### Appendix F

Evaluation of the Use of Alternative Fuels in Cargo Handling EquipmentF - 1

Evaluation of the Use of Alternative Fuels in Cargo Handling Equipment

Alternative fuels can be used in engines subject to the proposed cargo handling equipment regulation – as long as the engines meet the requirements, which are based on best available control technology (BACT), outlin ed in the proposed regulation. Inuse yard trucks would be required to meet the 2007 or later certified on-road diesel engine standards, the final Tier 4 certified off-ro ad diesel engine standards, or install a verified diesel emission control strategy (VDECS) t hat will result in the engine meeting equivalent diesel PM and NOx emissions of the final Tier 4 certified off-road diesel engine standards. In-use non-yard truck cargo hand ling equipment also have several compliance options, which include, but are not limi ted to, meeting certified on-road or off-road diesel engine standards and/or applying VD ECS. A detailed discussion of the requirements is available in Chapter 4 of this Staf f Report. These requirements do not specify that diesel fuel be used in cargo handling equipment engines. In fact, they were established for both diesel-fueled diesel engines a nd diesel engines that use alternative fuels. As such, an engine that meets the requireme nts of the proposed regulation would
be considered BACT if it used diesel or an alternat ive fuel.

A. Alternative Fuel Types

Liquefied Natural Gas: (LNG) is an odorless, colorless, non-corrosive an d non-toxic. When extracted from underground reserves, natural g as is composed of approximately 90 percent methane. During the liquefaction proces s, oxygen, carbon dioxide, sulfur compounds, and water are removed, purifying the fue l and increasing its methane content to almost 100 percent. As a result, LNG-fu eled vehicles can offer significant emissions benefits compared with older diesel-power ed vehicles and can significantly reduce carbon monoxide and particulate emissions as well as nitrogen oxide emissions. (EPA, 2002)

Compressed Natural Gas: (CNG) is odorless, colorless, and tasteless. It consists mostly of methane and is drawn from gas wells or in conjunction with crude oil production. CNG vehicles store natural gas in high -pressure fuel cylinders at 3,000 to 3,600 psi. An odorant is normally added to CNG for safety reasons. (EPA, 2002a)

Liquefied Petroleum Gas: (Propane or LPG) is a byproduct of natural gas pr ocessing and petroleum refining. In its natural state, propa ne is a colorless, nontoxic gas -- at least 90 percent propane, 2.5 percent butane and hi gher hydrocarbons, and the balance ethane and propylene. Under moderate pressure, pro pane gas turns into a liquid mixture, making it easier to transport and store in vehicle fuel tanks. Compared with gasoline, propane can lower carbon dioxide, carbon monoxide, and other toxic emissions. (EPA, 2002b)F - 2

B. Alternative Fuels Specifications (Regulations C oncerning Fuel Quality)

The Air Resources Board (ARB) adopted specification s for all alternative motor vehicle fuels can be found in the California Code of Regula tions, Title 13, Division 3, Chapter 5, Article 3, Sections 2290-2292.6. When the Board ad opted specifications for vehicular
alternative fuels 1 , it set essentially identical standards for the mo tor vehicle fuel sold commercially in California and the fuel used for em ission standard certification testing of new motor vehicles. The purpose for the commercial fuel specifications is to ensure
that motor vehicles certified on alternative fuel w ill receive in-use fuel having a quality similar to that of a certification fuel, so that ve hicles will achieve their emission
standards in use.

C. Standards For and Availability of Alternative F ueled Engines

The ARB must certify new motor vehicles and engines for emission compliance before they are legal for sale, use, or registration in Ca lifornia. Certification is granted annually to individual engine families and is good for one m odel year. Table F-1 lists the on-road heavy-duty engines that are CARB certified using al ternative fuels.

