Fueling the future

Last updated: March 2013

Volatile gasoline prices have spiked over $4 a gallon sparking consumer interest in vehicles that consume less petroleum and save at the pump. Concern about air pollution, carbon-dioxide emissions, and U.S. dependence on imported oil is also driving research into non-petroleum based fuels and technology.

The good news is that automakers and other researchers have been working on a variety of alternatives to conventional gasoline-fueled, internal-combustion engines. Hybrids and "clean diesels" present practical mainstream alternatives today, with plug-in hybrids and pure electrics showing promise in the near future.

Some analysts consider the spike in gasoline prices in the summer of 2008 as a sign of things to come. Experts argue that it's only a matter of time before increasing worldwide demand and tightening supplies of this declining resource drive pump prices still higher.

Predictions about when this will happen range from a less than a decade to more than a century. Dr. Peter Wells, an oil industry economist in Dubai, says that oil production from non-OPEC countries has already peaked. And he forecasts that OPEC production too will peak by 2020. After that, while it is likely that new oil sources will be found, none will be as big as existing fields, and they will be more expensive to drill, driving prices up dramatically.

Aside from pricing and supply issues, burning fossil fuels creates pollution-related health hazards and acid rain, and adds billions of tons of carbon dioxide (CO2) to the atmosphere annually. CO2 is considered a major contributor to global warming.

Technology can help, but as John Steele Gordon, a finance historian, has argued, a new technology replaces an older one only when it's cheaper, better, or both. So far, that's proved a stumbling block to many "green" vehicles that haven't been able to match the balance of price, convenience, performance, and driving range that conventional gasoline vehicles provide.

Thus far, alternative fuels have built only niche markets. Electric cars have struggled with commercial viability for decades because of limited range and long recharge times, though recent breakthroughs in lithium-ion batteries show potential. Clean-running hydrogen-powered cars are still in their infancy. And while diesels show promise, high fuel prices and the need for expensive emissions control systems have hindered their adoption. Most of all, relatively cheap gas in the United States has limited alternative fuel adoption.

The alternative that has gained the most acceptance so far is the gasoline-electric hybrid-technology that meets conventional cars halfway. Today's hybrids are essentially gasoline-fueled cars that use batteries and electric motors to dramatically boost their fuel economy.

Other types of hybrids on the way are more like electric cars. They have to be plugged in daily and offer even greater fuel economy. In this special section, we'll take a look at the different alternatives to gasoline that are on the horizon, and what role, if any, each may play.

CR Quick Take

A number of promising alternatives to the conventional, gasoline-powered car are being developed.

  • Hybrid vehicles are likely to continue generating consumer interest if gasoline prices remain relatively high.
  • Plug-in hybrids represent the next phase of hybrid-vehicle development, allowing cars to run on cheaper, cleaner electricity for most trips, while using a gasoline-fueled engine to give plug-in hybrids the long-distance capability of conventional cars.
  • Renewable fuels made from farm crops could help, but they cannot yet replace more than a small percentage of U.S. petroleum needs.
  • Hydrogen fuel-cell cars, which are ultraclean and use no petroleum, are still at least a decade away from being practical alternatives.
  • Over the next 10 to 20 years, we are likely to see incremental improvements in a number of areas, which will help improve fuel economy, stretch petroleum supplies, and reduce pollution.

Ethanol: Growing renewable fuels

Several alternative fuels that can power an internal-combustion engine are readily available, including compressed natural gas, propane, and alcohols such as methanol and ethanol. Ethanol, or ethyl alcohol, is the most practical renewable, not-from-petroleum gasoline substitute. It has long been used in fuel, usually as an oxygenate additive or blend with gasoline, because ethanol burns cleaner than gasoline.

All new cars sold in Brazil, run on some mixture of ethanol. It is also widely used in South Africa and Sweden. Most ethanol in the United States is made from corn. It is mixed in with most gasoline sold across the United States in a 10 percent ethanol/90 percent gasoline blend called E10. E85, an 85 percent ethanol/15 percent gasoline blend is sold primarily at gas stations in the Midwest, near where ethanol is produced.

Ethanol contains less energy per gallon than gasoline, so E85 gets roughly 30 percent fewer miles per tankful. Factoring in that loss, corn-based E85 is often more expensive than gasoline at today's prices—even after a 51-cent-per-gallon tax break.

This lower fuel economy also results in more carbon dioxide (CO2) emissions than burning gasoline. Ethanol advocates note that plants used to grow crops for ethanol absorb as much CO2 as the cars burning it emit, negating this problem. Other studies refute this claim.

Millions of "flex-fuel" vehicles, which can run on either E85 or gasoline, are already on the road in the United States. A list where to find the fuels can be found on the National Ethanol Vehicle Coalition's website. Some are only available to commercial fleets.

An incentive for automakers to produce vehicles that run on E85 is that they dramatically boost the automaker's Corporate Average Fuel Economy ratings. A National Highway Traffic Safety Administration (NHTSA) document details an example "for a dual-fuel model that achieves 15 miles per gallon operating on alcohol fuel and 25 mpg on the conventional fuel, the resulting CAFE [calculation] would be…40 miles per gallon." This effectively lowers average fuel economy requirements for other vehicles, allowing automakers to produce more large SUVs and trucks, which get poor fuel economy, even if the flex-fuel models never actually operate on ethanol.

