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Thoughts on Some California Alternative-Fuel Policies

The state of California has a long history of being at the forefront of automotive emission-control requirements, going back to the introduction of positive crankcase ventilation (PCV) in the mid-1960s. Since then, the state's limitations on allowable tailpipe emissions have always been more stringent than those set by the Federal government, with a percentage of new vehicles having to meet standards with names like Low Emission Vehicle (LEV), Ultra Low Emission Vehicle (ULEV), Super Ultra Low Emission Vehicle (SULEV), and even Zero Emission Vehicle (ZEV).

These requirements have created pressure on automakers to develop and deploy the alternative-fueled vehicles and advanced-drivetrain gasoline vehicles that are the topic of this website. However, automakers don't like being pressured any more than anybody else, and they and their allies in Congress often push back. In particular, the "ZEV Mandate" was enacted in 1990; it required that 2% of vehicles sold in California by major automakers in 1998 would have no tailpipe emissions, rising to 10% in 2003. Because of automaker opposition, it has been repeatedly watered down, to the point that today no vehicles with zero tailpipe emissions actually have to be marketed to the public; the 10% requirement is still nominally in place, but it can be satisfied by a combination of relatively clean internal-combustion-engine vehicles (so-called Partial ZEVs, or PZEVs), including hybrid gasoline-electric vehicles, and deployment of a few fuel-cell prototypes.

I have been interested in alternative-fueled vehicles since about 1988, and have paid close attention to state regulatory and policy activity at least since the early 1990s. In light of what I have seen over the last decade and a half, I'd like to offer some perspective on three recent developments:

Carpool-Lane Access for Hybrids

Since 2000, all freeway-legal vehicles that run on electricity (EVs), and natural gas vehicles (NGVs) that met at least the ULEV tailpipe-emission standard, have been allowed to drive in carpool lanes even with only a single occupant. This is a major perk, given how much time it can save on a daily solo commute, and I have met a number of people who bought NGVs specifically in order to take advantage of it. At the start of 2004, the law tightened down significantly, allowing only NGVs that met the SULEV standard to join the party; NGVs that only met the ULEV standard were allowed to keep their access stickers if they already had them, but no new ones would be issued to such vehicles.

In September 2004, a law was passed that loosened the requirements quite a bit. Hybrid-electric vehicles, for the first time, were added to the eligibility list: those in the 2004 or earlier model years that meet at least the ULEV standard, and later models that meet the PZEV standard (actually a modification called an "Advanced Technology PZEV," or AT-PZEV, that's pretty much automatic for hybrids that can meet the PZEV tailpipe standards), can get solo carpool-lane access if they have at least a 45 MPG EPA highway fuel-economy rating. (Also, 2004 and earlier NGVs that were eligible for stickers but didn't get them before the rule changed at the start of 2004 can again obtain them.) For reasons having to do with highway funding, the Federal government has to pass legislation in order for hybrids to get solo carpool-lane access (but from my reading of the new law I think that the part having to do with older NGVs goes into effect immediately).

A lot of people think that allowing hybrids solo access to the carpool lane alongside EVs and NGVs is a bad idea, and I have to agree with them. First, as a practical matter, hybrids generally are selling very well, with waiting lists several months long for the Toyota Prius in particular; automakers are ramping up production to keep up with demand. This is hardly a market that needs to be given additional incentives! In fact, limits had to be written into the law to prevent the number of eligible hybrids from overwhelming the capacity of carpool lanes. As an aside to this, note that the law allows hybrids that have already been sold (almost all 2004 and earlier hybrids met the ULEV standard and got 45 MPG on the highway) to get stickers; this is not an incentive to increase the market, though I can understand that the lawmakers didn't want to leave the early adopters out in the cold.