Table F-1 2005 CARB Certified Alternative Fueled On-Road Engi nes

Engine
Manufacturer Fuel Type Engine Size (L) Hp Class CARB

Executive Order #
CNG/LNG 5.9 195 - 230 MHDD A-021-0377
CNG/LNG 8.3 250 - 280 MHDD A-021-0381
CNG/LNG 8.3 250 - 280 UB A-021-0382
CNG/LNG 8.9 320 MHDD A-021-0372
CNG/LNG 8.9 320 MHDD A-021-0372-1 Cummins

CNG/LNG 8.9 320 UB A-021-0373

CNG 8.1 275 - 280 HHDD A-108-0035
CNG 8.1 250 MHDD A-108-0037 John Deere
CNG 8.1 250 - 280 UB A-108-0036

CNG/LNG 8.5 275 UB A-290-0116 DDC* CNG/LNG 11.9 275 UB A-290-0117
Mack Truck CNG/LNG 8.1 325 - 425 HHDD A-027-0118

LPG 8.1 325 HDO A-360-0003 Bi-Phase Technology LPG 8.1 325 HDO A-360-0004 MHDD= Medium Heavy Duty Diesel
UB= Urban Bus HDO= Heavy Duty Off-Road * DDC no longer offers an alternative fuel engine f or sale in California. (ARB 2005d)

1 Alternative fuels are defined as any fuel which is commonly or commercially known as one of the following: M-100 fuel methanol, M-85 fuel methanol , E-100 fuel ethanol, M-85 fuel ethanol, CNG, LPG, or hydrogen.F - 3

The ARB also certifies off-road engines prior to th eir legal sale, use, or registration in
California. Table F-2 lists two certified alternat ive fueled engines for off-road use in 2005. Both of these engines are also certified for on-road use. The Executive Order (E.O.) # U-R-002-0302 is on-road E.O. # A-021-0377 and E.O.# U-R-002-0303 is onroad E.O. # A-021-0378.

Table F-2

2005 CARB Certified Alternative Fueled Off-Road Eng ines

Engine
Manufacturer Fuel Type Engine Size (L) Hp Class CARB

Executive
Order #
Cummins CNG/LNG 5.9 195 - 230 MHDD U-R-002-0302
Cummins LPG 5.9 185 MHDD U-R-002-0303

. Table F-3 below lists the on-road emission standard s for heavy duty diesel engines along with certification information for an 2005 al ternative fueled engine.

Table F-3 Compare 2005 Alternative Fuel Engine Certification and Heavy-Duty On-Road Engines FTP Transient Test Stand ard (g/bhp-hr)

Model Year Fuel NOx CO PM

2005 Certification* CNG/LNG 1.4 (+HC) 1.0 0.004

Stardard

1990 Diesel 6.0 15.5 0.6

1991 - 1993 Diesel 5.0 15.5 0.25

1994 - 1998 Diesel 5.0 15.5 0.1

2004 Diesel 2.4 (+nmoc) 15.5 0.1

2007 Diesel 0.2** 15.5 0.01

*Certification for family 5CEXH0359BBG, ARB Executi ve Order A-021-0377

** phase in schedule, 50% from 2007 to 2009, 100% in 2 010. (Diesel, 2002)

Tables F-4 compares two 2005 alternative fuel engin e certification levels to the certification standards for off-road engines in the 175 to 300 horsepower range. Diesel
emission certification limits are the standard that alternative fuel off-road engines must

meet.F - 4 Table F-4 Comparison of 2005 Alternative Fuel Engine Certific ations and Off-Road Compression Ignition (diesel) Certificatio n Standards (g/bhp-hr)

Year Type Horse

power Fuel NMOC+

NOx PM CO

2005 *Off-Road
Certification 185 LPG 2.1 0.01 0.8

2005 **Off-Road
Certification 195 -

230 CNG/
LNG 1.4 0.004 1.0

1996
Tier 1 Off-Road

C.I. Std. (Diesel) 175 to

<300 Diesel 7.9 0.4 8.5

2001
Tier 2 Off-Road

C.I. Std. (Diesel) 175 to

<300 Diesel 4.9 0.15 2.6

2006
Tier 3 Off-Road

C.I. Std. (Diesel) 175 to

<300 Diesel 2.9 0.15 2.6

2011
Tier 4 Off-Road

C.I. Std. (Diesel) 175 to

<300 Diesel 1.6 0.01 2.6

*Certification for family 5CEXH0359BBG, ARB Executi ve Order # A-021-037 ** Certification for family 5BPTELPGEFVAP, ARB Exec utive Order # A-360-004

