Mass Transit: Use of Alternative Fuels in Transit Buses (Letter Report,
12/14/1999, GAO/RCED-00-18).

Pursuant to a legislative requirement, GAO reported on the: (1) status
of the development and use of alternative fuel technologies in transit
buses, particularly the use of compressed natural gas (CNG) as a fuel;
(2) air quality benefits of such technologies; (3) 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) primary incentives
and disincentives for using these technologies.

GAO noted that: (1) alternative fuel buses account for a very small, but
growing, portion of the nation's transit bus fleet; (2) in 1997, 5
percent of the nation's approximately 50,000 transit buses operated on
some alternative fuel system; (3) the most commonly used alternative to
diesel fuel is CNG accounting for an estimated 75 percent of the
full-sized alternative fuel transit buses in 1998; (4) transit operators
are also beginning to test and demonstrate new propulsion system
technologies in their transit buses; (5) hybrid electric transit buses
are available, and fuel cell buses will be commercially available by
2002; (6) data are limited on the extent to which alternative fuel
transit buses provide air quality benefits in urban areas; (7) 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; (8)
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; (9) transit operators pay more to buy, maintain, and
operate CNG buses than they pay for diesel buses; (10) operators that
buy CNG buses typically pay approximately 15 to 25 percent more for each
of these buses than they do for diesel buses; (11) the costs of
installing fueling facilities and upgrading maintenance garages for CNG
buses vary among transit operators; (12) however, constructing a
compressed natural gas fueling station typically costs about $1.7
million, and modifying a maintenance facility typically costs about
$600,000; (13) six of the eight transit providers GAO spoke with were
able to provide operating cost estimates reporting higher operating
costs, higher maintenance costs and higher fuel costs for their CGN
buses than for their diesel buses; (14) transit operators approach the
decision, of whether switch to alternative fuels by considering a range
of factors, such as adhering to more stringent emission standards and
the public's concerns about transit bus pollution; (15) factors such as
the increased costs and reduced reliability of alternative fuel buses
experienced to date discourage the use of fuels other than diesel; and
(16) diesel buses have become significantly cleaner over the past 11
years, thereby reducing the environmental advantages of shifting to
alternative fuel buses.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  RCED-00-18
     TITLE:  Mass Transit: Use of Alternative Fuels in Transit Buses
      DATE:  12/14/1999
   SUBJECT:  Cost analysis
	     Transportation research
	     Motor vehicle pollution control
	     Environmental policies
	     Mass transit operations
	     Urban transportation operations
	     Natural gas
	     Air pollution control
	     Equipment maintenance
IDENTIFIER:  DOE Alternative Fuels Program
	     DOE Bus Alternative Fuel Transportation Program
	     FTA Advanced Technology Transit Bus Program

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Cover
================================================================ COVER

Report to Congressional Committees

December 1999

MASS TRANSIT - USE OF ALTERNATIVE
FUELS IN TRANSIT BUSES

GAO/RCED-00-18

Mass Transit

(348161)

Abbreviations
=============================================================== ABBREV

  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 21\st Century

Letter
=============================================================== LETTER

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 21\st 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. 

   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

Alternative fuel buses account for a very small, but growing, portion
of the 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
cellsï¿½in 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 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. 

--------------------
\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. 

   BACKGROUND
------------------------------------------------------------ Letter :2

Automobiles, diesel-fueled trucks, and transit buses emit pollution
that 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 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. 

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

\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. 

   THE USE OF ALTERNATIVE FUEL
   TECHNOLOGY IN TRANSIT BUSES IS
   LIMITED BUT INCREASING
------------------------------------------------------------ Letter :3

Since 1992, alternative fuel transit buses have accounted for a very
small proportion of the total number of transit buses in the United
States.  According to DOT's national transit database, the number of
full-sized 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 (5 percent of the total number of full-sized
transit buses).  This percentage generally remained unchanged through
1997, the most recent year in 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                    236         411       1,265       1,212         418         218
 (particulate
 trap)\a
Methanol                   57         392         402         402          63          54
LNG                        10          52           9          50          50          50
Liquefied                  59          59           2           2           4           4
 petroleum gas
Electric battery            0           0           0           0           1           3
Other\b                   332         334         463         418         421         378
Total diesel              815       1,526       2,659       2,681       2,161       2,515
 alternatives
=========================================================================================
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 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 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. 

--------------------
\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. 

\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. 

