Climate Action - Assisting business towards carbon neutrality

By Kimberly Taylor, Director of Education and Business Programs, Alternative Fuel Vehicle Institute

Nassim Nicholas Taleb, author of Black Swan, explains in a fascinating manner the seeming cognitive dissonance that is the predictable reaction people have to a range of new global improbabilities, from frequent power outages to food shortages. As Taleb tells it, before Australia was discovered, there was an accepted certainty that all swans were white because that’s the only color swan anyone had seen.  Along came a black swan and poof-the white swan theory embraced by millions was discredited.  He points out three characteristics of a black swan.  
    1.  They defy regular expectations
    2.  Their impact is significant
    3.  As humans we explain away the appearance of the new reality once it is decidedly here.

Fleet managers today are confronted with a small gaggle of black swans that meet each of the above characteristics.  They include dramatic economic growth for China and India creating unanticipated economic and resource demand; the depletion of fossil fuels; and a planet that is warming at an alarming rate. These black swans bring with them countless unresolved questions facing fleet managers, policy makers and the automotive industry.  What is the likelihood of carbon regulation and how soon?  How high can gas prices go?  What alternative fuel vehicle options are there?  What fleet vehicle investment strategies won’t leave me with dangling assets?  How green is green?  For many, this convergence of events came out of the blue and awareness dawned at the gas pump.  The cost of a barrel of oil and diesel prices continue to set new records.  NASA’s top climate scientist denounced his previous carbon cutting projections claiming that now they must go deeper.  And all the while, oil imports are on a steady decline with greater control being exercised by state owned petroleum interests.

There was a profound man, Admiral H.G. Rickover, the father of the nuclear navy and modern nuclear engineering, who delivered a speech in May of 1957 to the Minnesota State Medical Association.  “In the face of the basic fact that fossil fuel reserves are finite, the exact length of time these reserves will last is important in only one respect:  the longer they last, the more time do we have, to invent ways of living off renewable or substitute energy sources and to adjust our economy to the vast changes which we can expect from such a shift.”  He was prescient in understanding that fossil fuels are finite.  He couldn’t have known, though, that China and India would ascend to a sort of economic super power status, or that the United States would enjoy the greatest growth in our history at the expense of a fragile planet.  But it is the new reality and fortunately, quietly and slowly, others with foresight around the globe were developing transportation and fuel alternatives long before people woke up to the problem.  The resulting evolution of changes in government policy, massive education, research, technological innovation, international cooperation and a firm resolve have already given us the robust alternative fuel, vehicle and advanced transportation market that we enjoy today.  Alternative fuels alone do not solve the energy, climate and geopolitical conundrum.    But, because of investments that have been made for decades, today, significant advances in the use of alternative fuels can be seen all over the United States and abroad.  Consider just a few examples of how they are being used today.   

The Port of Long Beach is replacing 16,800 old diesel trucks with no less than half new, alternative-fueled trucks as well as new or converted diesel trucks.  Kenworth Trucks and LNG truck engine maker Westport Innovations say they can produce 5000 new heavy-duty LNG trucks in 24 months.

The Department of Energy says the system cost for automotive fuel cells has gone from $275 per kilowatt in 2002 to $95 per kilowatt in 2008, and is expected to be at $60 by next year, compared to $50 per kilowatt for a gasoline engine.

GM is planning to deploy 1000 fuel cell vehicles in California

Grocery retailer Safeway, just this year, started using B20 biodiesel in its nationwide fleet of more than 1000 trucks.

The Environmental Protection Agency’s voluntary program “SmartWay” has recruited more than 600 companies since 2004 that have saved more than 600 million gallons of diesel fuel per year, saving the trucking industry nearly $2 billion in annual fuel costs, and eliminating nearly 7 million metric tons of carbon dioxide emissions that contribute to global warming.

There are over 150,000 natural gas vehicles on U.S. roads today and over 5 million worldwide.  Contributing to that is Honda’s Civic GX, which broke company sales records this year.

Today’s trucks and buses produce only one-eighth the tailpipe exhaust compared to 1990 models and new engines will be even cleaner.  It would take 60 trucks built last year to equal the soot emissions of one truck sold twenty years ago.

By displacing oil imports, domestically produced ethanol can reduce the U.S. trade deficit by $13 billion annually.

Overall operating costs of propane fleets range from 5-30% less than those of gasoline fleets.

The most significant market penetration in the near term is through fleet managers who can make the connection between the black swans and the need to change.  A personal commitment and a dogged determination to win over the management chain is the first step.  Global companies like UPS commitment to alternative fuels began thirty years ago.  Others have taken the first steps but embracing the fuels, vehicles and technologies that can displace petroleum, reduce emissions and achieve tremendous fuel efficiency gains must happen to avoid the heretofore unimaginable black swans.  Perhaps it was best stated recently by Faith Birol, the head of the International Energy Agency, when he said, “We must leave oil, before it leaves us.