D. Current Use of Alternative Fuels in Cargo Handl ing Equipment

Currently, LPG powered forklifts are being used at the Ports of Long Beach and Los Angeles container and dry and break bulk termin als. Container terminals at the POLB had 77 forklifts, 31 (43%) of the forklifts us e LPG fuel; the remaining forklifts are diesel powered. Likewise, at the Port of Los Angel es, the container terminals totaled 46 forklifts, 4 (9%) of the forklifts use LPG fuel. Total forklifts at POLB dry and break
bulk terminals was 153 forklifts. LPG fuel was use d in 37 (24%) forklifts, instead of diesel fuel. At the POLA, a majority (78%) of the forklifts are using LPG instead of diesel or gasoline. (Starcrest, 2004a) (Starcrest, 2004b)

Raley’s has been successfully using LNG yard tracto rs for 8 years. According to a Raley’s representative, the LNG yard tractors work fine compared to the diesel tractors. The drivers have commented the engine produces less soot and smell. Because of the higher cost of running LNG engines and the current and future cleaner emitting diesels, the future of the LNG fleet at Raley’s does not loo k promising. Higher cost fuel, for example, is costing about $2.25 for diesel and abou t $4.00 for LNG equivalent. Another high cost is spark plug replacement, costing each e ngine $28 per cylinder every 25,000 to 35,000 miles. (ARB, 2005a)F - 5

Von’s grocery, responding to a NRDC lawsuit, is usi ng LNG yard tractors at their distribution center. A Von’s representative stated the drivers do not seem to notice between the LNG and the diesel trucks, other than r efueling the LNG more often. One point is the higher cost of the fuel, about 20% hig her for LNG than diesel fuel. (ARB 2005b)

Port of Virginia is currently using new “hybrid” st raddle carriers. The hybrid technology
is new to straddle carriers. Common straddle carri ers are powered by diesel engines powering hydraulics for motion and lifts. New hyb rid technology straddle carriers enlist the use of a diesel-electric drive, the same techno logy that has been used by rubber tired gentry cranes in use in California. Accordin g to a supervisor at the Port of Virginia, the new “hybrid” straddle carriers are working just fine. (ARB, 2005e)

The Port of Long Beach (POLB) will be conducting a pilot project to evaluate LNG feasibility on some cargo handling equipment. The LNG equipment will be compared to the standard diesel equipment to meet the port need s and future emission standards. Currently, the POLB has ordered LNG yard trucks and is awaiting delivery. (POLB, 2005)

E. Fuel Cost

Table F-5 compares standard fuel prices to alternat e fuel prices. Gasoline and diesel prices shown are retail prices. The prices include federal, state, and local taxes. The prices are listed as gasoline gallon equivalent.

Table F-5 Alternative Fuel Price / Gallon Comparison

Fuel Week of 11/15/04 Week of 3/21/05
Gasoline 2.22 2.56

Diesel 2.27 2.47
CNG* 1.82 1.56 Propane* 2.33 1.63 *Price gasoline gallon equivalent (All West Coast P rices) (Clean Cities, 2005)F - 6

Table F-6 below outlines various fuels and its ener gy content relative to gasoline.