   DATA ON THE EXTENT OF AIR
   QUALITY IMPROVEMENTS IN URBAN
   AREAS CAUSED BY ALTERNATIVE
   FUEL BUSES ARE LIMITED
------------------------------------------------------------ Letter :4

There are limited data to quantify the extent to which alternative
fuel transit buses provide air quality benefits in urban areas.  DOT,
EPA, and DOE officials told us that these agencies had not studied
how a transit operator's use of alternative fuel transit buses has
affected regional air quality.  Moreover, EPA does not routinely
monitor the effects of transit buses on urban air quality.  On a
national scale, transit buses, including alternative fuel buses, do
not significantly affect national levels of air pollution because
they constitute a very small portion of the total number 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 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

                                         Table 2
                         
                           EPA's Exhaust Emission Certification
                         Standards for Heavy-Duty Diesel Engines

                                               Diesel
                                          particulate
                    Nitrogen oxides    matter (g/bhp-  Hydrocarbons (g/   Carbon monoxide
Year                     (g/bhp-hr)               hr)           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                            5.0         0.10, new               1.3              15.5
                                               buses;
                                      0.25, all other
1994                            5.0   0.07, new urban               1.3              15.5
                                               buses;
                                      0.10, all other
1996                            5.0   0.05, new urban               1.3              15.5
                                             buses;\a
                                       0.10 all other
1998                            4.0   0.05, new urban               1.3              15.5
                                               buses;
                                      0.10, all other
2004\b              2.4 or 2.5 with   0.05, new urban    Not applicable              15.5
                     a limit of 0.5            buses;
                          on NMHC\c   0.10, all other
-----------------------------------------------------------------------------------------
\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. 

--------------------
\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. 

\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. 

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

   COMPRESSED NATURAL GAS BUSES
   COST MORE THAN DIESEL BUSES
------------------------------------------------------------ Letter :5

This section addresses CNG-fueled transit buses because CNG is the
predominant fuel among full-sized alternative fuel buses.  Adding
those buses to an existing diesel bus fleet generally increases
capital and 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. 

--------------------
\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. 

      THE CAPITAL COSTS OF CNG BUS
      FLEETS ARE GREATER THAN
      THOSE OF DIESEL FLEETS
---------------------------------------------------------- Letter :5.1

According to transit bus manufacturers, transit operators who operate
CNG 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 procurements, typical CNG buses cost between $290,000 and
$318,000, 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 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. 

--------------------
\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. 

      IN MANY CASES, THE OPERATING
      COSTS OF CNG BUSES EXCEED
      THE OPERATING COSTS OF
      DIESEL BUSES
---------------------------------------------------------- Letter :5.2

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

   INCENTIVES AND DISINCENTIVES OF
   USING ALTERNATIVE FUEL
   TECHNOLOGIES IN TRANSIT BUSES
------------------------------------------------------------ Letter :6

The transit operators that we interviewed identified a number of
incentives and disincentives for using alternative fuel technologies. 

      INCENTIVES FOR USING
      ALTERNATIVE FUEL
      TECHNOLOGIES IDENTIFIED BY
      TRANSIT OPERATORS
---------------------------------------------------------- Letter :6.1

Nine of the 12 transit operators we interviewed cited concerns about
vehicle emissions standards and air quality as among the most
important reasons for using alternative fuel buses.  The Los Angeles
County Metropolitan Transportation Authority began purchasing and
testing 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, Oregonï¿½cited 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 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. 

--------------------
\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. 

      DISINCENTIVES FOR USING
      ALTERNATIVE FUEL
      TECHNOLOGIES IDENTIFIED BY
      TRANSIT OPERATORS
---------------------------------------------------------- Letter :6.2

Officials from 9 of the 12 transit operators we interviewed indicated
that the higher costs of alternative fuel bus operations--both
capital and operating costs--were a deterrent to switching from
diesel fuel.  For example, most operators of CNG buses had concerns
about the capital 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 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. 

   AGENCY COMMENTS
------------------------------------------------------------ Letter :7

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

   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :8

We obtained information from DOT, EIA, and the transportation
industry regarding the number of alternative fuel transit buses.  We
obtained 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 November
1999 in accordance with generally accepted government auditing
standards. 

---------------------------------------------------------- Letter :8.1

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

SCOPE AND METHODOLOGY
=========================================================== Appendix I

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. 

