Domestic Fuel

Here are five reasons why the climate bill will ruin your life:

1) You won’t be able to sell your house if it doesn’t pass an energy audit. If your house fails, you’ll have to reduce the price of the house or update the house until you can pass the audit. Here’s an incentive that’s sure to rejuvenate the housing market.

2) The bill would require that all buildings built in the U.S. conform to meet California Building Code Standards. Who needs an affordable house anyway?

3) Your energy bills and other expenses will be higher. The republicans are complaining that the bill would raise yearly electricity bills $175 per year by 2020 but some experts say that an average family’s expenses will go up between $1,200 to $3,000 per year. Break out the summer fans and winter sweaters and blankets.

4) CRAP and RAID - also known as cap and trade.  The legislation mandates a 17 percent cut in greenhouse gas emissions by 2020 and an 83 percent cut by 2050. These cuts will be “enforced” in part through a cap and trade system which puts a price on CO2 emissions. With a program this well thought out, how could it not work?

5) The government will tell you what kind of car you can drive. No more gas guzzling SUVs people. Start peddling - you need the exercise anyway.

Now, I could be wrong. The Republican filibuster on CSPAN last Friday nearly put me in a coma, but seriously people, this bill needs an overhaul.

Last year was a big year for growth in the American wind energy field, as the U.S. added more than 8,300 megawatts of capacity in 2008… a record year!

This article in the Des Moines (IA) Register says officials with the industry, along with a governor from a state that is really making headways in wind energy, were on Capitol Hill to warn Congress that the current proposed legislation doesn’t support the same continued growth:

A bill approved by a House committee last month and another under consideration in the Senate would require utilities to get a certain percentage of their power from renewable sources starting in 2012, but the targets are well below what the wind power industry wanted.

The Senate version would start at 3 percent in 2012 while the House bill would begin at 6 percent, and both could be lowered through energy efficiency measures.

Iowa Gov. Chet Culver joined industry representatives Thursday in meeting with House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid, D-Nev., to urge them to enact higher mandates. “The number does matter,” Culver said later.

To maintain the level of construction in the wind power industry last year - about 8,500 megawatts - the mandate would have to start at 10 percent in 2012, according to the American Wind Energy Association.

House and Senate leaders agree they would like to see the higher mandate but don’t think that 10 percent level would make it through Congress. Lawmakers from southern states that don’t have as much wind potential are seen as the biggest roadblocks.

A new National Fuel Efficiency Policy was passed today adding to recent efforts to curb America’s dependence on foreign oil while spurring development in new clean transportation technologies that will help curb greenhouse gas emissions. This new policy, which sets the toughest fuel economy requirements in the country’s history, speeds up, by four years, the fuel economy standards that were passed in 2007 (CAFE).

This new policy will go into effect in 2012 and ramp up through 2016 and will require passenger cars and light trucks to get an overall average of 35.5 miles per gallon (it is currently 23.1 mpg) by 2016 while cars are expected to average 39 mpg (currently 27.5) and trucks will be required to get 30 mpg. 

Speaker Nancy Pelosi issued a public statement today saying, “Today’s announcement builds on Congress’ increase of fuel efficiency standards two years ago, speeds us toward meeting the goal of 35.5 miles per gallon by 2020, and establishes the first-ever national standard for global warming pollution from cars and trucks. These efforts will save consumers money at the pump, strengthen our national security by making America more energy independent, and cut global warming pollution that is causing a climate crisis.”

Pelosi is just one of dozens of organizations publishing statements today applauding the new policy. Bob Dinneen, President of the Renewable Fuels Association, stated, “President Obama has rightly recognized that improving vehicle fuel economy is an important tool in reducing America’s reliance on foreign oil.  Together with the increasing use of renewable  fuels like ethanol, these technologies represent the most immediate and effective solution available to help meet our energy and environmental challenges.”

Dinneen went on to state that today’s policy decision does little to effect ethanol’s role in the fuel market place and concluded with, “Raising fuel economy standards, allowing for ethanol blends in excess of 10 percent, and continuing to invest in next generation renewable fuel technologies are the kind of forward-looking policies that will begin to change America’s foreign oil habit. President Obama’s announcement today, together with his recently reaffirmed commitment to biofuels, are appropriate steps in that direction.”

The $1-a-gallon tax credit that biodiesel now enjoys… but is set to expire at the end of this year… could have new life if a new piece of legislation makes it through Congress this year.

According to the Northwest Arkansas News, Sen. Blanche Lincoln (D-Ark.) has introduced legislation that will promote several renewable energy options, including the biodiesel credit:

Lincoln said she introduced legislation to do the following:

· Provide parity in the value of the credit for all renewable energy resources, increasing the value of the credit to full credit level for those resources that now get only a partial credit;

· Encourage innovation and entrepreneurship through alternative energy and conservation incentives; and

· Allow electricity from biomass used on-site to qualify for a tax credit - the Renewable Electricity Production Tax Credit.

