special arrangements have been
made with the local natural gas company. Some of the transit operators we
interviewed—Tacoma’s Pierce Transit Authority, the Los Angeles County
Metropolitan Transportation Authority, New York City Transit, and
SunLine Transit—have been able to decrease their costs for CNG fuel by
negotiating contractual arrangements to purchase the fuel at decreased
prices from their local gas distributors. Also, the fuel costs of using CNG
can be higher in part because, according to a recent FTA study, CNG buses
are 20 to 40 percent less fuel-efficient than diesel buses.




20
  According to a draft study by the Los Angeles County Metropolitan Transportation Authority (Fuel
Strategies for Future Bus Procurements [Mar. 12, 1999]), the inspection and tune-up costs of CNG
engine and fuel systems are expected to continue to outpace the costs of diesel systems because of the
time and frequency associated with these maintenance activities. However, the differential cost
between the two systems is expected to decrease, as fuel and ignition systems for CNG vehicles
become more durable with the continued advancement of this technology.
21
   Three-Year Comparison of Natural Gas and Diesel Transit Buses, SunLine Transit of Thousand
Palms, California (May 1999). The report compares the experiences of the transit operators in
Thousand Palms and Sacramento. Of the eight CNG transit operators we contacted, SunLine was the
only one that reported lower fuel and maintenance costs.
22
 According to DOE, for 1999, the average price of diesel fuel was $7.91 per million British thermal
units (1998 dollars), while the average price of CNG was $6.31 per million British thermal units (1998
dollars).


Page 12                                                              GAO/RCED-00-18 Mass Transit
                             B-282893




                             The transit operators that we interviewed identified a number of
Incentives and               incentives and disincentives for using alternative fuel technologies.
Disincentives of Using
Alternative Fuel
Technologies in
Transit Buses
Incentives for Using         Nine of the 12 transit operators we interviewed cited concerns about
Alternative Fuel             vehicle emissions standards and air quality as among the most important
Technologies Identified by   reasons for using alternative fuel buses. The Los Angeles County
                             Metropolitan Transportation Authority began purchasing and testing
Transit Operators            methanol buses in 1989 in response to impending changes in federal
                             emissions standards. Also, operators in areas that were already meeting air
                             quality standards—such as the Tri-County Metropolitan Transportation
                             District of Portland, Oregon—cited the need to further improve air quality
                             as a reason for using alternative fuel buses.

                             Emissions from transit buses are a very visible public concern. According
                             to an EPA official, the agency receives more complaints from the public
                             about emissions from transit buses than all other environmental issues
                             combined. According to 8 out of the 12 transit operators we contacted,
                             improving the public’s perception of transit and responding to the public’s
                             desire for cleaner fuels were factors that influenced their decisions about
                             the use of alternative fuel buses. By replacing diesel buses with alternative
                             fuel buses, transit operators believe that transit will be perceived as more
                             environmentally friendly and as a more desirable alternative. For example,
                             an official from the Greater Cleveland Regional Transit Authority said that,
                             after beginning to operate alternative fuel buses, the Authority received
                             very favorable comments from the public because its buses no longer
                             emitted the black smoke typical of older diesel engines.

                             Transit operators also cited the federal funding of alternative technologies
                             and state and local mandates as incentives. Officials of 4 of the 12 transit
                             operators we contacted said that they began using alternative fuels
                             because of the availability of federal government funding. For example,
                             the Miami Dade Transit Agency became an alternative fuel test site
                             because of an FTA program that funded a number of alternative fuel
                             activities. In this case, the program provided funding for the purchase of
                             40 alternative fuel buses and clean diesel buses used in Miami’s Alternative
                             Fuels Test program. Other transit operators were encouraged to try
                             alternative fuels because, under federal bus procurement programs, the



                             Page 13                                            GAO/RCED-00-18 Mass Transit
                             B-282893




                             federal funding match for alternative fuel vehicles is higher than it is for
                             standard diesel vehicles. Also, state and local mandates have encouraged
                             the use of alternative fuels. For example, Houston began purchasing LNG
                             because the state of Texas Clean Fleet Program required that transit
                             operators convert half of their fleets to consist of low-emission vehicles.23
                             The Los Angeles County Metropolitan Transportation Authority adopted a
                             policy in 1993 to purchase only buses that use alternative fuels.


Disincentives for Using      Officials from 9 of the 12 transit operators we interviewed indicated that
Alternative Fuel             the higher costs of alternative fuel bus operations—both capital and
Technologies Identified by   operating costs—were a deterrent to switching from diesel fuel. For
                             example, most operators of CNG buses had concerns about the capital
Transit Operators            investment associated with these buses. As noted earlier, the capital
                             investments include more costly vehicles as well as significant outlays for
                             installing fueling stations and modifying maintenance facilities.

                             The transit operators who use alternative fuel buses also found the
                             reduction in reliability to be a major disincentive to using these buses.
                             Officials of 10 of the 12 transit operators we contacted said that the
                             reduced reliability of alternative fuel buses was a disincentive. For
                             example, both Los Angeles County and the Greater Cleveland Regional
                             Transit Authority reported more engine and fuel system failures in their
                             CNG bus fleets than in their diesel bus fleets. Recent studies indicated that,
                             despite great strides by engine manufacturers, CNG buses’ engine and fuel
                             system will likely remain less reliable than these components in diesel
                             buses for the foreseeable future.

                             The higher costs and reduced reliability of alternative fuel transit buses
                             have led some transit operators to discontinue operating alternative fuel
                             transit buses. For example, Houston’s Metropolitan Transit Authority has
                             switched its dual-fuel LNG buses exclusively to diesel fuel. The Miami Dade
                             Transit Authority has discontinued its experiments with various
                             alternative fuels and converted all of its buses to diesel. These operators
                             indicated that they might reconsider their decisions in the future if the
                             alternative fuel technologies become more reliable and less expensive.
                             Transit operators that are committed to running alternative fuel buses tend
                             to view the reduction in reliability as a cost of doing business for using
                             alternative fuels. For example, officials of such transit operators as

                             23
                              The Texas Clean Fleet Program requires that participating local governments ensure that certain
                             percentages of their vehicle purchases are EPA-certified low-emission vehicles. In 1998, the program
                             was amended to exempt vehicles over 26,000 pounds—effectively exempting all full-sized transit
                             buses.



                             Page 14                                                              GAO/RCED-00-18 Mass Transit
                  B-282893




                  SunLine Transit, Pierce Transit, and the Greater Cleveland Regional
                  Transit Authority stated that they approach the challenges of alternative
                  fuel fleets by solving problems as they arise. They take the necessary
                  measures to ensure the success of their alternative fuel bus fleets.

                  In addition, diesel buses have become significantly cleaner over the past
                  11 years. According to the transit operators and industry experts we
                  contacted, the environmental advantages that CNG and alternative fuels
                  once enjoyed over diesel have dissipated, making transit operators less
                  likely to switch to CNG and other alternative fuel technologies for this
                  reason. As previously described, the manufacturers of diesel bus engines
                  have produced buses that meet EPA’s emissions standards. Some of the
                  transit operators we spoke with first experimented with or began using
                  alternative fuels in the early 1990s, when it was unclear whether diesel
                  engine manufacturers would be able to meet EPA’s new standards. Since
                  1988, the manufacturers have made great strides to ensure that diesel
                  buses emit less pollutants. For instance, permissible emissions of nitrogen
                  oxide have been reduced by 63 percent, and particulate matter levels have
                  been reduced by 83 percent. According to some transportation industry
                  experts, it appears that these dramatic improvements in the emission
                  performance of diesel engines will continue into the next decade. FTA
                  reported that these developments are eroding the advantages in emission
                  performance that alternative fuel heavy-duty engines offer over diesel
                  engines.


                  We provided DOE, EPA, and DOT with a draft of this report for their review
Agency Comments   and comment. The agencies were generally satisfied with the information
                  presented in the draft report. All provided technical clarifications, which
                  were incorporated as appropriate.