                               Table I.1
                
                      Transit Operators Contacted

                                                    Type of
                                                    alternative fuel
Transit operator                Location            used
------------------------------  ------------------  ------------------
Command Bus Company (New York   Brooklyn, N.Y.      CNG
City Department of
Transportation)

Metropolitan Transportation     Brooklyn, N.Y.      CNG, diesel hybrid
Authority: New York City                            electric
Transit

Greater Cleveland Regional      Cleveland, Ohio     CNG
Transit Authority

Metropolitan Transit Authority  Houston, Tex.       LNG
of Harris County

Los Angeles County              Los Angeles,        Methanol, ethanol,
Metropolitan Transportation     Calif.              CNG
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 Agency,    St. Louis, Mo.      CNG
Missouri-Illinois Metropolitan
District

Pierce Transit Authority        Tacoma, Wash.       CNG

SunLine Transit Agency          Thousand Palms,     CNG
                                Calif.
----------------------------------------------------------------------
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 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. 

--------------------
\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. 

SOURCES CONTACTED BY GAO
========================================================== Appendix II

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

U.S.  DEPARTMENT OF TRANSPORTATION

Federal Transit Administration

National Highway Traffic Safety Administration

Research and Special Programs Administration

 Advanced Vehicle Program

Volpe National Transportation Systems Center

OTHER FEDERAL AGENCIES

Environmental Protection Agency

Department of Energy

 Energy Information Administration

 National Renewable Energy Laboratory

 Alternative Fuels Data Center

STATE GROUPS

California Air Resources Board

National Conference of State Legislatures

INDUSTRY GROUPS

American Fuel Cells Association

American Methanol Institute

American Public Transit Association

Ballard Automotive

Cummins Engine Company

Gas Research Institute

National Corn Growers Association

Natural Gas Vehicle Coalition

Propane Vehicle Council

Society of Automotive Engineers

BUS MANUFACTURERS

New Flyer Bus Company

North American Bus Industries (NABI, Inc.)

Orion Bus Industries

OTHER ORGANIZATIONS

Chicago Transit Authority

Metropolitan Atlanta Rapid Transit Authority

Transit Cooperative Research Program

University of California-Davis

West Virginia University

LIQUEFIED NATURAL GAS
========================================================= Appendix III

OVERVIEW

As a transit fuel, liquefied natural gas (LNG) has expanded in recent
years.  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. 

FUEL CHARACTERISTICS

LNG is produced by cooling natural gas and purifying it to the
desired methane content.  The typical methane content is
approximately 95 percent for the conventional LNG produced at a ï¿½peak
shavingï¿½ 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. 

STATUS OF USE AND DEVELOPMENT

EIA has estimated that 725 full-sized transit buses were fueled by
LNG in 1999.  According to the American Public Transit Association,
as of 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. 

COSTS

According to the Transit Cooperative Research Programs' 1998 study,
the 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. 

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. 

EMISSIONS

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

INCENTIVES AND DISINCENTIVES

The use of LNG in buses offers lower emissions than diesel buses. 
LNG buses are commercially available and have many of the same
reliability 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. 

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

LIQUEFIED PETROLEUM GAS
========================================================== Appendix IV

OVERVIEW

Liquefied petroleum gas, otherwise known as propane, is a by-product
of 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. 

FUEL CHARACTERISTICS

Propane consists of a mixture of natural gas liquids, including
propane, 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. 

STATUS OF USE AND DEVELOPMENT

The extensive use of propane in larger transit buses is currently
hindered by the lack of a suitable commercially manufactured engine. 
Warranted 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 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. 

COSTS

According to the Transit Cooperative Research Program, in 1998, the
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. 

EMISSIONS

Propane bus engines generally have lower emissions than counterpart
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. 

INCENTIVES AND DISINCENTIVES

The primary incentive to use propane is the emissions benefits. 
Disincentives include safety concerns due to pressurized storage of
the 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 constituentï¿½pure propaneï¿½is considered to be
a simple asphyxiant by the American Conference of Governmental
Industrial Hygienists. 

--------------------
\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. 

ETHANOL
=========================================================== Appendix V

OVERVIEW

Ethanol would appear to be a good candidate for an alternative fuel
for 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. 

FUEL CHARACTERISTICS

Ethanol is produced by the fermentation of plant sugars.  Typically,
it is 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. 

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. 

STATUS OF USE AND DEVELOPMENT

EIA has estimated that in 1999 there are 51 full-sized ethanol
transit buses in the nation.  There are no orders for ethanol buses
currently.  No 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. 

