1 Demand for Biofuels: E85, Flex-Fuel Vehicles, and Intermediate Ethanol Blends US Chamber of Commerce September 27, 2007 Tom Stricker, Director Technical & Regulatory Affairs Toyota Motor North America, Inc.
Dec 31, 2015
1
Demand for Biofuels: E85, Flex-Fuel Vehicles, and Intermediate Ethanol Blends
US Chamber of Commerce
Demand for Biofuels: E85, Flex-Fuel Vehicles, and Intermediate Ethanol Blends
US Chamber of Commerce
September 27, 2007
Tom Stricker, Director
Technical & Regulatory Affairs
Toyota Motor North America, Inc.
September 27, 2007
Tom Stricker, Director
Technical & Regulatory Affairs
Toyota Motor North America, Inc.
2
Awareness of IssuesAwareness of Issues
Three issues: energy, CO2, and air quality Three issues: energy, CO2, and air quality
Global development ofGlobal development ofindustry & technologyindustry & technologyin the 21st centuryin the 21st century
Global development ofGlobal development ofindustry & technologyindustry & technologyin the 21st centuryin the 21st century
Accelerated Accelerated consumption of consumption of
fossil fuelsfossil fuels
Accelerated Accelerated consumption of consumption of
fossil fuelsfossil fuels
Automotive Powertrain IssuesAutomotive Powertrain Issues
1. Energy Issues1. Energy Issues
3. Air Quality Issues3. Air Quality Issues
PopulationPopulation growth growth (in USA, Asia, etc.)(in USA, Asia, etc.)PopulationPopulation growth growth (in USA, Asia, etc.)(in USA, Asia, etc.)
Growing number Growing number of motor of motor vehiclesvehiclesGrowing number Growing number of motor of motor vehiclesvehicles
2. CO2 Issues 2. CO2 Issues (global warming measures)(global warming measures)
3
Right TimeRight TimeRight TimeRight Time Right PlaceRight PlaceRight PlaceRight PlaceRight VehicleRight VehicleRight VehicleRight Vehicle
Gaseous Gaseous fuelfuel
ElectricityElectricityHydrogenHydrogenSynthetic Synthetic fuelfuel
Bio fuelBio fuel
Hybrid TechnologyHybrid TechnologyHybrid TechnologyHybrid Technology
Gasoline / Gasoline / DieselDiesel
Ultimate eco-carUltimate eco-car
Toyota’s ApproachToyota’s Approach
No silver bullet, but hybrid is beneficial to all typesNo silver bullet, but hybrid is beneficial to all types
4Biofuels (Ethanol) Discussion OverviewBiofuels (Ethanol) Discussion Overview
• Some Benefits of Ethanol
• Benefits/Challenges of Expanding Ethanol
- Low-Level Blends
- High-Level Blends
- Mid-Level Blends
• Food for Fuel Thought!
5Some Benefits of EthanolSome Benefits of Ethanol
Domestic Resource
Job Creation
Energy Security/Diversity
Potential CO2 Reductions
Source: LiveScience Image Gallery
Grinnell Glacierc. 1940 2004
6Low-Level Blends (E10↓)Low-Level Blends (E10↓)
All-Vehicle Compatibility Good Energy Content
0%10%20%30%40%50%60%70%80%90%
100%
Gasoline E10
BT
U v
s. G
aso
line
Blending Infrastructure
Legal Fuel
Other Non-Auto Equipment
7High-Level Blends (E85)High-Level Blends (E85)
High Oil Displacement ~8M FFV’s on the Road
Legal Fuel
Key Challenges: Customer Value, Fuel Availability, Fuel SupplyKey Challenges: Customer Value, Fuel Availability, Fuel SupplyKey Challenges: Customer Value, Fuel Availability, Fuel SupplyKey Challenges: Customer Value, Fuel Availability, Fuel Supply
8High-Level Blends (E85) – Customer FactorsHigh-Level Blends (E85) – Customer Factors
Main Reasons to Consider FFV
Main Reasons Not to Consider FFV
Decrease oil dependence
Lower fuel costs
Better for the environment
Availability of refueling
Never thought about it
Cost
Consumers Appear Both Educated and Uneducated at the Same TimeConsumers Appear Both Educated and Uneducated at the Same TimeConsumers Appear Both Educated and Uneducated at the Same TimeConsumers Appear Both Educated and Uneducated at the Same Time
9High-Level Blends (E85) – Potential Vehicle Mods.High-Level Blends (E85) – Potential Vehicle Mods.
Key upgrades for Ford Taurus FFV
Widely reported Big-3 cost of $150-200 per vehicle
10High-Level Blends (E85) – Customer FactorsHigh-Level Blends (E85) – Customer Factors
0%10%20%30%40%50%60%70%80%90%
100%
Gasoline E10 E85
0.000.501.001.502.002.503.003.504.00
WestCoast
Rocky Mt GulfCoast
Mid West LowAtlantic
CentralAtlantic
NewEngland
Reg. Gas. E85 (BTU)
Source: DOE Clean Cities Alternative Fuel Price Report July 2007
Lower Energy Density = Lower MPG and Reduced Range
Current E85 Fuel Cost > Current Gasoline Cost
11High-Level Blends (E85) – Customer FactorsHigh-Level Blends (E85) – Customer Factors
0%10%20%30%40%50%60%70%80%90%
100%
Before After
Definitely/Probably Consider
Flex Fuel technology loses about 1/3 of its considerers upon learning about the reduction in fuel economy and the loss of driving range per fill-up.