                  We obtained information from DOT, EIA, and the transportation industry
Scope and         regarding the number of alternative fuel transit buses. We obtained
Methodology       information from EPA regarding the air quality standards for transit buses.
                  We spoke with and obtained data from federal, state, and transportation
                  industry officials, as well as transit operators that have used alternative
                  fuel transit buses, about the types of costs incurred to operate alternative
                  fuel buses as well as incentives and disincentives for using CNG as well as
                  other alternative fuels. Appendix I provides our detailed scope and
                  methodology. We conducted our review from March through




                  Page 15                                            GAO/RCED-00-18 Mass Transit
B-282893




November 1999 in accordance with generally accepted government
auditing standards.


We are distributing this report to the Administrator of the Federal Transit
Administration, the Administrator of the Environmental Protection
Agency, the Secretary of Energy, and the Secretary of Transportation. We
will make copies available to others upon request.

If you have any questions about this report, please contact me at
(202) 512-2834. Major contributors to this report were Bonnie Pignatiello
Leer, Gail Marnik, Ernie Hazera, Eric Diamant, Libby Halperin, and Joseph
Christoff.




Phyllis F. Scheinberg
Associate Director,
  Transportation Issues




Page 16                                            GAO/RCED-00-18 Mass Transit
Page 17   GAO/RCED-00-18 Mass Transit
Contents



Letter                                                     1


Appendix I                                                20

Scope and
Methodology
Appendix II                                               23

Sources Contacted by
GAO
Appendix III                                              25

Liquefied Natural Gas
Appendix IV                                               28

Liquefied Petroleum
Gas
Appendix V                                                31

Ethanol
Appendix VI                                               34

Methanol
Appendix VII                                              37

Fuel Cells
Appendix VIII                                             40

Battery Electric
Appendix IX                                               43

Hybrid Electric




                        Page 18   GAO/RCED-00-18 Mass Transit
                 Contents




Appendix X                                                                                46

Biodiesel Fuel
Tables           Table 1: Number of Full-Sized Transit Buses by Type of Fuel,              5
                   1992 Through 1997
                 Table 2: EPA’s Exhaust Emission Certification Standards for               9
                   Heavy-Duty Diesel Engines
                 Table I.1: Transit Operators Contacted                                   21




                 Abbreviations

                 CNG        compressed natural gas
                 DOE        Department of Energy
                 DOT        Department of Transportation
                 EIA        Energy Information Administration
                 EPA        Environmental Protection Agency
                 ETBE       ethyl tertiary butyl ether
                 FTA        Federal Transit Administration
                 GAO        General Accounting Office
                 LNG        liquefied natural gas
                 TEA-21     Transportation Equity Act for the 21st Century


                 Page 19                                          GAO/RCED-00-18 Mass Transit
Appendix I

Scope and Methodology


             To determine the status of the development and use of alternative fuel
             technologies in full-sized transit buses, we obtained information from the
             Federal Transit Administration’s (FTA) national transit database on the
             number of transit buses with more than 35 seats and the number of
             articulated buses according to fuel type for 1992 through 1997—the dates
             of the most recent data available at the time we completed our work.1
             Because FTA’s data on the use of fuels for full-sized buses were current
             only through the end of 1997, we used data from DOE’s Energy Information
             Administration (EIA) for additional analysis on trends in fuel use from 1998
             through 2000.2 EIA’s data are more expansive than FTA’s: FTA’s data pertain
             only to metropolitan areas of 50,000 people or greater, while EIA’s data
             estimate fuel use nationwide. We performed limited reliability assessments
             on required data elements from FTA’s and EIA’s data. These assessments
             involved reviewing existing information about the data and performing
             electronic tests for reasonableness. We determined that the data were
             reliable enough for the purposes of this report. We also spoke with 12
             transit operators that have used or are currently using alternatively fueled
             transit buses to obtain information about their experiences. We
             judgmentally selected the transit operators on the basis of the number of
             buses, the number of unlinked passenger trips, alternative fuel experience,
             geographic location, federal funds obligated by the relevant state, and size
             of the urban area. Table I.1 lists the transit operators we contacted and the
             type of alternative fuel they used for transit buses.




             1
              An articulated bus is an extra-long bus (54 to 60 feet) that has the rear body section connected to the
             main body by a mechanism that allows the vehicle to bend when in operation for sharp turns and
             curves.
             2
              These data are estimates of alternatively fueled buses greater than 35 feet that the EIA compiled from
             the following sources: the American Public Transit Association’s 1999 Transit Vehicle Data Book; the
             Federal Transit Administration’s 1997 National Transit Database; the Energy Information
             Administration’s Form EIA-886, “Alternative Transportation Fuels and Alternative Fueled Vehicles
             Annual Survey;” miscellaneous newsletter, newspaper, and magazine articles; and worldwide websites.



             Page 20                                                               GAO/RCED-00-18 Mass Transit
                                         Appendix I
                                         Scope and Methodology




Table I.1: Transit Operators Contacted
                                                                                                 Type of alternative fuel
                                         Transit operator              Location                  used
                                         Command Bus Company          Brooklyn, N.Y.             CNG
                                         (New York City Department of
                                         Transportation)
                                         Metropolitan Transportation   Brooklyn, N.Y.            CNG, diesel hybrid electric
                                         Authority: New York City
                                         Transit
                                         Greater Cleveland Regional    Cleveland, Ohio           CNG
                                         Transit Authority
                                         Metropolitan Transit Authority Houston, Tex.            LNG
                                         of Harris County
                                         Los Angeles County            Los Angeles, Calif.       Methanol, ethanol, CNG
                                         Metropolitan Transportation
                                         Authority
                                         Miami Dade Transit Agency     Miami, Fla.               Methanol, CNG
                                         Minneapolis Metro Transit     Minneapolis, Minn.        Ethanol
                                         Greater Peoria Mass Transit   Peoria, Ill.              Ethanol
                                         District
                                         Portland Tri-County           Portland, Oreg.           LNG
                                         Metropolitan Transportation
                                         District of Oregon
                                         Bi-State Development          St. Louis, Mo.            CNG
                                         Agency, Missouri-Illinois
                                         Metropolitan District
                                         Pierce Transit Authority      Tacoma, Wash.             CNG
                                         SunLine Transit Agency        Thousand Palms, Calif.    CNG
                                         Legend

                                         CNG=compressed natural gas

                                         LNG=liquefied natural gas



                                         We also observed the activities at the Greater Cleveland Regional Transit
                                         Authority’s compressed natural gas (CNG) bus facility in Cleveland, Ohio.
                                         We obtained and reviewed studies conducted by transit operators in
                                         Cleveland, Ohio; Los Angeles, California; Miami, Florida; and Thousand
                                         Palms, California, regarding their experiences in using alternative fuels.
                                         We also obtained information on the development of alternative fuel
                                         technologies for use in transit buses from FTA as well as industry groups.
                                         Appendix II identifies the sources, other than transit operators cited in
                                         table I.1, that we contacted. To identify the air quality benefits of
                                         alternative fuel technologies, we reviewed information and spoke with
                                         Environmental Protection Agency (EPA) officials about air quality



                                         Page 21                                                GAO/RCED-00-18 Mass Transit
Appendix I
Scope and Methodology




standards that apply to transit buses. We also obtained from EPA
information regarding the degree to which transit bus emissions
contribute to the levels of pollution. We obtained and reviewed studies
conducted by West Virginia University for the Department of Energy (DOE)
on the potential emissions reduction resulting from the use of alternative
fuel technologies in transit buses. We spoke with West Virginia University
and DOE officials to discuss the studies’ findings. We spoke with a transit
bus engine manufacturer about the industry’s efforts to reduce emissions
from transit bus engines. Finally, we obtained and reviewed information
and studies from EPA and other sources regarding the potential to reduce
emissions from transit buses.

To identify transit operators’ costs of converting to alternative fuel
technologies, we spoke with the selected transit operators that have used
or are currently using alternative fuel transit buses. We obtained
information about the types of capital and operating costs they incurred
when switching their transit buses to alternative fuels and obtained the
actual cost figures where available. We also reviewed studies produced by
transit operators, as well as the Transit Cooperative Research Program, on
the costs that transit operators incur when switching to alternative fuels.