While most ethanol today is made from corn, cellulose is more promising. Cellulosic ethanol can be made from corn stalks after harvesting, limbs left from logging operations, from growing switchgrass, and even potentially from municipal trash. Sweden is moving toward greater dependence on ethanol from wood-based cellulose. A dozen or so companies are building demonstration plants in North America to distill ethanol from cellulose, using various chemical processes.

Since switchgrass and agricultural byproducts aren't food sources, they can replace a much larger portion of our energy needs—up to 30 percent of transportation fuel—according to a 2003 Energy Department study. However, using waste products for ethanol production eliminates any offset for ethanol's increased CO2 emissions.

So far, cellulosic ethanol costs about 50 percent more than corn-based ethanol. Clearly, ethanol has a long way to go before becoming cost effective in the United States. And while it may reduce oil consumption, ethanol looks unlikely to have any long term benefits in reducing global warming.


Another renewable fuel that is getting a lot of attention is biodiesel, a fuel made from vegetable oil that can be used to power diesel engines.

Most biodiesel outlets are located in the Midwest. To see where to buy biodiesel, visit the website of the National Biodiesel Board.

Most makers of diesel cars will not honor warranties on cars that burn biodiesel in higher concentrations than 5 percent biodiesel because of impurities and because it can eat away at seals in the fuel system. (However, Ford recently announced it would warranty new diesel Super Duty pickups for biodiesel concentrations up to 20 percent.)

According to statistics published by the U.S. Department of Energy's National Renewable Energy Laboratory, the United States has the capacity to produce about 900 million gallons of biodiesel a year, or enough to supplant less than 1 percent of the gasoline used in this country.

In Consumer Reports' own tests, a car running on biodiesel produced slightly less pollution than the same car running on conventional diesel but achieved slightly fewer mpg.

A variation on biodiesel is straight vegetable oil (SVO), which can also burn in diesel engines without modification. Cars running on SVO, however, need a separate fuel tank for the oil and a preheating system to keep it from congealing. Conversion kits to add the fuel tank and other hardware to existing diesels cost about $800, and the components reduce a vehicle's cargo space.

In our tests, the car running on vegetable oil posted almost the same acceleration and similar emissions as it did on petroleum diesel. Many people who go this route get free recycled fryer oil from restaurant kitchens, but it has to be filtered thoroughly before being put in the tank.

Another approach is growing biofuels from algae. Algae produces much more organic oil than other crops, and the oil can be made into either gasoline or biodiesel using conventional processes. Plus, algae consumes less water than growing other biofuel crops such as soy beans for biodiesel or corn for ethanol. A number of algae biorefineries are currently being built, but it will take several years before any large-scale commercial plants come online.

Compressed natural gas

The buzz on alternatives to gasoline usually focuses on hybrids or ethanol. But Honda is quietly pushing another alternative: The company sells a version of the Civic that runs on compressed natural gas (CNG).

Natural gas has been used as a motor vehicle fuel since the 1930s. Chrysler, Ford, and General Motors have all sold CNG-powered passenger vehicles in the past, primarily to fleets. Today, only Honda offers a natural gas powered car, the Civic GX. It is available to consumers in California, New York, Oklahoma, and Utah.

Today, 85 percent of the CNG consumed in the U.S. is also produced here. And compared with gasoline, it has much cleaner emissions with similar fuel economy, performance, and drivability. According to the Environmental Protection Agency, using CNG can reduce carbon-monoxide emissions by 90 to 97 percent and nitrogen-oxide emissions by 35 to 60 percent when compared with gasoline. CNG can also potentially reduce non-methane hydrocarbon emissions by 50 to 75 percent, while producing fewer carcinogenic pollutants and little or no particulate matter. When the 1998 Civic GX was introduced, the EPA cited it as having the cleanest internal combustion engine ever tested.

The main disadvantage of natural gas is that filling stations are few and far between: about 1,600 nationwide, versus almost 200,000 gasoline stations. And even if you've found one, filling time is considerably longer than filling up with regular fuel. To find a natural-gas filling station, check out the U.S. Department of Energy website.

Natural gas also requires a huge tank that holds relatively little fuel. In the case of the Civic GX, the tank takes up more than half the trunk space and holds the energy of just eight gallons of gasoline. When we tested a 2008 Civic GX, we found the low fuel warning light came on after just 150 miles of driving. The light indicates just 30 miles left.

To offset these challenges, Honda sells a home refueling compressor called the Phill, which hooks up to a household natural gas line. Since the Phill has to pressurize household gas to 3,600 psi, it takes overnight to replenish the GX's tank.

Department of Energy says vehicles powered by natural gas are as safe as conventional gasoline or diesel vehicles and their pressurized tanks have been designed to withstand severe impact, temperature, and environmental exposure. CNG is lighter than air, so if fuel were to escape in a crash, it would evaporate rather than create a puddle under the car.