Q: Assume that today your preferred manufacturer offered a vehicle that met your needs for vehicle size and your tastes for vehicle styling, to what extent would you consider purchasing this vehicle as your next new vehicle if it had the following vehicle technology…? (Definitely would consider, Probably would consider, Might or might not consider, Probably would NOT consider, Definitely would NOT consider)
Q: Now that you have read about each of the advanced technologies, assume that today your preferred manufacturer offered a vehicle that met your needs for vehicle size and your tastes for vehicle styling, to what extent would you consider purchasing this vehicle as your next new vehicle if it had the following vehicle technology…? (Definitely would consider, Probably would consider, Might or might not consider, Probably would NOT consider, Definitely would NOT consider)
50%
34%
12High-Level Blends (E85) – AvailabilityHigh-Level Blends (E85) – Availability
Source: DOE Alternative Fuels Data Center (as of May 2007)
Only about 1,200+ pumps nationwide – focus in the mid-west
13High-Level Blends (E85) – SupplyHigh-Level Blends (E85) – Supply
Figure 3. Ethanol production
0
5,000
10,000
15,000
20,000
25,000
2007 2008 2009 2010 2011 2012 2013 2014 2015
marketing year
mill
ion
gal
lon
s
Baseline Scenario 1 Scenario 2
31%
37%
47%
An Analysis of the Effects of an Expansion in Biofuel Demand on U.S. Agriculture, U.S. Department of Agriculture, May 2007 % Corn Crop
12B
15B
20B
14High-Level Blends (E85) – SupplyHigh-Level Blends (E85) – Supply
Estimate of Cellulosic Ethanol Potential
0%
20%
40%
60%
80%
100%
Current Future
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
Current (Lab) Future
DOE Target for Cellulosic Ethanol Cost
% U
S G
aso
line
De
ma
nd
$/g
allo
n
Source: USDA, DOE
$1.04
$2.50
$3.50
30%
0%
15Mid-Level Blends (E20)Mid-Level Blends (E20)
High Oil Displacement ~8M “E20” Vehicles on the Road
Legal Fuel
and
FFV Other
Key Challenges: Emissions, Near-Zero Fuel Availability, Non-AutosKey Challenges: Emissions, Near-Zero Fuel Availability, Non-AutosKey Challenges: Emissions, Near-Zero Fuel Availability, Non-AutosKey Challenges: Emissions, Near-Zero Fuel Availability, Non-Autos
16Mid-Level Blends (E20) – Potential Vehicle ConcernsMid-Level Blends (E20) – Potential Vehicle Concerns
(1)
(2)
(3), (4)
(5)
(6)
(*): Only some vehicles
Item
(1) Fuel cap valve rubber (*)
(2) Tank gasket (*)
(3) Fuel pump (*)
(4) Sender gauge
(5) Fuel delivery (*)
(6) Pulsation dumper (*)
Potential Issues: Potential Issues:
Materials failures, Evaporative Emissions, Hot Re-Start, Idle QualityMaterials failures, Evaporative Emissions, Hot Re-Start, Idle Quality
Potential Issues: Potential Issues:
Materials failures, Evaporative Emissions, Hot Re-Start, Idle QualityMaterials failures, Evaporative Emissions, Hot Re-Start, Idle Quality
17Toyota ViewToyota View
• Biofuels (ethanol) have a key role to play
• Low-level (E10) makes sense
- Interested in exploring all options – concern about E11+ usage
- Cooperation with/among CRC, EPA, DOE, etc.
• Still examining the best way to use “excess” ethanol
• 2009 Toyota Tundra FFV
- Support biofuels policy
- Pockets of demand (rejection criteria for some)
- Cautious approach while assessing customers, fuel supply and infrastructure
18Food for Thought (Not Toyota Position)Food for Thought (Not Toyota Position)
• Assume corn reaches 15B and cellulose reaches 15B in the next 15 years (cost-competitive) - total 30B gallons
• This is about 20% of future gasoline demand
• Let manufacturers choose between E20 and E85 vehicles - substantially greater potential for large ethanol-capable fleet (E20) at much lower cost
• Distribute “excess” ethanol as E20 rather than E85- Four times as many refueling locations with same amount of ethanol
- 1/4 to 1/8 the mpg, range and cost hit of E85 for consumers
Still Challenges: Fuel Spec, Certification Fuel, Misfueling Still Challenges: Fuel Spec, Certification Fuel, Misfueling
(E10 vehicles and non-automotive applications)(E10 vehicles and non-automotive applications)
Still Challenges: Fuel Spec, Certification Fuel, Misfueling Still Challenges: Fuel Spec, Certification Fuel, Misfueling
(E10 vehicles and non-automotive applications)(E10 vehicles and non-automotive applications)
19
TODAY for TOMORROWTODAY for TOMORROW