Transportation Demand Module
The NEMS Transportation Demand Module estimates energy consumption across
the nine Census Divisions (see Figure 5) and over ten fuel types. Each
fuel type is modeled according to fuel-specific technology attributes applicable
by transportation mode. Total transportation energy consumption is the
sum of energy use in eight transport modes: light-duty vehicles (cars and
light trucks), commercial light trucks (8,501-10,000 lbs gross vehicle
weight), freight trucks (>10,000 lbs gross vehicle weight), freight and
passenger aircraft, freight rail, freight shipping, and miscellaneous transport
such as mass transit. Light-duty vehicle fuel consumption is further subdivided
into personal usage and commercial fleet consumption.
Key Assumptions
Light-Duty Vehicle Assumptions
The light duty vehicle Manufacturers Technology Choice Model (MTCM) includes
63 fuel saving technologies with data specific to cars and light trucks
(Tables 26 and 27) including incremental fuel efficiency improvement,
incremental cost, first year of introduction, and fractional horsepower
change. These assumed technology characterizations are scaled up or down
to approximate the differences in each attribute for 6 Environmental Protection
Administration (EPA) size classes of cars and light trucks.
The vehicle sales share module holds the share of vehicle sales by import
and domestic manufacturers constant within a vehicle size class at 1999
levels based on National Highway Traffic and Safety Administration data.1
EPA size class sales shares are projected as a function of income per capita,
fuel prices, and average predicted vehicle prices based on endogenous calculations
within the MTCM.2
The MTCM utiizes 63 new technologies for each size class and origin of
manufacturer (domestic or foreign) based on the cost-effectiveness of each
technology and an initial availability year. The discounted stream of
fuel savings is compared to the marginal cost of each technology. The
fuel economy module assumes the following:
- All fuel saving technologies have a 3-year payback period.
- The real discount rate remains steady at 15 percent.
- For cars, the fuel economy standards are not attribute based, but apply
to both the manufacturer's domestic and imported fleet. For cars, the fuel
economy standard increases from 27.5 mpg in 2010 to 41.0 mpg in 2020 in
AEO2008. For light trucks, the footprint based average fleet fuel economy standard
increases from 24.0 mpg in 2011 to 31.0 mpg in 2020. In AEO2008, the light
duty vehicle fuel economy standards are assumed to remain at the 2020 level.
- Expected future fuel prices are calculated based on an extrapolation of
the growth rate between a five
year moving average of fuel price 3 years
and 4 years prior to the present year. This assumption is
founded upon
an assumed lead time of 3 to 4 years to significantly modify the vehicles
offered by a
manufacturer.
Degradation factors (Table 28) used to convert Environmental Protection
Agency-rated fuel economy to actual on the road fuel economy are based
on table values. Baseline degradation factors are tapplication of a logistic
curve to the projections of three factors: increases in city/highway driving,
increashen adjusted to reflect the percentage of reformulated gasoline
consumed.
The vehicle miles traveled (VMT) module forecasts VMT as a function of
the cost of driving per mile, and disposable personal income per capita.
Coefficients were re-estimated for AEO2008. Based on output from the model,
the fuel price elasticity rises to a maximum of -0.13 as fuel prices rise
above reference case levels in each year.
Commercial Light Duty Fleet Assumptions
With the current focus of transportation legislation on commercial fleets
and their composition, the Transportation Demand Module is designed to
divide commercial light-duty fleets into three types: business, government,
and utility. Based on this classification, commercial light-duty fleet
vehicles vary in survival rates and duration in fleet use before being
sold for use as personal vehicles (Table 29). The average length of time
vehicles are kept before being sold for personal use is 4 years for business
use, 5 years for government use, and 6 years for utility use. While the
total number of vehicles sold to fleets can vary over time, the share of
total fleet sales by fleet type is held constant at 2003 levels in the
Transportation Demand Module. Of total automobile sales to fleets, 84.8
percent are used in business fleets, 6.5 percent in government fleets,
and 8.7 percent in utility fleets. Of total light truck sales to fleets,
58.4 percent are used in business fleets, 7.1 percent in government fleets,
and 34.5 percent in utility fleets.3 Both the automobile and light truck
shares by fleet type are held constant from 2004 through 2030. In 2003,
19.1 percent of all automobiles sold and 12.2 percent of all light trucks
sold were for fleet use. The share of total automobile and light truck
sales to fleet remains constant at these levels over the entire forecast
period.
