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Spotlight on New York: A Decade of Progress in Alternative Transportation Fuels

Book Cover: Spotlight on New York

For New York in 1997, it is the best of times and it is the worst of times.

The bad news is that New Yorkers' quality of life continues to suffer the consequences of a transportation system wed to gasoline and diesel burning vehicles. These consequences are hardly minor: they include damage to the environment and to public health and near-total reliance on a finite and largely imported resource. The adverse effects of oil dependence in transportation are felt throughout the United States, but they are more pronounced in New York than in most other states. This plight will only worsen with time unless the status quo is challenged by a new transportation paradigm involving alternative fuels and propulsion technologies.

The good news is that 10 years of hard work to diversify transportation options in New York is beginning to pay significant dividends. Through their efforts to encourage clean alternative fuels and the engines they power, both New York State and New York City now sit squarely in the forefront of a global movement to commercialize advanced transportation fuels and technologies. These are the fuels and technologies that are likely to dominate the transportation marketplace of the 21st century.

As a result of the new directions it has taken in the past decade, New York is well along the path to gaining enormous benefits from a transition to the post-petroleum era. New York's mixture of public and private alternative fuel initiatives can serve in many ways as a model for other states, the federal government, and even other nations as they seek to move beyond dependence on petroleum fuels.

Yet New York's position as a leader rests on a fragile foundation. New York's program is really a collection of programs, each of which may be vulnerable in its own way to dangers that range from outright opposition to apathy and lack of leadership. To back away from any of the state's many initiatives would be to run the risk of losing momentum across the board.

New York's public and private decisionmakers face a critical set of challenges: to learn from the cumulative experience of the last decade; to implement whatever mid-course corrections and new initiatives may be necessary to continue along this path; to increase prudent investments in the state's emerging advanced transportation portfolio; and to move forward with enthusiasm and confidence.


Findings and Conclusions

New York is better positioned than most states to face the challenge of moving to a post-petroleum transportation era. But New York also has more to lose if it fails to do so. INFORM's 10-year-old transportation research program has taken a global perspective while always retaining a strong interest in New York activities - where a variety of initiatives are scattered among communities around the state. This report focuses on state-level programs and policies and activities in the state's largest metropolis, New York City. INFORM offers the following insights into the status of alternative transportation fuel efforts in New York.



Alternative transportation fuels have made a successful market entry into New York State. New York currently has thousands of alternative fuel vehicles on its roads. These vehicles include models in the heavy-, medium-, and light-duty markets, ranging from big urban buses to garbage trucks to taxi cabs. A catalogue of fuels used for vehicles in the state includes natural gas, propane, methanol, ethanol, biofuels, and electricity.

New York's programs show a strong focus on natural gas, echoing a national and international trend. New York has 3,000 of the nation's 60,000 natural gas vehicles, serviced by about 50 natural gas refueling stations - mostly concentrated in New York City. Worldwide, there are about one million natural gas vehicles. Over the past decade, natural gas has emerged as the alternative transportation fuel of choice by many vehicle operators because: it performs well, is cheaper than oil-derived fuels, is domestically produced, and has compiled an impressive safety record. In recent years, natural gas vehicles have been offered for sale by each of the three major US auto manufacturers. More than 30 natural gas-powered medium- and heavy-duty engines and vehicles, ranging from delivery and shuttle vans to buses and refuse collectors, are also on the market.

The major bus programs in New York City at the Department of Transportation and the Metropolitan Transportation Authority are among the most important alternative fuel projects in the country addressing the heavy-duty vehicle market. Medium-and heavy-duty vehicles, especially urban buses, represent the fastest growing markets at present for alternative transportation fuels in the United States. Natural gas buses, for example, now account for nearly 3 percent of the nation's urban bus fleet, and, as of the end of 1996, 20 percent of the confirmed orders for new buses will be filled with natural gas buses. Because each diesel bus consumes large amounts of fuel and is a major source of pollution, and because buses frequently operate in densely populated areas, the bus market is a particularly important one for alternative fuels.

The New York City natural gas taxi program is the most promising program currently addressing the light-duty vehicle market in New York State. For light duty vehicles, the most promising application of alternative transportation fuels is in public and private sector fleets, where the major obstacles to expansion - lack of a widespread refueling infrastructure and the high cost of building passenger vehicles - can best be overcome with high mileage, centrally refueled fleets. At present, the large number of New York City taxi cabs scheduled for replacement, and the availability of financial incentives for switching to natural gas make this a critical time for the acceptance of alternative fuel passenger cars in the state. The city's Taxi and Limousine Commission and the New York State Energy Research and Development Authority are working together to convert taxis to natural gas.

