Alternative fuel requirements.

Opportunities arise as new fuel regulations alter fleets

Life on Southern California's highways is already very complicated, and will soon become downright difficult for anyone driving a gasoline or diesel-powered car or truck for any commercial reason.

Traffic congestion management, clean air campaigns, energy conservation goals, international treaties to fight destruction of the ozone layer and widespread concern about global warming are now management issues which affect present vehicle use and future fleet operations plans throughout the nation and most especially in the Los Angeles Basin.

By 1998 (or, possibly, sooner), five or six different fuels may be used to power vehicles in large fleets. Use of these fuels will affect vehicle replacement or purchase schedules, maintenance arrangements, facilities management, employee training and safety, and other operating areas.

Employees may be traveling to work in their own cars one day, a van pool the next, and a train or bus the day after that. As a result, job schedules and other areas of work habits will be affected, along with shipping rates and schedules.

To keep up with the rules and statutes fuel choices and air quality standards, in Los Angeles, it is essential to monitor the activities of several regulatory agencies: The South Coast Air Quality Management District, the Southern California Association of Governments, the California Air Resources Board and the state Energy Commission, the California Department of Transportation, the U.S. Environmental Protection Agency, the U.S. Department of Transportation, and the U.S. Department of Energy.

Many business managers complain about the emerging, and ever- changing, web of government-driven programs affecting transportation. New actions and regulations are forcing changes in the routine ways people and goods move around. Compliance costs money and adds another layer of non- producing activity to the cost of doing business.

However, there is a vast horizon of new business opportunity in the future, all created by the remaking of the region's transportation technologies. Many of the opportunities are in helping government and business adopt "alternative" fuels for their vehicles.

By as early as 1995 or as late as 1998, depending upon action on federal proposals, regulations will require fleet operators nationwide to use "low emissions vehicles" (LEVs). By the end of this century, the regulators hope that LEVs will comprise more than half of fleet cars and trucks. Large of numbers LEV's should also be owned by individuals.

Within a few years, "zero emission vehicles" are targeted to be ten per cent of the total number of registered cars in California. Practically speaking, these will be electric cars and vans, although some early versions of fuel cell buses may also be on the road.

Today, LEVs are trucks or cars that meet extremely low tailpipe emissions requirements. Although very efficient engine designs may qualify a standard automobile using unleaded gasoline as an LEV, replacing unleaded gasoline with fuels that meet targeted emissions profiles are now regarded as the best way to satisfy the standards.

Gasoline may still be one of the fuels employed, however. "Reformulated gasoline" (RFG) is already mandated to be a low-emissions fuel by 1995 in the nine metropolitan areas of the U.S. with the worst ozone pollution. The petroleum industry is actively presenting RFG to regulators and scientists working on low emissions standards.

Other fuels that are used to power LEVs include methanol, ethanol, propane, and compressed natural gas (CNG).

Eventually, one or two of these fuels will probably dominate the marketplace, based on not only environmental concerns but also practical issues such as availability, cost, ease of use, safety, and performance of vehicles using the fuels. These topics are the focus of an SCAQMD study now underway, the Southern California Alternative Fuels Demonstration Project - nicknamed the "CleanFleet Project."

The issues associated with adopting alternative fuels may pose challenges to business and government, but they also present opportunities. For example, new designs will be needed for garages that house CNG-powered fleets because the fuel is lighter than air and requires different ventilation and safety features in the structures.

Different fueling systems are used for gaseous materials like CNG and propane, from fuel station storage tanks and dispensing units to the nozzles and vehicle tank fittings, from the vehicle fuel tanks to the hoses and engine manifold fittings, and more. Methanol-powered vehicles need corrosion-resistant tanks and other special equipment.

Product ideas, designs, manufacturing and maintenance will all change according to fuels adopted. Just as the nation established a network of refining, distributing and retailing capabilities to supply fuels, lubricants, parts and service to the expanding fleet of gasoline and diesel-powered vehicles in the early part of this century, the beginning of the next century will see the same process occur to support alternative fuels.

The fuel industries are most aggressively pursuing distribution and development programs. Both Southern California Gas Company and Pacific Gas and Electric are making heavy commitments to CNG fleet programs. T. Boone Pickens' Mesa Petroleum recently announced a campaign to convert up to 250,000 California vehicles to CNG if the fleet operators agree to buy natural gas from Mesa.

The oil companies are already promoting cleaner gasoline formulae. Chevron earlier this year offered to give its RFG formula to its competitors to help establish RFG as a product of choice. ARCO's "EC" fuels have been on the market for some time.

Southern California Edison is promoting electric cars and electric-powered transit choices. The company is a primary sponsor of several electric vehicle initiatives, including CAL-START, a consortium that is helping aerospace component suppliers apply their capabilities to electric vehicles and transit equipment. CAL-START's first project is the "Showcase Electric Car," slated to debut before the end of the year.

Ethanol is receiving heavy support in the Midwest. Methanol is popular with the transit agencies, which have made substantial investments in methanol buses, and the California Energy Commission. A series of methanol fueling points has been set up by the CEC to serve fleets of cars plying the state - although quite sparse outside the Bay Area and Los Angeles, the network is growing slowly.

To enable the development of the distribution systems for alternative fuels, vehicle manufacturers are now selling "flexible fuel" models. Both Ford and Chevrolet now offer factory-built fleet model cars that will run on either methanol or unleaded gasoline. The General Motors Truck Division is actively marketing a CNG-powered truck line.

Although many of these developments are several years ahead of regulatory deadlines, neither marketers nor businesses affected by LEV requirements should wait until the rules are in force. Getting into the marketplace now will position suppliers of fuels, goods and services to fulfill orders in the future.

There are good arguments for adopting alternative fuels as soon as possible. Businesses faced with obligations to add LEVs to their fleets may need to rebuild their fueling facilities. Some trade associations are supporting tax incentives and technical programs to ease the difficulty of conversions.

All of these steps take time and planning, and it is cheaper now to begin the process now than to wait until suppliers are flooded with orders.

However, adoption of alternative fuels can be a risk. The body of statues and regulations is not fixed. Frequent changes make it difficult to forecast important dates, financial and other incentives, or even if a particular fuel is likely to satisfy emissions goals. The only certain factor: Transportation in Southern California is going through an evolutionary process that will affect business for decades to come.

John C. King is Manager of the Environmental Affairs Division of Cerrell Associates Inc., a public affairs and public relations consulting company headquartered in Los Angeles, with offices in Sacramento and Washington, D.C. J. Lange Winckler, an accredited public relations counselor, is a Senior Account Executive at Cerrell Associates who works on environmental, transportation, and program development assignments.