COSTS

According to the Transit Cooperative Research Program, the actual
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. 

EMISSIONS

The primary emission advantage of using ethanol blends is that carbon
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. 

INCENTIVES AND DISINCENTIVES

A significant advantage of alcohol fuels is that when they are
combusted in diesel engines, they do not produce any soot or
particulate matter, and 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. 

METHANOL
========================================================== Appendix VI

OVERVIEW

Methanol is a liquid fuel that 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 methanol and for diesel fuel.  Experience with methanol has shown
unreliability of engines and high fuel prices.  No manufacturer is
currently producing methanol engines. 

FUEL CHARACTERISTICS

Methanol is a colorless liquid that is a common chemical used in
industry 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. 

STATUS OF USE AND DEVELOPMENT

EIA has estimated that in 1999 there are 38 full-sized methanol
transit buses in the United States.  No transit operators currently
have plans to purchase 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 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. 

COSTS

According to the Transit Cooperative Research Program, the actual
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. 

EMISSIONS

Methanol does not produce soot or smoke when combusted so no
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. 

INCENTIVES AND DISINCENTIVES

Methanol's major advantage in vehicular use is that it is a
convenient, familiar liquid fuel that can readily be produced using
well-proven 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. 

FUEL CELLS
========================================================= Appendix VII

OVERVIEW

Fuel cells are systems that convert hydrogen and oxygen to water. 
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. 

FUEL CHARACTERISTICS

According to FTA officials, fuel cells are fuel conversion
systems--not 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. 

STATUS OF USE AND DEVELOPMENT

Two major programs are under way in North America to develop and
commercialize fuel cell buses for transit.  DOT is funding the
longest 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 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. 

COSTS

Fuel cell bus technology is in a developmental stage characterized by
low 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. 

EMISSIONS

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

INCENTIVES AND DISINCENTIVES

Low emissions levels are the main incentive for using fuel cells in
transit buses.  However, the fact that they are still in the early
developmental 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. 

BATTERY ELECTRIC
======================================================== Appendix VIII

OVERVIEW

Battery-electric propulsion systems are primarily targeted to smaller
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. 

FUEL CHARACTERISTICS

Electricity can be considered as an alternative source of propulsion
as 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. 

STATUS OF USE AND DEVELOPMENT

Many U.S.  companies have electric bus development projects.  The
current research focus for electric propulsion vehicles is in the
area of battery 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. 

COSTS

The capital costs of battery-electric buses are substantially higher
than 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 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. 

EMISSIONS

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

INCENTIVES AND DISINCENTIVES

While battery-electric systems provide lower noise levels, emissions
benefits, and effortless cold starts as incentives, some
disincentives of 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 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. 

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

HYBRID ELECTRIC
========================================================== Appendix IX

OVERVIEW

Hybrid-electric transit buses may be a promising alternative to
diesel 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. 

FUEL CHARACTERISTICS

In a hybrid-electric drive system, the engine is used to drive a
generator 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. 

STATUS OF USE AND DEVELOPMENT

According to FTA, all major bus manufacturers have hybrid-electric
projects under way.  Hybrid-electric drive systems are being
aggressively 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 busesï¿½New York City and Minneapolis.  The
Metropolitan Transportation 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. 

COSTS

The development of full-sized hybrid-electric buses has now
progressed to 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 lower wear rates and extended repair
intervals of the mechanical service brakes as well. 

EMISSIONS

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

INCENTIVES AND DISINCENTIVES

The electric-motor drive systems in hybrid-electric buses typically
use high voltages with high currents.  These systems present shock
and 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. 

BIODIESEL FUEL
=========================================================== Appendix X

OVERVIEW

Biodiesel fuel is an alternative motor fuel that is derived from
biological 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. 

FUEL CHARACTERISTICS

The chemical process for creating biodiesel fuel involves mixing the
oil 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. 

STATUS OF USE AND DEVELOPMENT

The current efforts to commercialize biodiesel fuel in the United
States were started by the National Biodiesel Board (formerly the
National 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. 

COSTS

No modifications to maintenance garages or safety procedures are
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 highï¿½in 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. 

EMISSIONS

Transient cycle emissions testing with biodiesel blends consistently
shows 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. 

INCENTIVES AND DISINCENTIVES

An important incentive for the use of biodiesel fuel is that transit
operators may use conventional diesel fueling equipment because
biodiesel fuel has 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 fuelï¿½biodiesel 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. 

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