Alternative-fuel shares of fleet sales by fleet type are held constant
at year 2005 levels. Size class sales shares of vehicles are held constant
at anticipated levels (Table 30).4 Individual sales shares of alternative-fuel
fleet vehicles by technology type are assumed to remain constant for utility,
government, and for business fleets5(Table 31).
Annual VMT per vehicle by fleet type stays constant over the forecast period
based on the Oak Ridge National Laboratory fleet data.
Fleet fuel economy for both conventional and alternative-fuel vehicles
is assumed to be the same as the personal new vehicle fuel economy and
is subdivided into six EPA size classes for cars and light trucks.
The Light Commercial Truck Model
The Light Commercial Truck Module of the NEMS Transportation Model is constructed
to represent light trucks that weigh 8,501 to 10,000 pounds gross vehicle
weight (Class 2B vehicles). These vehicles are assumed to be used primarily
for commercial purposes.
The module implements a twenty-year stock model that estimates vehicle
stocks, travel, fuel efficiency, and energy use by vintage. Historic vehicle
sales and stock data, which constitute the baseline from which the forecast
is made, are taken from a recent Oak Ridge National Laboratory study.6
The distribution of vehicles by vintage, and vehicle scrappage rates is
derived from R.L. Polk company registration data.7,8 Vehicle travel by
vintage was constructed using vintage distribution curves and estimates
of average annual travel by vehicle.9,10
Because the commercial fleet model operates on three fleet type representations
(business, government, and utility), the federal and state mandates are
weighted by fleet vehicle stocks to create a composite
The vehicle sales module compares the legislatively mandated sales to the
results from the consumer driven sales shares. If the consumer driven
sales shares are less than the legislatively mandated sales The vehicle
sales module compares the legislatively mandated sales to the results from
the consumer driven sales shares. If the consumer driven sales shares
are less than the legislatively mandated sales requirements, then the legislative
requirements serve as a minimum constraint for the hybrid, electric, and
fuel cell vehicle sales.
The growth in light commercial truck VMT is a function of industrial output
for agriculture, mining, construction, trade, utilities, and personal travel.
These industrial groupings were chosen for their correspondence with output
measures being forecast by NEMS. The overall growth in VMT reflects a weighted
average based upon the distribution to total light commercial truck VMT
by sector. Forecasted fuel efficiencies are assumed to increase at the
same annual growth rate as light-duty trucks (<8,500 pounds gross vehicle
weight).
Consumer Vehicle Choice Assumptions
The Consumer Vehicle Choice Module (CVCM) utilizes a nested multinomial
logit (NMNL) model that
predicts sales shares based on relevant vehicle
and fuel attributes. The nesting structure first predicts the
probability
of fuel choice for multi-fuel vehicles within a technology set. The second
level nesting predicts
penetration among similar technologies within a
technology set (i.e., gasoline versus diesel hybrids). The
third level
choice determines market share among the different technology sets.11 The
technology sets
include:
- Conventional fuel capable (gasoline, diesel, bi-fuel and flex-fuel),
- Hybrid (gasoline and diesel),
- Dedicated alternative fuel (CNG, LPG, methanol, and ethanol),
- Fuel cell (gasoline, methanol, and hydrogen), and
- Electric battery powered (lead acid, nickel-metal hydride,lithium polymer)12
The vehicle attributes considered in the choice algorithm include: price,
maintenance cost, battery replacement cost, range, multi-fuel capability,
home refueling capability, fuel economy, acceleration and luggage space.
With the exception of maintenance cost, battery replacement cost, and luggage
space, vehicle attributes are determined endogenously.13 The fuel attributes
used in market share estimation include availability and price. Vehicle
attributes vary by six EPA size classes for cars and light trucks and fuel
availability varies by Census division. The NMNL model coefficients were
developed to reflect purchase decisions for cars and light trucks separately.
Where applicable, CVCM fuel efficient technology attributes are calculated
relative to conventional gasoline miles per gallon. It is assumed that
many fuel efficiency improvements in conventional vehicles will be transferred
to alternative-fuel vehicles. Specific individual alternative-fuel technological
improvements are also dependent upon the CVCM technology type, cost, research
and development, and availability over time. Make and model availability
estimates are assumed according to a logistic curve based on the initial
technology introduction date and current offerings. Coefficients summarizing
consumer valuation of vehicle attributes were derived from assumed economic
valuation compared to vehicle price elasticities. Initial CVCM vehicle
stocks are set according to EIA surveys.14 A fuel switching algorithm based
on the relative fuel prices for alternative fuels compared to gasoline
is used to determine the percentage of total VMT represented by alternative
fuels in bi-fuel and flex-fuel alcohol vehicles.
