Say Anything Blog

The city of San Francisco took delivery of its first Orion diesel-electric hybrid bus from DaimlerChrysler yesterday. It ordered a total of 56. Frisco mayor Gavin Newsom says that once all of them are in circulation, the buses will represent a huge step towards the city's goal of an emissions-free municipal transportation fleet by 2020. Hybrid powertrains are well-suited to buses because their stop-and-go nature makes optimal use of their regenerative braking capabilities, and the fact that they often crawl along at low speed maximizes use of the electric motors. This also makes them quieter than their conventionally-powered counterparts.

While technically impressive, the Orions headed to San Fran are not perfect. Passenger capacity is lower than that of a similar vehicle without the gee-whiz powertrain. And while they are 30% more efficient than diesel-only buses, that still amounts to just 4.5 mpg. The CNET article notes, however, that over the next 12 years, that amounts to fuel savings equivalent to 13,000 barrels of oil, and adds that that NYC (who also has Orions in service) sees signs that point towards lower maintenance costs.

Which brings us, ultimately, to the matter of dollars and cents. And here's where it gets a little hairy.

The hybrid buses cost $480,000 a pop (whoa!). Non-hybrid versions sell for around $280,000. Multiply the difference by 56, and that is an extra $11.2 million shelled out by the taxpayers. I know that you pay a premium when you choose a hybrid, but this seems a bit extreme.

By comparison, the 13,000 barrels of oil supposedly saved add up to only $936,000 if you use today's price of $72/barrel. And even if maintenance costs are reduced, I can't see that savings covering the remaining $10,000,000 gap. Yes, environmentalists would likely argue that the improved air quality resulting from the use of a zero-emissions fleet over time would yield incalculable healthcare savings, but putting a numerical value on that would be purely speculative.

If the goal is cleaner air, why not just buy a straight diesel fleet that's optimized for low-sulfur diesel fuel (which went on the market yesterday)? Presumably, it'd still be cheaper than the hybrid fleet while still reducing emissions significantly. In fact, you could buy more buses for the same money. Could a larger bus fleet running on clean diesel help pull more cars off the road? Would that then offset the additional emissions benefits lost by not buying hybrid buses?

The "Zero Emissions by 2020" goal strikes me as being as much (if not more) about image as it is about real, tangible results. It makes for neat soundbytes and gets media attention, but in the end one wonders if it's worth it financially. Lowered emissions are an admirable goal for any municipality, but care should be taken to not fleece the residents who are footing the bill. In the case of San Francisco, those people are on the hook for $11,000,000 extra dollars whose recoverability is, at this point, still suspect.

Unlike a consumer who walks into a showroom and willingly chooses to purchase a more expensive hybrid car, the taxpayers subsidizing a fleet purchase such as this have to pay that premium whether they want to or not. To that end, the program should not just be environmentally responsible, but fiscally prudent as well. Only time will tell how the numbers pan out for San Franciscans, but on the surface, the enviro-fiscal disconnect seems pretty substantial.

UPDATE 6/4/06: A Significant Correction Reveals A Smaller Gap

Fair is fair, and I have to address a flaw in my reasoning.

My calculation where I arrived at the $10,000,000 gap stems from this passage in the CNET article:

In other words, the Orions represent about a 35 percent improvement in fuel economy. Over a 12-year period, these buses will use 1.2 million fewer gallons of diesel than a standard bus, Renschler said. That's about 13,000 U.S. barrels of oils.

I used the 13,000 barrels of oil as the basis for my calculation. That was not smart, because unrefined crude prices, while high today, are not what we pay at the pump. The $936,000 number I use is too low.

I should have used the 1.2 million gallons of diesel saved. If you multiply that by $3.00 (which is in the ballpark for what diesel costs in California today), that $980,000 I cite jumps up to $3.2 million saved. That's almost 4 times the original, inaccurate amount I used. As a result, the $10 million gap drops to around $6.8 million. That's still a lot of money, but it is significantly lower than what I incorrectly reported in the original post.

My most sincere apologies for the mistake.

Sources: CNET and DaimlerChrysler

Additional resources:
DCX Press Release
CNET Video
CNET Photo Gallery
DCX: Benefits of Diesel-Electric Hybrid Buses

Cross-posted from NoonzWheels.