Second, carpool lanes are designed to clean the air, and hybrids are not in the same league as EVs or NGVs for this purpose. As the California Air Resources Board (CARB) explains on a webpage that predates the new law (and that will probably be taken offline soon!), hybrids are not inherently cleaner than other gasoline cars. In fact, the first hybrid sold in the U.S., the Honda Insight, still does not meet the PZEV standard (though other hybrids do), and the first vehicle certified as a PZEV was an ordinary gasoline car, the 2001 Nissan Sentra GXE. (In fairness, I should note that automakers understandably want to go to the effort of certification to the most stringent standards only for relatively mass-market cars, which is why the Sentra and a dozen other ordinary gasoline cars have been certified as PZEVs. The two-seat Insight only sells in small numbers, and as I noted at the Anaheim Auto Show last year, Honda probably only still builds it so that they won't have to surrender the number-one spot on the fuel economy list to the Toyota Prius!) By contrast, EVs and NGVs are classed by the Federal government as Inherently Low-Emission Vehicles (ILEVs); that's actually the term referred to in the law, not EV, NGV, etc. This means that their cleanliness is due to the qualities of their fuel: even if emission-control components on an NGV malfunction or wear out, it won't get dirty as fast as a gasoline vehicle (the catalytic converter of my 1993 van crumbled from age, but I never failed a smog check), and of course an EV doesn't even have any emission-control equipment to fail. In fact, since the earliest hybrids didn't meet the SULEV or PZEV standards, some of the hybrids allowed into the carpool lane will run dirtier than ordinary cars like the Sentra that aren't given the same privilege.

Of course, you may be aware that hybrids are exempt from getting smog checks, and from that it would be reasonable to conclude that they are nearly as clean as battery EVs, which also are exempt. However, as the Bureau of Automotive Repair (BAR) webpage on the subject makes clear, the reason they're exempt is that BAR procedures don't work properly for hybrids. For example, the "treadmill" test measures tailpipe emissions under load at various (simulated) road speeds; however, the Toyota Prius may very well shut off its gasoline engine and maintain speed using only its electric motor under these conditions. Since you can't plug the car in to charge it up like a real EV, its electricity ultimately came from its gasoline engine and therefore produced tailpipe pollution, but it was emitted earlier and can't be measured on the treadmill. An EV, of course, has no tailpipe to produce emissions under any circumstances, and as I detail on my FAQ page, it's several times cleaner than a hybrid even when you account for the pollution at the electrical power plant. From the point of view of a smog check, hybrids have more in common with other vehicles that can't be tested properly using BAR procedures, like diesels and two-strokes, than with EVs!

Well, apart from extra crowding in carpool lanes, why should we object if a good idea like hybrids is given a little extra push? The answer, for me anyway, is that as CARB has taken to talking up hybrids more and more, and as perks like this are extended to hybrids, the push for real alternative fuels has fallen by the wayside (with the exception of hydrogen, about which more below). CARB's ZEVInfo.com website, which used to contain information about vehicles with zero tailpipe emissions (see the archived version), now points to the DriveClean.CA.gov website, which focuses more on substitute vehicles like gasoline PZEVs, including hybrids. I have taken them to task, in fact, for overstating on this website the cleanliness of these vehicles, as detailed a couple of paragraphs up. My concern is that, as hybrids get more popular, I am increasingly encountering the perception that "since we have gasoline-burning hybrids, we don't need all those icky, inconvenient alternative fuels." Hybrids and non-hybrid PZEVs are better than average gasoline cars, but because they still burn gasoline and rely on complex after-treatment systems to clean up their exhaust, they are not going to be enough to accomplish the task of getting California's air up to standard. Hydrogen will, even under optimistic scenarios, not make a significant dent in the marketplace for at least another twenty years (pessimistic scenarios range from thirty years to never), so this is no time to slack off on the push for alternatives to gasoline vehicles like EVs and NGVs.

In the end, though, the discussion of hybrids in the carpool lane is likely to be moot. Ford's upcoming 2005 Escape hybrid SUV will not get good enough fuel economy to earn a solo spot in the carpool lane, and in fact only the Toyota Prius and Honda Civic hybrid will qualify for now and the near future (as well as older Honda Insights grandfathered in); thus Ford in particular lobbied strongly against the California bill, though without success. However, as I noted above, the Federal government has a say in this as well; and I have to expect that they will prevent this provision from taking effect because, after all, Ford's lobbying muscle carries a lot more weight in Washington than in Sacramento! [Note added 13 August 2005: Well, I was wrong about this: the Federal waiver was included in the highway bill signed into law four days ago. I understand that California's limits on which hybrids are to be allowed solo carpool-lane access are stricter than the limits in the Federal law now, in terms of both fuel economy and emissions; I think the looser Federal limits mean that the Ford Escape hybrid could be allowed into carpool lanes solo in other states.]

