Alternative Transportation Fuels: Distribution Infrastructure for Hydrogen and Ethanol in Iowa

Ethanol and hydrogen are receiving considerable attention as alternative fuels for transportation. They are being promoted to reduce greenhouse gas emissions and improve U.S. energy independence. This paper analyzes pipeline, rail, and truck distribution options for alternative fuels using the state of Iowa as a test case. By completely switching to E85 (85% ethanol, 15% gasoline) in Iowa, local ethanol production could replace 80% of gasoline use. Likewise, hydrogen derived from steam methane reforming at 7 facilities could replace all gasoline usage in the state. At 2006 gasoline prices, vehicles fueled with E85 would have comparable or lower fuel costs. The costs of hydrogen at the pump for both gas and liquid delivery are higher than those for gasoline and the ethanol scenarios. There are strong economies of scale in distribution paths, so a major shift to alternative fuels is needed to achieve the most cost effective distribution methods modeled in this analysis. There is considerable uncertainty in the cost estimates, particularly for the production costs of cellulosic ethanol, feedstock costs for hydrogen production, and the future price of petroleum.