To identify the incentives and disincentives for using alternative fuel
technologies for transit buses, we contacted officials from the selected
transit operators, industry groups, DOT, EPA, and the DOE. We obtained
information on federal programs that provide funds for alternative fuel
vehicle purchases as well as operating assistance.

Appendix II identifies the sources other than the transit operators listed in
table I.1 that we spoke with.




Page 22                                             GAO/RCED-00-18 Mass Transit
Appendix II

Sources Contacted by GAO


                     Table I.1 also lists the transit operators that we contacted to obtain
                     information as cited in appendix I.


                     Federal Transit Administration
U.S. Department of
Transportation       National Highway Traffic Safety Administration

                     Research and Special Programs Administration

                       Advanced Vehicle Program

                     Volpe National Transportation Systems Center


                     Environmental Protection Agency
Other Federal
Agencies             Department of Energy

                       Energy Information Administration

                       National Renewable Energy Laboratory

                       Alternative Fuels Data Center


                     California Air Resources Board
State Groups
                     National Conference of State Legislatures


                     American Fuel Cells Association
Industry Groups
                     American Methanol Institute

                     American Public Transit Association

                     Ballard Automotive

                     Cummins Engine Company

                     Gas Research Institute



                     Page 23                                             GAO/RCED-00-18 Mass Transit
                      Appendix II
                      Sources Contacted by GAO




                      National Corn Growers Association

                      Natural Gas Vehicle Coalition

                      Propane Vehicle Council

                      Society of Automotive Engineers


                      New Flyer Bus Company
Bus Manufacturers
                      North American Bus Industries (NABI, Inc.)

                      Orion Bus Industries


                      Chicago Transit Authority
Other Organizations
                      Metropolitan Atlanta Rapid Transit Authority

                      Transit Cooperative Research Program

                      University of California-Davis

                      West Virginia University




                      Page 24                                        GAO/RCED-00-18 Mass Transit
Appendix III

Liquefied Natural Gas


                       As a transit fuel, liquefied natural gas (LNG) has expanded in recent years.
Overview               The same engines designed for CNG are used for LNG by heating and
                       vaporizing the liquid fuel before it is fed to the engine. LNG is available
                       from gas utility companies that store it, from gas-processing plants, or
                       through import terminals in Louisiana and Massachusetts. LNG has a higher
                       storage density than CNG, which gives it some advantages as a
                       transportation fuel. Initial experiences with LNG transit buses indicated
                       problems with engine and fuel system reliability and operating costs in
                       exceeding those of diesel.


                       LNG  is produced by cooling natural gas and purifying it to the desired
Fuel Characteristics   methane content. The typical methane content is approximately 95 percent
                       for the conventional LNG produced at a “peak shaving” plant. Peak
                       shaving involves the liquefaction of natural gas by utility companies during
                       periods of low gas demand (summer) and subsequent regasification during
                       peak demand (winter).1

                       A number of gas utility companies store large volumes of LNG in peak
                       shaving plants. These facilities can rapidly evaporate the product and
                       inject it into the pipeline system at times of very high customer demand.
                       LNG can also be produced at gas-processing plants, because these plants
                       employ refrigeration to condense and separate undesirable constituents
                       before it is injected into the pipeline system. In addition, imported LNG is
                       distributed to some markets through import terminals in Louisiana and
                       Massachusetts.

                       The same engines designed for CNG are used with LNG by heating and
                       vaporizing the liquid fuel before it is fed to the engine. All commercially
                       available LNG buses use an engine that was originally designed for CNG
                       because the fuel enters the engine in a gaseous state. LNG offers a
                       substantially higher storage density than CNG, which gives the former some
                       advantages as a transportation fuel.

                       Current LNG buses are 30-percent less fuel-efficient than diesel buses. LNG
                       should offer somewhat higher in-service fuel economy than CNG buses
                       because of its lower fuel storage weight.




                       1
                        Liquefaction is the process of turning a solid or gaseous substance into a liquid.



                       Page 25                                                                GAO/RCED-00-18 Mass Transit
                    Appendix III
                    Liquefied Natural Gas




                    EIA has estimated that 725 full-sized transit buses were fueled by LNG in
Status of Use and   1999. According to the American Public Transit Association, as of
Development         January 1999, nine agencies operated LNG buses, including three that had
                    additional LNG buses on order. Initial experiences with LNG were not very
                    successful. Agencies such as the Metropolitan Transit Authority of Harris
                    County (Houston) and Portland Tri-County Metropolitan District, tried out
                    LNG buses and experienced reliability problems and engine and fuel system
                    failures.


                    According to the Transit Cooperative Research Programs’ 1998 study, the
Costs               incremental price of LNG transit buses can range from $45,000 to $65,000
                    more per vehicle than diesel. These prices are anticipated to decrease if
                    and when the market develops and more sales are made. The prices of
                    heavy-duty natural gas engines are variable, depending on the
                    manufacturer, engine, and project. Manufacturers charge a substantial
                    premium to cover some of their costs, including development,
                    certification, and warranty service.

                    Other capital costs incurred during the conversion of bus operations to
                    LNG  include those for maintenance garage modifications and fueling
                    facilities. Because of the small number of garages actually modified, it is
                    complicated to estimate maintenance garage modification costs. The
                    Transit Cooperative Research Program estimates that the median cost for
                    LNG maintenance garage modifications will be $600,000 for a 150- to
                    200-bus garage. The costs of an LNG fueling facility are probably more
                    variable than the costs for a CNG facility because fewer LNG stations have
                    been installed. A bid for the design and construction of an LNG fueling
                    facility was $2.5 million, plus another $200,000 for the capability of fueling
                    with both LNG and CNG.

                    The operating costs for LNG buses, relative to those for diesel buses,
                    depend mainly on fuel pricing, relative fuel economy, and maintenance
                    costs. LNG tends to be less expensive than diesel fuel when energy content
                    is considered. In regions with favorable LNG fuel pricing, the fuel costs
                    associated with LNG can be lower than those associated with diesel, even
                    including LNG’s 30-percent lower fuel efficiency. For most fuel sources, the
                    price of LNG is highly dependent on the buyer’s willingness to contract to
                    purchase a given quantity over a given time period as well as on the
                    transportation costs involved.




                    Page 26                                             GAO/RCED-00-18 Mass Transit
                 Appendix III
                 Liquefied Natural Gas




                 There are wider varieties of fuel supply scenarios for LNG than for CNG.
                 These include on-site liquefaction, central liquefaction facilities, LNG from
                 gas-processing plants, peak shaving LNG, and imported LNG. Each of these
                 has supplied fuel for LNG vehicles in the United States. Because natural gas
                 is widely used in the United States for home heating, the generation of
                 electricity, and industrial processes, fuel supply is not expected to
                 constrain the development of natural gas as a vehicular fuel. However, the
                 costs of supplying LNG through various supply scenarios will vary
                 regionally, and not all fuel supply scenarios will be economically viable at
                 all locations.


                 Because the engine technology is the same, emissions from LNG vehicles
Emissions        are essentially identical to emissions from CNG vehicles. They are both
                 significantly cleaner than diesel.


                 The use of LNG in buses offers lower emissions than diesel buses. LNG
Incentives and   buses are commercially available and have many of the same reliability
Disincentives    and operating cost issues as CNG buses. LNG offers a substantially higher
                 storage density than CNG, so the former may be a better choice for buses
                 that run longer routes. LNG buses are less fuel efficient than diesel buses.
                 Also, the freezing temperature associated with LNG systems creates a
                 number of generalized safety considerations for bulk transfer and storage.
                 Most importantly, LNG is a fuel that requires intensive monitoring and
                 control because of the constant heating of the fuel, which takes place
                 because of the extreme temperature differential between ambient and LNG
                 fuel temperatures. Refueling operations require operators’awareness of,
                 and protection from, hazards that result from skin contact with very cold
                 substances. Skin contact with leaking fuel can cause frostbite. Wearing
                 leather gloves, a face shield, and an apron provides good protection in the
                 event of a leak. Worn LNG fueling nozzles begin to leak fuel, and LNG
                 nozzles have shown poor durability in transit service in the past. The latest
                 nozzle designs are much more durable, and improvements continue to be
                 developed to improve durability to a satisfactory level.