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Greenhouse-Gas Tailpipe Emission Limits

Over the 40-year history of California's vehicle emission regulations, the focus has always been on reducing the pollution directly caused by vehicles. This has included directly poisonous gases like carbon monoxide, and also "smog precursors" like nitrogen oxides and unburned hydrocarbons that are not all that harmful in themselves but that, when baked in sunlight, lead to the production of poisonous ground-level ozone. With the ZEV regulations, the focus has broadened to include "fuel-cycle" or "upstream" emissions, which includes pollution at a gasoline refinery or an electric powerplant; however, the focus has always been on things that are dangerous to health today.

In 2002, California passed a law requiring CARB, which draws up tailpipe emission standards for pollutants like those discussed above, to create new standards that would require the "maximum feasible reduction" in tailpipe emissions of greenhouse gases as well. The reasoning behind adding these emissions to the list of substances that must be limited in vehicles sold here is that global warming, which is driven by greenhouse gases like carbon dioxide, will worsen air quality by cooking the smog precursors more thoroughly as the climate warms; the "findings" in the text of the law also refer to other adverse consequences of global warming, including drought, forest fires, and coastal erosion. Note, however, that from an air-quality perspective (which is CARB's mandate, and the reason California is allowed to set tailpipe standards that are stricter than the Federal limits), the target has shifted from gases that dirty the air now to gases that will cause the air to become dirtier in the future, a departure from current standards.

The reason I am making a big deal of this shift in focus is that I think it is going to cause these limits to run into a buzz saw at the level of Federal law, and I am concerned that this will damage efforts to reduce ordinary pollutants in the state. The Federal government, in order to prevent automakers from being obliged to meet a patchwork of 50 state laws, reserves the right to set requirements for vehicle fuel economy; this right is jealously guarded by automakers and their allies in Congress and the White House, especially now that high-profit, low-fuel-economy SUVs have become popular. Ways to cut emissions of carbon dioxide are (1) increase fuel economy; (2) switch to fuels like natural gas or electricity that produce less carbon dioxide to go the same distance; (3) make vehicles that can trap or bottle ("sequester") their tailpipe carbon dioxide; or (4) enact limits on vehicle miles traveled per year or on land use, or other measures to cut the amount of fuel burned by each vehicle per year. Option 4 is specifically ruled out (for reasons of political survivability!) in the law, and option 3 is impractical on the scale of an individual vehicle (it might be made to work with large industrial plants); thus options (1) and (2) are the only ones available, and requiring these runs squarely into the Federal reservation of the right to set fuel economy standards. California's logic is that, though the state does not have the right to set fuel-economy standards directly, it does have the right to set limits on tailpipe emissions that have an effect on its air quality, and this trumps the other consideration. [Note added 18 October 2004: Previous state efforts to promote alternative fuels in the general vehicle market have focused on tailpipe emissions in a fuel-neutral sense, not on requiring specific fuels as I noted above in option (2). There's no requirement for automakers to build natural-gas vehicles; however, they are a lot easier to clean up to SULEV standards than gasoline vehicles are. Even the ZEV standard is fuel-neutral, though in practice it can't be met without alternative fuels like electricity or hydrogen, unless the vehicle sequesters its exhaust!]