Freight Truck Assumptions
The freight truck module estimates vehicle stocks, travel, fuel efficiency,
and energy use of three size classes: light medium (Class 3), heavy medium
(Classes 4 -6), and heavy (Classes 7-8). Within the size classes, the stock
model structure is designed to cover twenty vehicle vintages and estimate
energy use by four fuel types: diesel, gasoline, LPG, and CNG. Fuel consumption
estimates are reported regionally (by Census Division) according to the
distillate fuel shares from the State Energy Data Report.15 The technology
input data specific to the different types of trucks including the year
of introduction, incremental fuel efficiency improvement, and capital cost
of introducing the new technologies, is shown in Table 32.
The freight module uses projections of dollars of industrial output to
estimate growth in freight truck travel. The industrial output is converted
to an equivalent measure of volume output using freight adjustment coefficients.
16,17 These freight adjustment coefficients vary by North American Industrial
Classification System (NAICS) code with the deviation diminishing gradually
over time toward parity. Freight truck load-factors (ton-miles per truck)
by NAICS code are constants formulated from historical data. 18
Fuel economy of new freight trucks is dependent on the market penetration
of various emission control technologies and advanced technology components.19
For the advanced technology components, market penetration is determined
as a function of technology type, cost effectiveness, and introduction
year. Cost effectiveness is calculated as a function of fuel price, vehicle
travel, fuel economy improvement, and incremental capital cost. Emissions
control equipment is assumed to enter the market to meet regulated emission
standards.
Heavy truck freight travel is estimated by class size and fuel type based
on matching projected freight travel demand (measured by industrial output)
to the travel supplied by the current fleet. Travel by vintage and size
class is then adjusted so that total travel meets total demand. Initial
heavy vehicle travel, by vintage and size class, is derived using Vehicle
Inventory and Use Survey (VIUS) data.20
Initial freight truck stocks by vintage are obtained from R. L. Polk Co.
and are distributed by fuel type using VIUS data.21 Vehicle scrappage rates
are also estimated using R. L. Polk Co. data.22
Freight and Transit Rail Assumptions
The freight rail module uses the industrial output by NAICS code measured
in real 1987 dollars and converts these dollars into an adjusted volume
equivalent. Coal production from the NEMS Coal Market Module is used to
adjust coal rail travel. Freight rail adjustment coefficients (used to
convert dollars to volume equivalents) are based on historical data and
remain constant.23,24 Initial freight rail efficiencies are based on the
freight model from Argonne National Laboratory.25 The distribution of rail
fuel consumption by fuel type is also based on historical data and remains
constant.26 Regional freight rail consumption estimates are distributed
according to the State Energy Data Report.27
Domestic and International Shipping Assumptions
As done in the previous sub-module, the domestic freight shipping module
uses the industrial output by NAICS code measured in real 1987 dollars
and converts these dollars into an adjusted volume equivalent.
The freight adjustment coefficients (used to convert dollars to volume
equivalents) are based on historical data. Domestic shipping efficiencies
are based on the model developed by Argonne National Laboratory. The energy
consumption in the international shipping module is a function of the total
level of imports and exports. The distribution of domestic and international
shipping fuel consumption by fuel type is based on historical data and
remains constant throughout the forecast. 28 Regional domestic shipping
consumption estimates are distributed according to the residual oil regional
shares in the State Energy Data Report. 29
Air Travel Demand Assumptions
The air travel demand module calculates the domestic and international
ticket prices for travel as a function of fuel cost. The ticket price is
constrained to be no lower than the current lowest cost per mile provider,
adjusted by load factor. Domestic and international revenue passenger miles
are based on historic data,30 per capita income, and ticket price. The
revenue ton miles of air freight are based on merchandise exports, gross
domestic product, and fuel cost.31
Airport capacity constraints based on the FAAs Airport Capacity Benchmark
Report 2004 are incorporated into the air travel demand module using airport
capacity measures.32 Airport capacity is defined by the maximum number
of flights per hour airports can routinely handle, the amount of time airports
operate at optimal capacity, and passenger load factors. Capacity is expected
to increase over time due to planned infrastructure improvements. If the
projected demand in air travel exceeds the capacity constraint, demand
is reduced to match the constraint.