                 Page 27                                            GAO/RCED-00-18 Mass Transit
Appendix IV

Liquefied Petroleum Gas


                       Liquefied petroleum gas, otherwise known as propane, is a by-product of
Overview               both natural gas processing and petroleum refining. While rarely used as a
                       fuel for full-sized buses, propane is used in several hundred paratransit
                       vehicles with spark-ignited engines.1 Along with a reduction in emissions,
                       the use of propane as a fuel in transit bus fleets brings with it high
                       operating and capital costs as well as some concerns about safety.
                       Propane buses also suffer a fuel efficiency penalty relative to diesel buses.
                       Propane’s widespread use is currently hindered by the lack of a suitable
                       commercially manufactured engine for full-sized transit buses.


                       Propane consists of a mixture of natural gas liquids, including propane,
Fuel Characteristics   propylene, butane, and butene. It is gaseous at room temperature but
                       liquefies at relatively low pressures. Propane’s properties make it
                       convenient for storage and transport as a pressurized liquid. The stored
                       liquid fuel is easily vaporized into a gas with clean-burning combustion
                       properties.

                       Approximately 60 percent of the propane produced in North America
                       comes from natural gas processing. Propane can be purchased wholesale
                       from distribution centers by fleet users with their own refueling stations or
                       at discounted prices from public-access refueling stations. The general
                       public can also purchase it at retail prices from public-access refueling
                       stations.

                       Propane buses are less fuel efficient than diesel buses. For example,
                       propane buses operating at a California-based transit agency were
                       26 percent less fuel efficient than equivalent diesel buses.


                       The extensive use of propane in larger transit buses is currently hindered
Status of Use and      by the lack of a suitable commercially manufactured engine. Warranted
Development            commercially manufactured propane engines are commercially available
                       for buses up to 30 feet long. While propane engine technology is currently
                       available, it has not been transferred to larger engines, although the
                       potential exists. According to an official from the Propane Vehicle
                       Council, Detroit Diesel had been developing a propane version of a
                       heavy-duty engine, but this program has been discontinued owing to a loss
                       of interest, which occurred after the natural gas industry greatly increased
                       its assistance for the development of natural gas engines. The propane

                       1
                        Paratransit vehicles are those, such as vans or small buses (generally less than 35 feet in length), that
                       can be used to provide transit services on a flexible basis, as opposed to operating on fixed routes and
                       according to fixed schedules.



                       Page 28                                                                GAO/RCED-00-18 Mass Transit
        Appendix IV
        Liquefied Petroleum Gas




        industry is now assessing the market demand for larger propane engines.
        Although rare, a few transit operators currently use full-sized propane
        buses in their fleets. Propane is also used in several hundred paratransit
        vehicles (less than 30 feet long) with spark-ignited engines. EIA has
        estimated that 152 full-sized propane transit buses were in service in the
        United States in 1999. According to the Propane Vehicle Council official,
        convincing manufacturers to make the investment that would move
        propane technology to a 350- to 400-horsepower engine is the biggest
        impediment to increasing the penetration of propane into the transit bus
        market.


        According to the Transit Cooperative Research Program, in 1998, the
Costs   incremental cost of a propane bus was approximately $35,000 to $45,000
        greater than a counterpart diesel bus.

        The use of propane requires that fueling, maintenance, and storage
        facilities be upgraded to different standards or that a new facility be
        constructed. For example, propane storage and dispensing areas must be
        located certain minimum distances away from buildings, adjoining
        property, streets, alleys, and underground tanks. A well-designed
        maintenance garage for propane vehicles has explosion-proof wiring and
        electrical equipment in low areas where propane buses are maintained.
        Building ventilation rates must be sufficient to remove propane from
        ground level. Maintenance facilities should be equipped with flammable
        gas detectors. These devices can detect concentrations of propane before
        the vapors reach flammable levels. These facility modifications entail
        additional capital costs. Although these costs vary substantially,
        depending on the specific circumstances and equipment, a typical estimate
        for a 200-bus transit fleet is $300,000 for modifications to one maintenance
        garage and $700,000 for one propane fueling facility.

        Since the early 1990s, the energy equivalent price (on average) of propane
        has been increasing relative to the price of gasoline and diesel fuel, and
        propane is now nearly as expensive as gasoline and is more expensive
        than diesel fuel. It is difficult to be precise about the price of propane as a
        motor fuel because its purchase price depends on many factors. These
        include whether the purchase is wholesale (e.g., for a fleet) or retail, the
        quantity being purchased, the timing relative to yearly and seasonal
        propane market fluctuations, the location of purchase within the United
        States, and the state’s tax treatment.




        Page 29                                              GAO/RCED-00-18 Mass Transit
                 Appendix IV
                 Liquefied Petroleum Gas




                 Propane bus engines generally have lower emissions than counterpart
Emissions        diesel engines, although generally not as low as natural gas or methanol
                 engines. According to an official of the Propane Vehicle Council, the
                 simple molecular structure of propane eliminates particulate matter. In
                 addition, experimental propane buses operated at a California-based
                 transit agency underwent tests that indicated very low nitrogen oxide
                 emissions. It appears that proper optimization for lean combustion in
                 spark-ignited propane engines can yield excellent emissions performance.


                 The primary incentive to use propane is the emissions benefits.
Incentives and   Disincentives include safety concerns due to pressurized storage of the
Disincentives    fuel and potential fire hazards during transport. Propane is stored under
                 moderate pressure at ambient temperatures to maintain it in a liquid state.
                 Since it is stored in this manner during bulk transport and storage
                 operations, there is a potential hazard associated with an inadvertent
                 opening of a fitting or plug that could become a projectile. A major
                 concern of the potential fire hazards during the transport of propane via
                 tanker trucks is the setting of pressure relief valves so that the container
                 will not vent propane vapor in the event of an unusually warm day. There
                 are no significant environmental concerns associated with propane spills,
                 since the liquid will quickly vaporize. Since propane for fleet use is a
                 mixture of hydrocarbons, the toxicity of the fuel is difficult to determine.
                 The major constituent—pure propane—is considered to be a simple
                 asphyxiant by the American Conference of Governmental Industrial
                 Hygienists.




                 Page 30                                            GAO/RCED-00-18 Mass Transit
Appendix V

Ethanol


                       Ethanol would appear to be a good candidate for an alternative fuel for
Overview               use in transit buses because it is a liquid and has several physical and
                       combustion properties similar to diesel fuel. These properties are so
                       similar that the same basic engine and fuel system technologies can be
                       used for both ethanol and for diesel fuel. However, the experiences of
                       transit operators using ethanol as a transit bus fuel have indicated that it is
                       not a satisfactory alternative because of higher costs and premature
                       engine failure. At this time, no bus manufacturer is currently producing
                       ethanol buses.


                       Ethanol is produced by the fermentation of plant sugars. Typically, it is
Fuel Characteristics   produced in the United States from corn and other grain products, while
                       some imported ethanol is produced from sugar cane. Pure ethanol is rarely
                       used for transportation applications because of the concern about
                       intentional ingestion. In fact, ethanol for commercial or industrial use is
                       always denatured (i.e., small amount of toxic substance is added) to avoid
                       the federal alcoholic beverage tax.

                       Pure ethanol is a clear liquid with a characteristic faint odor. It has a high
                       latent heat of vaporization, like methanol. Ethanol is completely soluble in
                       water, which presents problems for storage and handling. Current fuel
                       distribution and storage systems are not watertight, and water tends to
                       carry impurities with it. Ethanol will not be significantly degraded by small
                       amounts of clean water, though the addition of water dilutes its value as a
                       fuel.

                       Ethanol can be used as a transportation fuel in three primary ways. It can
                       be used as a blend with gasoline—typically 10 percent—that is commonly
                       known as gasohol. It can be used as a component of reformulated gasoline
                       both directly and/or by being transformed into a compound such as ethyl
                       tertiary butyl ether (ETBE). Or it can be used directly as a fuel—with
                       15 percent or more gasoline known as E85.

