Economic Development, Sustainability, and Technology

Experts eye benefits of clean fuels

The Rapid is among many organizations using or working toward alternative fuel technologies.

October 19, 2018
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Alternative fuel experts from across Michigan joined Clean Fuels Michigan for a clean mobility expo last week at The Rapid’s new compressed natural gas fueling station, to demonstrate how alternative fuel technologies currently are being utilized.

Mike Alaimo, executive director of Clean Fuels Michigan, hosted a panel with industry experts to discuss the environmental and economic benefits of bringing Michigan into the clean mobility sector.

The panel opened with Andrew Johnson, CEO of The Rapid, highlighting the organization’s current achievements in introducing 28 buses that run on CNG and take advantage of The Rapid’s CNG fuel station.

Johnson also said The Rapid expects to convert one-third of its fixed-route bus fleet to CNG by 2020 and convert its entire fleet of vehicles by 2027.

“We also have propane power, as well, with 68 GO!Buses delivering demand response services to those in the community unable to ride the fixed-route bus service,” Johnson said.

He said The Rapid is moving to CNG because it produces 20 to 30 percent fewer emissions and runs for less than half the cost of diesel power.

“We hope that, in the next five years, The Rapid reduces greenhouse gas emissions by 1 million metric tons using clean fuel produced in the U.S.,” Johnson said.

Alaimo moderated a panel featuring Scott Weber, director of alternative energy solutions for Consumers Energy; Jeff Guilfoyle, vice president of Public Sector Consultants; Albert Venezio, chairman of ICOM North America; and Robert Bacyinski, program manager of alternative fuel vehicles for DTE Energy.

To open the discussion, each panelist showcased his respective organization’s involvement in the clean mobility sector and how it applies to the state of Michigan.

Weber said Consumers has been engaged, particularly in the CNG and electric perspective.

“We have engaged with the purchase of 20 Chevy Volts that took place back in 2011, and since then, many of those vehicles have 200,000 miles on them, and we’ve really been able to experience the fuel savings and emission savings across the board,” he said.

Weber also said Consumers will be buying over 100 plug-in hybrid electric vehicles from GM over the next five years to move its efforts forward.

Guilfoyle cited a study prepared by PSC and released by Clean Fuels Michigan that said the clean mobility sector in Michigan contributes 69,000 direct and indirect jobs, with over $18 billion in economic activity and $700 million in taxes.

“Clean fuel vehicles are clearly going to be the future,” he said. “When you look around here right now, a lot of the clean fuel vehicles are industrial and fleet vehicles, but I think you’re going to see a much bigger growth in the consumer market, in particular, it’s both technology and policy that are going to push that forward.”

On the policy front, a number of countries have issued end dates for the sale of traditional fuel vehicles, Guilfoyle said. Norway will end the sale of gas and diesel vehicles in 2025, France and the U.K. will end sales in 2040, and Germany, India and China indicated they would set an end date, although currently none has been established.

“The U.S. is only about 20 percent of the world vehicle market, so if the whole world goes over to clean fuel vehicles, then our market’s going to need to go there, as well,” Guilfoyle said.

On the technology side, a number of automotive manufacturers have indicated plans to prioritize clean energy alongside the development of connected and automated vehicles.

As examples, Guilfoyle said General Motors, Nissan and Mercedes have said their connected and automated vehicles are going to be electric.

As a manufacturer of propane and natural gas vehicles, ICOM North America has about 30,000 vehicles out on the market in North America and South America, according to Venezio.

Locally, ICOM provides vehicle systems used by Metro Cars at Gerald R. Ford International Airport.

“I’ve got 25 years in alternative fuels … and what you have to do is you have to time the whole project,” Venezio said. “So, you need to bring in the technology that makes the vehicle work on alternative fuel.”

Bacyinski picked up from Venezio’s point about the amount of time it takes for clean fuel technology to develop. He said DTE Energy started discussions with The Rapid 12 years ago to turn the fleet over to cleaner burning vehicles.

“Twelve years later, we finally got it jump started, and it’s taking off leaps and bounds,” Bacyinski said.

Bacyinski, who has about 23 years of experience in alternative fuel technologies, said the market for these vehicles has changed drastically since the mid-1990s.

“In about the mid-’90s, natural gas vehicles were produced by Ford, General Motors, Chrysler, Honda, Toyota — the Camry and the Civic were available in natural gas — and the capital investment on building the stations is very high, the amount of fuel used by those light-duty cars is very low, and it’s a very expensive proposition,” he said.

Bacyinski said, as the battery technology for electric vehicles continues to improve, the light-duty market will be better served going forward. Medium-duty vehicles, like school buses, already are benefitting from propane technology, and natural gas also has gained a solid foothold on heavy-duty vehicles by providing the best savings and environmental benefits.

“Our top markets right now, transit — it’s no surprise — Muskegon Transit is now natural gas,” Bacyinski said. “Flint is now moving toward natural gas, and we’re in active discussions with Detroit, Ann Arbor, Traverse City and other areas.”

Bacyinski added refuse trucks also are big-fleet adopters of natural gas and noted the trucks used by the city of Grand Rapids and Waste Management. In addition to those used in Ann Arbor and Detroit, Bacyinski estimated just over 300 natural gas-powered refuse trucks are on the road in Michigan, and he hopes to increase the number, particularly in the Grand Rapids area.

Alaimo then asked panelists how Michigan’s implementation of alternative fuel vehicles compares to other parts of the world.

Bacyinski said there are 33 states in the U.S. that have alternative fuel credits in some form, which should be an incentive for Michigan, being the “motor capital of the world.”

“We don’t have anything in place,” Bacyinski said. “Just recently, we got a bill introduced in Lansing on some sales tax relief, but what we’re seeing is national fleets like UPS, Fed Ex and Coca-Cola are not putting natural gas and other alternative fuel vehicles into Michigan because it doesn’t make as much financial sense to them.”

Comparatively, corporations could deploy alternative fuel vehicles in Ohio, Indiana or Illinois and get “generous” tax credits for doing so, Bacyinski said. He also noted these corporations are consequentially incentivized to take their old diesel-powered vehicles into Michigan.

But Bacyinski said he’s excited about recent discussions between Clean Fuels Michigan and the Michigan legislature as well as gubernatorial candidate Gretchen Whitmer about more proactive approaches to clean fuel legislation.

The Business Journal previously reported two bills aimed at improving clean mobility infrastructure were presented by Reps. Bronna Kahle, R-Adrian, and Michael Webber, R-Rochester Hills.

Kahle’s bill would amend the Michigan Strategic Fund Act and allow advanced propulsion and mobility technologies to qualify for the fund.

Weber’s bill would make electric and alternative fuel vehicles exempt from a portion of the sales tax, which would be calculated based on the vehicle’s weight.

“Clean transportation technologies will play an increasingly important role in Michigan’s auto industry, which is why it is important to have policies in place that position Michigan to lead in this rapidly changing industry,” Alaimo told the Business Journal at the time.

Venezio agreed with Bacyinski’s statement, saying ICOM does a lot of work with UPS and notices when incentives exist in a given state, major corporations will deploy alternative fuel vehicles in said state.

Venezio also noted Metro Cars’ fleet growth in Michigan over the past decade and attributed it to a stimulus package introduced in 2009.

“Sometimes you need that little spur to make things happen,” Venezio said. “We do business in 49 of 50 states … we can still do plenty of business in those states where there are no incentives because the cost of fuels is still a nice comparison … but when there’s an incentive and it’s backed by the state government, it propels things forward.”

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