Aircraft Stock/Efficiency Assumptions
The aircraft stock and efficiency module consists of a world, US and Non-US,
stock model of wide body, narrow body, and regional jets by vintage. Total
aircraft supply for a given year is based on the initial supply of aircraft
for model year 2003, new passenger sales, and the survival rate by vintage
(Table 33).33 New passenger sales are a function of revenue passenger miles
and gross domestic product.
Older planes, wide and narrow body planes over 25 years of age are placed
as cargo jets according to a cargo percentage varying from 50 percent of
25 year old planes to 100 percent of those aircraft 30 years and older.
The available seat-miles per plane, which measure the carrying capacity
of the airplanes by aircraft type, vary over time, with wide bodies remaining
constant and narrow bodies increasing.34 The difference between the seat-miles
demanded and the available seat-miles represents potential newly purchased
aircraft. If demand is less than supply, then passenger aircraft is either
parked or exported, starting with twenty nine year old aircraft, at a pre-defined
rate. Aircraft continues to be parked until equilibrium is reached. If
supply is less than demand planes are either imported or unparked and brought
back into service.
Technological availability, economic viability, and efficiency characteristics
of new aircraft are assumed to grow at a fixed rate. Fuel efficiency of
new aircraft acquisitions represents, at a minimum, a 5-percent improvement
over the stock efficiency of surviving airplanes. Maximum growth rates
of fuel efficiency for new aircraft are based on a fixed growth rate. Regional
shares of all types of aircraft fuel use are assumed to be constant and
are consistent with the State Energy Data Report estimate of regional jet
fuel shares.
Legislation and Regulations
Energy Independence and Security Act of 2007 (EISA2007)
The EISA2007 legislation requires the development of fuel economy standards
for work trucks (8,500 lbs. to less than 10,000 lbs GVWR) and commercial
medium- and heavy-duty on-highway vehicles (10,000 lbs or more GVWR). The
new fuel economy standards require consideration of vehicle attributes
and duty requirements and can prescribe standards for different classes
of vehicles, such as buses used in urban operation or semi-trucks used
primarily in highway operation. The Act provides a minimum of 4 full model
years lead time before the new fuel economy standard is adopted and 3 full
model years after the new fuel economy standard has been established before
the fuel economy standards for work trucks can be modified. Because these
fuel economy standards are pending and NEMS does not currently model fuel
economy regulation for work trucks or commercial medium- and heavy- duty
vehicles, this aspect of the Act is not included in AEO2008.
A fuel economy credit trading program is established based on EISA2007.
Currently, CAFE credits earned by manufacturers can be banked for up to
3 years and can only be applied to the fleet (car or light truck) from
which the credit was earned. Starting in model year 2011 the credit trading
program will allow manufacturers whose automobiles exceed the minimum fuel
economy standards to earn credits that can be sold to other manufacturers
whose automobiles fail to achieve the prescribed standards. The credit
trading program is designed to ensure that the total oil savings associated
with manufacturers that exceed the prescribed standards are preserved when
credits are sold to manufacturers that fail to achieve the prescribed standards.
While the credit trading program begins in 2011, EISA2007 allows manufacturers
to apply credits earned to any of the 3 model years prior to the model
year the credits are earned, and to any of the 5 model years after the
credits are earned. The transfer of credits within a manufacturers fleet
is limited to specific maximums. For model years 2011 through 2013, the
maximum transfer is 1.0 mpg; for model years 2014 through 2017, the maximum
transfer is 1.5 mpg; and for model years 2018 and later, the maximum credit
transfer is 2.0 mpg. NEMS currently has a switch that allows for sensitivity
analysis of CAFE credit banking by manufacturer fleet, but does not model
the trading of credits across manufacturers. The AEO2008 does not consider
trading of credits since this would require significant modifications to
NEMS and detailed technology cost and efficiency data by manufacturer,
which is not readily available.
The CAFE credits specified under the Alternative Motor Fuels Act (AMFA)
through 2019 is extended. Prior to passage of this Act, the CAFE credits
under AMFA were scheduled to expire after model year 2010. Currently, 1.2
mpg is the maximum CAFE credit that can be earned from selling alternative
fueled vehicles. EISA2007 extends the 1.2 mpg credit maximum through 2014
and reduces the maximum by 0.2 mpg for each following year until it is
phased out by model year 2020. NEMS does not model CAFE credits earned
from alternative fuel vehicles sales because manufacturer specific data
would be required and although some manufacturer detail is represented
for light trucks, there is no manufacturer detail currently represented
for cars. In addition, an algorithm that counts credits earned from the
sale of alternative fueled vehicles would need to be added to NEMS, which
would require significant modification to the model structure. AEO2008 does not consider this section of the Act.