                       Ethanol can also be used directly in diesel engines specially configured for
                       alcohol fuels. Using ethanol to make gasohol, in reformulated gasoline, or
                       transformed into ETBE for use in reformulated gasoline, does not require
                       specially configured vehicles. Almost all existing vehicles will tolerate
                       these fuels without problems and with likely advantageous emissions
                       benefits.




                       Page 31                                              GAO/RCED-00-18 Mass Transit
                    Appendix V
                    Ethanol




                    In 1997, the United States had a production capacity for fuel ethanol of 1.1
                    billion gallons per year. Ninety percent of this capacity was from 16 plants
                    having a capacity of 10 million gallons per year and larger. Almost all
                    ethanol production plants are located in the Midwest where the largest
                    amount of corn is grown.


                    EIA has estimated that in 1999 there are 51 full-sized ethanol transit buses
Status of Use and   in the nation. There are no orders for ethanol buses currently. No
Development         manufacturer has produced alcohol-fueled engines since 1996. The Los
                    Angeles County Metropolitan Transportation Authority converted its
                    methanol fleet to ethanol in 1995, believing that the ethanol engines would
                    have to be rebuilt only once every 3 years as opposed to once every 12
                    months with methanol. However, the ethanol engines failed at a much
                    quicker rate, achieving only about half the life of the methanol engines. In
                    1998, Los Angeles County received approval to convert the alcohol-fueled
                    engines to diesel as the engines failed and the warranties expired. The
                    decision to convert the alcohol-fueled buses to diesel was very
                    controversial, but the other options were more costly and would have
                    negatively affected service.


                    According to the Transit Cooperative Research Program, the actual
Costs               incremental costs for ethanol buses when they were available for purchase
                    were approximately $25,000 to $35,000. Ethanol fueling facilities and
                    modifications to maintenance facilities entail additional capital costs.
                    Although these costs vary substantially on the basis of the specific
                    circumstances and equipment, a typical estimate for a 200-bus transit fleet
                    is $300,000 for modifications to one maintenance garage and $400,000 for
                    one ethanol fueling facility.

                    The operating costs for ethanol buses, relative to diesel buses, depend
                    primarily on fuel costs and maintenance costs. Because of the limited use
                    of ethanol transit buses, no definitive estimate of the incremental
                    maintenance costs of ethanol buses exists. According to a 1996 DOE study,
                    the maintenance costs of ethanol-powered bus engines and fuel systems
                    were significantly higher than those of diesel buses. Among the fuels that
                    the Transit Cooperative Research Program reviewed, on the basis of
                    energy content, only hydrogen is more expensive than ethanol. Because
                    ethanol is basically an agricultural product, agricultural economics and
                    institutions dominate its production, and its price is related to crop prices.




                    Page 32                                             GAO/RCED-00-18 Mass Transit
                 Appendix V
                 Ethanol




                 The primary emission advantage of using ethanol blends is that carbon
Emissions        monoxide emissions are reduced by the oxygen content of ethanol. The
                 oxygen in the fuel contributes to combustion much the same as adding air.
                 Because this additional oxygen is being added through the fuel, the engine
                 fuel and emissions systems are fooled into operating leaner than designed,
                 the result of which is lower carbon monoxide emissions and typically
                 slightly higher nitrogen oxides emissions.

                 The emissions characteristics of E85 (a blend of ethanol with 15 percent or
                 more gasoline) are not as well documented as those for M85 (a blend of
                 methanol with 15 percent or more gasoline) vehicles. However, Ford
                 Motor Company tested and found essentially no difference in tailpipe
                 emissions compared to using the standard emissions testing gasoline
                 (Indolene). In this test, the engine-out emissions of hydrocarbons and
                 nitrogen oxides were lower than they were for gasoline, but ethanol’s
                 lower exhaust gas temperatures were believed to decrease the catalyst’s
                 efficiency only slightly, so the tailpipe emissions were the same.


                 A significant advantage of alcohol fuels is that when they are combusted in
Incentives and   diesel engines, they do not produce any soot or particulate matter, and
Disincentives    such engines can be tuned to also produce very low levels of nitrogen
                 oxides. Other inherent advantages are that their emissions are less
                 reactive in the atmosphere, thus producing smaller amounts of ozone, the
                 harmful component of smog. The mass of emissions using ethanol is not
                 significantly different from that of petroleum fuels.

                 A bus fueled with ethanol will have a longer range than a methanol-fueled
                 bus with the same size fuel tank, but ethanol generally costs more than
                 methanol, and large quantities are needed for transit usage. Like methanol
                 buses, ethanol buses suffer a fuel economy penalty compared to diesel
                 buses.




                 Page 33                                           GAO/RCED-00-18 Mass Transit
Appendix VI

Methanol


                       Methanol is a liquid fuel that has several physical and combustion
Overview               properties similar to diesel fuel. These properties are so similar that the
                       same basic engine and fuel system technologies can be used for methanol
                       and for diesel fuel. Experience with methanol has shown unreliability of
                       engines and high fuel prices. No manufacturer is currently producing
                       methanol engines.


                       Methanol is a colorless liquid that is a common chemical used in industry
Fuel Characteristics   as a solvent and directly in manufacturing processes. The currently
                       preferred (and most economical) process for producing methanol is the
                       steam reformation of natural gas. Methanol can also be produced from
                       coal and municipal waste. In the United States, the primary methanol
                       production location is the Gulf Coast area. Methanol is distributed
                       throughout the nation as an industrial chemical. In the transportation
                       sector, methanol has typically been sold either blended with 15 percent or
                       more gasoline (M85) or unblended (M100).

                       The low vapor pressure and high latent heat of vaporization of methanol
                       created creates cold-start difficulties in spark-ignition engines. To
                       overcome this hurdle and improve the visibility of the methanol’s flame, a
                       consensus developed that 15-percent gasoline per volume would be added
                       to methanol (known as M85.) The addition of gasoline changes some of
                       the fuel properties significantly and makes them behave much more like
                       gasoline. This facilitated the development of flexible fuel vehicles, which
                       allow straight gasoline and M85 to be used in the same fuel tank. M100 is
                       the predominant fuel formulation in heavy-duty methanol engines.

                       On an energy-equivalent basis, current methanol buses have experienced a
                       slightly lower fuel economy compared to diesel buses. This fuel economy
                       penalty is likely due to the additional fuel storage weight carried by the
                       methanol buses.


                       EIA has estimated that in 1999 there are 38 full-sized methanol transit buses
Status of Use and      in the United States. No transit operators currently have plans to purchase
Development            methanol buses. There is currently little effort to develop new heavy-duty
                       methanol engines, although Caterpillar Technologies has been working,
                       with support from DOE, to develop a modern four-stroke truck engine that
                       uses methanol or diesel fuel or any combination of the two. Such a
                       “fuel-flexible” engine could make a transition to the increased use of
                       methanol fuels in the heavy-duty sector much simpler than relying on



                       Page 34                                            GAO/RCED-00-18 Mass Transit
            Appendix VI
            Methanol




            dedicated methanol engines that could be used only in areas where
            methanol is available.

            No manufacturer has been producing alcohol-fueled engines since 1996.
            Some transit operators have experienced mechanical problems with
            methanol fleets, including premature engine failures, which failed twice as
            fast as they should have. Because of problems with reliability and engine
            failure, the Los Angeles County Metropolitan Transportation Authority
            converted its methanol fleet to ethanol in 1995, believing that the ethanol
            engines would have to be rebuilt only once every 3 years as opposed to
            once every 12 months with methanol.


            According to the Transit Cooperative Research Program, the actual
Costs       incremental costs for methanol buses, when they were available for
            purchase, were approximately $25,000 to $35,000. Methanol fueling
            facilities and modifications to maintenance facilities entail additional
            capital costs. Although these costs vary substantially on the basis of
            specific circumstances and equipment, a typical estimate for a 200-bus
            transit fleet is $300,000 for modifications to one maintenance garage and
            $400,000 for one methanol fueling facility.

