September 9, Mr. John Eichberger Executive Director Fuels Institute 1600 Duke Street, Suite 700 Alexandria, Virginia 22314

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1 September 9, 2015 Mr. John Eichberger Executive Director Fuels Institute 1600 Duke Street, Suite 700 Alexandria, Virginia RE: CMU Life Cycle Greenhouse Gas Study for Light Duty Vehicles Dear John: NGVAmerica appreciates the opportunity to share comments on the recently published Carnegie Mellon University report, Comparison of Life Cycle Greenhouse Gases from Natural Gas Pathways for Light-Duty Vehicles. Quantifying GHG emission benefits for all types of transportation fuels is a complicated endeavor given the differing viewpoints on data sets and the changing nature of the assumptions that are required for such comparisons. Therefore, it is not surprising that we take issue with some of the assumptions used in the CMU study. NGVAmerica strongly believes that natural gas vehicles are part of a low carbon solution to America s transportation needs. NGV products are available today in nearly every application needed by consumers and fleets that are seeking to lower GHG and other emissions. The latest data currently under consideration by the California Air Resources Board as part of the review of the State s Low Carbon Fuel Standard (LCFS) program indicates that NGVs and the use of natural gas in transportation reduce greenhouse gas emissions compared to gasoline vehicles by percent. The U.S. Department of Energy s Alternative Fuel Data Center reports that NGVs produce about 11 percent less GHG emissions based on well-to-wheels analysis. Additionally, the natural gas industry continues to take important steps to lower its upstream emissions and has reduced these emissions while producing and delivering larger quantities of natural gas. Future voluntary efforts, new technologies, and additional regulations will lower natural gas upstream emissions even further, thus improving the environmental benefits provided by NGVs. There are many reasons fleets and consumers are choosing natural gas for their transportation needs, including the energy security benefits of using an abundant domestic resource, promoting fuel diversity as a hedge against oil price volatility, reduced criteria pollutants, and lower operating noise levels (compared to diesel vehicles). And while

2 current world oil prices have reduced the economic advantage of low-cost natural gas, well-documented models demonstrate that natural gas prices will remain stable for decades to come given significant domestic reserves. History has also been clear that oil prices will spike and fall based on the world economy. Policymakers, fleets, and fuel providers understand that there are a host of reasons to employ and support natural gas vehicles. NGVAmerica continues to see this support everyday as we work with more states to institute policies that promote the use of NGVs and as federal lawmakers work to fix various inequities to promote fairness in the treatment of all transportation fuels. America s natural gas fueling infrastructure also continues to expand today there are more than 1,600 outlets providing natural gas fuels to fleets and consumers. While NGVAmerica appreciates the goals of the Fuels Institute-sponsored study, there are several fundamental areas where additional review or the consideration of other important factors could lead to different conclusions. We take particular issue with six areas: 1) Use of global warming potential numbers that have not been adopted by the U.S. Environmental Protection Agency; 2) Reliance on a 20-year timeframe to evaluate technologies that likely will have only minimal impact on climate change in the next 20 years; 3) Omission of more recent upstream emission reductions in the baseline assumptions regarding overall natural gas emissions; 4) Pessimistic Methane Estimate is not a valid representation of overall natural gas emissions; 5) Assumptions that favor electric vehicles over natural gas vehicles ignore how these vehicles will be used in the real-world; and 6) Absence of full consideration that gasoline and diesel fuels are increasing in carbon intensity a key element of any credible well-to-wheels study. NGVAmerica offers the following comments regarding these key areas of the report: GWP number for methane Like the previous CMU study on heavy-duty vehicles, this study uses the most extreme case presented in the IPCC 5th Assessment and uses a global warming potential (GWP) of 36 instead of using an average of the numbers presented in the 5th Assessment. The U.S. EPA has not made a decision concerning how to incorporate the latest IPCC GWP figures into its rules or analysis, and in fact the recently proposed Phase 2 heavy-duty vehicle fuel efficiency rulemaking has requested comments on this issue. EPA s proposal is to retain the current GWP value of 25 for methane in this rulemaking. Given the uncertainty surrounding the values in the latest IPCC report, we believe that this is the right approach. 2

3 20-year timeframe for evaluating technologies and GHG emissions Evaluating the impact of pollutants through the lenses of different timeframes appears to be of limited benefit, given these pollutants also have longer term impacts and it would be short sighted not to consider them. Another factor to consider is that many of the technologies that purportedly fare better when a 20-year timeframe is used are not short term solutions and will require much longer time periods to have any impact on GHG emissions (e.g., electric vehicles fueled by power plants that use carbon sequestration). Moreover, if the idea behind looking at 20 years versus 100 years is that GHG emissions must drop significantly during this time frame in order to affect the rate of climate change, then the set of emissions evaluated in this paper (emissions from new vehicles) will have little to no impact on climate change since there are more than a billion on-road vehicles in existence. New cars only make up a subset of the population of motor vehicles and new cars only make up a small part of overall global emissions. It is important to recognize that new vehicles reduce GHG emissions from those produced just a few years ago, thus the real issue is not whether emissions are trending downward for new vehicles but rather how much of an impact these new vehicles will have on overall GHG emissions. The reality is that the introduction of the even the most fuel efficient and lowest GHG emitting vehicles may not have a significant impact on GHG levels in the next 20 years. The only way to impact total emissions is to address the overall vehicle miles traveled (VMT) and fuel consumption of all vehicles, new and in-use vehicles. To truly evaluate the best policy options for the next 20 years it would make sense to evaluate a host of policies extending far beyond new vehicles, including increased use of mass transit and other policies like smart growth, tele-commuting, etc. that reduce VMT and fuel consumption. Utility of vehicles and replacement trends The study does not consider the relative utility of electric vehicles and how they will impact the total miles driven by motorists. It is fair to ask whether electric vehicles will actually replace SUVs and minivans, or whether such vehicles will serve mostly as commuter cars. If electric vehicles will not actually replace vehicles on a one for one basis, then their estimated emission reductions or benefits should be adjusted to reflect this fact. Assumptions Regarding Electric Vehicles The electric vehicle estimated benefits are distorted because they assume natural gas combine cycle plants when in fact many electric vehicles will be fueled by older less efficient natural gas plants or high emitting coal plants. The flaw in this comparison is highlighted by the fact that the study assumes the electricity provided for CNG fueling stations is based on average US grid, but does not also do this for electric vehicles. 3