Table F-6 Gasoline Gallon Equivalency Table

Fuel Unit BTU's Gal. Equivalent Gasoline Gallon 114,100 1.00
Gasoline (RFG) Gallon 112,000 1.02

Diesel Gallon 129,800 0.88 LNG Gallon 75,000 1.52
CNG Cubic Foot 900 126.67 cu. ft. LPG Gallon 84,300 1.35 Soy Power, 2005

Although at present natural gas is less expensive t han diesel, it is impossible to be
certain about fossil fuel market conditions between now and 2020. In recent years, CNG has been 15 – 20 percent more expensive (on a $ /mile basis) compared to diesel. However, key parameters of the natural gas market a ppear to be changing. Canadian imports, which have met domestic demand growth in t he past 10 – 15 years, are becoming insufficient. In addition, environmental concerns continue to favor natural gas combustion over oil and coal, and demand for cleane r fuels may well push natural gas prices higher. (ARB, 2005g)

F. Fueling Infrastructure Cost

Gasoline and diesel fuel terminals are commonly loc ated at or very near ports. Thus, the fueling infrastructure already exists. The sam e is not true for alternative fuels. As a result, using an alternative fuel will result in in frastructure costs not associated with diesel or gasoline.

The recent analysis, prepared by ARB regarding the South Coast transit bus rule, identified the cost of construction of an L/CNG (ga sification) station at about $25,000 per bus and for a CNG (compression) station at abou t $36,000 per bus.

In 1998, Raley’s constructed a permanent 13,000 gal lon LNG fueling station at an estimated cost of $350,000. This station fueled ei ght heavy-duty on-road trucks and two yard tractors. A current completed LNG termina l, dispensing about 16,000 gallons from a single point will cost about $700,000. This terminal would refuel about 30-35 vehicles. Costs for a permanent alternative fuelin g site can vary widely. (ARB, 2005a) (Raley's, 2000) (Clean Car Maps, 2005) (ARB, 2005f) (ARB, 2005g)F - 7

G. Equipment Cost

Alternative fuel engines are more expensive to purc hase than their diesel counterparts. ARB staff estimated that the costs of a LNG yard tr uck is currently about $40,000 per truck more than its diesel counterpart. In collect ion vehicle application, ARB staff
estimated that the incremental cost of a collection vehicle is $50,000 more than a diesel equipped vehicle.

Another source of information on the cost of altern ative fuel equipment is the Carl Moyer Program. Since 1998 there have been 23 projects f or yard hustlers operating in California, most in port areas. All of the project s replaced diesel engines with liquefied natural gas engines. The engines were 195 or 200 h orsepower engines. The chart
below lists the incremental cost increase of a LNG engine compared to a similar diesel engine. (Carl Moyer)

Table F-7 LNG Compared to Diesel Incremental Cost per Unit

Year Quantity Incremental Cost 1998 - 1999 12 $9,630 - $20,000 2001 - 2002 1 $19,499 2002 - 2003 10 $29,128

H. Maintenance and Repair Costs

Based on current experiences with natural gas buses and collection vehicles, ARB staff
believes that maintenance costs for alternative fue led equipment will be somewhat higher than for diesel equipment. For example, sta ff estimated the extra maintenance cost for natural gas buses to be $4,300 per year an d $2,000 per year for collection

vehicles. Additional costs would also occur due to maintenance of the fueling facility.

I. Other Technologies

Dual Fuel: Dual fuel engines are compression ignition engine s that use diesel fuel and a supplementary fuel. The supplementary fuel is us ually natural gas, but propane and even methanol can be used. They operate very simil arly to diesel engines and they may operate on a wide percentage of diesel fuel, ra nging from 100% diesel to as little as 1%. Many older dual fuel engines obtained about 5% of their energy from diesel fuel, but newer pre-chamber dual fuel engines may u se as little as 1%. An advantage of dual fuel engines is that they can attain higher ef ficiencies than spark ignition engines (CI engines are more efficient than SI engines), bu t they have lower emissions than diesel engines.F - 8

A diesel engine cannot be used if alternative fuel is only being used. An alternative fueled engine needs a spark ignition to ignite the fuel. Manufacturers use diesel engines as a base to burn alternative fuel. The di esel engines have been modified to accomplish a spark ignition instead of a compressio n ignition, lower compression ratio, and air and fuel mixture combined prior to entering the combustion chamber, comparable to an Otto cycle engine.

