## CMU study finds that HEVs and PHEVs with small battery packs offer more emissions and oil displacement benefits per dollar spent than large pack PHEVs and BEVs; policy implications

##### 27 September 2011
 Value of life-cycle emissions externality damages and oil premium costs from vehicles in 2010 $. Michalek et al. Click to enlarge. Strategies to promote adoption of hybrid electric vehicles (HEVs) and plug-in hybrid electric vehicles (PHEVs) with small battery packs offer more social benefits (i.e., air emissions and oil displacement benefits) in the near term per dollar spent than PHEVs and battery-electric vehicles (BEVs) with large battery packs providing longer electric range, according to a new study by Carnegie Mellon University’s Jeremy J. Michalek and colleagues. A paper presenting the results of the group’s latest year-long study on the lifecycle air emissions and oil displacement benefits of plug-in vehicles was published this week in the Proceedings of the National Academy of Sciences. In this study we assess, under a wide range of scenarios, how much externality damage reduction plug-in vehicles can offer in the US and at what cost. To answer this question, we gathered data on (i) the quantity and location of emissions released from tailpipes and from upstream processes to produce and operate vehicles, (ii) the externality costs of damages caused by the release of these emissions, and (iii) estimates of externalities and other costs to the US associated with oil consumption. We compare externality and oil consumption costs to the costs of owning and operating these vehicles and to subsidies designed to encourage their adoption. —Michalek et al.  Net present value of lifetime private ownership cost, emissions externality damages, and oil premium costs in 2010$. Michalek et al. Click to enlarge.

Michalek et al. estimated lifecycle emissions damages for comparable new mid-size vehicles, including a conventional vehicle (CV), an HEV, PHEVs with battery packs sized for storing 20 km/12 miles (PHEV20) or 60 km/37 miles (PHEV60) of grid electricity (with the remainder powered by gasoline), and a battery electric vehicle (BEV) with a 240-km/149-mile pack (and no gasoline engine).

They estimate location-specific externality damages for releases of CO; NOx; particulate matter (PM); SO2; and volatile organic compounds (VOCs) using data from a 2010 National Research Council (NRC) study. They also examined a range of estimates for damages from GHG emissions. They then combined these externality values with data on US driving patterns from the 2009 National Household Travel Survey (NHTS) and data on manufacturing, fuel cycle, and operation emissions from Argonne National Laboratory (ANL) to estimate US lifecycle damages for each vehicle.

In our base case, we assume average US values for emissions and damage valuation of electricity generation, oil refining, vehicle and battery production, driving location, and upstream supply chain emissions, we use a medium global valuation for GHG emissions, and we assume the battery will last the life of the vehicle. Although gasoline production and combustion produce significant emissions, battery and electricity production emissions are also substantial. We find that, in the base case, plug-in vehicles (PHEVs and BEVs) may produce more damage on average than today’s HEVs. This fact is due in large part to SO2 and GHG emissions from coal-fired power plants.

...Although the costs of damages from vehicle-associated emissions are significant, the damage reductions that can be gained through electrification are small compared to the total cost of owning and operating a vehicle.

—Michalek et al.

Under an optimistic scenario, plug-in vehicles with large battery packs could offer lower damage at lower lifetime cost, the researchers found. Conversely, in a pessimistic scenario using low gasoline prices, shorter battery life, coal-powered charging, and ANL 2015 cost estimates, plug-in vehicles could produce more damages at substantially higher cost.

Although large battery packs offer the largest emissions and oil consumption reductions at lowest cost in the most optimistic scenarios, they result in high costs and increased damages if not all of the right factors fall into place, including high gasoline prices and achievement of low battery costs, long battery life, and low electricity production emissions. In contrast, HEVs and PHEVs with small packs are robust, providing emissions reductions and oil displacement benefits at low cost with less infrastructure investment and lower uncertainty.

...In the future, if there are sufficient decreases in battery costs and increases in gasoline prices, the market may drive adoption of vehicles with larger battery packs. Until then, US policy would produce more benefit per dollar spent by supporting research on battery cost reduction, enforcing air emission reductions in power generation and transportation, and encouraging adoption of HEVs and small-capacity PHEVs (and potentially advanced conventional vehicles, not studied here).

—Michalek et al.

Policy implications

 Value of life cycle air emissions and oil displacement benefits compared to federal tax credit for plug-in vehicles. Error bars represent variation of estimates based on charging electricity source (Base case is U.S. average electricity grid mix, hydroelectric is assumed to be a zero emission source, while coal is a higher emission source). All dollar values are in year 2010 US dollars. Source: CMU Policy Brief. Click to enlarge.

