Fine Print: The Case for Alternatively Fueled Vehicles in New Jersey

Tom Johnson | October 28, 2011 | Energy & Environment
Working group report charts the road to clean vehicles -- bumps, detours, and all

What it is: An examination of the opportunities and barriers to promoting alternatives to conventional gasoline-powered vehicles in New Jersey, based on a review of the policy issues by a panel of energy industry executives, state officials, and utility representatives appointed by the New Jersey Board of Public Utilities (BPU).

Why it is important: Without significant changes in fuel efficiency and/or increased use of alternative fuels, along with a reduction in vehicle miles traveled, it will be difficult to meet the goals of the state’s Global Warming Response Act, a law passed in 2007 that set aggressive targets to reduce emissions of greenhouse gases that contribute to global warming, according to the report. The transportation sector accounts for about 35 percent of the state’s greenhouse gas emissions.

What it suggests: Essentially, it has three core recommendations: Replace petroleum with alternative and renewable fuels; reduce petroleum use through encouragement of smart driving practices, idle reduction and fuel-efficient vehicles; and reduce petroleum consumption through the use of mass transit, trip elimination, and congestion mitigation.

What’s to like about the shift: In most cases, the cost of fueling a vehicle for consumers and businesses will drop, according to the report. For example, take plug-in electric vehicles, which are now being rolled out by Detroit. Based on today’s electricity prices in New Jersey and gas prices of $3 per gallon, the working group calculated the cost per mile for an electric vehicle is approximately $0.034 compared to $0.12 for gasoline. The same is true for other alternative fuels. Fleets powered by natural gas can achieve savings of 40 percent to 60 percent compared with gasoline or diesel fuel, the report projected. Virtually all of the alternative fuels also substantially reduce pollution, when compared with conventional cars powered by gasoline.

What it doesn’t spell out in detail: There is going to be a hefty price tag for building the infrastructure for alternatively fueled vehicles no matter what route the state takes: plug-in cars, compressed natural gas, propane, or biodiesel. The working group’s report recommended the state explore ways to develop more refueling stations for alternative fuels, either by establishing a revolving loan fund or by leveraging private capital. The alternative vehicles are also more expensive than conventional gasoline-fueled cars.

What’s in place today: There are 51 alternative fuel stations in New Jersey, with 28 of them available to the public, according to the working group. Still, the report argued private industries and public entities have shown increasing interest in alternative fuels to save on costs, diversify fueling infrastructure, reduce vehicle maintenance and lower emissions.

Why it is not happening sooner: Barriers to entry include the pace and location at which fueling stations are established, as well as the unanswered question of who will foot the cost. There is also likely to be a big debate over how large a role the state’s utilities will play in building the infrastructure for plug-in electric vehicles.

The tax man still cometh: The working group said institution of a motor fuel tax should be evaluated for alternative fuels, although it recommends it be set very low or at zero, until certain deployment targets are achieved.