The Energy Policy Act of 2005
The Energy Policy Act of 2005 provides tax credits for the purchase of
vehicles that have a lean burn engine or employ a hybrid or fuel cell propulsion
system. The amount of the credit received for a vehicle is based the vehicles
inertia weight, improvement in city tested fuel economy relative to an
equivalent 2002 base year value, emissions classification, and type of
propulsion system. The tax credit is also sales limited by manufacturer
for vehicles with lean burn engines or hybrid propulsion systems. After
December 31, 2005, the first calendar quarter a manufacturers sales of
lean burn or hybrid vehicles reaches 60,000 units, the phase out period
begins. Reduction of credits begins in the second calendar quarter following
the initial quarter the sales maximum was reached. For that quarter and
the following quarter, the applicable tax credit will be reduced by 50
percent. For the subsequent third and fourth calendar quarters, the applicable
tax credit is reduced to 25 percent of the original value. These tax
credits are included in the AEO2008.
Energy Policy Act of 1992 (EPACT)
Fleet alternative-fuel vehicle sales necessary to meet the EPACT regulations
are derived based on the
mandates as they currently stand and the Commercial
Fleet Vehicle Module calculations. Total projected
AFV sales are divided
into fleets by government, business, and fuel providers (Table 34).
Because the commercial fleet model operates on three fleet type representations
(business, government, and utility), the federal and state mandates are
weighted by fleet vehicle stocks to create a composite mandate for both.
The same combining methodology is used to create a composite mandate for
electric utilities and fuel providers based on fleet vehicle stocks.35
Low Emission Vehicle Program (LEVP)
The LEVP was originally passed into legislation in 1990 in the
State of California. It began as the implementation of a voluntary
opt-in pilot program under the purview of Clean Air Act Amendments of 1990
(CAAA90), which included a provision that other States could opt in to
the California program to achieve lower emissions levels than would otherwise
be achieved through CAAA90. Twelve states have elected to adopt the California
LEVP.
The LEVP is an emissions-based policy, setting sales mandates for 6 categories
of low-emission vehicles: low-emission vehicles (LEVs), ultra-low-emission
vehicles (ULEVs), super-ultra low emission vehicles (SULEVs), partial
zero-emission vehicles (PZEVs), advanced technology partial zero emission
vehicles (AT-PZEVs), and zero-emission vehicles (ZEVs). The LEVP requires
that in 2005 10 percent of a manufacturers sales are ZEVs or equivalent
ZEV earned credits, increasing to 11 percent in 2009, 12 percent in 2012,
14 percent in 2015, and 16 percent in 2018 where it remains constant thereafter.
In August 2004, CARB enacted further amendments to the LEVP that place
a greater emphasis on emissions reductions from PZEVs and AT-PZEVs and
requires that manufacturers produce a minimum number of fuel cell and electric
vehicles. In addition, manufacturers are allowed to adopt alternative
compliance requirements for ZEV sales that are based on cumulative fuel
cell vehicle sales targets for vehicles sold in all States participating
in Californias LEVP. Under the alternative compliance requirements, ZEV
credits can also be earned by selling battery electric vehicles. Currently,
all manufacturers have opted to adhere to the alternative compliance requirements.
The mandate still includes phase-in multipliers for pure ZEVs and allows
20 percent of the sales requirement to be met with AT-PZEVs and 60 percent
of the requirement to be met with PZEVs. AT-PZEVs and PZEVs are allowed
0.2 credits per vehicle. EIA assumes that credit allowances for PZEVs
will be met with conventional vehicle technology, hybrid vehicles will
be sold to meet the AT-PZEV allowances, and that hydrogen fuel cell vehicles
will be sold to meet the pure ZEV requirements under the alternative compliance
path.
Transportation Alternative Cases
High Technology Case
In the high technology case, the conventional fuel saving technology characteristics
came from a study by the American Council for an Energy Efficient Economy.36 Tables 35 and 36 summarize the High Technology matrix for cars and light
trucks. High technology case assumptions for heavy trucks reflect the optimistic
values, with respect to efficiency improvement, for advanced engine and
emission control technologies as reported by ANL.37
Transportation Notes |