The cost of CNG can be as little as half that of a gallon of gas if you refuel at home. And at commercial stations, the cost is still significantly less than gasoline—about 30 percent less than gasoline on average. Natural-gas prices have been volatile, however, and today's good deal might not look so good tomorrow.

The Civic GX costs about $7,000 more than an equivalent gas-powered Civic, which is somewhat offset by a $4,000 tax credit from the federal government. The Phill costs another $3,500 to buy, and receives a $1,000 federal tax credit. Additional subsidies of up to $2,000 are available from various environmental authorities.

Electric cars

A new wave of electric cars is hitting the streets, after about a 15-year hiatus since slow-selling models last left the market in the mid 1990s.

Electric cars are attractive to environmentalists and politicians, because they are up to three times as efficient as gasoline cars and emit no pollution. Even counting the fuel consumed and emissions produced at power plants, electric cars come out ahead. According to a study by the Natural Resources Defense Council and the Electric Power Research Institute, electric cars with a 40 mile range could reduce CO2 emissions nationwide by 5 percent. In regions with cleaner electricity production such as the West Coast, the reduction could be as much as 50 percent.

Consumers, however, are still reluctant to adopt electric cars because of their limited range, long recharge times, and expensive batteries.

Improving battery and charging technology are reducing those challenges, however. Several modern electric cars with lithium batteries are said to achieve a range of 100 miles. And consumers who have tested them express a preference for charging at home in their garages, rather than stopping at gas stations. Many auto executives now expect that cars with electric, or electrically assisted powertrains will make up as much as half of all auto sales by 2020. And they are making huge investments in electric cars, batteries, and the factories to build them.

While some of these models, like the Nissan Leaf, will be all electric, several others, such as the Chevrolet Volt, will be primarily electric but also have a small gas engine to extend the range for longer trips.

The Leaf will be the first all-electric vehicle sold to the public from a major automaker since the 1990s when it goes on sale in December 2010, at about the same time as the Volt.

Hydrogen: A long wait

At first glance, hydrogen-powered electric cars using fuel cells seem like the ideal solution to pollution woes and dependence on imported oil. They don't use combustion but rather an electro-chemical reaction whose only major byproduct is water. Fuel cells have been used for years to provide electricity in space, and hydrogen is the most abundant element in the universe.

Many automakers are testing working prototypes, mainly in fleets, including the Daimler-Benz F-Cell, Ford Focus FCV, Chevrolet Equinox Fuel-Cell Vehicle, Honda FCX Clarity, Hyundai Santa Fe FCEV, Toyota Highlander FCHV, and Volkswagen HyMotion. And the federal government has committed hundreds of millions of dollars to do research on fuel cells and hydrogen issues. But daunting technical and infrastructure challenges make it unlikely that fuel-cell cars will get beyond the prototype stage for decades to come.

Manufacturing costs are now about a hundred times that of an equivalent gasoline car, however, and reliability and life-span issues are still being addressed. Honda's FCX Clarity was the first fuel-cell vehicle to be leased to a handful of consumers, but a Honda spokesman told us they didn't expect to produce a mass-market fuel-cell vehicle for at least 20 years.

Pressing problems for this technology are the issues of where to get the hydrogen and how to get it to the vehicle. While hydrogen is abundant, it's almost always bound up in minerals, hydrocarbons, or water and needs to be extracted.

An alternative is taking electricity from a nonpolluting source like solar, wind, or hydropower and using it to split water into its hydrogen and oxygen components. The problem here is that it takes more electricity to make the hydrogen than the hydrogen generates in a fuel cell.

Another problem is that hydrogen gas carries very little energy per cubic foot. So it has to be stored on a car at very high pressures up to 10,000 psi. Storing it in liquid form seems impractical, as it takes too much energy to cool it, and the hydrogen evaporates. The government is working on other storage methods, but so far all have so far proven too heavy and too costly.

Building a hydrogen distribution network also faces a major chicken-and-egg problem. Without the ability to refill them, people won't buy the cars, and without masses of cars to service, businesses won't spend the billions of dollars it would take to build the infrastructure. California and New York state have plans to construct small networks of hydrogen filling stations, which will increase the range of the tiny fleet of fuel-cell cars undergoing tests there. Those stations have electric-powered reformers that electrolyze water to make hydrogen on-site. Similar initiatives have been proposed in Canada.

A simpler solution is to burn hydrogen in a regular internal combustion engine, as BMW has demonstrated with a hydrogen-powered 7 Series sedan.

A hydrogen-burning engine creates no carbon dioxide (CO2), is relatively inexpensive to produce, and doesn't need the ultra-pure hydrogen that a fuel cell demands. On the other hand, it still requires a hydrogen-fueling system and needs a catalytic converter to reduce NOx emissions, and the vehicle needs a space-robbing tank.

Even if hydrogen fuel is relatively expensive, it could be the best alternative for making pollution-free vehicles.

As of this writing, it looks like battery-based electricity is the emerging technology, prevailing over all other alternatives. Most of it is due to the ability to use existing infrastructure.

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