US policy has been pushing the auto industry to investigate alternatives to fossil fuels; the American Recovery and Reinvestment Act of 2009 provides up to $7,500 in tax credits for up to 200,000 plug-in vehicles. These subsidies of up to$7,500 for vehicles with large battery packs are far larger than the optimistic estimates of externality benefits and represent GHG abatement costs well over $100∕t in the base case, according to the authors. Subsidies would produce greater reductions of emissions damages and oil premium costs per tax dollar spent if targeted to HEVs and PHEVs with small battery packs. For example, in our base case, the current subsidy of up to$7,500 for up to 200,000 plug-in vehicles, implying a maximum total subsidy of $1.5 billion, could pay the purchase premium for 390,000 HEVs or 290,000 PHEV20s, reducing emissions externality damages and oil premium costs by$350 million or $330 million, respectively, compared to conventional vehicles. In contrast,$1.5 billion could pay the purchase premium for only 130,000 PHEV60s or 51,000 BEV240s, reducing damages and premium costs by $86 million or$7 million, respectively (lifetime fuel costs also vary). As battery technology improves, gasoline prices rise, the electricity grid improves, and constraints on GHG emissions become stringent, BEVs and PHEVs with large battery packs may become more cost effective at reducing damages. But today’s HEVs and PHEVs with small battery packs offer more emissions reduction and petroleum displacement per dollar spent with less of a need for new infrastructure and with lower uncertainty about future costs and life-cycle implications.

—Michalek et al.

Michalek recently received a $400,000 grant from the National Science Foundation (NSF) to analyze how public policy could help determine the types of vehicles built in coming years and how consumers might respond to these vehicles. Resources ### Comments So small battery PHEVs are the way to go - as evinced by Toyota with the PHEV Prius. The main thing is to make an ICE car as efficient as possible with as little cost (and hence battery size) possible. This makes for the possibility of electricity maximising strategies for cars; particularly on predictable commutes where you know where the choke points are, and use the electric drive there, rather than on the first 14 miles driven each day. Or better still, you tell a GPS where you are going (that day) and it calculates a maximising strategy based on traffic data. So the US should reduce their battery tax credit so that it maxes out at 4 or 5 Kwh and spread the love more widely. GM, however, might have other ideas. I don't think much can be had from this study, since it is speculative and already out of date (took a year to complete). The author made questionable choices in setting out study parameters, deciding to compare mid-size cars (I assume Camry/Accord class) including the BEV. There were essentially no mainstream BEVs on the market when he started the study, and only now and in the next couple of years will there be a representative sample available, and all are small cars (not the mid-size he based his results on). He further gave this hypothetical mid-size BEV a 149-mile range, even though the initial crop of BEVs have smaller (around 80-100 mile) batteries. BEV technology is in high flux; who's to say what the costs and benefits will be in five years (when such policy recommendations might have use). ICE technology is changing as well. Power generation technologies are changing with more renewables coming on line every year; policy-makers are beginning to move us away from the coal-fired basis for this study. The study author erroneous assumes non-car variables will all remain static. One could counter that if he didn't do that, it would be impossible to reach any conclusions, but if the assumptions are not valid, then neither are the study results. Public policy should drive the technology and relative cost/benefits. Public policy should not be based on technology status quo. Academics too often think in an idealized ivory tower world. Their products are most frequently ignored by policy makers. One might question why, in this period of financial crisis, the government continues to borrow$millions from China to fund these studies.

While batteries seem relatively expensive, every trip has a first few miles and oil use/expense/start-stop engine maintenance can be eliminated by short range EV batteries.

A year from now, the 15 mile range 2012 Prius plugin sales may clearly confirm this.

ChrisL-

Huh? Where do government policy makers come from? The ivory towers of academia, right?

So, those from ivory towers that work for Congress or the White House are somehow better than those that stayed in academia?

Why? Because they get to spend more money? Because they're indebted to lobbyists and campaign contributors.

Give me a break.

This isn't the first scientific study to question the federal plug-in tax credit, and there were experts arguing this point to Congress during inception and since. Likewise, there have been multiple studies over the last few years, in Europe as well as the US, that have questioned the science, or lack thereof, behind this tax credit.

But, hey, the ivory tower policy makers of the government have a proven track record of cost-effective policies don't they? No politics, no pork, no $16 coffee or$200 hammers are every a result of public policy, never.

