Fleets should not only strive to maximize diesel fuel efficiency now to survive in today’s tough economy, but also investigate alternate fuels to survive in tomorrow’s high fuel cost market.
Diesel fuel prices are down today, but the economy will recover, and the price of diesel fuel will increase significantly. Oil refiners suffered low profits last quarter due to depressed crude oil prices (refinery profits directly correlate with crude prices.) Undoubtedly, the price of crude oil will go up quickly.
The king of fluid energy efficiency is diesel fuel. CO2 reduction legislation will soon serve to increase diesel fuel demand due to its use by light-duty vehicles. Developing nations like China and India are already clamoring for additional diesel fuel. Our nation’s debt load will soon bring about increased inflation. Since crude oil is priced in U.S. dollars, all of the above will serve to increase diesel fuel prices significantly.
Today’s fleet operators should spend anything they can afford to increase the diesel fuel economy of a fleet. This means carefully evaluating aerodynamic and rolling resistance improvements for constant-speed Class 8 vehicles and rolling resistance and total weight for those vehicles that must frequently change speeds (P & D, etc.). It also means purchasing 2010 engines when possible, since they will deliver improved fuel economy. Money spent now for these improvements will pay dividends regardless of the price of diesel fuel or the type of alternate fuel utilized.
But fleets must not forget that alternate fuels will be required in tomorrow’s high diesel fuel cost environment. Biodiesel fuel utilization has recently slowed to a crawl because of at least three factors:
• The sluggish economy
• Failure of Congress to extend refiners’ biodiesel blending tax credits
• Depressed diesel fuel prices
Some biodiesel producers have actually closed their doors. Failure to proceed with the evaluation of alternate fuels now will put fleets behind when alternate fuels technology becomes viable due to increased diesel fuel prices.
When evaluating alternate fuels (or any alternate source of energy), consider at least two separate factors—energy efficiency and energy storage. As far as energy efficiency goes, one should investigate both fuel economy and biofuel production efficiency (or cost).
Europe started by converting rapeseed oil into biodiesel because of strong environmental and farm lobbies. Unfortunately, the U.S. paid no attention to Europe’s experience and went blindly down the same path with soybean oil. True, soy-based biodiesel reduces greenhouse gases (GHG) 57% compared to ULSD, but it’s not the most efficient feed stock to utilize. Researchers have known for years that palm oil is 10 times more efficient than rapeseed or soybean oil.
Recent R&D has uncovered a much more efficient source of oil to produce biodiesel. Algae can contain 300 times more oil than soy beans at a cost of $0.60 per gallon versus $2.50 per gallon for soybean oil. Algae contains as much as 50% oil, so it also offers much more efficient energy storage. Additionally, algae doesn’t interfere with our food supply, and it can be used to store CO2. Storage of CO2 into algae actually makes the algae grow faster.
Algae can also be cultivated virtually anywhere there is water, so it doesn’t tie up valuable crop land. Since there is much more water than dirt on this earth, algae also has a better chance than soybeans of being able to produce biodiesel in sufficient quantities to reduce our dependence on foreign sources of crude oil.
Does biodiesel produced from algae sound like a good idea to you? It certainly does to J. B. Hunt, who recently initiated a field test of biodiesel produced from algae. I hope we hear some favorable results soon!
