Performance Measurement of Transportation Systems: Summary of the Fourth International Conference (2013)

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11 BREAKOUT SESSION 1-B Adjusting Your Performance Management Program for Changes in Vehicle and Fuel Technology Gary L. Cowger, GLC Ventures, LLC (Moderator) Paul Sorensen, RAND Corporation PerformanCe management in the Context of evolving vehiCle and fuel teChnology Paul Sorensen discussed the potential impacts that changes in vehicle and fuel technology could have on transportation performance measurement. He also described some of the uncertainties associated with dif- ferent fuels and technologies. Sorensen’s presentation made the following points: • Evolving vehicle and fuel technologies could affect performance management in two ways. First, they could lead to new dimensions of performance that would be useful to measure and manage. Second, they could influ- ence future performance on measures that were already tracked and managed. Although the latter effect appears likely to be the more dominant, there may be a few new dimensions of performance that will become useful to measure and manage. • Although the concepts being outlined were specu- lative, they were informed by two relevant studies. The first, National Cooperative Highway Research Pro- gram (NCHRP) Project 20-83(04), Effects of Changing Transportation Energy Supplies and Alternative Fuel Sources on Transportation, developed plausible energy use scenarios for 2050 and considered their impacts on state departments of transportation. It also identified robust policy responses. The second study examined performance-based accountability systems. This project focused on the combination of performance measures and linked incentives to improve public service delivery in transportation and other sectors. • NCHRP Project 20-83(04) considered a range of alternative fuels and vehicle technologies, including improved conventional vehicles and hybrids, natural gas–powered vehicles, biofuels, and flexible-fuel vehi- cles. Other technologies are electric vehicles, hydrogen fuel cell vehicles, and relevant technologies for heavy vehicles. • Future prospects for alternative fuel and vehicle technologies are subject to considerable uncertainties, such as future oil prices, improvements in conventional vehicle fuel economy, and technological breakthroughs in alternative fuel and vehicle technologies. Other uncer- tainties are federal and state climate and energy policies and transportation funding policies. • Many experts believe it is unlikely that petroleum will be replaced as the primary transportation fuel in the next 20 to 40 years. Factors favoring the contin- ued use of conventional vehicles include moderate oil prices, improved fuel economy, and the lack of cost- competitive alternatives. Factors that could reduce the share of conventional vehicles include higher oil prices, government policies to promote the development and adoption of alternative fuel vehicles, and technology advances in alternative fuel vehicles. • There is significant momentum toward biofuels, but they are not expected to make up more than 20 to 50 percent of transportation fuels in the future. Factors that would favor increased use of biofuels include higher oil prices, more stringent renewable fuel standards and continued subsidies, public and private research and development support for advanced biofuels, and greater adoption of flexible-fuel or intermediate-blend vehicles.

12 performance measurement of transportation systems Factors deterring the increased use of biofuels include feedstock capacity constraints; negative impacts on land, water, and food availability; and the lack of investment in a distribution and refueling infrastructure. • Natural gas could be a transitional energy source, and the technology is relatively mature. The number of commercial offerings has decreased in recent years, however, and currently accounts for only 0.1 percent of vehicles on the road. Factors that favor an increase in the use of natural gas include reduced costs of natural gas relative to petroleum, reduced vehicle cost premiums, increased model options, and a refueling infrastructure. Other factors include advancements in onboard stor- age and vehicle range and vehicle purchasing subsidies. Factors that deter an increase in the use of natural gas include moderate oil prices, an increase in the cost of natural gas, and advancements in competing fuel and vehicle technologies. • Commercial development of electric and plug-in hybrid vehicles is under way. Future success will hinge primarily on advancements in battery technology. Fac- tors that favor the increased use of electric vehicles include higher oil prices and improvements in battery technology to reduce cost, reduce charge time, and increase range. Other factors are increased investments in a vehicle charging infrastructure and electric vehicle subsidies. Factors that deter the increased use of elec- tric vehicles include moderate oil prices; advancements in competing technologies; and generation, transmis- sion, and distribution issues that limit the grid’s ability to accommodate a significant additional load. • Although promising in many dimensions, the tech- nology for hydrogen fuel cell vehicles is not yet mature, and widespread adoption over the next 15 or 20 years remains unlikely. Factors that favor the increased use of hydrogen vehicles include higher oil prices and increased government support for relevant research and develop- ment. Other factors are reductions in the cost of fuel, fuel cells, and onboard storage; commercialization of vehicles and a refueling infrastructure; and vehicle purchase sub- sidies. Factors that deter the increased use of hydrogen vehicles include moderate oil prices and advancements in competing technologies. • NCHRP Project 20-83(04) included the develop- ment of a range of plausible future scenarios that are helpful tools for long-range decision making. The sce- narios examined a mix of alternative fuels and vehicle technologies and the effects on the cost of driving and on personal travel and goods movement. The scenarios accounted for relevant trends in population growth, eco- nomic growth, land use, and other factors. • The future energy mix remains highly uncertain. Plausible scenarios include petroleum remaining dominant, a single competitor to oil gaining a significant market share, and future transportation energy use patterns characterized by a mix of competing fuels and vehicle technologies. • Developments in fuel and vehicle technology will influence the marginal cost of driving. Plausible scenar- ios for future per-mile driving costs include these costs declining by half, remaining the same, and doubling. • The cost of driving will in turn influence travel trends. Plausible scenarios include the following: – High growth: passenger vehicle miles traveled (VMT) growing at historic rates and no change in transit mode share; – Moderate growth: moderate growth in passen- ger VMT and a modest increase in transit mode share; and – Low growth: constrained growth in passenger VMT and a significant increase in transit mode share. • Transportation energy use and travel scenarios could pose challenges for transportation agencies. These challenges include revenue shortfalls, higher construc- tion costs, and increased traffic congestion. Other pos- sible challenges are increased transit demand, greater safety risks, and increased pressure to reduce greenhouse gases (GHGs). • Transportation agencies already measure and manage numerous dimensions of performance, includ- ing service quality, state of repair, and safety. Addi- tional dimensions currently measured are energy and the environment, efficiency and cost efficiency, and other dimensions of institutional performance. Although some measures address potential challenges posed by evolving energy use patterns, additional measures may be needed. • Evolving energy and travel trends could affect what is measured and the agency responsible for measurement. Areas to address if transportation faces greater pressure to reduce GHG emissions include the carbon intensity of agency operations, agency support for low-carbon tech- nologies, incentives and options for low-carbon travel, and GHG emissions production from the transportation sector. Measures to consider if transit demand increases consider- ably include the coordination of land use and transporta- tion measures. Measures to consider if there is a significant shift to electric vehicles include the demand transportation places on the electric grid and transportation’s contribu- tion to air pollution and GHGs via grid power sources. • The scope of looming challenges may call for greater use of performance-based accountability. Transportation already measures numerous dimensions of performance. Performance measures are often used to inform planning and investment decisions. Performance measures are used much less frequently as a basis for accountability. Explic- itly linking performance to incentives can stimulate more efficient service provisions. Performance-based account- ability may prove to be a helpful tool in addressing pend- ing challenges in a resource-constrained environment.