Energy Policy 32 (2004) 7–27 Societal lifecycle costs of cars with alternative fuels/engines Joan M. Ogden*, Robert H. Williams, Eric D. Larson Princeton Environmental Institute, Princeton University, Princeton, NJ 08544, USA Abstract Effectively addressing concerns about air pollution (especially health impacts of small-particle air pollution), climate change, and oil supply insecurity will probably require radical changes in automotive engine/fuel technologies in directions that offer both the potential for achieving near-zero emissions of air pollutants and greenhouse gases and a diversification of the transport fuel system away from its present exclusive dependence on petroleum. The basis for comparing alternative automotive engine/fuel options in evolving toward these goals in the present analysis is the ‘‘societal lifecycle cost’’ of transportation, including the vehicle first cost (assuming large-scale mass production), fuel costs (assuming a fully developed fuel infrastructure), externality costs for oil supply security, and damage costs for emissions of air pollutants and greenhouse gases calculated over the full fuel cycle. Several engine/fuel options are considered—including current gasoline internal combustion engines and a variety of advanced lightweight vehicles: internal combustion engine vehicles fueled with gasoline or hydrogen; internal combustion engine/hybrid electric vehicles fueled with gasoline, compressed natural gas, Diesel, Fischer–Tropsch liquids or hydrogen; and fuel cell vehicles fueled with gasoline, methanol or hydrogen (from natural gas, coal or wind power). To account for large uncertainties inherent in the analysis (for example in environmental damage costs, in oil supply security costs and in projected mass-produced costs of future vehicles), lifecycle costs are estimated for a range of possible future conditions. Under base-case conditions, several advanced options have roughly comparable lifecycle costs that are lower than for today’s conventional gasoline internal combustion engine cars, when environmental and oil supply insecurity externalities are counted— including advanced gasoline internal combustion engine cars, internal combustion engine/hybrid electric cars fueled with gasoline, Diesel, Fischer–Tropsch liquids or compressed natural gas, and hydrogen fuel cell cars. The hydrogen fuel cell car stands out as having the lowest externality costs of any option and, when mass produced and with high valuations of externalities, the least projected lifecycle cost. Particular attention is given to strategies that would enhance the prospects that the hydrogen fuel cell car would eventually become the Car of the Future, while pursuing innovations relating to options based on internal combustion engines that would both assist a transition to hydrogen fuel cell cars and provide significant reductions of externality costs in the near term. r 2002 Elsevier Ltd. All rights reserved. Keywords: Alternative fueled vehicles; Hydrogen; Fuel cells 1. Introduction Continued reliance on current transportation fuels and technologies poses serious oil supply insecurity, climate change, and urban air pollution risks. Globally, transportation consumes oil at a rate equivalent to 3 4 of world oil imports and accounts for 1 4 of greenhouse gas (GHG) emissions and a significant fraction of air- pollutant emissions. Even with continuing incremental progress in improving energy efficiency and reducing emissions per vehicle, oil supply insecurity risks and emissions of GHGs and air pollutants are expected to grow over the next century under business-as-usual conditions because of rapidly growing demand for transportation fuels, especially in developing countries. Effectively addressing environmental and oil supply insecurity concerns will probably require radical changes in automotive engine/fuel technologies in directions that offer the potential for achieving near- zero emissions of air pollutants and GHGs and a diversification of transportation fueling away from present exclusive dependence on petroleum. To compare alternative automotive engine/fuel op- tions in evolving toward these goals, estimates are ARTICLE IN PRESS *Corresponding author. Tel.: +001-609-258-5470; fax: +001-609- 258-3661. E-mail address: ogden@princeton.edu (J.M. Ogden). 0301-4215/04/$ - see front matter r 2002 Elsevier Ltd. All rights reserved. PII:S0301-4215(02)00246-X