CARB approved regulations to implement the law in September 2004, and automakers, of course, are threatening to sue to block them. The reason that I think their lawsuit would probably succeed, and the reason that I'm worried about collateral damage to regulation of ordinary tailpipe pollutants, is that we've been here before. As I noted above, CARB has repeatedly watered down the ZEV mandate due to automaker opposition since it was created in 1990; the changes have included reductions in the numbers of ZEVs that actually need to be placed in service, and partial-credit mechanisms for other kinds of vehicles to take their place, most recently PZEVs (whence the "P" in the name). In the 2001 revisions, automakers were offered partial credit for producing hybrids, and extra credit if they met certain efficiency, i.e., fuel economy, standards. The logic here was that extra-efficient hybrid drivetrains would produce spinoff benefits for future ZEVs (either battery EVs or fuel-cell vehicles) by driving progress in technology that is important to those vehicles, and thus they would help speed the future introduction and clean-air benefits of ZEVs even though they did not have any immediate effect on air quality. This future focus is similar to what we find in the greenhouse-gas limits, and it was not enough to persuade a Federal judge to leave the rules in place. Worse, the judge decided that the efficiency standards were sufficiently entangled with the rest of the state's tailpipe-emission regulations that the whole package of ZEV and partial-credit ZEV rules had to be thrown out, putting the regulations at a dead standstill for two model years while the regulations were rewritten to remove all references to efficiency and satisfy the automakers' objections.

So I don't think the CARB greenhouse-gas rules are going to stand if the automakers take them to court, and I don't think the bad publicity they'll receive will deter them from doing so. [Note added 8 December 2004: the Alliance of Auto Manufacturers filed the lawsuit yesterday.] Fortunately, these standards are at present separate from the state's regulations to control ordinary air pollutants, so unlike the case a few years ago, I don't think the latter will immediately be brought down along with them. However, the aim of California's emission standards is to cut pollution down to meet Federal air-quality standards in time, and I am concerned that by the time the greenhouse-gas standards take effect in 2009, they will become interwoven with this continuing effort. I don't have a crystal ball or insider info such that I can claim to foresee this happening; however, crossing the line into the fuel economy arena has burned the state's emission-reduction efforts once before, and we can't afford to have it happen again as a result of tilting at the greenhouse-gas windmill. [Note added 11 November 2004: one possible "entanglement" that has been suggested is that, at present, running a fuel-cell vehicle on hydrogen made from fossil-fuel energy produces more carbon dioxide than simply burning that fossil fuel in a hybrid-electric vehicle. Thus, at least one automaker representative has asserted (threatened?) that, since fuel-cell vehicles will not produce the "maximum feasible" greenhouse-gas reductions until we have a lot more renewable energy on the grid, if the new rules are adopted then automakers would be obliged not to bring them to market!] The problem of fuel economy that has been stagnant for twenty years definitely needs to be addressed--I don't have any argument with the "findings" of adverse effects from global warming that I mentioned above, or with cutting dependence on Mideast oil--but it must be done at the national level. Either that, or accept "trickle-down" improvements from vehicles that automakers will be required to build for the Kyoto countries...

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The California Hydrogen Highway Network

Observers of alternative fuels often talk about the "chicken and egg" problem: automakers don't want to build vehicles that run on alternative fuels until there are stations where buyers can get the fuel, but energy companies don't want to build those refueling stations until there are vehicles on the road to use them. Getting out of the cycle of waiting for the other half of the equation takes cooperation between those who build vehicles and those who fuel them, and it involves commitment from potential users as well. The Clean Cities program includes many examples of how all these "stakeholders" can come together on a local level; recently the state of California has undertaken to address the "chicken and egg" problem for hydrogen statewide with the Hydrogen Highway project.

Since 1999, the California Fuel Cell Partnership has fostered cooperation among automakers, component and fuel suppliers, government agencies, and environmental organizations to attack the problem of commercializing hydrogen transportation, mostly from the vehicle side; in his State of the State speech in January 2004 and a follow-up Executive Order in April 2004, Governor Schwarzenegger committed the state to address the other side of the equation. Taking automakers at their word that they intend "to commercially market 'tens of thousands' of hydrogen and fuel cell vehicles within this decade, providing that a hydrogen infrastructure is available" (a quote from the Executive Order), he committed the state to promote the building (by government, energy companies, and maybe even auto companies) of 150 or so hydrogen refueling stations, one about every twenty miles along the major Interstate highways, with the goal of ensuring that the majority of Californians have access to hydrogen fuel by 2010. [Note added 13 August 2005: the goal of 150 stations by 2010 has since been cut back significantly.]