As one of only three states with a Zero-Emission Vehicle program, and the only one to require its start in model year 1998, New York has become an incubator for the development and production of advanced vehicles and components. Besides improving the environment, the ZEV program has the potential to boost statewide economic development and jobs creation. More than 60 companies operating in New York stand to gain new business in providing alternative fuel vehicles, refueling stations, or fuel as a result of the implementation of the ZEV program. Public and private sector investments in developing an alternative fuels industry in the state already total $70 million.

New York has established a leadership position in the development of hybrid-electric vehicles, in large part due to an aggressive research program at the New York State Energy Research and Development Authority (NYSERDA). While the internal combustion engine and mechanical transmission technology have dominated automotive manufacturing for nearly a century, recent improvements in electric motor and drive train technology strongly suggest that a fundamental shift toward electric vehicles is about to take place. NYSERDA's projects show that hybrid-electric vehicles, especially those powered by natural gas, are rapidly demonstrating their superiority over the conventional mechanically driven automobile and are likely to enter the marketplace soon.

New York State's 1996 Clean Water/Clean Air Bond Act, one of the largest environmental bonds ever issued by a state government, could provide a most important impetus to alternative transportation fuel use. The $55 million offered by the Bond Act specifically for transportation projects, plus an additional $20 million for clean air projects that might be used for transportation purposes, represent enormous new investments in the state's fledgling alternative fuel vehicle industry.

Active private sector involvement in the development of alternative transportation fuels and vehicle technology has been critical to the advancement of alternative transportation in New York State and will be vital to its continued success. Natural gas utilities, especially Brooklyn Union and the trade association New York Gas Group (NYGAS), as well as several private fleet operators including the United Parcel Service, have been especially outspoken and active participants in early alternative transportation fuel efforts around the state. More recently other industries, for example member companies in the Environmental Business Association of New York and the Alternative Fuel Technology Center, have played a vocal and important role in promoting alternative fuel vehicle industries in New York.

Although New York deserves most of the credit for the accomplishments of the past decade with regard to increased alternative transportation fuel use in the state, the federal government in many cases has provided needed technical support and financial assistance. Federal programs that have been particularly helpful in New York include the Congestion Mitigation and Air Quality Improvement Program managed by the US Department of Transportation, the urban bus purchase program managed by the Federal Transit Administration, and the Clean Cities program managed by the US Department of Energy.

A missing component in New York's alternative transportation portfolio is a major focus on hydrogen vehicle technologies, which offer an exciting sustainable transportation option. With the exception of fuel cell development projects funded by the New York State Energy Research and Development Authority, the state has not focused much attention on hydrogen research. Because natural gas is a finite resource, its value as a transportation fuel must be measured in decades; INFORM's research shows that hydrogen produced from renewable resources may well have a value measured in centuries. Sustainable energy systems based on renewable, non-polluting resources will be crucial for powering not only transportation systems but other energy sectors as well.



The multifaceted nature of New York's alternative fuels program has created a synergistic momentum that must be maintained to continue the transition to expanded use of clean fuel vehicles. With so many decisions on the table, as described in this report, 1997 is a crucial year for the future of alternative fuels in New York State. Losing one or two of the major policies or projects could undermine the comprehensive nature of the overall program, which is what makes the state a national leader in this field.

Decisions as to how the dollars from the Clean Water/Clean Air Bond Act are spent will have long-term implications for the development of the alternative fuels industry in New York. Because allocations made now will provide direction and impetus to projects around the state, it will be important to include public review and participation in decisions about how, where, and when to spend this money.

Continued and expanded participation by private sector fleet operators and other businesses is vital to the development of alternative fuel technologies and the infrastructure to support them. One of the most encouraging aspects of the move toward alternative fuels in New York is the growing recognition by the private sector that alternative fuels can provide important economic benefits and offer new business opportunities. Businesses willing and able to build the necessary vehicle manufacturing facilities and refueling stations have an important role to play in carrying out the state's policy goals.

Broader economic incentives would facilitate greater private sector involvement in alternative transportation technologies. The use of alternative fuels still carries a significant front-end capital cost. While New York is one of 28 states with some form of economic incentive, such as tax exemptions, to encourage the use of alternative fuel, its actions in this area have been relatively meager. Non-cash incentives could also be helpful, such as extending access to high occupancy lanes to alternative fuel vehicles.

New York can best retain its leadership position in alternative vehicle fuels and meet its long-term transportation energy needs by diversifying its program to more aggressively include hydrogen. Investing in hydrogen vehicle research and development now, and utilizing technologies that are already on the road, is an important step for the future of sustainable transportation in New York.

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