7. Economic Benefits of AFVs

Energy Security

The tragedies of September 11, 2001 remind us about the danger of complete reliance on imported petroleum as our sole source for transportation fuel (97 percent of all energy consumed by the U.S. transportation sector is foreign). It is critically important to decrease this reliance on foreign energy sources and increase the use of domestic energy transportation fuels. Enhanced energy security for the nation provides an important economic benefit for all citizens.

Natural gas is an abundant natural resource in North America, providing the capability to significantly enhance our nation's energy security. Industry experts indicate natural gas supplies will last beyond the 21st century. It is estimated that if NGV use were to increase to ten million vehicles, natural gas consumption would only increase by six percent. In other words, dramatic increases in NGV implementation will not adversely affect conventional uses of natural gas (home heating and cooking, industrial).

Furthermore, an extensive natural gas transmission and distribution system is already in place, facilitating fuel availability without the need for diesel trucks (which are polluters themselves) to transport the fuel.

A majority of power plants in California operate on natural gas. Even though we did experience energy shortages last year, 95 percent of EVs charge at night when there is no shortage of electricity. In addition, thanks to new power plants coming on line and the conservation efforts of California citizens, we have now transformed an energy shortage into an energy surplus.

Health Care Costs and Quality of Life

The price of pollution is substantial in terms of increased rates of respiratory and cardiovascular disease, missed workdays due to respiratory ailments such as asthma and the potential for lifelong health problems from pollution caused illnesses. In addition, since pollution does not stay where it is generated, but travels with the air currents, it affects our precious natural resources by damaging plants and animals and creating a brown haze in our once pristine national parks.

Price Stability

Historically, natural gas prices have exhibited significant price stability as compared to petroleum-derived fuels. Since most of California's electricity is derived from natural gas generation, the same is relatively true for electricity. This stability is an important benefit of AFV use since more accurate long term cost planning may be conducted and expected savings may be projected. A notable exception is California&rsquo s 2001 energy crisis (high prices) resulting from deregulation, which has since been addressed.

The Incremental Cost of AFVs

As with all new technology, AFVs are currently produced in limited numbers. In fact, some EVs are still virtually built by hand. This results in higher initial purchase costs due to lost economies of scale. As a result, these vehicles generally cost more than comparable baseline vehicles and engines. The incremental costs can range from a few percent higher to more than double the cost of a comparable gasoline or diesel vehicle . Local, state and federal incentive programs help bring down the initial cost of EVs or NGVs, and the anticipated savings in fuel and maintenance help improve the economic equation. With increased production, it is expected that the differential costs will eventually be reduced or eliminated.

NGV Fuel Cost Calculator

An economic analysis of natural gas as a vehicle fuel depends on many factors, including vehicle application (gasoline or diesel), vehicle size (light-duty, medium-duty, or heavy-duty), fleet size, annual mileage, etc. The extent of the economic benefits will depend on these factors for each fleet or individual user.

It is noteworthy that many public fleets are tax exempt, so there is an opportunity for additional savings for these fleets.

Click the " payback calculator" to estimate the economic benefits of your specific NGV program.

EV Fuel Cost Calculation Example

Operating an electric vehicle is very economical compared to operating a traditional gasoline vehicle. With available utility rate incentives, the fuel cost per mile traveled averages around 2 cents compared to about 5 cents per mile travel for gasoline.

The example below is based on actual operation of an EV in the Burbank area for a one-week period:

Electric Vehicle: 336.8 miles per week 139 kWh consumed per week 2.42 kWh/Mile Gasoline Vehicle: 336.8 miles per week 18.71 gallons consumed per week 18 MPG

Burbank Utility Rate (kWh X .03307) Burbank EV Mileage Discount (.01085 X Mileage)

With the above example costs for the above week were as follows:

Gasoline Costs: 18.71 Gallons @ $1.25 per gallon = $23.38 per week

Electricity Costs: 139 kWh X .03307 = $4.59 per week

Burbank Discount 336.8 X .01085 = $3.65

Total Electric Costs for 336.8 miles = $0.94 per week

The above kWh consumed measured with an Edison Charger (at the end of the charge cycle it provides kWh consumed to full charge).

** Same example over three months of data collection **

Electricity:
2525 Total Mileage
1297 kWh Consumed
1.94 kWh per mile.
Total Electrical Cost with Utility Discount: $15.50

Gasoline:
2525 Total Mileage
140 Gallons @ 18 MPG
Estimated Cost: $1.25 per gallon
Total Gasoline Costs: $175.00