Alternative Energy and Its Impact on Fleet Vehicles in Northeast PA

For The Institute for Public Policy and Economic Development
Summary of Study

Northeastern Pennsylvania’s thriving transportation and warehousing sector is a pillar of the region’s economy. The continued growth of e-commerce during the pandemic further positions this industry as a key player in the area’s economic resilience and recovery in 2021 and beyond. Firms in this sector typically need access to ground transportation infrastructure, particularly close access to interstate highways, because truck transportation is the primary means of transporting goods into and out of distribution centers.

Traditionally, conventional diesel fuel has been the primary fuel for heavy vehicles. Several alternative fuels are coming into prominence, however, each with unique features. These include natural gas, renewable diesel, and battery electric vehicles. Biodiesel and renewable diesel are most common, though compressed natural gas (CNG) has been in use as a vehicle fuel for decades.

Though battery electric vehicles have not yet seen wide adoption in heavy-duty applications, the market share of electric vehicles is quickly growing among passenger cars and several manufacturers have plans to begin production of electric Class 8 semi-trucks in the coming years. Electric vehicles are limited by their range due to their need to be charged, but ranges and charging times have increased as technology continues to advance. Among these alternative options, electric vehicles have the lowest lifecycle emissions.

In northeastern Pennsylvania, CNG may offer a particularly noticeable cost reduction (and less price fluctuation) compared with other fuels due to close proximity to sources of natural gas in the Marcellus formation. The possibility of retrofitting older vehicles to use CNG adds to its value as a useful energy source for commercial vehicles – at least until further advances in battery electric technology overcome limitations for high-mileage and/or long-haul uses. In light of these benefits, policymakers should consider ways to expand incentives for CNG retrofits.

Enterprises with large fleets (including businesses and government agencies) and economic development agencies and business park developers are poised to be major stakeholders in the transition to alternative energy. Business and industrial parks are likely to be critical locations for fueling and charging infrastructure investment. Public-private partnerships with equipment manufacturers (e.g., Tesla) and the logistics industry (including carriers, distribution center operators, etc.) should be pursued.

Read the full policy report here.

Feature Charticle

The Institute for Public Policy and Economic Development

Findings:

  • Costs of gasoline, diesel, and B20 (a biodiesel blend) have fluctuated across a wide range over the past 20 years. The volatility in the market cost of petroleum is a primary reason for this variation.
  • The equivalent price of CNG has typically been lower than petroleum-based fuels, and the price has been much more stable.
  • The cost of electricity for battery-powered vehicles is substantially lower after accounting for their increased energy efficiency compared to internal combustion engines.

Read the full policy report here.