Alternative energy sources, such as biomass and biofuels, offer job-creation opportunities for new and expanding small businesses, and she is pushing for incentives to help build a strong alternative-energy industry in the state

The article goes on to say that Lincoln feels these incentives are necessary to sustain the renewable fuels market.

“The goal is to set America on a course for a secure and sustainable energy future.” DOE Energy Secretary Steven Chu

The alternative energy industry is already receiving the monies set aside to help spur the economy and reduce America’s dependence on fossil-fuel based energy sources. The National Renewable Energy Laboratory was the recipient of $110 million in funding, announced by U.S. Department of Energy Secretary Steven Chu. The funds were allocated as part of the Recovery and Investment Act.

The funds have been designated to accelerate the completion of the construction of NREL’s Golden Colorado campus. Once completed, this research facility will dramatically expand NREL’s capacity for renewable energy research. The facility will be equiped with the latest technologies to reduce energy consumption, a model for future buildings across America.

The remaining $10 million in funds will be used to improve NREL’s National Wind Technology Center located near Boulder, Colorado. NREL’s Director Dan Arvizu said, “These investments are an unmistakable signal from DOE about the Laboratory’s central role in advancing President Obama’s clean energy agenda. It is a significant investment in NREL’s future.”

The announcement was part of a half-day tour of NREL by Secretary Chu and included Colorado Governor Bill Ritter. Colorado has been positioning itself as a leader in renewable energy, and earlier this year President Obama went to Colorado where he signed the Recovery and Investment Act into law.

While the United States government drags its feet on making a decision to offer American motorists the choice to use E15 at the pump, the Brazilian government is contemplating an ethanol blend increase from E25 to E30. Currently the EPA comment period to get feedback on the increase to E12 or E15 is open, and the U.S. ethanol industry is actively lobbying for an extension of the comment period.

Simultaneously, the ethanol industry in Brazil, led by Unica (the Brazilian sugarcane industry), is aggressively pushing their federal government to increase the ethanol blend wall according to a report in the April 7th issue of Biofuels Brazil. Brazilian ethanol producers are facing the same scenarios as producers in the States as they contend with low prices and surplus supply.

The Iowa Renewable Fuels Association (IRFA) sent out a statement today calling for more aggressive action from the U.S. government. “Despite all of the rhetoric, the United States isn’t leading on biofuels issues,” said Monte Shaw, executive director of IRFA.  “As we tip-toe toward E15 and worry about the impact on weed-whackers, Brazil has moved quickly to put in place policies that have freed them from foreign oil.  Maybe the very real price of foreign oil in terms of blood, treasure and environmental degradation should be taken at least as seriously as any hypothetical challenges higher blends pose for small, off-road engines.”

According to Shaw, the foot dragging and arguments against approving E15 blends give many Iowans a sense of deja vu. Thirty years ago, critics of ethanol were calling for more testing of both conventional cars and small engines when considering E10; they are calling for these same tests as today. Ethanol propronents also remain frustrated as they cite the success that Brazil has had not only in achieving oil independence but exporting biofuels as well, and question why the U.S. can’t achieve the same goals.

There is a lot of dialogue surrounding the best way to create energy and environmental policies, specifically around greenhouse gas emissions. The RAND Corporation recently released a study, “Evaluating Options for U.S. Greenhouse-Gas Mitigation Using Multiple Criteria,” that evaluates three past attempts to develop energy policy. The study notes that the majority of current policy focuses on cost-effectiveness but policy that relies on this criteria is unlikely to survive.

The paper identifies four normative criteria that can be applied to GHG-control systems and examines their implications for how packages of GHG policies might perform against these criteria. The criteria include: cost effectiveness, fairness of distributional inputs, incentives for innovation and adaptability of policy framework.

The authors offer lessons to be learned about the policies they reviewed and noted, “Well-crafted environmental policies need to address not only efficiency issues but also equity or distributive issues and appeal generally to the public and industry.”

Ultimately the paper finds that policies likely to have political viability and achieve environmental goals will:

• Include burden-sharing mechanisms that are transparent, means-tested, and limited in scope and duration when considering incentive-based greenhouse gas mitigation policy.

• Couple the mitigation policy with a strategic framework for research, development, and demonstration (RD&D) to reduce long-term GHG emissions, including a clear role for public-sector financing from revenues generated by the mitigation policy.

• Limit irreversible commitments in order to maintain the ability to adapt to uncertain and changing future circumstances.

This is an informative policy paper especially for those lobbying on behalf of the renewable energy industry. Click here to download a free copy of the report, “Evaluating Options for U.S. Greenhouse-Gas Mitigation Using Multiple Criteria“.