Considering the long lead time to develop new products (particularly with new technology such as PHEVs), Toyota must have figured out this many, many years ago. No wonder that they managed to put the new Prius PHEV right on the sweet spot in the diagram. Well, in fact, this is not a big surprise, since Toyota has been promoting this option for a couple of years.

Government policy makers have been corrupted by our political system, which is far worse than academics pursuing grants, who are well-intentioned. No utopia here.

"US policy would produce more benefit (per dollar spent) by supporting research on battery cost reduction, enforcing air emission reductions in power generation and transportation, and encouraging adoption of HEVs and SMALL-CAPACITY PHEVs.

And I will gloat, "Hah! Told ya so." The smaller PHEV battery pack that offers a 10-20 mile all-electric driving range incentivizes routine trips becoming shorter whereby more may be conducted without having to drive; a factor probably not fully considered in the study, but still significant. The BEV incentive is to maintain long-distance driving, over the cliff of human stupidity.

An average trip in most countries (USA included) is roughly 15 km. The problem with PHEVs that have a small battery capacity is that you do not save much money by charging the batteries. If you each time save, for example, one dollar, the incentive for plugging in is too small for many customers to even bother about doing that.

I think most people who buy a PHEV would charge the cars when they could. After all, they will have paid a considerable premium (over a HEV or an ICE) to buy the car, so they would want to get the best out of it.
And hence would charge whenever they could.

This would lead to increased demand for at work and mall parking charging as people will want to charge more often if they have a smaller batteries.

This means that more charging would be done during the day (rather than at night) which is probably not what the utilities want.

Nonetheless, say you had a charger which could charge the car in 3 hours (Prius pHev) but had it parked at work for 9 hours, you could devise an optimum charging strategy which would minimise the impact on the grid, charging when demand was lowest (or low).

The smaller batteries of these PHEVs makes for lots of usage optimisation, both in terms of charging and use of the electric power (which is lots of fun for the engineers).

BEV/240+ (with quick charging capability) with our very low rate hydro power instead of \$5.20/gal gas(and going up) for ICE/HEV/PHEV would be the best way to go for us, in about 24 months or whenever the e-charging infrastructure is ready.

There's a problem with PHEVs that most people don't consider - the problem of NOT using your engine enough.

If saving fuel is your goal you would have a battery pack large enough to cover your normal driving habits and rely on the ICE for those trips that are outside this range, right? Trips like that could actually be few and far between and you might end up going for months without the engine becoming active. So what's the problem with that? Answer - bad gas.

Many fuels have what amounts to a half-life. Gasoline is so highly refined it has one of the shortest half-lifes: The shelf life of gasoline depends on the type of gas and the storage conditions and can range from a couple months to a couple years. One wild card is that gas you buy at the pump may already have been in storage for anywhere from days to months.

What makes gas go stale? Usually the first thing that happens is the lighter chemicals in it evaporate, leaving behind a heavier, less peppy product. Gasoline is an ideal motor vehicle fuel partly because it vaporizes readily to form a combustible mix with air. If it sits unused, however, its more volatile components waft away, leading to poorer engine performance. It's hard to tell how much punch your gas has lost without scientific testing, but don't worry — though your car might start a little harder, it'll still run (assuming it ran before), and there's little risk in burning the fuel if this is all that's gone wrong.

The second cause of bad gas is oxidation — some of the hydrocarbons in the fuel react with oxygen to produce new compounds, almost all of them worse than what you started with. When oxidation becomes a problem, you'll know it without lab tests — the gasoline gives off a sour odor. If you pour some into a glass container, you'll see it's turned dark, and you might find small, solid particles of gum. Using oxidized gasoline is a bad idea, since the gum can clog your fuel filter, create deposits in your fuel system (especially the injectors), and generally hurt performance.

Finally there's the problem of contamination. Water, which can cause gas-line freezing and other problems, is the main culprit — it usually gets into stored gas via condensation as temperatures fluctuate. If the gas is relatively fresh, a "fuel dryer" additive (basically isopropyl alcohol) can help by combining with the water to make a burnable mix that can be run through the system. Another potential problem caused by water is bacteria, although that's not nearly as common. Gas contaminated with dirt or rust is a no go, as the crud will foul your engine.

The push for reformulated gasoline using ethanol (such as E10, aka gasohol) has heightened concerns about gasoline stability. On its Web site Chevron claims "federal and California reformulated gasolines will survive storage as well or better than conventional gasoline," and I can't find any good test data to dispute that. The fact remains that ethanol is hydrophilic, meaning it tends to draw moisture out of the air, so theoretically gasohol should become contaminated more easily than pure gasoline.

