Life-Cycle Costs of Alternative Fuels: Is Biodiesel Cost Competitive for Urban Buses?

The purpose of this paper is to provide an expected cost comparison for operating a transit-bus fleet on three different alternative fuels—biodiesel, compressed natural gas (CNG), and methanol. Petroleum diesel is the base fuel. Infrastructure, refueling, and maintenance costs are all part of running an urban transit bus. Additional expenditures would be needed to change fuel storage and delivery systems, as well as bus engines and fuel systems, to use methanol or CNG. Using a 5-percent discount rate, the present value per bus per mile was calculated for the total cost (the sum of infrastructure, bus-alteration, refueling, and maintenance expenses) of a transit fleet over the estimated 30-year life cycle of a refueling infrastructure. Not surprisingly, diesel buses had the lowest cost at 24.7 cents per mile. As biodiesel is blended with diesel, the cost per mile ranged from 27.9 to 47.5 cents, depending on the amount of biodiesel used and its estimated price. CNG’s cost varied from 37.5 to 42 cents per mile, while methanol’s cost was 73.6 cents per mile. This analysis indicates that, although biodiesel and biodiesel blends have higher total costs than diesel fuel, they have the potential to compete with CNG and methanol as fuels for urban transit buses.