With Wall Street still not recovered from the economic downturn and banks keeping a tight hold of the credit purses’ drawstrings, the next generation of biofuels producers could have a rough time getting going and staying going.

Recently, the Biotechnology Industry Organization (BIO)… a group that represents more than 1,200 biotechnology companies, academic institutions, state biotechnology centers and related organizations across the United States and more than 30 other nations… gave some of its ideas on how to loosen the credit crunch. BIO’s vice president of its Industrial and Environmental Section, Brent Erickson, said that will come through the federal government’s leadership to coordinate and fund biofuel-friendly programs and help the development of the new feedstocks, transportation and delivery of products, alternative fuel distribution networks and vehicles. Joining him in this call were several of the nation’s leading biofuels companies.

During a news conference, the companies, such as Verenium, Aurora Biofuels, Abengoa Bioenergy, and Gevo, Inc… just to name a few… gave an update on how they’re doing. There was some good news and some not-so-good news with the overall tone upbeat… although most of them agreed that the tough economic times will make it impossible for the cellulosic ethanol industry to meet the government’s goal of 100 million gallons next year. But after that, they remain optimistic. In addition, many on the conference call pointed out that with a finite amount of non-renewable petroleum out there, growing demand and a growing desire to eliminate the fuels that contribute to global warming, there’s really no other choice but to develop these clean, renewable energy sources.

It was a pretty interesting conversation, and you can either go to BIO’s Web site and look up the information so you can listen to the hour-plus of the conference call… OR you can listen to our own Domestic Fuel Cast (just about 7 1/2 minutes of your busy day) where we have condensed it down to its most important points here:

Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.

The choice is yours. Me… I’m a busy guy. I know which one I’d choose.

You can also subscribe to the DomesticFuel Cast here.

Podcast: Play in new window | Download

State senators in Iowa have passed a standard that would require all diesel fuel sold in the state contain 5 percent biodiesel. The measure still needs to clear the State House and gain the governor’s signature to become law. If it does, the Hawkeye State would become the eighth state in the nation to have a biodiesel requirement, joining Minnesota, Washington, Oregon, Pennsylvania, Louisiana, New Mexico and Massachusetts, which all have biodiesel mandates.

The news was welcomed by the National Biodiesel Board:

“Iowa has been a leader in the helping to establish biodiesel as a reliable and renewable energy alternative,” said Joe Jobe, National Biodiesel Board CEO. “Biodiesel gives all Iowans an opportunity to use a renewable fuel made for, grown by, refined by, and distributed by Iowans. This is empowering the citizens of the state to choose to use less foreign oil.”

Officials say Iowa’s biodiesel requirement will drive demand for 45 million gallons of the green fuel in the state, as well as generating jobs in the local production of the feedstock, primarily soybeans in Iowa, and the biodiesel.

The California Air Resources Board (CARB) is set to vote on the Low Carbon Fuels Standard (LCFS) on April 23-24, 2009. This first of its kind bill was designed to reduce the carbon intensity of all transportation fuels in California 10 percent by 2020. Many states, as well as the federal government, are watching the outcome very closely as they consider adopting similar bills.

In preparation for the ruling, the ethanol industry has been working with CARB to document ethanol as a proven low carbon fuel. Today, the Brazilian Sugarcane Industry Association (UNICA) sent out a statement declaring that sugarcane ethanol’s carbon intensity is even lower than currently calculated by CARB.

“Sugarcane ethanol has a verifiable reduction in greenhouse gases of 90% compared to gasoline. Sugarcane ethanol will easily meet the LCFS, not just in 2020 but today,” said Marcos Jank, UNICA’s President & CEO. UNICA sent out a public statement following the submission of a 25-page letter to the California regulator.

Within this standard, gasoline will be eligible as a “low carbon fuel” if it reduces its current carbon output from 95 grams of carbon dioxide per megajoule (gCO2/MJ) to 86 gCO2/MJ by 2020. Since all biofuels have a lower carbon intensity, they will be a large factor in the reduction of fuel-based carbon.

However, CARB is still considering incorporating indirect land use calculations into the carbon intensity number assigned toeach type of biofuel. According to UNICA, their letter also addresses the controversial calculations resulting from so-called indirect land use change impacts from sugarcane expansion. Their letter supports numerous comments from stakeholders and mentions specifically a letter by 111 PhD scientists stating that the science used to determine such impacts is quite limited, highly uncertain and open to misuse through selective enforcement of such impacts. UNICA’s letter urges CARB to revisit the methodologies utilized in land use change modeling.

Although UNICA’s letter is specific to sugarcane ethanol produced in Brazil, the American ethanol industry has also submitted documentation about the uncertainty of indirect land use and repeatedly called for more research before finalizing the LCFS.