Fuel Advantage: Making Sense of Mandates

When the mayor of Fort Wayne, IN, ordered all his city department heads to “Go Green” in 2007, fleet manager Larry Campbell knew just what to do: Go into stealth mode.

Like hundreds of other government and utility fleet managers around the country in recent years, Campbell was suddenly faced with a mandate to clean up his vehicles without being told exactly how to do that. But Campbell had already given it a lot of thought, and he quickly responded by starting to use B20 biodiesel in the city’s heavy trucks, taking delivery of two hybrid vehicles and working with the city’s fuel vendor to put in an E85 ethanol pump for his 57 flex-fuel vehicles (FFVs), all without telling the mayor.

“I didn’t tell him, because if it failed and we had problems, I didn’t want his name out there,” Campbell explains. “And then we had an ozone day, and then I let him know that we’d been doing it for a month and a half and didn’t have any problems, and he threw his speech away and took my notes and said, ‘You’re standing here, because if there are questions, you’re answering them!’”

Fortunately for Campbell and for the city, there have been no problems, and as for the mayor, “He has realized how much the city fleet could do to help with the green initiative,” Campbell says wryly.

Of course, this approach won’t work for everyone, but it does serve to illustrate the fact that fleet managers who are under orders from their mayors, their city councils, their governors, their CEOs or Boards of Directors are now finding they have new options at their fingertips.

THE FIRST MANDATE

The situation has changed considerably since 1992, when the Environmental Protection Act (or EPAct) first mandated that federal fleets and utility fleets purchase alternative fuel vehicles, but fell short of requiring those fleets to actually use alternative fuels.

“At that time, NAFA (National Association of Fleet Administrators) vigorously told Congress that it did not make sense to mandate that fleets purchase vehicles and use fuels that would either be more costly or potentially not even available,” says Patrick O’Connor, NAFA’s U.S. Legislative Council, with law firm Kent & O’Connor. “Congress persisted, and one of the trade-offs was that they would require an acquisition mandate, but they would not require a fuel use mandate. The assumption was—and we told them at the time that the assumption was wrong—if the manufacturers build the vehicles, the fueling infrastructure would go into place.

“There was a lot of talk in 1992 about the cost advantage of using, say, natural gas,” O’Connor explains. “So the trade-off was, we’re going to make fleets acquire these vehicles, and that will drive the infrastructure.” But, he says, it didn’t pan out that way, pointing to the debacle of the 1996 Summer Olympics in Atlanta, GA, to illustrate his point: “Amoco was going to ring the beltway in Atlanta with CNG stations, and there were going to be thousands of CNG vehicles in Atlanta for the Olympics,” he says. But the CNG vehicles never materialized, and, “The end result was that Amoco built very few of the stations because there wasn’t the demand.”

According to O’Connor, the lack of an alternative fuel infrastructure can still hinder fleets that are trying to meet not only EPAct requirements, but new mandates that are being instituted on state and city levels across the country.

“Today, most of the (alt fuel) vehicles out there are FFVs, and in many states there is no ethanol available, or it is slowly coming online,” he explains. “The State of Pennsylvania has a large number of FFVs in their fleet, and as of a year ago there were no ethanol stations in Pennsylvania. The State of Washington’s university system has FFVs in their fleet, but no ethanol available in the state. At one point you could have purchased CNG autos, but there’s only one CNG auto configuration available today.”

ACT LOCALLY

But it’s not all speed bumps and roadblocks, according to Jerry Leanderson, north central regional fleet account executive for General Motors. While EPAct has failed to be much of a factor in the development of an alternative fuel infrastructure, states and municipalities like Fort Wayne are making real headway, Leanderson says. “Many state governors have issued administrative requirements, and many legislatures have passed laws that the state will use alternative fuel fleets—in the Midwest I think it’s in every state,” he explains. “I see more action meeting those requirements than any of the EPAct laws. State fleets have made tremendous progress.

“The approach they have taken is this: if a flex-fuel vehicle is available in a particular category, they will make every effort to purchase that vehicle, unless there is a huge cost to do that,” Leanderson explains. And because there is not a significant cost differential between a gasoline vehicle and an FFV, Leanderson sees more state fleets now purchasing FFVs and then investing in their own infrastructure. The State of Michigan, for example, recently put in an E85 pump at its central fleet location in Lansing, in response to orders from the governor that the state’s FFVs should now run on E85 “whenever it makes sense.” Well, with a state-owned pump on the premises, it suddenly “makes sense” to fill up with E85.

Even law enforcement agencies, which are excluded from EPAct requirements, are starting to change course. “With the Impala police car becoming E85 capable, as the Tahoe has been for a number of years, and the Ford Crown Victoria E85-capable this year, I think you’ll see most of the law enforcement agencies moving that way, just because it’s available,” Leanderson says.

“You also have local municipalities, where generally there are no mandates,” he says. “When you see some mandates it’s similar to the states, where you have progressive mayors or city councils who have taken the step of saying if it is available we’re going to buy it and make our city green.”

GOING GREEN

That brings us right back to Fort Wayne, IN, where the mayor’s new hero is forging ahead with his efforts to “green” the city fleet. With E85 costing 60 to 90 cents a gallon less than regular unleaded gasoline, Campbell can’t afford not to incorporate E85 into his fleet fuel program.

With Campbell’s encouragement, the city’s fuel provider, Lassus Brothers, has worked with the local Clean Cities chapter to secure a grant to help finance the installation of an E85 pump at one of Lassus Brothers’ locations. Meanwhile, Campbell is stocking up on FFVs, including 40 new police Impalas. And the mayor’s not the only one smiling.

“What we see with E85 right now is, we do lose a few miles per gallon, but we actually got better performance,” Campbell says. “Our deputy chief runs an E85 Tahoe, and he really watches that, and he could tell the difference. He lost a little over two miles per gallon, but he said, ‘Man, the performance is just tremendous, and it actually ran better!’”

If it worked for Fort Wayne, it can work for you. Alternative fuel mandates can have a crippling effect on your fleet purchasing plans, but with new options for acquiring both vehicles and fuels, fleets have fewer and fewer reasons not to go green.

For expanded coverage on alternative fuel mandates, watch for the Spring issue of Fuel Advantage, available at www.fuelpub.com

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