4 Assumptions concerning technology developments and efficiency If the report models carbon sequestration, it should also model the use of CNG in hybrid applications. It would also be fair to model the use of SIDI natural gas engines that burn natural gas and gasoline mixtures thereby benefiting from higher natural gas octane and improved fuel economy. The potential benefits of such strategies are highlighted by the chart showing how increased efficiency of NGVs is beneficial, but the report does not appear to show side by side comparisons based on higher fuel efficient NGVs. The U.S. DOE recently announced plans to fund SIDI natural gas/gasoline engine development. This technology has the potential to further enhance the efficiency and emission benefits of NGVs. The study is helpful in highlighting the importance of efficiency. It also shows that as upstream emissions are reduced and natural gas efficiency increases, NGVs can be quite beneficial. This was not shown in the side by side modeled cases but is highlighted in Fig. 3. This points to the need for U.S. DOE and industry to invest in developing more fuel efficient natural gas engines. Given the much higher cost of battery electric vehicles, it would be interesting to see how similar investments in NGVs would reduce emissions. Baseline assumptions for gasoline and diesel fuel The study s authors indicate that they looked at only one unconventional source of petroleum (Canadian tar sands), but it is not clear how this is factored into the comparisons. The carbon intensity factors for gasoline and diesel appear to be derived principally from GREET 2013 and GREET These models provide significantly lower estimates of carbon intensity for these fuels than the OPGEE model used by California in their LCFS program. Future reports and studies should include comparisons based on these other models that include higher carbon intensity factors for gasoline and diesel. Natural gas emissions (or leakage) rates The baseline natural gas emission rate of 1.3 percent appears generally to be in line with the views of many in the natural gas industry. However, recent studies suggest that this level could be closer to 1.0 percent. At the 1.3 percent level and 100 percent fuel efficiency, NGVs show a clear benefit relative to gasoline vehicles for the 100-year timeframe and come close to showing a benefit for the 20-year timeframe (even when using the much higher GWP number in the report). The report shows a breakeven point for NGVs when upstream emissions are at 0.9 percent and a 20-year timeframe is considered. If these reductions are considered in the context of improvements from vehicles that were manufactured just a few years ago (meaning the vehicles they will replace), these are significant reductions in GHG emissions. NGVAmerica has several concerns regarding the report s characterization of natural gas upstream emission rates. We do not agree with the pessimistic view presented in the report and the use of a plus up factor. Recent studies point to declining natural gas upstream emissions. Moreover, much research suggests that the baseline emissions rate is 4

5 likely closer to 1.0 percent. The authors note that several studies have recently been conducted that update a number of outdated methane leakage studies of the natural gas supply chain. However, the authors only consider and update figures for emissions related with natural gas production. They do not incorporate similar studies related to transmission and distribution, where some of the largest reductions relative to the current EPA GHG inventory have been shown. The study also neglects regional differences in natural gas distribution infrastructure, with some regions demonstrating distribution leakage rates 75 percent lower than assumed in the EPA GHG inventory. This is particularly important to CNG pathways, as these pathways rely on distribution systems to supply natural gas to CNG stations. Test data versus GREET inputs It is unclear why the researchers use the specific fuel economy test data for gasoline and NGVs, but rely on GREET s assumptions regarding tailpipe methane emissions, specifically that NGVs emit 10x more methane than gasoline vehicles. EPA certification data shows that the average methane emissions from a 2015 Honda Civic Natural Gas (the assumed NGV) is 3.7x higher than a Honda Civic (the assumed gasoline vehicle). Conclusion NGVAmerica appreciates the opportunity to comment on this study and to provide input to the Fuels Institute. Our 200+ members represent the entire value chain of the NGV industry and are firmly committed to all efforts that improve efficiency and lower emissions. NGVs provide a currently available low-carbon alternative for America s transportation needs. NGVAmerica is confident that the natural gas industry will continue to take steps to reduce its emissions and advance the use of innovative technological solutions. These efforts will only enhance the environmental and economic benefits provided by NGVs. We hope that data driven analysis and carefully considered science will lead to a fair examination of the facts for consumers, fleets, policymakers and others interested in fully harnessing the potential of America s abundant natural gas resources. Sincerely, Matthew Godlewski President NGVAmerica 5