            The operating costs for methanol buses, relative to diesel buses, depend
            primarily on fuel costs and maintenance costs. Fuel costs are substantially
            higher for methanol buses because of current methanol fuel prices and a
            fuel economy penalty. Current data on relative maintenance costs for
            methanol buses are based largely on the experiences of Los Angeles
            County. According to the Transit Cooperative Research Program,
            methanol buses experienced high maintenance costs because of the need
            for frequent engine rebuilds. It is likely that additional development work
            could lead to better designs that could greatly improve their durability.
            However, there is little likelihood that a methanol engine meeting modern
            standards of durability will be developed for some time.


            Methanol does not produce soot or smoke when combusted so no
Emissions   particulate matter is formed. Peak combustion temperatures can be
            reduced with correspondingly low emissions of nitrogen oxides. Methanol
            contains no sulfur so it does not contribute to atmospheric sulfur dioxide.
            Since sulfur dioxide and nitrogen oxides emissions lead to acidic
            deposition, the use of methanol would make a minor contribution to
            reducing acid rain.



            Page 35                                           GAO/RCED-00-18 Mass Transit
                 Appendix VI
                 Methanol




                 Methanol’s major advantage in vehicular use is that it is a convenient,
Incentives and   familiar liquid fuel that can readily be produced using well-proven
Disincentives    technology. It is a fuel for which vehicle manufacturers can, with relative
                 ease, design a vehicle that will obtain an advantage in some combination
                 of reduced emissions and improved efficiency. Other inherent advantages
                 are that methanol emissions are less reactive in the atmosphere, thus
                 producing smaller amounts of ozone—the harmful component of smog.
                 The mass of emissions from methanol is not significantly different from
                 that of petroleum fuels. Alcohol fuels do not produce any soot or
                 particulate, and they can be tuned to also produce very low levels of
                 oxides of nitrogen when they are combusted in diesel engines.

                 The major disadvantages of methanol include high initial costs and the
                 impact of reduced energy density on the range of driving or large fuel
                 tanks. Also, the additional fuel needed to achieve a diesel-equivalent range
                 adds increased weight that may reduce legal passenger capacities in bus
                 models, which are already heavy in diesel form. Methanol burns with a
                 flame that is not visible in direct sunlight, and there is a need to educate its
                 users and handlers concerning toxicity and safety.

                 Some transit operators have experienced higher rates of engine failure and
                 poor engine durability with methanol buses. The poor durability appears
                 to be mainly attributable to leaking fuel injectors as a result of mechanical
                 wear and the accumulation of combustion deposits in the injector tips.

                 Methanol can cause acute toxic effects through inhalation, ingestion, or
                 skin contact. According to one transit operator we contacted, it is
                 necessary to conduct safety training for personnel working with methanol
                 because of its high toxicity and its lack of a visible flame. Special
                 precautions also must be taken to contain any spills.




                 Page 36                                              GAO/RCED-00-18 Mass Transit
Appendix VII

Fuel Cells


                           Fuel cells are systems that convert hydrogen and oxygen to water.
Overview                   According to FTA officials, a fuel cell generates electricity from the
                           chemical reaction of combining hydrogen and oxygen into water. Fuel
                           cells may either be directly fueled by hydrogen stored onboard the vehicle
                           or may use reformers to generate hydrogen from methanol, natural gas, or
                           other hydrocarbon fuels. Still in the developmental stage, fuel cell buses
                           are currently more expensive than CNG buses, but their combination of
                           very high efficiency and low emissions has interested researchers for some
                           time.


                           According to FTA officials, fuel cells are fuel conversion systems—not
Fuel Characteristics       fuels. The basic elements of a fuel cell are the anode, cathode, electrolyte,
                           and electric load. At the simplest level, fuel cells may be thought of as
                           batteries that operate with hydrogen and oxygen. The complete reaction of
                           the fuel cell combines hydrogen with oxygen to produce water and
                           electricity. The chemical energy is converted to electrical energy with high
                           efficiency, negligible pollution, and little noise. With this process, energy
                           conversion efficiencies on the order of 80 percent are theoretically
                           possible. In comparison, the energy conversion efficiency associated with
                           burning fuels in heat engines to produce mechanical energy, and convert
                           the mechanical energy to electrical energy, is limited to less than
                           40 percent.

                           Two types of fuel cells have been considered for transit bus applications.

                       •   The phosphoric acid fuel cell is so named because it uses hot concentrated
                           phosphoric acid as its electrolyte. This type of fuel cell cannot be started
                           at room temperature but, instead, must be preheated above 100 C before
                           any current can be drawn.
                       •   The Proton-Exchange Membrane fuel cell offers a paramount advantage in
                           that it may be started at room temperature without preheating. The actual
                           efficiencies of working fuel cells are in the range of 40 to 60 percent.


                           Two major programs are under way in North America to develop and
Status of Use and          commercialize fuel cell buses for transit. DOT is funding the longest
Development                running project through FTA. This project initially focused on the
                           development of a methanol reformer-fueled phosphoric acid fuel cell in a
                           30-foot transit bus. FTA’s fuel cell transit bus program is now moving into a
                           new phase, which seeks to demonstrate methanol-fueled fuel cells in
                           40-foot transit buses. This program is also developing a Proton-Exchange



                           Page 37                                             GAO/RCED-00-18 Mass Transit
        Appendix VII
        Fuel Cells




        Membrane fuel cell system for a 40-foot transit bus fueled with reformed
        methanol. The other program involves Proton-Exchange Membrane fuel
        cell stacks directly fueled by compressed hydrogen. Currently, the Chicago
        Transit Authority is undertaking a demonstration of three Ballard-New
        Flyer fuel cell buses. Three additional Proton-Exchange Membrane buses
        are being tested at British Columbia Transit in Vancouver (British
        Columbia, Canada). In addition, in late 1997, Daimler-Benz announced that
        it had engineered a compact methanol-fueled hydrogen reformer to work
        with the Proton-Exchange Membrane cell. Recent developmental work
        appears to have led to dramatic improvements in hydrogen reformer
        performance for automotive fuel cells.


        Fuel cell bus technology is in a developmental stage characterized by low
Costs   production volumes and high unit costs. Firm cost data are hard to obtain.
        As with any new technology, unit costs will fall as production rates and
        manufacturing experience increase. Forty-foot Ballard bus prototypes to
        be operated by British Columbia Transit and the Chicago Transit Authority
        reportedly cost $1.4 million each. Ballard has estimated that the price
        could fall to between $500,000 and $550,000 during initial commercial
        production and that with large-scale commercial production, prices would
        be competitive with CNG buses.

        Hydrogen is the basic fuel for fuel cells. The hydrogen may be stored
        onboard or it may be generated from other fuels by a reformer. Fueling
        facilities for fuel cell buses will be dramatically different, depending on
        whether the bus uses an onboard reformer. Reformers in existing and
        planned fuel cell bus and development programs are designed for
        methanol, although it is possible that a fuel cell engine using a natural gas,
        or a diesel or gasoline reformer might be developed in the future. Adding a
        reformer increases the cost, bulk, and complexity of the fuel cell system.
        Conventional methanol bus fueling facilities would be suitable for fuel cell
        buses as well.

        Fuel cell buses not using reformers are fueled directly with hydrogen. In
        the Ballard bus, hydrogen is stored as a compressed gas at 3,000 pounds
        per square inch. The hydrogen would be compressed in the liquid state to
        4,000 pounds per square inch, vaporized to a gas, and then dispensed into
        the onboard storage tanks.




        Page 38                                             GAO/RCED-00-18 Mass Transit
                 Appendix VII
                 Fuel Cells




                 The fuel cell emits zero emissions with onboard hydrogen and no
Emissions        particulate matter, trace amounts of hydrocarbons and nitrogen oxides,
                 and very little carbon monoxide with a reformer.


                 Low emissions levels are the main incentive for using fuel cells in transit
Incentives and   buses. However, the fact that they are still in the early developmental
Disincentives    stages, characterized by low production volumes and high unit costs, is a
                 large disincentive. In addition, directly fueling vehicles with hydrogen has
                 a number of liabilities. These include high costs, poorly developed supply
                 infrastructure, a storage volume greater than that required for CNG, and
                 codes and standards for the design of electrical equipment, maintenance
                 garages, and fueling facilities that are only now being developed.