The shelf life of gasohol is difficult to determine — proponents claim it's similar to that of pure gasoline but present no hard data. Anecdotally speaking, boat owners and survivalists — people who often deal with stored gasoline — report a much shorter shelf life for gasoline-ethanol blends and advise against storing them long-term.

Diesel has a longer half-life but biodiesel can have a shorter one IF the water/bacteria issue comes up. The most stable fuels are heavy or bunker oil, which is why it's used in ships, and natural gas.

All-in-all I'd recommend that PHEVs be fueled with NG: It's cleaner burning, lasts long in the tank, can be replaced easily with a renewable version (both in the car and in the infrastructure of the country), is already piped to most buildings in North America (making home refueling as possible as home recharging) and (for those who think FEVs are the future) it can be used as a feedstock in the production of hydrogen.

What's not to like?

Vrrt. Vzzt. Me human. Me drive car. Get to job counting beans for corporat boss on other side county. Yesterday, today, tomorrow, beans need counting. Human need car to count beans grown East Asia. Once counted, shipped back to East Asia. Vrrt. Vzzt.

The fuel can be butanol or propane in a sealed tank for vehicles that operate seldom in range extending mode, but the car computer can insist the the standard fuel is used up before it becomes stale and replaced.

Automobiles with a short all electric range can be built with very cheap lead acid batteries as was the first CALCARS Prius plus. Lighter weight high power lead acid batteries are already being prototyped with the EFFPOWER bipolar batteries.

They VOLT with its expensive elaborate system and large engine was designed to kill all talk about electric cars for GM.

Wright thinks, correctly, that automobiles that are efficient enough can be bought already and only large vehicles with high gasoline or diesel consumption need improvement where the extra costs will pay off.

Infinite amounts of liquid fuels and electrical energy is available indirectly and directly through the use of nuclear energy upon the earth and not relying solely upon the sun to provide nuclear energy to the earth.

The high price and low availability of liquid fuels is artificial and due to speculation and the decisions of the major world governments to allow the speculation to continue. ..HG..

@ai_vin

You're right Peter, with small batteries you don't have to worry about bad gas/diesel, but then you do have to worry about using up good gas/diesel. Damned if you do, damned if you don't.

@ChrisL,

I agree academics are less likely than government wonks to be pushed to arrived at a predetermined finding, though both can be biased.

I think the theory behind offering a market incentive to a new technology, above the cost of alternative carbon abatement mechanisms, is to leverage private capital (both consumer and industry) to create a market for lower cost and more efficient offerings. I'm guessing the tax credits earned by PHEV and BEV will do that.

As to the accuracy of the carbon abatement math, well, in California 20%+ of electricity will be renewable in the next few years, and almost no electricity comes from coal.

IF recharging at work and at the mall are convenient, small battery PHEV should do a lot of electric miles.
...IF...

Interesting thing:

Propane is a fuel that does not have evaporative losses (sealed tanks) and no gum formation (no oxidizing because of... sealed tanks). Perhaps using propane dissolved in gasoline to pressurize a sealed fuel system and exclude air would eliminate the fuel-aging issues, as well as making cold starting a lot easier.

Interesting idea E-P but wouldn't it complicate the refueling process?

With the hybrid & PHEV, any combustable fuel may be utilized, including hydrogen. With a utility grid failure, BEV may supplement household power and recharge via photovoltiac solar panels. However, PHEVs in such emergencies can recharge battery packs and supply electricity immediately.

The fueling process would be no more complicated than it is for LPG today.

Another possibility is to use a bladder tank (no vapor vented or air admitted except when fueling) and charge the fuel or purge the fuel tank with carbon dioxide to exclude oxygen.

Prius owners were not too happy with the pre-2010 bladder tanks.

The Volt is using a sealed and pressurized system, GM seems to have solved the aging gasoline issue in the Volt. The only weird thing about this system is that you have to press a button, then wait a few seconds for a pump to equalize the pressure before you can open up the gas cap prior to refueling. I believe the button is next to the fuel cap.

Now, a 100 mile EREV with a tiny LPG fueled wankel engine might be interesting, heck even a single cylinder ICE with a walbro carburetor would be fine. That fuel would never go bad.. would you have to add some lubricant to the LPG?

@Herm

I did not know that about the Volt, thank you for the info.

Now back to the alt-fuel idea: Either NG or LPG would work - NG gives you the home refueling option but LPG has more retail outlets. Maybe the manufacturer could offer both and let the buyer pick.

The comments to this entry are closed.