J. Conclusions

Alternative fuel use in cargo handling equipment ha s been successful on limited equipment applications. However, high fuel and inf rastructure cost, new cleaner emitting diesel engines, and small number of engine s available make alternative fuel a limited option. Yard trucks and forklifts have bee n successfully using alternative fuel. However, the use of 2007 on-road engines in yard tr ucks greatly narrows the emissions reduction advantage of alternative fuels compared t o diesel for this application. Additional alternative fuel projects involving othe r cargo handling equipment (i.e., top handlers, RTG cranes, etc.) will need to take place before a full port or rail yard can use alternative fuel for all applications. The possibl e higher cost of the alternative fuel and alternative fuel infrastructure, along with cleaner diesel engines which are near to the emissions of alternative fuel engines, favors selec tion of alternative fuels on a case-bycase basis instead of a general mandate.F - 9

REFERENCES:

(ARB, 2005a) California Air Resources Board. 5/27/ 05. Telephone conversation with Mr. Stan Sasaki of Raley's. May 27, 2005

(ARB, 2005b) California Air Resources Board. 5/27/ 05. Telephone conversation with Mr. Tom Nartker of Von’s/Safeway. May 31, 2005

(ARB, 2005c) California Air Resources Board. 6/13/ 05, Telephone conversation with Mr. Robert Oldum, of NorthStar Inc. June 13, 2005

(ARB, 2005d) California Air Resources Board. 6/27/ 05, Telephone conversation with Mr. Ralph Mendez, Valley Power Systems

(ARB, 2005e) California Air Resources Board. 6/28/ 05, Telephone conversation with Mr. Dan Demers, Supervisor Port of Virginia.

(ARB, 2005f) California Air Resources Board Staff Report: Proposed Amendments to
the Exhaust Emission Standards for 2007-2009 Model – Year Heavy Duty Urban Bus Engines and the Fleet Rule for Transit Agencies. July 29, 2005.

(ARB, 2005g) California Air Resources Board Staff Report: Proposed Amendments to
the Diesel Particulate Control Measure for On-Road Heavy Duty Residential and
Commercial Solid Waste Collection Vehicles: Fleet Rules for the South Coast Air Quality Management District . July 29, 2005.

(Clean Car Maps, 2005) Clean Car Maps, June, 2005 www.cleancarmaps.com

(Clean Cities, 2005) Clean Cities, The Alternative Fuel Price Report. March 28, 2005

(Diesel, 2002) Diesel Progress, North American Edi tion, 23 rd Annual Engine Yearbook. “Emission Standards Reference Guide, for New Heavy- Duty and Off-Road Diesel Engines ” June 2002.

(EPA, 2002) U.S. Environmental Protection Agency. Clean Alternative Fuels: Liquefied
Natural Gas . (EPA420-F-00-038) March 2002

(EPA, 2002a) U.S. Environmental Protection Agency. Clean Alternative Fuels: Compressed Natural Gas . (EPA420-F-00-033) March 2002

(EPA, 2002b) U.S. Environmental Protection Agency. Clean Alternative Fuels: Propane . (EPA420-F-00-039) March 2002

(Raley's, 2000) U.S. Department of Energy, Raley's LNG Truck Fleet, Final Results, Alternative Fuel Truck Evaluation Project, March 2000F - 10

(POLB, 2005) Port of Long Beach – Alternative fuel web page. http://www.polb.com/environment/air_quality/alterna tive_fuels.asp

(Soy Power, 2005) Soy Power, 2005. www.soypower.net/energyequivalents.asp

(Starcrest, 2004a) Starcrest Consulting Group, LLC 2002 Baseline Emissions Inventory, Cargo Handling Equipment, Rail Locomotiv es, and Heavy-Duty Vehicles . p. 28 March 2004

(Starcrest, 2004b) Starcrest Consulting Group, LLC . The Port of Los Angeles, Final Draft, Port-Wide Baseline Air Emission Inventory June 2004,