Sounds like a bold stroke, cutting the Gordian knot; so why do I feel obliged to comment on it? Well, because again, we've been here before. In populous areas of the state, natural-gas stations are already located about 20 miles apart or less; a quick look at the Clean Car Maps website shows that California has an infrastructure for compressed natural gas (CNG) that hydrogen can only dream about at this point. And the same is true nationwide; using the Alternative Fuels Data Center list to plan my route, in 1998 I drove my CNG van from Los Angeles to Maine: Clean Across America and Back. CNG vehicles can have range per refueling of 300 miles or more (my personal best is 326.1 miles), and can be profitably sold for only a few thousand dollars more than a comparable gasoline vehicle, which can pay for itself in fuel and repair savings very quickly in a high-mileage application like, say, a taxi or shuttle van. So again, CNG vehicles have practicality and economic viability that hydrogen vehicles can only dream about at present. You'd think that automakers would be enthusiastic about supporting a successfully established market like this, right?

Wrong. With the exception of Honda, automakers are cutting back or completely killing their CNG vehicle offerings. Chrysler, who made my van, has been in and out of the market over the last decade, and a couple of years ago exited for good; Toyota made a CNG Camry for only a couple of years; Ford went from the best lineup of CNG (and propane) vehicles in the nation in the 2004 model year to none in 2005; and GM cut their offerings dramatically in 2005, dropping their vans and compact sedan. (You can still go to a conversion company to have them retrofit a gasoline vehicle with a Baytech CNG kit that meets all new-car emission requirements, but I'm focusing on the major automakers here since they're the ones talking about hydrogen.) So in the 2005 model year, the only CNG vehicles you can buy new from a major automaker are GM pickups and the Honda Civic GX. [Note added 17 September 2006: as of the 2007 model year the rest of the GM vehicles are gone too, leaving only the Civic GX.] I mentioned above that CNG makes particular economic sense for high-mileage applications like taxis and airport shuttles; this need has been filled by a variety of vans and the Ford Crown Victoria full-size sedan, but as of the 2005 model year none of these are still available from a major automaker.

So a substantial investment has been made in natural-gas infrastructure, only to see automakers cutting back their production of vehicles that use it. A similar situation, of course, prevails for EVs; government and private companies installed a lot of public recharging stations throughout the state (again, see the Clean Car Maps website), only to see all major automakers (including Honda this time) abandon production of vehicles that can make use of them. So the question that needs to be asked, and that frankly I have never heard anybody but myself ask, is "why should we spend hundreds of millions of dollars on hydrogen infrastructure after the automakers have stranded the investments already made in infrastructure for NGVs and EVs?"

I have asked this of various people involved in fuel-cell research, and I have never received a persuasive answer. Most of them focus on a comparison of fuel-cell vehicles with EVs, asserting that a fuel-cell drivetrain allows the building of vehicles without the "compromises" necessary for a battery-electric vehicle. The power-to-weight and energy-to-weight ratios of a fuel cell drivetrain are much more favorable than for a typical battery drivetrain, meaning that the design of the vehicle does not require the extreme focus on reducing excess weight that characterized, say, the GM EV1. This enables greater range and payload or passenger capacity at a given level of performance, and therefore greater marketability. Of course, this ignores advances in battery technology, such that AC Propulsion can boast that the energy-to-weight ratio of their entire tzero electric sports car, with lithium-ion batteries, is greater than the energy-to-weight ratio of just the nickel metal hydride battery pack of the late Toyota RAV4-EV. But regardless of the relative merits of fuel-cell vehicles versus battery EVs, I have never received a good answer as to why hydrogen is worth pursuing down a long and difficult road, when natural gas is being abandoned after its road to commercialization has already been successfully traveled. Before this budget-strapped state, and commercial entities within it, invest in refueling infrastructure for hydrogen vehicles that don't exist yet outside of demonstration projects, this question needs to be answered convincingly.

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new 15 October 2004, revised 17 September 2006