                 According to FTA officials, there are also safety concerns when
                 compressed hydrogen is stored onboard a bus to power the fuel cell. For
                 example, compressed hydrogen systems have a tendency to leak, which
                 presents fire safety hazards. Hydrogen leaks are difficult to detect, since
                 hydrogen is colorless and odorless.




                 Page 39                                            GAO/RCED-00-18 Mass Transit
Appendix VIII

Battery Electric


                       Battery-electric propulsion systems are primarily targeted to smaller
Overview               transit buses, such as those used for service in vehicle tours that are
                       relatively short and low speed. This is due to the limited range and power
                       of battery electric-powered vehicles. Battery-electric propulsion is being
                       offered by several manufacturers for medium-duty buses from 22 to 30 feet
                       long. These buses offer several attractive features, including lower noise
                       levels, zero tailpipe emissions, and effortless cold starts. Their principal
                       drawbacks, compared to similar motor bus models, are reduced range and
                       performance, along with substantially higher purchase prices.


                       Electricity can be considered as an alternative source of propulsion as
Fuel Characteristics   evidenced by the use of electrically powered fleet vehicles using batteries
                       as the storage medium. The bulk transport of electricity via the electric
                       power distribution system is a fundamental part of the nation’s
                       infrastructure. The hazards associated with high-voltage power lines,
                       substation transformers, and local power distribution centers are well
                       known. Low energy density and the weight of batteries limit vehicle
                       performance and driving range. Typical battery recharging times are on
                       the order of 6 to 8 hours, requiring that fleets be recharged overnight.
                       According to FTA officials, battery pack changes or rapid recharging may
                       be used to extend the operating range of a battery-electric bus.


                       Many U.S. companies have electric bus development projects. The current
Status of Use and      research focus for electric propulsion vehicles is in the area of battery
Development            development, where the goal is to develop batteries that have low initial
                       cost, high specific energy, and high power density. Battery-electric buses
                       currently in use are predominantly 22- to 30-foot buses, not full-sized
                       buses. EIA has estimated that in 1999, there were only 150 full-sized
                       electric-powered transit buses used in the United States. Although
                       full-sized battery-electric buses have been successfully operated in
                       downtown shuttle routes with limited speed and range, their performance
                       limitations make them impractical for conventional route service but quite
                       appropriate for niche routes requiring only 22- to 30-foot vehicles and
                       ranges of 100 or fewer miles.


                       The capital costs of battery-electric buses are substantially higher than
Costs                  those of similarly sized diesel transit buses. A 25-foot battery-electric
                       shuttle bus is slightly more than twice as expensive as a comparable diesel
                       model when the battery-electric bus is equipped with a lead-acid battery



                       Page 40                                            GAO/RCED-00-18 Mass Transit
                 Appendix VIII
                 Battery Electric




                 pack. With the larger 33-foot buses, the cost premium for battery-electric
                 buses falls to approximately 33 percent. A Nickel Cadmium battery option,
                 which yields greater range per battery charge and increases a battery’s life
                 from 3 to approximately 7 years, appears to be widely available. Specifying
                 the Nickel Cadmium instead of a lead-acid battery pack will add from
                 $40,000 to $48,000 to the price of a battery-electric bus.

                 The operating costs for battery-electric buses that may differ from those of
                 diesel motor buses include energy costs, maintenance costs, and the costs
                 or savings associated with lower or higher vehicle availability. The energy
                 costs per mile reported for battery-electric buses are similar to those for
                 similarly sized diesel buses.1 Very little maintenance cost data for
                 battery-electric buses are reported in the literature. This may be because
                 the power trains in many of the buses in service to date have been
                 developmental and so have had maintenance requirements that are higher
                 than would be expected in fully commercialized production vehicles and
                 therefore are not comparable to production diesel vehicles.


                 Battery-electric propulsion buses have no emissions, smoke, or exhaust
Emissions        odor.


                 While battery-electric systems provide lower noise levels, emissions
Incentives and   benefits, and effortless cold starts as incentives, some disincentives of
Disincentives    battery-electric propulsion systems must be considered, including reduced
                 range and performance, and substantially higher purchase prices. There
                 are some safety concerns as well. One of the advantages of electricity
                 compared to other alternative motor fuels is that all facility personnel are
                 generally familiar with the hazards associated with electrical power.
                 Therefore, personnel working with the recharging system can be expected
                 to be aware of the dangers and follow the proper safety procedures. There
                 are no specific health or environmental hazards associated with the
                 transmission and use of electricity at a fleet facility.

                 The disadvantages associated with battery-electric propulsion for transit
                 buses include the limited range and performance capabilities, as
                 previously discussed. In addition, the battery-electric buses cost more than
                 diesel. All of the safety issues associated with electricity are directly
                 related to the transmission of electric power to the recharging station at

                 1
                  Cost information presented in the study for battery-electric buses focused generally on buses shorter
                 than 40 feet.



                 Page 41                                                              GAO/RCED-00-18 Mass Transit
Appendix VIII
Battery Electric




the fleet facility. There is no storage issue, since the electrical energy is
stored in the onboard batteries. The major safety concern is the exposure
of personnel to electrical hazards as they work with the recharging system
and connecting the vehicles to that system. This is not expected to be a
serious safety hazard because the normal design practices for setting up
the connections involve safeguards to ensure that personnel are protected
from direct exposure to electrical hazards.




Page 42                                            GAO/RCED-00-18 Mass Transit
Appendix IX

Hybrid Electric


                       Hybrid-electric transit buses may be a promising alternative to diesel
Overview               transit buses. Major bus manufactures are examining this technology, and
                       two of the transit operators we spoke with are either currently testing or
                       planning to test hybrid-electric buses. Since the system is still in the
                       developmental stage, the costs are high. However, the potential exists to
                       greatly reduce nitrogen oxide emissions with the hybrid-electric drive
                       system.


                       In a hybrid-electric drive system, the engine is used to drive a generator
Fuel Characteristics   set, which, in turn, powers one or more propulsion motors. In a
                       hybrid-electric vehicle, a relatively small engine is used to power an
                       alternator, which more or less continuously recharges the propulsion
                       batteries. The smaller engine operates primarily at steady state, using
                       batteries to store and discharge energy as needed under transient
                       conditions. This can improve fuel economy and emissions over traditional
                       internal combustion engines.

                       Hybrid-electric vehicles have a longer range than pure-electric vehicles
                       because they are not limited to stored battery energy. This also enables
                       them to reduce the necessary battery weight on the vehicle, which further
                       reduces overall energy consumption. To the extent that hybrid-electric
                       drive improves fuel economy in service, fuel fills and dispensing time
                       would decrease, or lower dispensing rates could be used with unchanged
                       dispensing times. For all of the hybrid-electric technologies being
                       developed for full-sized transit buses, a diesel, propane, or natural gas
                       engine ultimately provides all the energy for propulsion. Therefore,
                       hybrid-electric buses would be fueled in a normal manner for one of these
                       fuels.


                       According to FTA, all major bus manufacturers have hybrid-electric
Status of Use and      projects under way. Hybrid-electric drive systems are being aggressively
Development            investigated as a means of facilitating several important transit bus design
                       goals, including improved fuel economy, lower emissions, and lower
                       maintenance requirements to reduce operating expenses. Hybrid-electric
                       vehicles use both an internal combustion engine and an electric driveline
                       to provide propulsion energy. This combination of an internal combustion
                       engine with an electric drivetrain provides certain advantages over pure
                       battery-electric or internal-combustion engine-driven power trains. Two of
                       the transit operators we spoke with are testing diesel hybrid-electric
                       buses—New York City and Minneapolis. The Metropolitan Transportation



                       Page 43                                            GAO/RCED-00-18 Mass Transit
        Appendix IX
        Hybrid Electric




        Authority’s New York City Transit recently took delivery of five diesel
        hybrid buses and placed them in revenue service. In addition, Minneapolis
        Metro Transit recently ordered five diesel-hybrid buses and expects to
        receive them in early 2000.

