Nathan Sacks Georgia Institute of Technology July 31, 2013 Biodiesel School Buses How biodiesel can help local school districts save money, improve health, and reduce emissions

Outline 1. Background a. Diesel Fuel b. Diesel Emissions Reduction Act (DERA) c. Biodiesel 2. Current Policy 3. Biodiesel Potential a. Implementation b. Economic Analysis 4. Recommendations 5. Conclusion

Background – Diesel Fuel  Schools spent over $3 billion on fuel in 2012  2012: average price of diesel was 3.5x that of 1995  On average, 14% increase per year

Background – Diesel Fuel  Some school buses in operation for up to 20 years  Recommended lifespan: 12 years  Diesel Emissions  CO 2, NO X, SO X, particulate matter  Respiratory Effects  Children disproportionately affected  Developing respiratory system Higher respiratory rates Narrower airways  Increased exposure Particulate matter higher on buses than normal exposure Up to 5-15x more emissions

Background – DERA  Diesel Emissions Reduction Act (DERA)  Passed with the Energy Policy Act of 2005, renewed in 2010  Goal: Reduce diesel particulate emissions  Revolving loans, competitive grants  Every $1 spent returns $13 in health and environmental benefits

Background – Biodiesel  Made from vegetable oil and can be blended with diesel  B20 = 20% Biodiesel, 80% Diesel  Vegetable oil converted through chemical process

Background – Biodiesel  Tested technology  Warrantied up to B20  Higher-percentage blends can deteriorate parts in older vehicles, problems in cold weather  Compared to diesel:  Reduced cost with the use of waste vegetable oil  Reduced emissions B20: -10% particulate matter, -11% CO, -15% CO 2, -21% unburned hydrocarbons B100: -47% particulate matter, -48% CO, -75% CO 2, -67% unburned hydrocarbons

Background – Biodiesel  Follows cost of diesel  Average price difference between diesel and B20: $0.13

Current Policy DERA focuses on maximum emission reduction, not cost savings Waste vegetable oil disposed of according to necessary regulation Biodiesel blends used in school buses in a few locations around the country

Third Party Support of Biodiesel  No Fuel Liability  No Upfront Cost  Higher Fuel Cost  Medford Township, NJ  School buses on biodiesel since 1997  B20 maintenance : -$0.02/mile ≈ -$0.14/gallon  Economic Analysis of B20:  = $8 million/year savings from reduced maintenance costs

School District – Supplier Partnership  No Fuel Liability  No Upfront Cost  Reduced Fuel Cost  Economic Analysis of B20:  $345 million/year savings from reduced fuel costs  $115 million/year savings from reduced maintenance costs  = $460 million/year savings total

Locally Managed Biodiesel Production  Fuel Liability  High Upfront Cost  Significantly Reduced Fuel Cost  Hoover, AL  Collects oil from restaurants and households  Makes B100 for $0.70-$0.80/gallon  Return on investment in 200 days  Economic Analysis of B20:  $527 million/year savings from reduced fuel costs  $115 million/year savings from reduced maintenance costs  - upfront infrastructure cost  = $642 million/year savings total

No Fuel Liability No Upfront Cost Higher Fuel Cost Third Party Support – Medford Township, NJ No Fuel Liability No Upfront Cost Reduced Fuel Cost School District – Supplier Partnership Fuel Liability High Upfront Cost Significantly Reduced Fuel Cost Locally Managed Biodiesel Production – Hoover, AL Biodiesel Potential

Biodiesel Potential – Economic Analysis of B20 = $8 million/year savings from reduced maintenance costs Third Party Support $345 million/year savings from reduced fuel costs $115 million/year savings from reduced maintenance costs = $460 million/year savings total School District – Supplier Partnership $527 million/year savings from reduced fuel costs $115 million/year savings from reduced maintenance costs - upfront infrastructure cost = $642 million/year savings total Locally Managed Biodiesel Production B20 retail fuel costs: +$0.13/gallon compared to diesel B20 maintenance costs: -$0.02/mile compared to diesel ≈ -$0.14/gallon

Recommendations  EPA regional offices: compile list of waste vegetable oil disposal amounts  Initial pilot program  Biodiesel production feasibility studies  Third party support where biodiesel supplier exists  Urban areas  Locally managed biodiesel production  Rural areas  DERA funding to provide assistance with upfront costs  Implement waste vegetable oil recycling program  Restore DERA funding

Conclusion  Potential fuel cost savings  Can range from breakeven to >$600 million/year  Significant public health savings  Reduced emissions  Improved children’s health  No bus modifications required

Acknowledgments Special Thanks To:  Melissa Carl, ASME Government Relations  Dr. Adam Christensen, Johns Hopkins University, Mentor  Dr. Gail Marcus, Faculty Member in Residence