        Research is currently being conducted on a variety of hybrid-electric drive
        configurations. At one extreme are systems that are primarily
        battery-electric but use a small engine-driven generator set to reduce the
        battery output that would otherwise be needed, thereby extending the
        operating range between charges. With this system, the vehicle’s batteries
        are externally recharged and constitute the primary energy source. At the
        other extreme are systems with generator sets large enough to directly
        power the drive motors in all operating modes without being
        supplemented by a discharging energy storage device. With this system,
        the engine’s fuel is the primary energy storage medium, and the vehicle is
        not equipped for external battery recharging. Given that the goal of lower
        floor height is being sought by transit operators for new bus designs, the
        large generator set option appears to be the most feasible for
        general-purpose transit buses.


        The development of full-sized hybrid-electric buses has now progressed to
Costs   the advanced demonstration phase. However, bus manufacturers are only
        now planning product design and marketing strategies for
        commercialization. This makes it difficult to accurately project the capital
        and operating costs of production vehicles. The prices for these buses
        have reportedly ranged from $550,000 to $600,000, but it is anticipated that
        fully commercialized diesel hybrids eventually may be priced similarly to
        CNG motor buses—at over $300,000. The maintenance facilities for
        hybrid-electric vehicles will need a variety of new tools and equipment. If
        hybrid-electric propulsion allows for significant reductions in transmission
        and brake maintenance, fewer service bays and maintenance spares may
        be needed than with a similarly sized fleet of motor buses. But provisions
        for storing and replacing propulsion batteries may be needed.

        The operating costs for hybrid-electric buses ultimately should be lower
        than they are for conventional motor buses. On the basis of the
        performance of electric rail propulsion systems, mature, commercialized
        hybrid-electric drive systems should be quite reliable and durable.
        Operating data and performance simulations indicate hybrids will
        consume approximately 30 percent less fuel than similar motor buses. The
        braking capabilities of the hybrid-electric bus should result in dramatically



        Page 44                                            GAO/RCED-00-18 Mass Transit
                 Appendix IX
                 Hybrid Electric




                 lower wear rates and extended repair intervals of the mechanical service
                 brakes as well.


                 Hybrid-electric vehicles can use conventional fuels much more efficiently
Emissions        than conventional vehicles and do so with greatly decreased emissions.


                 The electric-motor drive systems in hybrid-electric buses typically use high
Incentives and   voltages with high currents. These systems present shock and
Disincentives    electrocution hazards to service personnel. Transit personnel have safely
                 serviced similar power systems in rail cars and trolley buses for some
                 time. However, training in appropriate work practices is essential.

                 Hybrid-electric buses using alternative fuels will carry volatile fuels in the
                 same vehicle as powerful electric propulsion systems. Careful system
                 engineering will be called for to prevent electrical shorts or ground faults
                 in the power system from presenting ignition sources for fuel leaks.
                 According to FTA, the lack of an emissions certification protocol for
                 hybrid-electric transit buses is a barrier to their accelerated development.




                 Page 45                                              GAO/RCED-00-18 Mass Transit
Appendix X

Biodiesel Fuel


                       Biodiesel fuel is an alternative motor fuel that is derived from biological
Overview               sources such as soybean oil, rapeseed oil, other vegetable oils, animal fats,
                       or used cooking oil and fats. It is nontoxic and nonvolatile and will
                       naturally degrade if spilled or otherwise exposed to the environment. The
                       information regarding the current usage of biodiesel fuel in transit buses is
                       limited. While transit operators would not necessarily need to modify their
                       buses or maintenance garages to accommodate biodiesel use, biodiesel
                       fuel generally costs more than diesel. However, this cost can be offset to a
                       certain extent through the use of biodiesel blends.


                       The chemical process for creating biodiesel fuel involves mixing the oil
Fuel Characteristics   with alcohol in the presence of a chemical catalyst. This process produces
                       a methyl ester if methanol is used (typically the most common, for
                       economic reasons) or an ethyl ester if ethanol is used. Either methyl ester
                       or ethyl ester can be used neat (100 percent) or blended with conventional
                       diesel fuel (petrodiesel) as a fuel for diesel engines. Biodiesel fuel is
                       typically blended with diesel fuels at a 20-percent soy ester/80-percent
                       diesel ratio. Blending tends to extend biodiesel fuel’s storage life and also
                       reduces its cost.


                       The current efforts to commercialize biodiesel fuel in the United States
Status of Use and      were started by the National Biodiesel Board (formerly the National
Development            SoyDiesel Development Board) in 1992. The emphasis of their activity is
                       on the use of soybean oil methyl ester blended with petrodiesel fuel at
                       various volume percentages. These blends are believed to offer the best
                       balance of cost and engine emissions characteristics. As soy ester is a
                       surplus by-product, the soybean industry is interested in developing new
                       markets for it.

                       The National Biodiesel Board reported that as of the beginning of 1994,
                       biodiesel buses had accumulated nearly 8 million miles in demonstrations
                       involving more than 1,500 vehicles across the country, particularly in
                       urban buses. Neither DOT nor EIA collect data on biodiesel use in transit
                       buses. However, according to the American Public Transit Association, as
                       of January 1, 1999, eight transit buses were operating with biodiesel fuel.
                       There is a much larger base of operating experience with biodiesel buses
                       in Europe, amounting to several hundred times more vehicles and miles
                       than in the United States, because of a total or near-total exemption from
                       fuel taxes in most European countries. No manufacturer has certified an
                       engine calibrated to run on biodiesel fuel.



                       Page 46                                            GAO/RCED-00-18 Mass Transit
                 Appendix X
                 Biodiesel Fuel




                 No modifications to maintenance garages or safety procedures are
Costs            necessary when using biodiesel fuel. Blends can also be used in diesel
                 engines with no modifications. According to the National Biodiesel Board,
                 a 20/80 blend of vegetable oil to diesel fuel will be generally about 50 to
                 75 percent more than diesel fuel. In 1998, the Transit Cooperative
                 Research Board reported that biodiesel prices at the time were quite
                 high—in the range of $4.50 to $5.00 per gallon. In addition, in 20-percent
                 blends with diesel fuel, the blended product would cost from $1.54 to $1.64
                 per gallon.


                 Transient cycle emissions testing with biodiesel blends consistently shows
Emissions        moderate reductions (10 to 20 percent) in particulate matter, exhaust
                 opacity, and carbon monoxide, which may be accompanied by moderate
                 increases in oxides of nitrogen.


                 An important incentive for the use of biodiesel fuel is that transit operators
Incentives and   may use conventional diesel fueling equipment because biodiesel fuel has
Disincentives    mechanical and ignition properties that are very similar to diesel fuel. In
                 addition, biodiesel is even less volatile than diesel fuel, and no
                 modifications to safety procedures practiced with diesel fuel are needed.
                 The data for the properties of soybean oil methyl ester indicate that it is
                 safer than diesel fuel, which, in turn, makes it safer than the other
                 alternative motor fuels considered.

                 The disincentives for the use of biodiesel fuel include cost and the
                 potential for fire hazards. As previously stated, biodiesel fuel is generally
                 more expensive than diesel fuel—biodiesel blends can cost as much as 50
                 to 75 percent more than diesel. In addition, an unusual physical
                 characteristic of biodiesel that has a fire hazard implication is the
                 possibility of spontaneous combustion in highly saturated materials, such
                 as some vegetable oils and methyl ester, which oxidize in the air. It will be
                 necessary to alert personnel at the fleet operator’s fuel storage and
                 maintenance facilities of the potential for spontaneous combustion. This is
                 not a serious problem and can be simply resolved by having closed metal
                 cans for oily combustible material. Owing to the low volatility of biodiesel
                 fuel, there are no specific fire hazards during transport. Any leak or spill is
                 less likely to ignite than diesel or gasoline under equivalent conditions.
                 There are no specific fire hazards during unloading to storage, or during
                 storage, other than the potential spontaneous combustion issue.




(348161)         Page 47                                              GAO/RCED-00-18 Mass Transit
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